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Impending Minimum Wage hike causing restaurants to close

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  • #31
    Originally posted by Mountain Man View Post
    Yes, because employers saying that they will not be able to remain profitable if the minimum wage is increased is "imaginary evidence".
    Yes.

    For starters you are imagining that they said that. On page 1 of this thread Carrikature explained that they actually said they expected they would raise prices.

    More importantly, the common mistake that people often make when thinking about minimum wage increases is that they only consider the fact that some employers will have to pay staff more. But the equally important effect is that those staff then have a higher income and will spend it, meaning businesses in the area will have more income. This will result in local business making greater profits and/or needing to employ additional staff to meet the higher level of demand for goods and services.

    It is very difficult to predict in advance exactly how these two effects balance out since it depends on where the people choose to spend their extra money and to what extent the various businesses in the area can afford to pay employees more and/or need to employ more staff to service the increased demand. Existing empirical studies show that these two effects tend to balance each other out, giving a net result of very little change in the overall employment numbers.

    As your link said:
    "More than 600 economists, including seven Nobel Prize laureates, recently affirmed the growing consensus that low-wage workers benefit from modest increases in the minimum wage without negative consequences for the low-wage job market"


    Poorer people, unlike richer people, spend all or nearly all of their income from week to week. If the income of poor people is increased, then immediately more money is spent by them in purchasing goods and services. (And poorer people, far more than richer people, are more likely to spend their money purchasing from local businesses) This has a multiplier effect throughout the community, as the businesses that are selling more goods then in turn need to employ more people to sell them, who in turn then have a job with more money to spend etc. Various empirical studies have suggested the multiplier effect is around 4x, so every additional $1 you give to a poor person there will be $4 total economic growth.

    The most effective way to stimulate any economy is therefore to give more money to poor people (regardless of whether it is by entitlement increases, minimum wage increases, or union negotiations for higher pay). Conversely, too much wealth inequality hurts the economy, because the richer people simply store the money away in savings and investments (often offshore) and it goes out of circulation, while the poorer people are unable to buy the amount of goods and services they would have otherwise purchased, and due to less demand for products the local businesses will have less income and need fewer staff. The OECD recently published an analysis looking at how increasing income inequality is harming economic growth. They note, "In particular, what matters most is the gap between low income households and the rest of the population."

    Comment


    • #32
      Originally posted by Mountain Man View Post
      Yes, because employers saying that they will not be able to remain profitable if the minimum wage is increased is "imaginary evidence".

      Even the Conressional Budget Office says that raising the minimum leads to job loss.

      Source: USA Today

      CBO examined the budget impacts of raising the minimum wage to $9 and $10.10. The report concluded that a $9 increase would lift 300,000 workers above the poverty line, but cost 100,000 new jobs as employers are expected to reduce workforces to make up for higher wages. A $10.10 increase would lift 900,000 workers above the poverty line, but cost 500,000 jobs.

      http://www.usatoday.com/story/news/p...-jobs/5582779/

      © Copyright Original Source


      Nope ... what the CBO said was that there was a great deal of uncertainty regarding the employment impact of increasing the minimum wage, with estimates ranging anywhere from 1,000,000 jobs reduced to virtually zero jobs reduced with a $10.10 minimum wage. The 500,000 number is just taking the middle number of two unlikely extremes.

      And, again, it's totally reasonable to expect an increase in labor costs to result in some reduction in employment. The question is whether that reduction is 1) large or small, 2) temporary or permanent, and 3) offset by the positive aspects of increasing the minimum wage. Economists have largely agreed that modest minimum wage hikes would have net positive effects.

      And it bears reminding folks that the federal minimum wage at the end of the 1960s was over $10/hour if adjusted for inflation. It's not like this is uncharted water.

      —Sam
      "I wonder about the trees. / Why do we wish to bear / Forever the noise of these / More than another noise / So close to our dwelling place?" — Robert Frost, "The Sound of Trees"

      Comment


      • #33
        Originally posted by Starlight View Post
        More importantly, the common mistake that people often make when thinking about minimum wage increases is that they only consider the fact that some employers will have to pay staff more. But the equally important effect is that those staff then have a higher income and will spend it, meaning businesses in the area will have more income. This will result in local business making greater profits and/or needing to employ additional staff to meet the higher level of demand for goods and services.
        And from whence does this new magic stream of money flow? If he raises his prices, his customers will have LESS money to spend in the local businesses, and so will the proprietor himself. You are simply forcing the proprietor to give up more of his money to allow others to spend it.
        "Neighbor, how long has it been since you’ve had a big, thick, steaming bowl of Wolf Brand Chili?”

