Toledo Talk

Seattle $15 minimum wage

I look forward to entering my future McDonald's orders at an interactive kiosk. Rise of the robots!

http://www.detroitnews.com/article/20140603/POLITICS03/306030028/Seattle-raises-minimum-wage-15-will-others-follow-

created by MrGlass419 on Jun 03, 2014 at 10:02:59 am     Comments: 78

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Comments ... #

Real wages have been declining for years for most workers and more and more people, even conservatives, are waking up to the realization that this is not good, even for the few at the top whose wealth continues to increase disproportionately. Unless an economy grows in a balanced and equitable way it is headed for trouble. Even Walmart admits that their customers have no more money to spend and that that is why they cannot grow. The fundamental error that the real economic leadership makes is that money really wealth and something to be hoarded and kept in as large of quantities as possible. In fact real wealth is growing a productive, renewable, safe, secure, educated, articulate, and thinking society where there is a hope and future for the young people. In reality the economic leaders of our nation, such as the Koch brothers, are in fact destroying the real wealth and capital of our nation which are in reality our children, our educational institutions and the vision of what kind of society we should be.

posted by ilovetoledo on Jun 03, 2014 at 10:34:22 am     #   13 people liked this

I could add "creative" to the list also.

posted by ilovetoledo on Jun 03, 2014 at 10:35:21 am     #  

ilovetoledo posted at 10:34:22 AM on Jun 03, 2014:

Real wages have been declining for years for most workers and more and more people, even conservatives, are waking up to the realization that this is not good, even for the few at the top whose wealth continues to increase disproportionately. Unless an economy grows in a balanced and equitable way it is headed for trouble. Even Walmart admits that their customers have no more money to spend and that that is why they cannot grow. The fundamental error that the real economic leadership makes is that money really wealth and something to be hoarded and kept in as large of quantities as possible. In fact real wealth is growing a productive, renewable, safe, secure, educated, articulate, and thinking society where there is a hope and future for the young people. In reality the economic leaders of our nation, such as the Koch brothers, are in fact destroying the real wealth and capital of our nation which are in reality our children, our educational institutions and the vision of what kind of society we should be.

How can you build real wealth if you don't save?

The problem isn't with savings. The problem is there is no incentive to save. What kind of interest rate are you getting at any financial institution now? How many times in the last few years have we been told we must spend to stimulate the economy? Society today isn't taught or programmed to save, therefore society isn't taught or programmed to accumulate real wealth.

The people who are hoarding wealth now aren't a barrier to you building wealth. Economics isn't a zero sum game. The bottom line is there is no real interest by our leaders in encouraging the middle and lower classes in this country to build wealth. This can be seen in the attempts to raise the minimum wage, which prices the lower skilled and those just entering the workforce right out of the workforce, therefore depriving them of a chance to prove their worth and move up the income scale.

posted by tolbuck on Jun 03, 2014 at 11:35:44 am     #   1 person liked this

Hello runaway inflation.

Goodbye small business.

Meanwhile, let's all get less stressful jobs doing menial labor for nearly what our many years of education, certification, and experience have provided.

posted by justread on Jun 03, 2014 at 11:55:01 am     #   6 people liked this

I tried that menial labor business, and it didn't work out.

I was taking orders at McVomit's, and they tell you what you're supposed to say. I can't remember the exact words, but it something like, "Good morning, would you like to try our new breakfast special today?" I got fed up with that after a while, and just started asking for orders. You know, just saying, "What'll it be?" or "Whenever you're ready." The customers were okay with it, but the boss had a hissy fit and gave me a lecture on happiness or something. Then they put me at the counter with that loudspeaker system so I got to scream at the kitchen staff all the time, which is kind of fun. Then I got two old ladies who couldn't make up their minds what they wanted, and every time they'd order I tell the kitchen staff what the order was, then I'd have to correct it. So the third time they changed their minds, I announced that the order was "Two bags of bird shit and a baby rattle." The kitchen staff thought it was a hoot, the old ladies didn't understand and the lady manager had another hissy and fired me. I told her to take her job and shove it, only I sang the lyric over the loudspeaker system.

Then I got hired on customer service at Wally World, and about the third time some hemorrhoid tried to rain on my parade I unloaded on her and told her she had the brains of a rat trap. So I got fired again, but it turns out I'm some kind of protected class so they had to hire me back. Something about equal opportunity or something. They put me in the warehouse, but I got bored and me and a few other guys started drag racing the forklifts down the main aisle, and the other guy forced me off the road into a stack of TVs. So they had to let me go, they said.

