Seattle Council Passes $15.00 Minimum Wage Ordinance
46 replies, posted
[QUOTE=Silly Sil;44991629]
Minimum wages don't exist in a vacuum. You need a reason to employ people for jobs that give you more than minimum wage and it still has to be profitable so companies will increase prices.
[/QUOTE]
The problem is that too many jobs go as low as possible legally even if they don't always have to. There are plenty of jobs that could pay you more than 10/hr but won't and instead go to lowest possible aka minimum wage. If increasing minimum wage causes prices to go up it means too many companies are banking by squeezing their employees dry. So to continue squeezing they have to up the prices.
If companies pay more than minimum wage, they don't have to increase item prices.
Ugggg too many people moving to our city already. Everyone go back to California.
on a real note a lot of businesses will just switch headquarters to Tukwila/Renton/Kent. Amazon recently bought up an entire block of warehouses in kent.
[QUOTE=itisjuly;44991661]The problem is that too many jobs go as low as possible legally even if they don't always have to. There are plenty of jobs that could pay you more than 10/hr but won't and instead go to lowest possible aka minimum wage. If increasing minimum wage causes prices to go up it means too many companies are banking by squeezing their employees dry. So to continue squeezing they have to up the prices.
If companies pay more than minimum wage, they don't have to increase item prices.[/QUOTE]
Oh my god. Even if you pay more than minimum wage to engineers or whatever that you employ, once the minimum wage is raised you need to start paying them more too, increasing your costs so you either increase the price of your services or you simply lose all your employees over time.
People won't study for years and work a hard and demanding job when they can earn just a bit less for any job. You need an incentive to attract people to have a hard job or one that requires lots of education beforehand.
And companies pay as low as they can because there is more people than jobs. Because of high taxes and shit like minimal wage, which have reduced the number of jobs, as an employer you can offer shit jobs for shit pay and people will work anyway because there is no other job to take.
Unless you create a situation where companies have to compete with each other for employees, you will always be fucked and shit like this only makes it worse. Why do you think very-high-education jobs or high risk jobs have a much higher pay? Because there isn't enough employees meeting the conditions and so companies have to attract them with high salary.
[QUOTE=Mudbone;44991672]Ugggg too many people moving to our city already. Everyone go back to California.
on a real note a lot of businesses will just switch headquarters to Tukwila/Renton/Kent. Amazon recently bought up an entire block of warehouses in kent.[/QUOTE]
they can't escape it. seatac has their minimum wage set to $15
i work in kent, and we're at $18.80 for starting wage around the warehouse areas
[QUOTE=No_Excuses;44990899]Doesn't increasing minimum wage just cause the price of goods and services to rise, which in turn nullifies the increase?[/QUOTE]
Prices always increase, that's inflation (and it's a good thing). The point of increasing the minimum wage is to keep up with inflation.
[editline]4th June 2014[/editline]
[QUOTE=Silly Sil;44991763]Oh my god. Even if you pay more than minimum wage to engineers or whatever that you employ, once the minimum wage is raised you need to start paying them more too, increasing your costs so you either increase the price of your services or you simply lose all your employees over time.
People won't study for years and work a hard and demanding job when they can earn just a bit less for any job. You need an incentive to attract people to have a hard job or one that requires lots of education beforehand.
And companies pay as low as they can because there is more people than jobs. Because of high taxes and shit like minimal wage, which have reduced the number of jobs, as an employer you can offer shit jobs for shit pay and people will work anyway because there is no other job to take.
Unless you create a situation where companies have to compete with each other for employees, you will always be fucked and shit like this only makes it worse. Why do you think very-high-education jobs or high risk jobs have a much higher pay? Because there isn't enough employees meeting the conditions and so companies have to attract them with high salary.[/QUOTE]
So much doom and gloom. All the negative effects you mention are short term and in the long term the economy will re-calibrate itself.
I don't expect to see prices rise much at all, but I do expect to see increases in both minority and youth unemployment and many new startups choosing other cities to open up in.
