T Nation

Will a Higher Minimum Wage Cost Jobs?

Hope this debate actually happens.

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=9721

[quote]Zeppelin795 wrote:
Hope this debate actually happens.

No

Of course it won’t. I’m hoping for a nice $30-40/hour(or more!) raise myself. Stick it to those evil rich guys until they’re paying me so much that I’m also one!

'm obvi simplifying but here goes:

Lets not forget that $1 increase in wage typically costs the employer $1.30.

So say I employ 10 people at 2000 hours for $7 an hour. Total cost to me of 182K a year. Now the government tells me I have to pay them $9 total costs now 234k a year, 52k more a year with a zero increase in productivity or value.

My options:

  1. I’m a good business man so I operate on the margins. So in order to maintain (not even grow, just maintain) year over year I have to add 52k to my prices. So that means the market would have to otherwise call for a 52,001 a year increase in what it is willing to pay for me to make $1 more in profit year over year.

  2. Fire two people so my new costs are only a 5k increase year over year. This involves me asking 8 people to do the work of 10, for more money than they are worth… They will want raises (Ignoring small increases in overhead that come with firing people.)

  3. Allow the additional 52k in costs to give my bottom line a haircut. Well the bank won’t like this, and it brings the overall value of my company down, effects ability to grow. Can’t hire more people without growth.

  4. I can take 52k less in my salary. Which means I can take home less to my family, all while putting in the same hours, risking the same amount and doing the same amount of work for significantly less money. Um yeah, everyone wants everyone else to do this, and aren’t willing to do it themselves…

[quote]countingbeans wrote:

'm obvi simplifying but here goes:

Lets not forget that $1 increase in wage typically costs the employer $1.30.

So say I employ 10 people at 2000 hours for $7 an hour. Total cost to me of 182K a year. Now the government tells me I have to pay them $9 total costs now 234k a year, 52k more a year with a zero increase in productivity or value.

My options:

  1. I’m a good business man so I operate on the margins. So in order to maintain (not even grow, just maintain) year over year I have to add 52k to my prices. So that means the market would have to otherwise call for a 52,001 a year increase in what it is willing to pay for me to make $1 more in profit year over year.

  2. Fire two people so my new costs are only a 5k increase year over year. This involves me asking 8 people to do the work of 10, for more money than they are worth… They will want raises (Ignoring small increases in overhead that come with firing people.)

  3. Allow the additional 52k in costs to give my bottom line a haircut. Well the bank won’t like this, and it brings the overall value of my company down, effects ability to grow. Can’t hire more people without growth.

  4. I can take 52k less in my salary. Which means I can take home less to my family, all while putting in the same hours, risking the same amount and doing the same amount of work for significantly less money. Um yeah, everyone wants everyone else to do this, and aren’t willing to do it themselves…[/quote]

Increase in productivity? It’s been going on for 30 years but instead of going to those who are responsible, it has been siphoned to the top.

Yes you can’t hire more people without growth and no one can buy your products or services unless they have discretionary funds. No money=no demand.

Since you fancy yourself an economist, lets’ just wait for the debate if Burkhauser takes him up on it.

[quote]countingbeans wrote:

'm obvi simplifying but here goes:

Lets not forget that $1 increase in wage typically costs the employer $1.30.

So say I employ 10 people at 2000 hours for $7 an hour. Total cost to me of 182K a year. Now the government tells me I have to pay them $9 total costs now 234k a year, 52k more a year with a zero increase in productivity or value.

My options:

  1. I’m a good business man so I operate on the margins. So in order to maintain (not even grow, just maintain) year over year I have to add 52k to my prices. So that means the market would have to otherwise call for a 52,001 a year increase in what it is willing to pay for me to make $1 more in profit year over year.

  2. Fire two people so my new costs are only a 5k increase year over year. This involves me asking 8 people to do the work of 10, for more money than they are worth… They will want raises (Ignoring small increases in overhead that come with firing people.)

  3. Allow the additional 52k in costs to give my bottom line a haircut. Well the bank won’t like this, and it brings the overall value of my company down, effects ability to grow. Can’t hire more people without growth.

  4. I can take 52k less in my salary. Which means I can take home less to my family, all while putting in the same hours, risking the same amount and doing the same amount of work for significantly less money. Um yeah, everyone wants everyone else to do this, and aren’t willing to do it themselves…[/quote]

Any business that is running with minimum wage…which isn’t most small businesses its more crap like Walmart and fast food has already shrunk the labor force down to the minimum necessary to do the job. They aren’t carrying more workers because the wage is lower. They are already at the minimum number of workers needed for the job.

