General Question

Caravanfan's avatar

How high do you think a government mandated minimum wage should go?

Asked by Caravanfan (13722points) January 24th, 2019

Here is an article in the New York Times arguing that it should go to $33/hr in New York.
https://www.nytimes.com/2019/01/04/nyregion/the-15-dollar-minimum-wage-is-not-enough.html

Here is an article in Reason that is a rebuttal.
https://reason.com/archives/2019/01/24/be-careful-what-you-wish-for-on-the-mini

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20 Answers

RedDeerGuy1's avatar

It should be indexed by inflation. Every year.

Caravanfan's avatar

@RedDeerGuy1 And what if it’s shown that a minimum wage increase actually makes inflation worse? (It has not necessarily been, but what if it did?)

RedDeerGuy1's avatar

@Caravanfan Then don’t do it.

gorillapaws's avatar

Federal minimum wage should result in full-time employees being able to afford food, shelter, transportation, healthcare, and other basics without government assistance. I’m not an economist so I’m not sure where that line is, but I’ve heard $15/hour being mentioned so I’m assuming that other, smarter people have worked these things out and come to that number. It at least sounds like it’s in the ballpark.

It should absolutely be indexed to inflation. Even if it increases inflation marginally, it’s certainly not to the degree where it would generate a feedback loop that would trigger hyperinflation.

ARE_you_kidding_me's avatar

If we are going to make it more than “kid jobs” like fast food or paper delivery and mandate that they are to sustain a person then it needs to pay the basic necessities for a single person: food, shelter, clothing, healthcare etc… We need to be careful how we define full and part-time plus a bunch of other caveats. Where I live you can subsist on it now if you are resourceful and considering you are providing for only yourself or are not under a heavy debt load. It would be a very basic life though. $15 would be plenty. I survived quite well on $14 when I was 21 and completely independent. I was able to save too… It’ll be a little harder now but not too much. The cost of living for an area needs to be realistcally assesed to establish what a minimum wage baseline should be. It would be different in most places. Not an easy problem. I don’t believe some jobs need to pay a “living wage” so I’d support having both minimum and living wages. It would be complicated.

stanleybmanly's avatar

Better than the never ending struggle to up the minimum wage, why avoid addressing the reasons why such large numbers of people cannot earn enough to live regardless of whatever minimum agreed. One thing should be perfectly obvious if the rewards of labor are to continue to be increasingly directed to the top. And it is that the swindle cannot continue, let alone increase minus compensating governmental subsidies which are inevitably degrading and like the minimum wage, usually inadequate to sustain a reasonable existence. And this process cannot avoid the massive accumulation of debt as more of us who ordinarily cannot avoid paying taxes fall below poverty levels requiring taxation. The big practical joke of course is that the very class of folks responsible for the impoverishment driving most of us toward the dole (thus depriving the coffers of tax revenues)—the single group prospering from the scheme and capable of shouldering responsibility is exactly the cohort whose existence is predicated on tax evasion. Is ours a future where the government must feed and house everyone, while such obscenities as the current necessity for billionaires to receive social security checks after a lifetime reaping the benefits of corporate welfare?

JLeslie's avatar

At the federal level I’ve been saying $12 the last few years, but I might be changing my mind and going to $10 now. I’m conflicted.

Each city or state can put a higher minimum wage if it seems necessary. Moreover, our states give us the ability to see how different ideas actually work. If a state or city puts in a higher minimum and it works well, then other states, or even the federal government, can inact the same policies. This is one of the benefits of our system, which give states some autonomy, and they can be like test markets.

I don’t think the minimum has to be a living wage, but I think it needs to feel fair, and working for $8 doesn’t feel fair to me, not for any job. I was having a conversation about minimum wage with my Mexican MIL not too long ago, and I really believe one of the things that has differentiated us from the third world is a minimum wage. She’ll talk about the workers there don’t need more, because where the workers live everything costs less. She almost talks about it like they don’t know any better. It makes me very uncomfortable to hear people talked about in that way.

Some things to consider: where I live they pay very low wages for a lot of jobs. Some are $8 or $9 and change. These jobs include manning a gated entry where cars drive through, working at the front desk at recreation centers, and being greeters at a sales office and information center.