[QUOTE=sgman91;44993140]I don't expect to see prices rise much at all, but I do expect to see increases in both minority and youth unemployment and many new startups choosing other cities to open up in.[/QUOTE]
The ordinance also includes a provision for a separate youth minimum wage, much like what we have here. Younger employees may be seen as a better option for both existing firms and new start ups.
When small organisations are impacted by 2022, the increase probably won't be as noticeable due to inflation anyways.
[QUOTE=Antdawg;44993304]The ordinance also includes a provision for a separate youth minimum wage, much like what we have here. Younger employees may be seen as a better option for both existing firms and new start ups.[/QUOTE]
Do you know what the increase is for youth and what age this lower wage applies to? I would expect a decrease in employment for the groups I mentioned under any increase. By increasing the minimum cost of employment you also increase the minimum risk of employment which causes employers to be less likely to take the necessary risk associated with generally less reliable and experienced groups.
[QUOTE]When small organisations are impacted by 2022, the increase probably won't be as noticeable due to inflation anyways.[/QUOTE]
When starting a business one will always look at future known costs. So I expect the delayed change to not really matter much to a startup. The question will still be: "Is the higher cost of employment worth being in Seattle?" I would expect some, not all, startups to answer that question with "no".
[QUOTE=sgman91;44993517]Do you know what the increase is for youth and what age this lower wage applies to? I would expect a decrease in employment for the groups I mentioned under any increase. By increasing the minimum cost of employment you also increase the minimum risk of employment which causes employers to be less likely to take the necessary risk associated with generally less reliable and experienced groups.[/quote]
In real terms I assume the cost of youth employees will remain the same as it is now, when the changes are fully implemented eight years from now. Youth employees (especially those who have never worked before) can be considered as opportunities for the firm anyways; they may not be as likely to bring bad habits they had from previous workplaces (if they ever worked before) to the new workplace. If they are trained from the ground up, their capabilities will be as effective as the training they undertake for the new job.
The only risk to the employer with youth staff is the employer itself and how well they train their staff. There's also the fact that many workplaces use different managerial practices; someone who worked in a workplace which utilised scientific management may be more of a liability than someone who's never worked before if both enter a workplace adopting a completely different management strategy. The need to destroy old habits from the experienced worker etc.
[Quote]When starting a business one will always look at future known costs. So I expect the delayed change to not really matter much to a startup. The question will still be: "Is the higher cost of employment worth being in Seattle?" I would expect some, not all, startups to answer that question with "no".[/QUOTE]
Most SMEs don't even last eight years. You also need to understand why businesses are established. It's not a case of 'oh I should totally make these trinkets and find a place to sell them!', it's more a case of 'hmmm people from Seattle seem to like those trinkets and not many businesses are selling them, maybe I should establish a business and profit off of that untapped potential!'. If there are opportunities, which I'm sure a city like Seattle has plenty of, there will be startups wanting to benefit from those opportunities. Tl;dr, demand needs to be satisfied by supply, but just because you provide supply doesn't mean that demand exists.
If you raise minimum wage, it will have more downsides than you guys seem to see. It's easy to look at a post and go "ohey, no evidence," but when you look at the situation logically, it's absolutely 100% inevitable that an increase in minimum wage will lead to lay offs. Why? Oh, well I'm glad you asked:
Large business are entirely sociopathic, and ought to be. They care about nothing but quotas and their bottom line. If their costs are something like $8.50/hr per employee, and they have 150 employees, they probably wouldn't be very willing to all of a sudden pay $10/hr for each of those employees (much less $15...). going from $8.50/hr to $10 means you now pay $1500/hr instead of $1275. At 30 hours a week (not abnormal for many lower wage employees) you go from spending $38,250/wk to spending $45,000. That's a difference of almost $7,000 per WEEK. The company then has a few options: they could increase prices, they could let people go, or they could say fuck it and pretend like they don't care that their margins just dropped by $7,000 per week, because doing the other things would hurt people.