[quote]Zeppelin795 wrote:

Increase in productivity? It’s been going on for 30 years but instead of going to those who are responsible, it has been siphoned to the top. [/quote]

Did you even read what I wrote?

We aren’t talking about a 30 year period for these wages to increase. We are talking about a matter of days. In what world do you live in where productive is going to go up 28.5% to justify a raise like that in the course of hours?

Haha, no, no you can’t… Really, you are, 100% trolling at this point.

Okay, but seeing as I’m in business and employing 10 people full time, it appears people have enough discretionary fund to purchase my goods or services, so moot point is moot.

[quote]
Since you fancy yourself an economist,[/quote]

Never said any such thing.

How about I don’t care about your shitty link to your lefty website and still won’t give them the web traffic even if he does.

It is beyond obvious you are here, simpily to pimp your website, the unrealnews.insane.cra

[quote]groo wrote:
Any business that is running with minimum wage…which isn’t most small businesses its more crap like Walmart and fast food has already shrunk the labor force down to the minimum necessary to do the job. They aren’t carrying more workers because the wage is lower. They are already at the minimum number of workers needed for the job.
[/quote]

Again:

[quote]countingbeans wrote:

'm obvi simplifying but here goes:[/quote]

Aside from the fact your post doesn’t, not for a second, address the costs issue.

[quote]countingbeans wrote:

[quote]groo wrote:
Any business that is running with minimum wage…which isn’t most small businesses its more crap like Walmart and fast food has already shrunk the labor force down to the minimum necessary to do the job. They aren’t carrying more workers because the wage is lower. They are already at the minimum number of workers needed for the job.
[/quote]

Again:

[quote]countingbeans wrote:

'm obvi simplifying but here goes:[/quote]

Aside from the fact your post doesn’t, not for a second, address the costs issue. [/quote]

I am saying its not going to hurt small businesses.
And that I don’t care if it impacts businesses like Walmart say.

It won’t create more unemployment though or at least it never has historically.

[quote]groo wrote:

I am saying its not going to hurt small businesses.
[/quote]

That is literally a simplification of the plans we’ve already discussed with our small business clients.

Do you own a small business, or work in or with the management of one?

[quote]countingbeans wrote:

[quote]groo wrote:

I am saying its not going to hurt small businesses.
[/quote]

That is literally a simplification of the plans we’ve already discussed with our small business clients.

Do you own a small business, or work in or with the management of one?[/quote]

Yar.

Most small businesses don’t pay minimum wage.
And its only something like 15 percent of the labor force that makes it right?

To be frank a business that your 50k makes or breaks is running pretty tight already.

Do you hear that business owners? You are not responsible for your success! Your employees are.

Why do the workers responsible for this increase in productivity continue to work for others instead of themselves? Another question is why do the workers continue to work for less than they are worth? Are there no businesses that appreciate their talents?

As awesome as the government is at telling people how to run businesses, I sure wish it would just cut out the middle man and run the businesses itself!

[quote]NickViar wrote:
Do you hear that business owners? You are not responsible for your success! Your employees are.

Why do the workers responsible for this increase in productivity continue to work for others instead of themselves? Another question is why do the workers continue to work for less than they are worth? Are there no businesses that appreciate their talents?

As awesome as the government is at telling people how to run businesses, I sure wish it would just cut out the middle man and run the businesses itself![/quote]

Hard to compete with 10 cents a day in the third world…just saying. The price of labor has been deflated by the clamor for free market at the cost of the home country.

[quote]groo wrote:

Most small businesses don’t pay minimum wage

And its only something like 15 percent of the labor force that makes it right?[/quote]

This doesn’t only affect people making min wage. This effects everyone working for you to a degree, and the closer they get to entry level the more it affects them.

Come on.

You been at a place 3 years, got a $1 raise every year, and now all the people who just started make $1 less than you? You don’t want a raise?

Think man, you are smarter than this.

[quote]To be frank a business that your 50k makes or breaks is running pretty tight already.
[/quote]

Come on man. I’ve said like three times this is a simplification for display purposes. Why are you picking out details to try and bash it?

[quote]countingbeans wrote:

[quote]groo wrote:

Most small businesses don’t pay minimum wage

And its only something like 15 percent of the labor force that makes it right?[/quote]

This doesn’t only affect people making min wage. This effects everyone working for you to a degree, and the closer they get to entry level the more it affects them.