Most jobs here are occupied by seniors who are retired or semi retired and have other income. Some younger adults do the work too, often they are part time workers, mostly moms, who want to get their child into the charter school here. If they work minimum 20 hours in the city limits, their child can go to the school here, and it’s the best in the area. Significantly better, because this region of FL is a low wage area, which affects the quality of the schools.

Sometimes I wonder if it’s fair how people are paid in my city. The low wages combined with tons of volunteerism (I volunteer teaching Zumba) our maintenance fees to live in the community are relatively low. This is especially great for people on low fixed incomes who don’t want to work, or who can’t work.

The one thing I like about a slightly higher minimum wage is employers who want to pay more (I wanted to when I was a business owner) can more easily assuming the market can bear a higher cost of services and goods. My market could easily have paid another $5—$10 for a lot of services, but I had trouble raising my prices more, because of competition. If the other owners had to also pay the minimum wage of $12, then we all would raise our prices a little. I compare it to dentists being forced to wear gloves when the whole HIV thing happened in the 80’s. Just make it a standard practice so everyone has to do it, and the patients won’t wonder why their dentist suddenly started wearing gloves. Level the field and protect both the dentist and the patient.

gorillapaws's avatar

@JLeslie Don’t forget the stimulus effect on the economy. People earning minimum wage as a group spend nearly everything they make. That means more people buying products and services a higher minimum wage increases the velocity of money. Billionaires generally hoard their wealth, often in offshore accounts or investments that actually decrease the value of the dollar. That increase in demand for goods and services will drive a big increase in hiring.

Jaxk's avatar

Just a couple of comments that I think will offset the higher wages. Fewer workers will decrease the effect on the economy of higher wages. Also the advantages of automation become more intense, again reducing the workforce. And of course more production per worker will be needed.
Another side effect of much higher wages will be larger and fewer corporations. I know many of you dislike the large corporations but they do have the ability to operate on smaller margins. Small business will feel the pinch faster and harder than a large corporation. The result will be that the small guys will disappear and the large mega corporations will absorb them. Of course the small businesses will see less profit so that when they do sell out to the large corporations they will be much less valuable robbing many small business owners of their retirement. The higher wages have to come from somewhere and most of it will be from the small businesses. Retirees on fixed income will quickly become the poverty class.
Feel good legislation seldom works and the law of unintended consequences creates more trouble than it solves.

JLeslie's avatar

@gorillapaws I’m right with you on that point. There are so many things at once to consider with wages.

@Jaxk Do you agree that socialized medicine would make it easier for people to become small business owners? Let’s say on the premise that socialized medicine was actually run well. Maybe that would take away the need for paying into workman’s comp at such a high rate, and people wouldn’t lose health insurance by leaving a corporate job.

I’m all for automation. I don’t mean self check (I’m not so fond of that) but I do mean automating production lines, harvesting, etc. I do think we are heading for a time of not enough jobs, that’s why I think the government should change the work week to 36 hours eventually (hopefully for many that means a 4 day work week) and socialized medicine. If healthcare is socialized people can retire earlier and free up jobs. I know a lot of people who work until they hit Medicare age.

Jaxk's avatar

@JLeslie – It’s not an easy question but you have to understand where the money will come from. Assuming socialized medicine is well run is a giant step that I don’t see happening. Government is not an efficient beast and once you’ve loosed that beast you can’t get it back. We’ve already got deficits in economic collapse range and the rich won’t cover the cost. Workman’s comp won’t go away it will skyrocket.
Production, harvesting and the like are already automated for any big business but think about things like car vending machines. You can actually by a car now from a vending machine and this is only the tip of the iceberg. Customer service is quickly becoming a thing of the past.Manufacturing is where the jobs are more likely to continue and with wages, and taxes going up dramatically Manufacturing jobs have got to move to a more business friendly environment. We’re left with service jobs that are being automated away a healthcare industry that is gobbling up our economy and a future ripe for economic collapse. Hopefully I’ll be dead before that happens.

Caravanfan's avatar

@JLeslie “Do you agree that socialized medicine would make it easier for people to become small business owners? ”

Absolutely. It’s one of the reasons I am all for it.

JLeslie's avatar

@Caravanfan Thanks, I’m glad you put your opinion in on the question of mine.