        Comment


        • #34
          Originally posted by Cow Poke View Post
          And from whence does this new magic stream of money flow? If he raises his prices, his customers will have LESS money to spend in the local businesses, and so will the proprietor himself. You are simply forcing the proprietor to give up more of his money to allow others to spend it.
          Trying to explain basic economics to Starlight or Sam is a waste of time. You're better off trying to explain it to a brick, a block of concrete, or almost anything or anybody else.
          "The man from the yacht thought he was the first to find England; I thought I was the first to find Europe. I did try to found a heresy of my own; and when I had put the last touches to it, I discovered that it was orthodoxy."
          GK Chesterton; Orthodoxy

          Comment


          • #35
            Originally posted by Starlight View Post
            The most effective way to stimulate any economy is therefore to give more money to poor people (regardless of whether it is by entitlement increases, minimum wage increases, or union negotiations for higher pay). Conversely, too much wealth inequality hurts the economy, because the richer people simply store the money away in savings and investments (often offshore) and it goes out of circulation, while the poorer people are unable to buy the amount of goods and services they would have otherwise purchased, and due to less demand for products the local businesses will have less income and need fewer staff. The OECD recently published an analysis looking at how increasing income inequality is harming economic growth. They note, "In particular, what matters most is the gap between low income households and the rest of the population."
            Boy have you been drinking the socialist Kool-Aid.

            If any of this were even remotely true then our economy should be roariing along like Reagan was back in office when you consider that Obama's policies have led to record numbers of people receiving government handouts.
            Some may call me foolish, and some may call me odd
            But I'd rather be a fool in the eyes of man
            Than a fool in the eyes of God


            From "Fools Gold" by Petra

            Comment


            • #36
              Originally posted by Sam View Post
              Nope ... what the CBO said was that there was a great deal of uncertainty regarding the employment impact of increasing the minimum wage, with estimates ranging anywhere from 1,000,000 jobs reduced to virtually zero jobs reduced with a $10.10 minimum wage. The 500,000 number is just taking the middle number of two unlikely extremes.

              And, again, it's totally reasonable to expect an increase in labor costs to result in some reduction in employment. The question is whether that reduction is 1) large or small, 2) temporary or permanent, and 3) offset by the positive aspects of increasing the minimum wage. Economists have largely agreed that modest minimum wage hikes would have net positive effects.

              And it bears reminding folks that the federal minimum wage at the end of the 1960s was over $10/hour if adjusted for inflation. It's not like this is uncharted water.
              "Two-likely extremes"... so what you're saying is that it's likely that as many as 500,000 people will lose their jobs if the minimum wage is increased. In other words, you agree with the basic point I was making even as you go through the motions of disagreeing (force of habit, I guess. ) But the fact remains that minimum wage increases have historically had a negative impact on the labor market.

              Source: Heritage

              Supporters of the minimum wage intend it to lift low-income families out of poverty. Unfortunately, despite these good intentions, the minimum wage has proved ineffective at doing so. Indeed, it often holds back many of the workers its proponents want to help. Higher minimum wages both reduce overall employment and encourage relatively affluent workers to enter the labor force. Minimum wage increases often lead to employers replacing disadvantaged adults who need a job with suburban teenagers who do not.

              This can have long-term consequences. Minimum wage positions are typically learning wage positions—they enable workers to gain the skills necessary to become more productive on the job. As workers become more productive they command higher pay and move up their career ladder. Two-thirds of minimum wage workers earn a raise within a year. Raising the minimum wage makes such entry-level positions less available, in effect sawing off the bottom rung of many workers’ career ladders. This hurts these workers’ career prospects.