Come on.

You been at a place 3 years, got a $1 raise every year, and now all the people who just started make $1 less than you? You don’t want a raise?

Think man, you are smarter than this.

[quote]To be frank a business that your 50k makes or breaks is running pretty tight already.
[/quote]

Come on man. I’ve said like three times this is a simplification for display purposes. Why are you picking out details to try and bash it?[/quote]
Eh cause I would like a living wage law enacted.
Or tightening up of the ability of companies to use foreign labor which would naturally raise the labor rate.

But mostly short replies because in between rounds of bellator fights…

[quote]NickViar wrote:
Do you hear that business owners? You are not responsible for your success! Your employees are.

Why do the workers responsible for this increase in productivity continue to work for others instead of themselves? Another question is why do the workers continue to work for less than they are worth? Are there no businesses that appreciate their talents?

As awesome as the government is at telling people how to run businesses, I sure wish it would just cut out the middle man and run the businesses itself![/quote]

You know what you are right.

Everyone should just get paid 100k a year for every job, no matter what it is. Then everything will be perfect.

Yup, no issues there, none at all.

[quote]groo wrote:

Eh cause I would like a living wage law enacted.[/quote]

Of course there would be no unintended consequences to something like that, none at all.

Oh wait, that’s right, we’d be right back to where we are.

So index it to inflation. That will fix that…

Oh wait, a loaf of bread will cost 16 trillion dollars if we do that, and the paper money we have now that is worthless will be super worthless.

So, fuck those other people that now have the opportunity to turn the wages they do have into tehir own freedom. Fuck them. Merica needs it’s low skilled labor back because we are too lazy to inovate…

[quote]countingbeans wrote:

[quote]groo wrote:

Eh cause I would like a living wage law enacted.[/quote]

Of course there would be no unintended consequences to something like that, none at all.

Oh wait, that’s right, we’d be right back to where we are.

So index it to inflation. That will fix that…

Oh wait, a loaf of bread will cost 16 trillion dollars if we do that, and the paper money we have now that is worthless will be super worthless.

So, fuck those other people that now have the opportunity to turn the wages they do have into tehir own freedom. Fuck them. Merica needs it’s low skilled labor back because we are too lazy to inovate… [/quote]

Yes I think we should look out for America first. And part of that is ensuring there is work for everyone at least ahead of someone in some other country.

We could start it out simple and simply refuse to do business with any company that uses child slave or prison labor…and of course ban prison labor here.
Just that would change the steel market. Lots of the pig iron we get and use say is from slave labor.

[quote]groo wrote:

Yes I think we should look out for America first. [/quote]

Nationalism has sent countries into a tail spin through history. Not saying certian levels are bad, but we should be careful.

And seeing as globalization has made the world, over all, a better place, I don’t think it is that much of an issue.

This certianly isn’t the government’s task. Not by a long shot.

This is your’s and my job. I do my part about 2,300 hours a year on average.

If citizens get together and do this, fine. I don’t want the government telling me where I have to spend my money. Thsi includes blocking me from buying from a perfectly otherwise legal company.

I’d have a Cuban in my mouth right now if our government weren’t dolts.

[quote]Just that would change the steel market. Lots of the pig iron we get and use say is from slave labor.
[/quote]

Maybe the whole is better off with pig iron made else where.

[quote]countingbeans wrote:

[quote]groo wrote:

Yes I think we should look out for America first. [/quote]

Nationalism has sent countries into a tail spin through history. Not saying certian levels are bad, but we should be careful.

And seeing as globalization has made the world, over all, a better place, I don’t think it is that much of an issue.

This certianly isn’t the government’s task. Not by a long shot.

This is your’s and my job. I do my part about 2,300 hours a year on average.

If citizens get together and do this, fine. I don’t want the government telling me where I have to spend my money. Thsi includes blocking me from buying from a perfectly otherwise legal company.

I’d have a Cuban in my mouth right now if our government weren’t dolts.

[quote]Just that would change the steel market. Lots of the pig iron we get and use say is from slave labor.
[/quote]

Maybe the whole is better off with pig iron made else where. [/quote]

Some of what you say I’d be willing to move on but I think that it should be out and out illegal to do business with companies that use slave, child or prison labor. Now I don’t see this coming to pass but if I were writing the national platform that would be my unelectable part of it.