"Raising the Minimum Wage Kills Jobs": A Scam Not a Fact

[Mindmaster]

You have obviously never been poor. I can assure you it doesn't work the other way.
You start with no money, you start with no savings. At the end of the week you still have no money and no savings.
I agree, it can be argued that entertainment is a waste; but it is good for the mind and body and gives you an escape from the day to day drudgery of life on the minimum wage.

I've been worse than poor, extremely poor. All I am saying is personal responsibility counts, and it is valuable to teach people how to improve themselves financially. You can replace entertainment spendings with trips to the library and nature walks. Both are probably better for you anyway. Hobbies are also very cheap in most cases as well, and you might learn some skills you can make more money with. I trust citizens with cash more than I trust the government -- I think it's valuable to keep the bulk of the money in our hands.

20K a year will get you a house, all your food, and utilities in a suburb provided you buy a used car. Two people working minimum wage living together make about 32k/yr. Not living like kings or anything, but certainly not starving. Don't want to live with someone? You're economically silly, and I can't help that. The government incentivizes married couples -- at least with where the wages currently are and how taxes work. Don't hate me for stating it. I did it myself, as a young man. If I can do it then anyone can do it, it's just a technique.

That leaves about 12k a year to save or blow. Personally, I recommend putting the max in your IRA because it reduces your taxes, and if you have a 401k with matching top that puppy out too -- few things give 100% return on investment... You should have about 40-50k in holdings in ten years, and you won't be poor. If you get fired, have to move, or have to do anything else your nest egg is huge. That's not even counting any raises. In 15 years, even if you never switched jobs you'd have a net worth around 90k. Poor is a nearly a mental condition, and we should deal with it.

How to lose the most money: vices. If you drink, smoke, do weed, or whatever that's where at least 15-20% of your cash is going. The sooner you quit the better off you will be.

 

[Shadow Wolf]

Wendy's is working on replacing workers at the burger joints with automated systems, because of the raised minimum wage, or at least so they claim.

http://www.techinsider.io/wendys-workers-will-lose-jobs-to-robots-2016-5

That's what they claim, but even at $7.25/hour they would still replace human workers for robots as it's cheaper. It's also been the reality of my adult life that you are going to be expected to do far more work for less pay and benefits. I can also say I saw prices climb as gas prices increased, but they never went back down during the Recession and gas prices plummeted. I also did not notice the increase from $5.15 to $7.25 like I did with gas going up. And we've also seen companies cut workers and slash at pay with executives keeping their million-dollar salaries and bonuses.

You have obviously never been poor. I can assure you it doesn't work the other way.
You start with no money, you start with no savings. At the end of the week you still have no money and no savings.

Very much so. When you're poor, even if you do make an effort to save, one unexpected and unplanned expense (such as an emergency or car repair) can wipe out your savings. Having to take time off work for something like a surgery will drain and deplete your savings.
And, honestly, most poor people I know aren't spending much on entertainment. They may have Netflix, but a month of Netflix is far cheaper than going to the movies just once.

 

[Acim]

Without going into depths of economic theory, I think of it as not a good thing to unilaterally raise the minimum wage. Seeing that labor costs are perhaps the biggest expense of any business, I do think large corporations can effectively deal with minimum wage increases, whereas I wonder why we collectively think it would be good / not harmful to small(er) businesses? Especially businesses in their first 3 years where say they may have under 10 employees. If budgeting for labor expense over the next year to be say $250,000 for 10 employees, and then unilaterally that rate has to be changed to say $350,000, I don't get where people think that business will get the money from, other than borrowing, and charging more for product where competition of the corporate/larger business kind could keep prices lower.

A possible solution would be to only raise minimum wages for larger businesses, but then who would want to work for the smaller businesses, knowing you could get paid more for roughly the same job at a bigger business? Oh wait, all the anti-corporation / anti-big business people could take those type of jobs if they are being consistent with their rhetoric.

 

[Altfish]

Berkeley University is cutting 500 jobs, mostly because of budget cuts, but there's speculation that the $15 raise forced it to be a higher number.

http://redalertpolitics.com/2016/04/20/uc-berkeley-just-cut-500-jobs-due-15-minimum-wage/

Red Alert politics?? Unbiased opinion of a group that is campaigning against the minimum wage and low taxes for high earners.

 

[Ouroboros]

That's what they claim, but even at $7.25/hour they would still replace human workers for robots as it's cheaper.

But they didn't. Not until $15 did they start talking about it. These articles are about companies laying off people right now, because they (as they argue) can't afford the $15 hike.

There's a cost to develop and deploy automatic systems. It's not something you do unless you can see a break-even somewhere and then followed by gains. At $7.25, no company was talking about automating the food industry.

It's also been the reality of my adult life that you are going to be expected to do far more work for less pay and benefits. I can also say I saw prices climb as gas prices increased, but they never went back down during the Recession and gas prices plummeted. I also did not notice the increase from $5.15 to $7.25 like I did with gas going up. And we've also seen companies cut workers and slash at pay with executives keeping their million-dollar salaries and bonuses.

Sure. And?