              Even if minimum wage workers do not lose their job, the overlapping and uncoordinated design of U.S. welfare programs prevents those in need from benefitting from higher wages. As their income rises they lose federal tax credits and assistance. These benefit losses offset most of the wage increase. A single mother with one child faces an effective marginal tax rate of 91 percent when her pay rises from $7.25 to $10.10 an hour. Studies also find higher minimum wages do not reduce poverty rates. Despite the best of intentions, the minimum wage has proved an ineffective—and often counterproductive—policy in the war on poverty.

              Congress could do more to help low-income families by restructuring and coordinating welfare programs and their associated phase-out rates. No one in America—and especially not low-income workers—should face tax rates in excess of 50 percent.

              http://www.heritage.org/research/tes...on-the-economy

              © Copyright Original Source


              The study also notes, interestingly, that "2.9 percent of all workers in the United States" would benefit from a minimum wage increase and that while "some minimum-wage workers do struggle with poverty, they are not representative of the typical worker in minimum-wage jobs. The data simply does not support the stereotype of minimum-wage workers living on the edge of destitution. [...] The notion that workers are trapped earning $7.25 an hour for much of their working lives is mistaken and ignores the primary value of minimum-wage jobs. Their importance lies not so much in the low wages they pay in the present, but in making workers more productive so they can command higher pay in the future." Finally, "Two-thirds of the studies in this 'new minimum wage research' utilizing state variation in minimum wages came to the same conclusion that previous economists had: higher minimum wages reduce the employment of less-skilled workers. Among the most methodologically rigorous studies, 85 percent came to this conclusion."

              In summary, raising the minimum wage would end up hurting the very people that it is supposed to help.
              Some may call me foolish, and some may call me odd
              But I'd rather be a fool in the eyes of man
              Than a fool in the eyes of God


              From "Fools Gold" by Petra

              Comment


              • #37
                Here is a little something from the man that has had more minimum wage jobs than all of us combined:

                Source: Mike Rowe


                Hi Mike,

                The federal minimum wage is $7.25 and hour. A lot of people think it should be raised to $10.10. Seattle now pays $15 an hour, and the The Freedom Socialist Party is demanding a $20 living wage for every working person. What do you think about the minimum wage? How much do you think a Big Mac will cost if McDonald’s had to pay all their employees $20 an hour?

                Darrell Paul



                Hi Darrell

                Back in 1979, I was working as an usher for United Artists at a multiplex in Baltimore. The minimum wage was $2.90, and I earned every penny.

                When I wasn’t tearing tickets in half and stopping kids from theater hopping, I was cleaning out the bathrooms, emptying the trash, and scrapping dubious substances off the theater floor with a putty knife. I wore a silly outfit and smiled unnaturally, usually for the entirety of my shift. I worked 18 hours my first week, mostly after school, and earned $62.20. Before taxes. But I was also learning the importance of “soft skills.” I learned to show up on time and tuck my shirt in. I embraced the many virtues of proper hygiene. Most of all, I learned how to take Edited by a Moderator from the public, and suck up to my boss.

                After three months, I got a raise, and wound up behind the concession stand. Once it was determined I wasn’t a thief, I was promoted to cashier. Three months later, I got another raise. Eventually, they taught me how to operate a projector, which was the job I wanted in the first place.

                The films would arrive from Hollywood in giant boxes, thin and square, like the top of a card table, but heavy. I’d open each one with care, and place each spool on a separate platter. Then, I’d thread them into the giant projector, looping the leader through 22 separate gates, careful to touch only the sides. Raging Bull, Airplane, The Shining, Caddyshack, The Elephant Man - I saw them all from the shadowy comfort of the projection booth, and collected $10 an hour for my trouble. Eventually, I was offered an assistant manager position, which I declined. I wasn’t management material then, anymore than I am now. But I had a plan. I was going to be in the movies. Or, God forbid, on television.

                I thought about all this last month when I saw “Boyhood” at a theater in San Francisco. I bought the tickets from a machine that took my credit card and spit out a piece of paper with a bar code on it. I walked inside, and fed the paper into another machine, which beeped twice, welcomed me in a mechanical voice, and lowered a steel bar that let me into the lobby. No usher, no cashier. I found the concession stand and bought a bushel of popcorn from another machine, and a gallon of Diet Coke that I poured myself. On the way out, I saw an actual employee, who turned out to be the manager. I asked him how much a projectionist was making these days, and he just laughed.
                “There’s no such position,” he said. I just put the film in the slot myself and press a button. Easy breezy.”