@Jaxk I actually think customer service still helps differentiate businesses, and I think service jobs will continue to be a place for employment, until maybe Rosie the robot is actually invented and put into use.

Buying a car from a vending machine has come to be because the sales people are usually horrible! They are not serving us, they are trying to work us over. Good service at a restaurant is still appreciated. I think a lot of American households would do better with help in the house. The nail Salon near me is so busy it’s incredible, and they charge a lot of money (too much in my opinion) for their services. The company I owned, golf cart repair, you need a mechanic. Same goes for jobs like plumbing and electrician. My bet is the country actually needs more of them.

I understand your point about big business being able to handle smaller margins, but they also often are paying very low wages. In retail, they push smaller companies out. Look at grocery, they use loss leaders (if it’s legal in your state) and heavy advertising, and if it’s larger stores a wider breadth of Merchandise for the stop the customer is making. If they are making millions in profit they can pay more. Part of how the rich get richer is owning stock in companies, that’s part of the profit monster. Pushing fir bigger and bigger profit, and our government often is feeding the monster (we might agree on that point) with subsidies for things like healthcare and agriculture, and social programs for the underpaid emoloyees.

When I started with Bloomingdale’s most sales people earned more money than they do now. Then they were forced to change with Federated putting pressure to make more profit. Even when we were profitable, it wasn’t enough.

The problem is fixing it is tricky. The way I see it, only raising wages doesn’t completely fix it. A multiplicity of changes need to occur at once. Maybe I’m wrong? Maybe raising wages will set a snowball rolling in the right direction. Maybe it will go in the wrong direction. I’m really not sure.

Jaxk's avatar

@JLeslie – Let me give you an example of why I don’t believe more government is the solution. Of course I’m in California so the problem is amplified. I generate hazardous waste at my gas station. I use a privately owned hazardous wate disposal company to remove it. They are licensed by the state to do this. Generally it costs me a few hundred dollars a year to do this. safe and reasonable. The hazardous waste I generate is water used in government mandated testing of the underground storage tanks. I pay four different agencies license and fees based on the hazardous waste I generate. Those fees are 10 times the cost of the hazardous waste disposal. So basically the government mandated the creation of the hazardous waste (OK) then they expect me to dispose of it (OK), then they tax multiple times the the cost of all this for agencies that do nothing in the process. It seems that forcing me to create hazardous waste is a bad idea but OK maybe that is the best way to test the tanks. Then I pay to dispose of it, OK I’ll except that charge. But then charging thousands of dollars in fees for an operation that does nothing in the process is pure and simple waste. That’s what government does, waste money. Now you advocate we turn nationalize the entire Healthcare industry. I see nothing good coming from that. We have thousands of legislators both state and federal, that do nothing but think of ways to spend money. I’m fed up.

JLeslie's avatar

@Jaxk I agree that sounds like a lot of wasteful expenses for your business paying those government fees. But, I also think paying BCBS a huge profit is wasteful. I see the two things as practically the same.

Jaxk's avatar

What is BCBS

JLeslie's avatar

Blue Cross Blue Shield. They get a ridiculous amount of money from the government for the market place insurance and their profit last year was huge.

Jaxk's avatar

I suppose it depends on where you look. Since the states regulate health insurance each state has a separate company. Most of them lost money in 2016 and any profits from 2017 only help to get them even.Some of these companies are still losing money on the ACA involvement but some have turned a profit. However you look at it the profit margins are very slim (in the 2% range). I know most here don’t want to see any profit but the alternative is no insurance. Unless of course, you get to nationalize the health care industry and you already know how I feel about that so I won’t elaborate.

JLeslie's avatar

@Jaxk I take objection to the insurers looking at their ACA group as separate from other groups in their system. I understand why businesses usually analyze their business in this way to maximize profit, but it gives the false idea that the insurer is struggling overall, when in actuality they were very profitable, just not on that particular item. In the last year, most insurers showed a profit for the ACA offerings. They have greatly increased premiums, I know mine went up. Also, I don’t completely trust all the numbers, I feel there is probably some manipulation going on.

I’m sure there are some items in your business that you just break even on, or a very small
Profit, but it’s part of your offerings because customers want it need it, and it still pays all the salaries.

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