This leads back to what I said earlier. Businesses are generally all sociopathic (or at least nearly all successful ones are). They don't care about hurting people's feelings or eating into the daily costs of the average man. They want to keep their margins and make money. This eliminates option 3, and that means they can do one of two things: raise prices, or cut workers. And yes, alternatively they could lower the quality of their good, or do a few other more specific thing, but short term, this will be what happens.
Also keep in mind that this will be hitting the lowest level of society. This will be directly hitting those that hire unskilled labor for factory work or manufacturing. This means the cost of manufacturing in the US goes up. This means that the cost of manufacturing outside of the US becomes more promising. This also means that good produced within the US immediately become more expensive to keep the same margins as before (because cost of manufacturing went up). Wholesalers also then have to pay their stockers, warehouse workers, and other employees more money. That means that their prices will likely go up as well. If the prices of wholesalers go up, the prices of retailers also have to go up, because like I said, the margins need to stay the same.
I agree that at some point the minimum wage must fluctuate based upon inflation. Right now, though, people are complaining about not being able to afford a $90/mo phone bill and not being able to afford a $500/mo car payment on minimum wage. That's not the point of minimum wage jobs...
All that increasing the minimum wage is going to do is make inflation occur more quickly. I don't understand how this isn't just the obvious conclusion. If cost goes up, something HAS to change to keep the same profit margins. And because businesses can't control people's minds to increase demand, they have to do something on their end to cut back on their expenses. Whether they increase their prices or lay people off is their choice, but there will be many businesses doing both if this comes to pass on a large scale. It's worth considering all of this before jumping on the "give me more money" bandwagon. And if you really want everyone in the US to have all the same nice cars and phones and houses and pools and whatever, try supporting communism more. That's pretty much what that is. Like it or not, our economy is structured to reward those who do well, and punish those who do poorly. That's how life works, that's how this country works. If people REALLY want more money, they can get it with effort. If they can't, well, guess they're out of luck. No reason to make everyone's money worth less in order to appease those who can't put forth enough effort to work a real job.
My only problem with minimum wage is that it's usually used as a bandage for greater problems. We need a Nomadic Employment Act, we need two years of trade school or college to be able to be paid through life-time taxes over upfront payments and loans, every state should have a bank of its own(eg. Bank of North Dakota), and we need a proper National Healthcare System.
[QUOTE=Antdawg;44992655]Prices always increase, that's inflation (and it's a good thing). The point of increasing the minimum wage is to keep up with inflation.[/QUOTE]
Hahaha you have no idea what you're talking about. What's the reason for inflation?
[QUOTE=Antdawg;44992655]So much doom and gloom. All the negative effects you mention are short term and in the long term the economy will re-calibrate itself.[/QUOTE]
Raising minimum wage sounds nice in short term but fucks shit up in long term. That's the point. Economy recalibrate itself to increased minimum wage by increasing salaries in all places and increasing prices in all places while reducing number of jobs available. It's not helping at all in long term.
[editline]4th June 2014[/editline]
[QUOTE=Antdawg;44993698]Most SMEs don't even last eight years. You also need to understand why businesses are established. It's not a case of 'oh I should totally make these trinkets and find a place to sell them!', it's more a case of 'hmmm people from Seattle seem to like those trinkets and not many businesses are selling them, maybe I should establish a business and profit off of that untapped potential!'. If there are opportunities, which I'm sure a city like Seattle has plenty of, there will be startups wanting to benefit from those opportunities. Tl;dr, demand needs to be satisfied by supply, but just because you provide supply doesn't mean that demand exists.[/QUOTE]
It's going to be "hmm people from seattle seem to like those trinkets and not many businesses are selling them, maybe I should establish a business and profit off of that untapped potential! And the prices seem high too maybe I could beat the competition with lower prices!" And then when that person checks the costs of business in seattle he goes "welp, it's not profitable to set the price any lower than it is now and even then the profits aren't worth the trouble, maybe I'll take my business elsewhere"
For people to sell stuff, there has to be a demand but it also has to be PROFITABLE to satisfy that demand.