                To answer your question Darrell, I’m worried. From the business owners I’ve talked to, it seems clear that companies are responding to rising labor costs by embracing automation faster than ever. That’s eliminating thousands of low-paying, unskilled, entry level positions. What will that mean for those people trying to get started in the workforce? My job as an usher was the first rung on a long ladder of work that lead me to where I am today. But what if that rung wasn't there? If the minimum wage in 1979 had been suddenly raised from $2.90 to $10 an hour, thousands of people would have applied for the same job. What chance would I have had, being seventeen years old with pimples and a big adams apple?

                One night, thirty-six years ago, during the midnight showing of The Rocky Horror Picture Show, I sat in the projection booth and read a short story by Ray Bradbury called “A Sound of Thunder.” It was about a guy who traveled back in time to look at dinosaurs, but against strict orders, ventured off the observation platform and accidentally stepped on a butterfly. When he returned to the present, everything in the world had changed. “The Butterfly Effect” is now an expression that describes a single event that leads to a series of unanticipated outcomes, resulting in a profoundly unintended consequence. (Ironically, it's also a movie with Ashton Kutcher, which I had to pay to see 30 years later.)

                Anyway, I’m not an economist or a sociologist, but I’m pretty sure a $20 minimum wage would affect a lot more than the cost of a Big Mac. Beyond the elimination of many entry-level jobs, consider the effect on the skills gap. According to the BLS, they’re about three million available positions that companies are trying to fill right now. Very few of those jobs require a four-year degree, but nearly all require specific training. And all pay more than the current minimum wage. If we want a skilled workforce, (and believe me, we do,) should we really be demanding $20 an hour for unskilled labor?

                Last year, I narrated a commercial about US manufacturing, paid for by Walmart. It started a crapstorm, and cost me many thousands virtual friends. Among the aggrieved, was a labor organization called Jobs With Justice. They wanted me to know just how unfairly Walmart was treating it’s employees. So they had their members send my foundation over 8,000 form letters, asking me to meet with unhappy Walmart workers, and join them in their fight against “bad jobs.”

                While I’m sympathetic to employees who want to be paid fairly, I prefer to help on an individual basis. I’m also skeptical that a modest pay increase will make an unskilled worker less reliant upon an employer whom they affirmatively resent. I explained this to Jobs With Justice in an open letter, and invited anyone who felt mistreated to explore the many training opportunities and scholarships available through mikeroweWORKS. I further explained that I couldn’t couldn’t join them in their fight against “bad jobs,” because frankly, I don’t believe there is such a thing. My exact words were, “Some jobs pay better, some jobs smell better, and some jobs have no business being treated like careers. But work is never the enemy, regardless of the wage. Because somewhere between the job and the paycheck, there’s still a thing called opportunity, and that’s what people need to pursue.”

                People are always surprised to learn that many of the subjects on Dirty Jobs were millionaires - entrepreneurs who crawled through a river of crap, prospered, and created jobs for others along the way. Men and women who started with nothing and built a going concern out of the dirt. I was talking last week with my old friend Richard, who owns a small but prosperous construction company in California. Richard still hangs drywall and sheetrock with his aging crew because he can’t find enough young people who want to learn the construction trades. Today, he’ll pay $40 an hour for a reliable welder, but more often than not, he can’t find one. Whenever I talk to Richard, and consider the number of millennials within 50 square miles of his office stocking shelves or slinging hash for the minimum wage, I can only shake my head.

                Point is Darrell, if you fix the wage of a worker, or freeze the price of a thing, you’re probably gonna step on a few butterflies. Doesn’t matter how well-intended the policy - the true cost a $20 minimum wage has less to do with the price of a Big Mac, and more to do with a sound of thunder. Frankly, it scares the hell out of me.

                Mike

                PS I looked into the Freedom Socialist Party and their demand for a universal, $20 an hour living wage. Interesting. You're right - they're serious. But not long after they announced their position, they made the interesting decision to advertise for a web designer....at $13 an hour. Make of that what you will...