The thread is about showing any evidence for companies cutting jobs because of the $15 minimum pay. These articles show directly that there are companies who are doing exactly this simply because (as they say) can't take the $15.

Now, if you see some of the other links I provided, they were also talking about mom-n-pop restaurants forced to lay off people as well. They're not millionairs. They're most of the time barely making it day-to-day. My wife works in the food industry, and there's plenty around here were I live, but very few can afford expensive homes or cars because of their "million dollar" CEO salary on top of their coffee shop. Some large companies will use the $15 as an excuse to do what they always do, but these small single owner companies that have 10 employees that barely making it, they're also considering changing strategy, like laying off people, and hire $15 salary employees with higher skills that have to do multiple jobs.

 

[Altfish]

Without going into depths of economic theory, I think of it as not a good thing to unilaterally raise the minimum wage. Seeing that labor costs are perhaps the biggest expense of any business, I do think large corporations can effectively deal with minimum wage increases, whereas I wonder why we collectively think it would be good / not harmful to small(er) businesses? Especially businesses in their first 3 years where say they may have under 10 employees. If budgeting for labor expense over the next year to be say $250,000 for 10 employees, and then unilaterally that rate has to be changed to say $350,000, I don't get where people think that business will get the money from, other than borrowing, and charging more for product where competition of the corporate/larger business kind could keep prices lower.

A possible solution would be to only raise minimum wages for larger businesses, but then who would want to work for the smaller businesses, knowing you could get paid more for roughly the same job at a bigger business? Oh wait, all the anti-corporation / anti-big business people could take those type of jobs if they are being consistent with their rhetoric.

So, let's take this argument to it's logical conclusion. Bringing back slavery would be good for new businesses. So let's do it!!

 

[Ouroboros]

Red Alert politics?? Unbiased opinion of a group that is campaigning against the minimum wage and low taxes for high earners.

Sorry. Perhaps I should be picking articles from sources that you can trust would be better.

Would SFGate be better for you?
http://www.sfgate.com/education/article/UC-Berkeley-to-eliminate-500-staff-jobs-7244049.php

How about Washington post?
https://www.washingtonpost.com/news...keley-to-cut-500-positions-in-next-two-years/

Or perhaps Investors Business Daily, the second largest investing news paper in US:
http://www.investors.com/politics/e...en-fires-hundreds-of-workers-after-it-passes/

Here's from the Daily Cal: (Daily Cal is Berkeley's own newspaper.)
http://www.dailycal.org/2016/02/10/...ost-cutting-measures-amid-structural-deficit/

Now, granted, it's not said that they're laying off people because of the $15 min, but because of increased costs. The timing is rather appropriate though, just after the law goes into effect, this news goes out. And who will they lay off first? Not the tenured professor, since they can't, but the lower income earners at the bottom of the barrel.

 

[Shadow Wolf]

But they didn't. Not until $15 did they start talking about it. These articles are about companies laying off people right now, because they (as they argue) can't afford the $15 hike.

There's a cost to develop and deploy automatic systems. It's not something you do unless you can see a break-even somewhere and then followed by gains. At $7.25, no company was talking about automating the food industry.

Yeah, and they've obviously been thinking about it before since it was all of a sudden a thing with minimum wage increases. It's like day one of legal pot and suddenly there is all this pot available when it was illegal just the day before.

 

[Shadow Wolf]

Now, granted, it's not said that they're laying off people because of the $15 min, but because of increased costs. The timing is rather appropriate though, just after the law goes into effect, this news goes out. And who will they lay off first? Not the tenured professor, since they can't, but the lower income earners at the bottom of the barrel.

And the OP requested actual evidence, not speculation, and the evidence part has been falling short.

 

[Altfish]

Now, granted, it's not said that they're laying off people because of the $15 min, but because of increased costs. The timing is rather appropriate though, just after the law goes into effect, this news goes out. And who will they lay off first? Not the tenured professor, since they can't, but the lower income earners at the bottom of the barrel.

You've spotted the problem with the original article; they were adding 2 plus 2 and getting 5
I would argue that many of the jobs will be well paid jobs not affected by the minimum wage increase.

 

[esmith]

Let me ask a very simple question that does not have a simple answer
If the minimum wage is raised does this not cause workers to ask for a raise.
Look at it this way
Minimum wage Y is raised X amount. Workers with skills higher that minimum wage earners who were making Y+W now see their relative wage reduced to Y+W-X. Would not they, especially in unions, demand a raise by X amount or more?

 

[metis]

Actually, in economics, we learned that there's a balance. The cost-supply curves do play part in it. There's nothing wrong with raising minimum wage, but raising too much (however much that would be is the tricky part) would affect supply. If the cost goes up too much for a certain product, the supply will diminish. With that said, I think only certain industries will be affected by this minimum raise, like restaurants and fast food joints, kiosks in the malls, and other currently low-pay jobs. They're paying low to keep the costs low to provide low-priced products. We will most likely see more of the automated kiosks for iPhone cases, chargers and such like that have in the airports now. While most other companies won't be affected so much. For instance, I don't think Disney land will cut down on employees because of this. They can afford it. Their problem is that they can't keep people out and not buying their insanely priced tickets.