[QUOTE=Maegord;44985790]$15 seems a bit dramatic for a moment, but when you consider the amount of economic activity and cost of living in Seattle, it's pretty reasonable.[/QUOTE]
Yeah, like minimum wage in Norway is like $22 but it's also two or three times as expensive to live there compared to a major US city
[QUOTE=Silly Sil;44996046]Hahaha you have no idea what you're talking about. What's the reason for inflation?[/quote]
There are several kinds of inflation, one is demand-pull which can be summarised as too much money being spent chasing too few goods. Then you have cost-push inflation which doesn't necessarily come from minimum wage increases alone, but from the bargaining of all wages and salaries over time (and usually follows demand-pull inflation). Before you accuse others of not having an idea of what they are talking about, you should perhaps take a course in introductory macroeconomics.
[Quote]Raising minimum wage sounds nice in short term but fucks shit up in long term. That's the point. Economy recalibrate itself to increased minimum wage by increasing salaries in all places and increasing prices in all places while reducing number of jobs available. It's not helping at all in long term.[/quote]
Australia must be a shithole then. Oh wait, we actually have a liveable minimum wage. I would also like to see you provide a source showing any correlation between higher minimum wage and unemployment.
[quote]It's going to be "hmm people from seattle seem to like those trinkets and not many businesses are selling them, maybe I should establish a business and profit off of that untapped potential! And the prices seem high too maybe I could beat the competition with lower prices!" And then when that person checks the costs of business in seattle he goes "welp, it's not profitable to set the price any lower than it is now and even then the profits aren't worth the trouble, maybe I'll take my business elsewhere"
For people to sell stuff, there has to be a demand but it also has to be PROFITABLE to satisfy that demand.[/QUOTE]
Well for one, you don't need to beat the competition with lower prices, you can do it with product differentiation which grants you a limited monopoly and more flexibility regarding pricing. Basic microeconomics. Two, if you're an entrepreneur and you believe Seattle wouldn't be profitable (so you choose not to establish there), that's only going to benefit established businesses who will have larger profit margins due to less competition. In fact, those economic profits will draw new competitors back in over the long term, so your point is null anyways.
[QUOTE=Antdawg;44996292]There are several kinds of inflation, one is demand-pull which can be summarised as too much money being spent chasing too few goods. Then you have cost-push inflation which doesn't necessarily come from minimum wage increases alone, but from the bargaining of all wages and salaries over time (and usually follows demand-pull inflation). [/QUOTE]
Both of those things will be increased by the increase of minimum wage. You are strongly boosting the inflation and then going "well it would raise anyway".
[QUOTE=Antdawg;44996292]Before you accuse others of not having an idea of what they are talking about, you should perhaps take a course in introductory macroeconomics.[/QUOTE]
Perhaps you should take a course in logic.
[QUOTE=Antdawg;44996292]Australia must be a shithole then. Oh wait, we actually have a liveable minimum wage. I would also like to see you provide a source showing any correlation between higher minimum wage and unemployment.[/QUOTE]
Uh you want me to show you correlation between higher costs for employers and higher product prices and lower number of jobs? Do you really need a study on this? Wow.
[QUOTE=Antdawg;44996292]Well for one, you don't need to beat the competition with lower prices, you can do it with product differentiation which grants you a limited monopoly and more flexibility regarding pricing. Basic microeconomics.[/QUOTE]
You know that any kind of monopoly increases the price of the product right? Basic microeconomics.
[QUOTE=Antdawg;44996292]Two, if you're an entrepreneur and you believe Seattle wouldn't be profitable (so you choose not to establish there), that's only going to benefit established businesses who will have larger profit margins due to less competition. In fact, those economic profits will draw new competitors back in over the long term, so your point is null anyways.[/QUOTE]
So increasing the costs for companies actually profits them? You make absolutely no sense.
The lack of competition leads to increasing the price of your product because you don't have to compete for clients. The less competitive a market is the more you can exploit your clients. Congrats you've just made everything more expensive and also companies are less eager to create workplaces in seattle. How did that help anyone?
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