                Source

                © Copyright Original Source


                And just for a little perspective. As a home healthcare worker, I work for the state yet I do not make minimum wage.
                Last edited by Jedidiah; 03-15-2015, 03:46 PM.
                "Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience." ― C.S. Lewis, God in the Dock: Essays on Theology (Making of Modern Theology)

                Comment


                • #38
                  Originally posted by Cow Poke View Post
                  And from whence does this new magic stream of money flow? If he raises his prices, his customers will have LESS money to spend in the local businesses, and so will the proprietor himself. You are simply forcing the proprietor to give up more of his money to allow others to spend it.
                  The general point is to distribute wealth downward from the very top tier (0.01% - 1%), where people tend not to spend wealth as effectively (at least in terms of economic growth), to the lower income brackets, where people tend to spend their money on immediate needs and tangible objects, supporting economic growth.

                  So, yes — hypothetically, it's forcing the proprietor (who has a large amount of wealth) to give up more of her money to allow others (who have a low amount of wealth) to spend it. They'll generally spend a high percentage of that money on things like food, clothes and services, whereas the proprietor would generally spend a much lower percentage of the same amount of money on those things. Hence the idea that sequestering more and more wealth into the top economic bracket actually hurts economic growth.

                  This obviously holds much truer for companies like Wal-Mart than it does for Sally's Diner.

                  —Sam
                  "I wonder about the trees. / Why do we wish to bear / Forever the noise of these / More than another noise / So close to our dwelling place?" — Robert Frost, "The Sound of Trees"

                  Comment


                  • #39
                    Originally posted by Mountain Man View Post
                    Boy have you been drinking the socialist Kool-Aid.

                    If any of this were even remotely true then our economy should be roariing along like Reagan was back in office when you consider that Obama's policies have led to record numbers of people receiving government handouts.
                    Do we need to see those private and public sector job growth comparisons between Reagan and Obama again?
                    "I wonder about the trees. / Why do we wish to bear / Forever the noise of these / More than another noise / So close to our dwelling place?" — Robert Frost, "The Sound of Trees"

                    Comment


                    • #40
                      Originally posted by Mountain Man View Post
                      "Two-likely extremes"... so what you're saying is that it's likely that as many as 500,000 people will lose their jobs if the minimum wage is increased. In other words, you agree with the basic point I was making even as you go through the motions of disagreeing (force of habit, I guess. ) But the fact remains that minimum wage increases have historically had a negative impact on the labor market.
                      No, I'm saying that the amount of uncertainty in estimating the number of job losses is so high, there's no "likely" scenario — you are again simply taking the middle number between two very unlikely estimates and saying "Well, it's not likely I'll die this morning and it's not likely I'll die tonight; therefore, it's likely I'll die this afternoon." Doesn't make a lick of sense.

                      As I posted earlier, it is no fact that minimum wage increases have historically had a negative impact on the labor market. This is not substantiated.
                      "I wonder about the trees. / Why do we wish to bear / Forever the noise of these / More than another noise / So close to our dwelling place?" — Robert Frost, "The Sound of Trees"

                      Comment


                      • #41
                        Originally posted by Sam View Post
                        Do we need to see those private and public sector job growth comparisons between Reagan and Obama again?
                        How about income inequality charts?

                        "As for my people, children are their oppressors, and women rule over them. O my people, they which lead thee cause thee to err, and destroy the way of thy paths." Isaiah 3:12

                        There is no such thing as innocence, only degrees of guilt.

                        Comment


                        • #42
                          Originally posted by Sam View Post
                          The general point is to distribute wealth downward from the very top tier (0.01% - 1%), where people tend not to spend wealth as effectively (at least in terms of economic growth), to the lower income brackets, where people tend to spend their money on immediate needs and tangible objects, supporting economic growth.

                          So, yes — hypothetically, it's forcing the proprietor (who has a large amount of wealth) to give up more of her money to allow others (who have a low amount of wealth) to spend it. They'll generally spend a high percentage of that money on things like food, clothes and services, whereas the proprietor would generally spend a much lower percentage of the same amount of money on those things. Hence the idea that sequestering more and more wealth into the top economic bracket actually hurts economic growth.

                          This obviously holds much truer for companies like Wal-Mart than it does for Sally's Diner.