My last job was at a 7/11 working nights. The assistant manager said she smelled liquor on my breath, and I told her I smelled road kill on hers, and they fired me. I didn't really care, because I'll tell you what, until you've worked the night shift at a convenience store you haven't seen anything yet. Some of those people only come out at night, I swear.

My next job I think, I'm going to be an executive of some kind or another. The pay's better, and if you get high enough up the ladder you make the big bucks and you can afford the drugs and social amenities you need to cure your stress and headaches and stuff.

posted by madjack on Jun 03, 2014 at 12:32:01 pm     #  

The problem is simplification on both ends. If everyone saves, (ie. everyone hoards money), it destroys the economy. The economy and money are not real wealth. They are merely electronic impulses stores in computers and pieces of paper. They are IOUs. Money is a convenience. If the IOUs are left unused or hoarded the economy stalls. Period.

posted by ilovetoledo on Jun 03, 2014 at 12:45:06 pm     #  

If it's all the same, you know.... like socialism indicates it should be, and we take the free market out of employment, I think I'd like to be a really slow cigar roller. If that's already taken, I'll take whittler.

posted by justread on Jun 03, 2014 at 12:48:42 pm     #  

Here is a good article about the subject: http://www.washingtontimes.com/news/2014/may/18/corporations-hoard-cash-overseas-away-from-high-us/?page=all

posted by ilovetoledo on Jun 03, 2014 at 12:51:58 pm     #  

Are you actually accusing those of us who managed to squirrel away funding for retirement of destroying the economy?

I'm not really sure what points you are trying to make here. You're going in a lot of directions. Are you in favor of out and out socialism or just in taking money from the wealthy and distributing it to those without skills?

posted by jimavolt on Jun 03, 2014 at 01:00:33 pm     #   2 people liked this

It is the vast oversimplifications and lack of understanding of the complexities of the economy, wealth, productivity, and society and the interactions of all of these things and more that will destroy our nation if not the world.

posted by ilovetoledo on Jun 03, 2014 at 01:05:32 pm     #  

jimavolt posted at 01:00:33 PM on Jun 03, 2014:

Are you actually accusing those of us who managed to squirrel away funding for retirement of destroying the economy?

I'm not really sure what points you are trying to make here. You're going in a lot of directions. Are you in favor of out and out socialism or just in taking money from the wealthy and distributing it to those without skills?

Think they are proposing taking anyone's money but their own or their friends and giving it to people who they feel deserve it, such as others who share their values and thoughts.

posted by MIJeff on Jun 03, 2014 at 01:08:05 pm     #   5 people liked this

I will just say this in conclusion, since I see it is pointless to try to have a real discussion here. Go ahead and stuff away all your "wealth" in your mattress, or in companies that invest overseas in companies that exploit workers and the environment. But please do not complain when you are elderly and the physical, medical, professional, economic, and social infrastructure you expected is not here. Unless we properly and wisely invest in our nation, its people, and all its infrastructures there is no future.

posted by ilovetoledo on Jun 03, 2014 at 01:10:24 pm     #   4 people liked this

Holy crap - I had to read that three times and I'm still not
sure what point you were trying to convey.

posted by jimavolt on Jun 03, 2014 at 01:20:29 pm     #   1 person liked this

The only thing that I can get out of it is to lower the corporate tax rate and stop manipulating the market for political gains so that those with wealth stop moving it offshore.

posted by justread on Jun 03, 2014 at 01:22:14 pm     #   2 people liked this

My Holy crap above was in response to Ilove toledo's comment: "It is the vast oversimplifications and lack of understanding of the complexities of the economy, wealth, productivity, and society and the interactions of all of these things and more that will destroy our nation if not the world."

posted by jimavolt on Jun 03, 2014 at 01:23:38 pm     #   1 person liked this

Actually this isn't overly complicated. With risk comes reward. Put your money at risk, and you can be rewarded with great wealth. You don't need a lot to begin with to gain wealth.

The problem is society today is trying to eliminate risk. Who benefits from eliminating risk? The government, who gains power by eliminating risk. Also, those people who are already wealthy benefit. New and better ventures put the wealth of those already rich at risk, so the best way to preserve that wealth is to eliminate risk.

You want a poor society, then eliminate the risk / reward ideal.

posted by tolbuck on Jun 03, 2014 at 01:30:33 pm     #  

And, of course, the fact that we are taxed to the hilt and then some - at every level - has nothing to do with people's ability to spend more disposable income on needs and wants thereby stimulating the economy and creating real jobs for real people and keeping YOU in control of more of your own $$.