Yes, there is a balance of sorts, and it takes some time for it to be reached as I mentioned. However, I can't confirm this, but I think that it's less likely a swing down and up as it used to be because most companies/businesses nowadays pretty much hire only a minimum number of employees to get the job done.

Either way, the line we so often hear that raising the minimum wage will eliminate jobs is largely a bogus claim.

 

[metis]

Let me ask a very simple question that does not have a simple answer
If the minimum wage is raised does this not cause workers to ask for a raise.
Look at it this way
Minimum wage Y is raised X amount. Workers with skills higher that minimum wage earners who were making Y+W now see their relative wage reduced to Y+W-X. Would not they, especially in unions, demand a raise by X amount or more?

Yes, but that's not intrinsically a negative. There's a rule of thumb that goes like this: a rising tide raises all ships. You, I, and everyone here in all likelihood very much were positively affect by the development of labor unions even if one didn't belong to one because it led to higher wages overall.

 

[Walter Russell]

[Source: Well written article by Nick Hanauer. Very much worth the time to read.]

Do you know of any evidence that raising the minimum wage kills jobs? If so, what is it?

Given the weight of evidence against the notion that raising the minimum wage kills jobs, what do you make of the motive(s) of those who espouse the notion? Do you, like Hanauer, see it as a scam designed to keep wages low and profits high?

I am not personally aware of raising wages killing jobs in and of itself.
Although I do have first hand experience with raising the cost of doing business will raise the cost of the product to offset any loss.
In that case it would depend on how much the price increase is and if people are still willing to buy it. If so than alls good, if not than yes, surely jobs will be lost and business's could close.

 

[metis]

I am not personally aware of raising wages killing jobs in and of itself.
Although I do have first hand experience with raising the cost of doing business will raise the cost of the product to offset any loss.
In that case it would depend on how much the price increase is and if people are still willing to buy it. If so than alls good, if not than yes, surely jobs will be lost and business's could close.

That's all very true. Well said.

 

[Ouroboros]

You've spotted the problem with the original article; they were adding 2 plus 2 and getting 5
I would argue that many of the jobs will be well paid jobs not affected by the minimum wage increase.

Well, I spotted the problem before you mentioned it because I did say, "Berkeley University is cutting 500 jobs, mostly because of budget cuts, but there's speculation that the $15 raise forced it to be a higher number."

 

[Ouroboros]

Yes, there is a balance of sorts, and it takes some time for it to be reached as I mentioned. However, I can't confirm this, but I think that it's less likely a swing down and up as it used to be because most companies/businesses nowadays pretty much hire only a minimum number of employees to get the job done.

I'm more concerned about the small mom-n-pop shops who can't pay much for their few employees. The neighborhood store, book store, butcher, and so on, all have gone out of business the past 100 years because it's not cost effective to run small businesses anymore. Workers comp, insurance, and labor costs are quite big here in California. Especially if you have any kind of service that relates to food, health, and such. Where the customers or the employees can get hurt. Huge work comp and insurance. Also the high taxes influence business decisions. I read that some 9,000 companies left California last 7 years and moved to other states due to the high cost of business, and these are mostly the big companies.

Either way, the line we so often hear that raising the minimum wage will eliminate jobs is largely a bogus claim.

Mostly it means that companies become more efficient, doing the same job with fewer employees.

I saw the same thing happen in Sweden 40 years ago. The higher the cost of business, the fewer employees doing more highly skilled jobs.

The benefit is that many new entrepreneurs might invent new businesses and create new jobs that way. There tends to be rebirth in the wake of destruction.

 

[esmith]

Yes, but that's not intrinsically a negative. There's a rule of thumb that goes like this: a rising tide raises all ships. You, I, and everyone here in all likelihood very much were positively affect by the development of labor unions even if one didn't belong to one because it led to higher wages overall.

Sorry you are wrong, labor unions never and I mean never led to me receiving higher wages.

You say that a rising tide raises all ships which I take as when wages are raised then wages across the board rise. Is this your take? Then if all wages rise then the cost of doing business will rise thus raising the cost of goods and services or employers will reduce the number of employees. If they have to increase the cost of goods or services this means that your dollar has less value. Do you disagree with this?

 

[tytlyf]

This is obvious. Raising the MW doesn't kill jobs, don't trust people who say that. They are capitalistic minded with profit as their #1 goal. Why else do corporations move overseas? To exploit low wages. Never trust a republican saying it kills jobs, they lie on purpose.

Raising the minimum wage has many benefits.

-Boost in the economy
-More jobs
-Less crime
-Less people qualifying for public assistance

 

[Revoltingest]

I've been worse than poor, extremely poor. All I am saying is personal responsibility counts, and it is valuable to teach people how to improve themselves financially. You can replace entertainment spendings with trips to the library and nature walks. Both are probably better for you anyway. Hobbies are also very cheap in most cases as well.

Small digression......
I still have a collection of old local brewery bottles I dug up in an old dump.
They cost nothing, & aren't worth much, but they're attractive & historically interesting.