                          —Sam
                          The problem with your argument Sam is pretty obvious, to anybody with a fully functional brain. For starters, there's a huge difference between Wal-Mart and that local diner's owners/ stock holders. Primarily, the Walton's have billions of dollars while your local business owners do not and as a result of that, they can afford changes in labor rates better than your local business owners can. Think about this for a second... if you can kneecap your completion and keep them from challenging your lead, is it worth spending a bit more money to accomplish this goal? Of course because remember, the nearly bankrupt companies of Sears, JC Penny, etc were once the rulers of the roost (Sears was the largest retail company, back in the 1970's and JC Penny was huge back in the day too) because upstarts uprooted them from their lead (IE Wal-Mart or Amazon). Naturally, when you come to realize that the biggest threat to your lead, is an upstart company rising up and taking your share of the market, reducing you to the level of Sears or JC Penny is at today; you might want to take steps to uproot your competition before they ever get the chance to uproot you. Thus, big business become partners of the government and tries to use the government to help them kneecap their competition. Big government is the best thing for Wal-Mart and those rich people, you so hate, because the government helps them to kneecap their competition and they give huge sums of money for their political campaigns. So the rich can end up getting richer, the politicians can keep their cushy government jobs, and the rest of the country gets screwed. You really want to help the poor and keep those rich fat cats from making too much money, free market competition is the best way to do this vs trying to use the government to achieve this. After all, stock prices of these rich fat cats keep souring, while the rest of us keep getting poorer.
                          "The man from the yacht thought he was the first to find England; I thought I was the first to find Europe. I did try to found a heresy of my own; and when I had put the last touches to it, I discovered that it was orthodoxy."
                          GK Chesterton; Orthodoxy

                          Comment


                          • #43
                            would you be willing to pay 20 more cents for a dollar menu item, so the minimum wage workers could get a $6.00 an hour increase (Go from $8.00 hr to $14.00 hr)

                            IOW , a simple 20% (thats 2 dimes for every dollar) increase , for a 75% wage increase for the laborers...

                            Average Fast Food Costs Percentages.jpg
                            SOURCE (I'm using a source that is critical of any wage increase, Heritage.org)

                            look, 100% of sales on this example chart is $821,256

                            $821,256 x 20% = $164,251

                            the payroll and taxes is $217,484

                            $217,484 x 75% = $163,113 (close to the 20% increase of price which was $164,251 two lines above)
                            To say that crony capitalism is not true/free market capitalism, is like saying a grand slam is not true baseball, or like saying scoring a touchdown is not true American football ...Stefan Mykhaylo D

                            Comment


                            • #44
                              Originally posted by Jesse View Post
                              Here is a little something from the man that has had more minimum wage jobs than all of us combined:

                              Source: Mike Rowe


                              Hi Mike,

                              The federal minimum wage is $7.25 and hour. A lot of people think it should be raised to $10.10. Seattle now pays $15 an hour, and the The Freedom Socialist Party is demanding a $20 living wage for every working person. What do you think about the minimum wage? How much do you think a Big Mac will cost if McDonald’s had to pay all their employees $20 an hour?

                              Darrell Paul



                              Hi Darrell

                              Back in 1979, I was working as an usher for United Artists at a multiplex in Baltimore. The minimum wage was $2.90, and I earned every penny.

                              When I wasn’t tearing tickets in half and stopping kids from theater hopping, I was cleaning out the bathrooms, emptying the trash, and scrapping dubious substances off the theater floor with a putty knife. I wore a silly outfit and smiled unnaturally, usually for the entirety of my shift. I worked 18 hours my first week, mostly after school, and earned $62.20. Before taxes. But I was also learning the importance of “soft skills.” I learned to show up on time and tuck my shirt in. I embraced the many virtues of proper hygiene. Most of all, I learned how to take Edited by a Moderator from the public, and suck up to my boss.

                              After three months, I got a raise, and wound up behind the concession stand. Once it was determined I wasn’t a thief, I was promoted to cashier. Three months later, I got another raise. Eventually, they taught me how to operate a projector, which was the job I wanted in the first place.

                              The films would arrive from Hollywood in giant boxes, thin and square, like the top of a card table, but heavy. I’d open each one with care, and place each spool on a separate platter. Then, I’d thread them into the giant projector, looping the leader through 22 separate gates, careful to touch only the sides. Raging Bull, Airplane, The Shining, Caddyshack, The Elephant Man - I saw them all from the shadowy comfort of the projection booth, and collected $10 an hour for my trouble. Eventually, I was offered an assistant manager position, which I declined. I wasn’t management material then, anymore than I am now. But I had a plan. I was going to be in the movies. Or, God forbid, on television.