It would be one thing if all that tax $$ was wisely spent and actually "invested" as the politicos would like you to believe. But when such a large portion of it is simply pissed away and, ultimately, given to the crony capitalists, it has little positive effect on the economy.

I'm guessing the reason that the overwhelming tax burden doesn't resonate with the majority here is that many of you are probably not sharing in that burden. Have an average income and a couple of kids and your federal tax burden simply becomes a nuisance, not a burden. Of course, this is all by political design.

If people would only realize their biggest enemies to gaining financial independence is the politicians they elect and stop trying to make people like the Koch brothers the boogeymen, we might actually start to get somewhere. But that's a tough habit to break isn't it ilt? Creating and maintaining class warfare has always worked so well on an uninformed and apathetic population.

posted by Foodie on Jun 03, 2014 at 02:04:07 pm     #   3 people liked this

What is the difference between Koch Brothers and George Sorros?

posted by MIJeff on Jun 03, 2014 at 02:08:09 pm     #   1 person liked this

I am really trying to stay out of this post - but I will say the reference to the Koch Brothers by ilovetoldeo was lame.

posted by Molsonator on Jun 03, 2014 at 02:16:51 pm     #   3 people liked this

MIJeff posted at 02:08:09 PM on Jun 03, 2014:

What is the difference between Koch Brothers and George Sorros?

About 18 Billion as of 2:15 EST

posted by justread on Jun 03, 2014 at 02:21:17 pm     #   4 people liked this

Molsonator posted at 02:16:51 PM on Jun 03, 2014:

I am really trying to stay out of this post - but I will say the reference to the Koch Brothers by ilovetoldeo was lame.

It seemed like a vast oversimplification which lacked the understanding of the complexities of the economy, wealth, productivity, and society and the interactions of all of these things.

posted by justread on Jun 03, 2014 at 02:23:05 pm     #   5 people liked this

Dorfman seems to have an understanding of the complexities, etc.

http://www.forbes.com/sites/jeffreydorfman/2014/05/06/seattle-will-hurt-local-economy-with-15-an-hour-minimum-wage/

posted by justread on Jun 03, 2014 at 02:42:41 pm     #  

posted by toledolen_ on Jun 03, 2014 at 03:05:27 pm     #   1 person liked this

For forty years after WWII, America stood astride the rest of the world that was largely destroyed by war (Europe and Japan) or never industrialized in the first place (South America, China and India). As a consequence of that lack of competition, our businesses flourished and even an unskilled laborer could make enough to buy a house, support a wife who was at home with the children and maybe even go on a decent vacation once in a while. It was a great time in America, but the more I think about it, it was probably an aberration that is only now being reversed. And that stings. It hurts our pride and also challenges our vision of America as something special. I hope that we can get back to a place where Americans feel positive about their nation and its prospects, but I am just not sure that is possible.

posted by Ace_Face on Jun 03, 2014 at 03:06:03 pm     #   5 people liked this

I must say that madjack just had one of the funnies couple paragraphs I've seen posted in this forum sounds like one of the jerky boys,good stuff.

posted by moxie on Jun 03, 2014 at 05:20:24 pm     #   2 people liked this

As a consequence of that lack of competition, our businesses flourished and even an unskilled laborer could make enough to buy a house, support a wife who was at home with the children and maybe even go on a decent vacation once in a while. It was a great time in America, but the more I think about it, it was probably an aberration that is only now being reversed.

I disagree that that time in America is gone, the issue is more that we have more 'costs' of living today than we had 40 years ago. Back then we had a house phone, a 3 or 4 channel TV, usually one car, and extra currucilars for the kids based on the schools.

Today we have cell phones for each person in the house, most people have cable, cars for each adult in the house, and year round sports and activities outside of school for the kids. What used to go toward vacations is not spent on monthly phone bills, team fees, cable bills, etc.

People could live the life of old if they want to; they don't want to.

posted by MrsArcher on Jun 03, 2014 at 07:34:08 pm     #  

justread posted at 11:55:01 AM on Jun 03, 2014:

Hello runaway inflation.

Goodbye small business.

Meanwhile, let's all get less stressful jobs doing menial labor for nearly what our many years of education, certification, and experience have provided.