                              I thought about all this last month when I saw “Boyhood” at a theater in San Francisco. I bought the tickets from a machine that took my credit card and spit out a piece of paper with a bar code on it. I walked inside, and fed the paper into another machine, which beeped twice, welcomed me in a mechanical voice, and lowered a steel bar that let me into the lobby. No usher, no cashier. I found the concession stand and bought a bushel of popcorn from another machine, and a gallon of Diet Coke that I poured myself. On the way out, I saw an actual employee, who turned out to be the manager. I asked him how much a projectionist was making these days, and he just laughed.
                              “There’s no such position,” he said. I just put the film in the slot myself and press a button. Easy breezy.”

                              To answer your question Darrell, I’m worried. From the business owners I’ve talked to, it seems clear that companies are responding to rising labor costs by embracing automation faster than ever. That’s eliminating thousands of low-paying, unskilled, entry level positions. What will that mean for those people trying to get started in the workforce? My job as an usher was the first rung on a long ladder of work that lead me to where I am today. But what if that rung wasn't there? If the minimum wage in 1979 had been suddenly raised from $2.90 to $10 an hour, thousands of people would have applied for the same job. What chance would I have had, being seventeen years old with pimples and a big adams apple?

                              One night, thirty-six years ago, during the midnight showing of The Rocky Horror Picture Show, I sat in the projection booth and read a short story by Ray Bradbury called “A Sound of Thunder.” It was about a guy who traveled back in time to look at dinosaurs, but against strict orders, ventured off the observation platform and accidentally stepped on a butterfly. When he returned to the present, everything in the world had changed. “The Butterfly Effect” is now an expression that describes a single event that leads to a series of unanticipated outcomes, resulting in a profoundly unintended consequence. (Ironically, it's also a movie with Ashton Kutcher, which I had to pay to see 30 years later.)

                              Anyway, I’m not an economist or a sociologist, but I’m pretty sure a $20 minimum wage would affect a lot more than the cost of a Big Mac. Beyond the elimination of many entry-level jobs, consider the effect on the skills gap. According to the BLS, they’re about three million available positions that companies are trying to fill right now. Very few of those jobs require a four-year degree, but nearly all require specific training. And all pay more than the current minimum wage. If we want a skilled workforce, (and believe me, we do,) should we really be demanding $20 an hour for unskilled labor?

                              Last year, I narrated a commercial about US manufacturing, paid for by Walmart. It started a crapstorm, and cost me many thousands virtual friends. Among the aggrieved, was a labor organization called Jobs With Justice. They wanted me to know just how unfairly Walmart was treating it’s employees. So they had their members send my foundation over 8,000 form letters, asking me to meet with unhappy Walmart workers, and join them in their fight against “bad jobs.”

                              While I’m sympathetic to employees who want to be paid fairly, I prefer to help on an individual basis. I’m also skeptical that a modest pay increase will make an unskilled worker less reliant upon an employer whom they affirmatively resent. I explained this to Jobs With Justice in an open letter, and invited anyone who felt mistreated to explore the many training opportunities and scholarships available through mikeroweWORKS. I further explained that I couldn’t couldn’t join them in their fight against “bad jobs,” because frankly, I don’t believe there is such a thing. My exact words were, “Some jobs pay better, some jobs smell better, and some jobs have no business being treated like careers. But work is never the enemy, regardless of the wage. Because somewhere between the job and the paycheck, there’s still a thing called opportunity, and that’s what people need to pursue.”

                              People are always surprised to learn that many of the subjects on Dirty Jobs were millionaires - entrepreneurs who crawled through a river of crap, prospered, and created jobs for others along the way. Men and women who started with nothing and built a going concern out of the dirt. I was talking last week with my old friend Richard, who owns a small but prosperous construction company in California. Richard still hangs drywall and sheetrock with his aging crew because he can’t find enough young people who want to learn the construction trades. Today, he’ll pay $40 an hour for a reliable welder, but more often than not, he can’t find one. Whenever I talk to Richard, and consider the number of millennials within 50 square miles of his office stocking shelves or slinging hash for the minimum wage, I can only shake my head.

                              Point is Darrell, if you fix the wage of a worker, or freeze the price of a thing, you’re probably gonna step on a few butterflies. Doesn’t matter how well-intended the policy - the true cost a $20 minimum wage has less to do with the price of a Big Mac, and more to do with a sound of thunder. Frankly, it scares the hell out of me.

                              Mike

                              PS I looked into the Freedom Socialist Party and their demand for a universal, $20 an hour living wage. Interesting. You're right - they're serious. But not long after they announced their position, they made the interesting decision to advertise for a web designer....at $13 an hour. Make of that what you will...


                              Source

                              © Copyright Original Source


                              And just for a little perspective. As a home healthcare worker, I work for the state yet I do not make minimum wage.

                              In 1979, $2.90/hour was the equivalent of $9.34/hour in 2015. An increase to $10/hour in 1979 would be the equivalent of a $32.19/hour minimum wage today.

                              The current federal minimum wage is $7.25/hour, about $1.10/hour less than what the author was making in 1979, when he was "earning every penny." A minimum wage of $10.10/hour would be only about $0.75/hour more than he was earning back then.

                              Puts it in perspective when you adjust for inflation.
                              Last edited by Jedidiah; 03-15-2015, 04:13 PM.
                              "I wonder about the trees. / Why do we wish to bear / Forever the noise of these / More than another noise / So close to our dwelling place?" — Robert Frost, "The Sound of Trees"

                              Comment


                              • #45
                                Originally posted by Darth Executor View Post
                                How about income inequality charts?



                                Thanks, those are useful charts which show the issue more clearly than other graphs I've seen on that subject.

                                Actually, the article you got those from has some other really clear and useful graphs on the subject (as well as some really unclear and useless ones)... Also useful to consider is:

                                Productivity is steadily increasing, but employees who are working harder than ever aren't seeing their fair share of it.

                                This is resulting in pretty serious wealth imbalances, which are much worse than what the average person assumes:


                                From what I've read / heard, the primary causes of this appear to be:
                                (1.) A series of Supreme Court decisions in the 70s that allowed more money into politics, paving the way for rich people to use financial leverage on politicians.

                                ...which resulted in:
                                (2) Reaganomics - Reagan's deliberate introduction in the early 80s of new economic policies designed to favor the rich - lower taxes for the rich etc. Allegedly wealth was going to 'trickle-down' to everybody else, however as the graphs make clear this simply hasn't happened as a matter of empirical fact. Reagan's changes of favoring the rich were a paradigm shift that all governments since have bought into to a greater or lesser extent. Federal income tax rates for the rich have halved since 1980:
                                US top tax rates.jpg
                                (from here)
                                The halving federal income tax rate for the rich is not even the full story, as the rich have been able to influence tax policy sufficiently to get a large number of loopholes written into laws, allowing the rich to pay accountants, lawyers and financial managers to claim back or avoid most of their taxes, and to hide their money in tax havens. This means the rich often pay a much lower effective tax rate than the average worker does.

                                ...and:
                                (3) The suppression of unions. Unions used to ensure that workers got regular wage increases, and essentially got their share of the increasing economic growth. However the systematic suppression of unions through court decisions and government policies has largely led to their demise. A study I saw recently estimated that 50% of the missing growth in wages for workers since 1980 can be attributed to the lack of unions.

                                The solution to all this is really, really, simple at a conceptual level: Higher taxes on the very-rich, lower taxes on everyone else, higher wages for all workers, and more benefits to the poor. ie more socialist, redistributive policies. (ie all policies that the Democrats in the US currently favor and the Republicans are currently dead against.)

                                The really strange thing in the US is that the rich people have brainwashed quite a large number of middle and lower income people into voting against their own interests and voting for the rich people to continue screwing them over. Thus, massive numbers of lower-income people vote Republican under the slogan of 'lower taxes' while having no clue that Republicans are focused on lower taxes only for the very wealthy and typically raise them for everyone else, whereas a Democrat government would actually result in lower taxes for these people themselves. While repeating the mantra “taxed enough already” these people vote for the party who wants to tax them more and hate on the party who wants to tax them less.

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