I'm sure you can cite some sound science indicating a rise in minimum wages will have the damaging effect on the economy you described?

posted by Sohio on Jun 04, 2014 at 07:19:24 am     #  

I'm sure I can too.

posted by justread on Jun 04, 2014 at 08:20:26 am     #  

moxie posted at 05:20:24 PM on Jun 03, 2014:

I must say that madjack just had one of the funnies couple paragraphs I've seen posted in this forum sounds like one of the jerky boys,good stuff.

Thank you, Moxie.

posted by madjack on Jun 04, 2014 at 09:34:52 am     #  

MrsArcher posted at 07:34:08 PM on Jun 03, 2014:

As a consequence of that lack of competition, our businesses flourished and even an unskilled laborer could make enough to buy a house, support a wife who was at home with the children and maybe even go on a decent vacation once in a while. It was a great time in America, but the more I think about it, it was probably an aberration that is only now being reversed.

I disagree that that time in America is gone, the issue is more that we have more 'costs' of living today than we had 40 years ago. Back then we had a house phone, a 3 or 4 channel TV, usually one car, and extra currucilars for the kids based on the schools.

Today we have cell phones for each person in the house, most people have cable, cars for each adult in the house, and year round sports and activities outside of school for the kids. What used to go toward vacations is not spent on monthly phone bills, team fees, cable bills, etc.

People could live the life of old if they want to; they don't want to.

I'm not sure I buy the idea of overconsumption as the main cause of why Americans have such little in savings, for two main reasons. First, most two parent households with children now means that both parents are working. And these households with two incomes make 75% more than the single breadwinner households in the past. Cell phones, cable and sports activities should not be breaking the bank. Second, consumption today is probably less than what it was in the 50s and 60s. The war was over and the economy was roaring. People were buying kitchen appliances, second cars, boats, washing machines, etc. all on one income. And they still managed to save.

This is a good debate over whether Americans really overconsume or are just being demolished by runaway costs for basics (housing, food, healthcare, etc.).

http://www.bostonreview.net/forum/what%E2%80%99s-hurting-middle-class

posted by Ace_Face on Jun 04, 2014 at 11:39:39 am     #   2 people liked this

I am waiting on the news of the automatic taco stuffer an burger flipping machines to be revealed in Washington state first.
http://www.gizmag.com/hamburger-machine/25159/

posted by MIJeff on Jun 04, 2014 at 12:11:38 pm     #  

justread posted at 08:20:26 AM on Jun 04, 2014:

I'm sure I can too.

And I am sure that to prove you can...you won't.

posted by Sohio on Jun 04, 2014 at 12:13:42 pm     #  

Sohio posted at 12:13:42 PM on Jun 04, 2014:
justread posted at 08:20:26 AM on Jun 04, 2014:

I'm sure I can too.

And I am sure that to prove you can...you won't.

Why would I need to prove that I can? Is that why people engage in discussion forums? Does "proving" a reasonable and intuitive point on a discussion forum at your demand provide some validation that the responsibilities of my professional roles and achievements do not?
You may be here for "threadwinning." I'm here for the chat and humor. For a simple-minded diversion. Maybe rank and file needs the validation. I don't.

I think most people can wrap their head around the simple fact that such a large incremental increase in labor cost for the businesses who rely on minimum wage employees would exert considerable pressure on wages throughout the economy and impact the cost base for small employers to an unsustainable point. I don't think that it is necessary for me to go hunt for studies to "prove" what I know is fact from my experience and resonates as reasonable for anyone with any insight into how business and the economy work.

If you don't agree with the assertion, you are welcome to refute it. I'll let the little green box around the point do the validating.

If I were to do a research project for this thread, it would be on the causal factors that put us here in the first place. Why so many grown up Americans are forced to make careers out of the meaningless jobs that our high-school kids used to do as a right of passage. That would be much more interesting, and a better use of time than "proving" the reasonable generalization that small business can't sustain the nearly doubling of wage overhead and that it would cause massive upward pressure on wages overall and ultimately on the CPI, which is already edging up.

posted by justread on Jun 04, 2014 at 01:28:34 pm     #   8 people liked this

I guess we'll just assume that Sohio can cite some "sound science indicating a rise in minimum wages will not have a damaging effect on the economy"?

I maintain that it will hurt the economy. No need to re-post my position on this thread. I've done that already on the first thread below, which likewise showed the issue to be polarizing.

http://toledotalk.com/cgi-bin/tt.pl/article/161050/Fast_Food_workers_demanding_15hr

Maggie cites some interesting links on this earlier TT thread on the matter.

http://toledotalk.com/cgi-bin/tt.pl/article/85433/Suggested_Changes_for_Minimum_Wage_Laws_in_Ohio

posted by jimavolt on Jun 04, 2014 at 01:48:13 pm     #   2 people liked this

"It is the vast oversimplifications and lack of understanding of the complexities of the economy, wealth, productivity, and society and the interactions of all of these things and more that will destroy our nation if not the world."

ilovetoledo is exactly right, his lack of understanding of the complexities of the economy will destroy jobs for those suffering the most already. Technology and unskilled labor are substitutes. As the price of unskilled labor rises or doubles overnight, youth and those without post secondary education will continue to be displaced by technology. For evidence please visit your local grocery store that features two checkout lines with cashiers while ten lines are staffed by machines.

Horrendous youth employment rates
http://www.bls.gov/web/empsit/cpseea10.htm

Employment by education
http://www.bls.gov/emp/ep_chart_001.htm

Numbers provided by your federal government and not your bogeyman the Koch brothers.

posted by MrGlass419 on Jun 04, 2014 at 11:30:06 pm     #  

toledolen- The Walmart video is the poorest thought out video I've ever seen produced in my life as an economic argument. The boxes of Macaroni and cheese do not magically appear on the shelf of Walmart. Walmart is one component of the process to deliver the mac and cheese to the consumer. If we need to tack on a penny for every component in the process of bringing mac and cheese from the fields to the consumer you have inflation.

The next weak assumption is when consumers have more dollars chasing product, and business' attains pricing power, they will not raise prices.

Everyone ends up getting paid more through inflation with no benefit in real purchasing power. The only group that is punished is our seniors who spent their lives busting their ass and saving who have their purchasing power destroyed through ploys for voter turnout.

posted by MrGlass419 on Jun 04, 2014 at 11:45:45 pm     #   1 person liked this

I'm not sure I buy the idea of overconsumption as the main cause of why Americans have such little in savings.

I was not commenting on levels of consumption or savings; I was responding to the statement that the life of old was not attainable today.

First, most two parent households with children now means that both parents are working.

Unfortunately, the number of two-parent households is declining - 1.2 million fewer two-parent households over the last decade while the number of children being raised in a single-parent household has doubled in the last fifty years.

People can try to ignore this point all they want but the reality is that the easiest way to stay out of poverty is to: graduate from high school; get a job - any job; get married; and wait until you are married to have kids. Now, if you don't want to do that, fine; but don't blame me if you are in poverty.

Cell phones, cable and sports activities should not be breaking the bank.

I didn't say they break the bank; I said these expenses have replaced much of the disposable/vacation spending that happened 50 years ago. $200-300 a month for cell phone plans for the family; 100 a month for cable; kids sports - $300-$1000 per sport sometimes a couple times a year depending on what they are playing PLUS equipment, uniforms, and actually getting to tournaments. It all adds up, sometimes to quite a lot. And that's not even including the manicures, pedicures, highlights, etc., that seem to be the norm for female fashion. Ever see how busy the nail salon is in Walmart - wow.

Second, consumption today is probably less than what it was in the 50s and 60s.

Wrong. Real GDP per capita - has increased 190% since 1960:

http://www.multpl.com/us-real-gdp-per-capita/table/by-year

And that's real GDP - adjusted for inflation.

To delve in to this number a bit more, Household Consumption as a percent of GDP was a bit above 60% in the early 70's (can't find 60's numbers) and has gone up to the upper 60's lower 70's in more recent years.

Government spending as a percentage of GDP was about 30% back on the 60's; it peeked above 40% 2010.

(Note: household and government spending numbers came from two different sources; in one year they seem to account for more than 100% of spending which I know is not possible, but you still get the idea that sector spending has maintained in certain ranges).

People were buying kitchen appliances, second cars, boats, washing machines, etc. all on one income. And they still managed to save.

Savings rates have dropped from about 8% in the last 60's to about 4% currently.

But its not just appliances, cars, boats, etc., that has changed the buying patters of households - look at how many more restaurants we have today than there were half a century ago, movie theaters, clothing stores, golf courses, blah, blah, blah.

All I am saying is you can't disparage what today doesn't give us by comparing it to 50 years ago when we have so many other ways to spend money. It all adds up; we believe this is today's standard of living; it is different from the 1960's, but you can still have a 2-parent family with kids living on 1 income and enjoying vacations and the like - but you have to choose carefully how you spend your money.

posted by MrsArcher on Jun 05, 2014 at 09:23:52 am     #   2 people liked this

In this thread: a whole lot of people who confuse dogma with reality and haven't realized the whole "minimum wages cause inflation" thing was disproven over and over and over by dozens of credible studies over the last 30 years. Similarly, minimum wage hikes have never actually been correlated to ANY job action - loss or gain.

Now, maybe that's changed in the last year or so since I wrote a 30-something page paper on the topic that went through all of the relevant non-industry-funded research I could find (and also used some proprietary in-house capital corporation funded studies for background), but I haven't heard about groundbreaking research in the last year.

The bottom line I'll boil down for you is that it mostly works like this - inflation happens at generally the same rates no matter what the minimum wage is. Hiring happens to fit demand by businesses. When the minimum wage increases, there's a period where the spending power of the lowest-earners in society increases and this ties directly into an increase in economic activity, resulting in further hiring. When the wage continues to adjust at inflation rates (as it did through the 80s and part of the 90s, though not quite as well as it should have), the purchasing and economic power of the lowest-level remains mostly unchanged. When that drops off due to politics or any other cause, you begin to see a shift of the money sources and spend.

Effect 1: greater reliance on public assistance to get by results in a drain on government resources.
Effect 2: Lower spending on "luxury" or nonessential goods / entertainment with the obvious results to the economy.

Now, the really interesting piece that every study pointed to was this: the minimum wage has NO MEASURABLE net effect on inflation. None. This was counter-intuitive to me, and as I dug deeper I found that the reasons for inflation are actually tied much more strongly to the world money supply and the spending levels at higher income brackets. There HAVE been anecdotal studies linking inflation and welfare increases, but those also hit the same issue as before - if wages don't keep pace with inflation, assistance becomes necessary for more people. (in other words, the correlation and causation are in the opposite direction than what was intuitive to me).

I can't publish my paper here due to NDA on a large portion of it, but the research is out there and very easy to find if you look for scholarly sources. Avoid industry-funded / thinktank funded studies, as they tend to start with a conclusion and look to back it with evidence then found to fit.

posted by endcycle on Jun 05, 2014 at 11:19:14 am     #   3 people liked this

"Second, consumption today is probably less than what it was in the 50s and 60s.

Wrong. Real GDP per capita - has increased 190% since 1960:

http://www.multpl.com/us-real-gdp-per-capita/table/by-year

And that's real GDP - adjusted for inflation."

You are correct GDP per capita has grown. But, the reason GDP per capita has grown is becuase GDP in total has grown since the 60s.

However it is not as simple as saying that GDP per capita has grown when it is a well documented fact that the vast majority of the GDP growth is going to top1% income earners.

http://eml.berkeley.edu/~saez/saez-UStopincomes-2012.pdf

http://www.pewresearch.org/fact-tank/2013/12/05/u-s-income-inequality-on-rise-for-decades-is-now-highest-since-1928/

So its not like for the majority of Americans GDP growth adjusted for inflation has been that great.

Unless you can find some evidence out there that income growth outside of top earners has been growing as fast as GDP growth? I am going to bet you cant because it has not.

posted by glasscityguy on Jun 05, 2014 at 11:48:06 am     #  

If it works why stop at only 15, why not make it 25 or 50?

posted by MIJeff on Jun 05, 2014 at 02:30:09 pm     #   2 people liked this

endcycle. Thank you for your non-trivial, well articulated posting. I think often it is because of the overwhelming glut of advertising and propaganda from certain political groups that even segments of the population who should be thinking otherwise have bought into what George Bush denounced as "voodoo economics." Please post more if you can withstand the onslaught of ignorance that will be thrown at you.

posted by ilovetoledo on Jun 05, 2014 at 02:55:05 pm     #   1 person liked this

endcycle posted at 11:19:14 AM on Jun 05, 2014:

In this thread: a whole lot of people who confuse dogma with reality and haven't realized the whole "minimum wages cause inflation" thing was disproven over and over and over by dozens of credible studies over the last 30 years. Similarly, minimum wage hikes have never actually been correlated to ANY job action - loss or gain.

Now, maybe that's changed in the last year or so since I wrote a 30-something page paper on the topic that went through all of the relevant non-industry-funded research I could find (and also used some proprietary in-house capital corporation funded studies for background), but I haven't heard about groundbreaking research in the last year.

The bottom line I'll boil down for you is that it mostly works like this - inflation happens at generally the same rates no matter what the minimum wage is. Hiring happens to fit demand by businesses. When the minimum wage increases, there's a period where the spending power of the lowest-earners in society increases and this ties directly into an increase in economic activity, resulting in further hiring. When the wage continues to adjust at inflation rates (as it did through the 80s and part of the 90s, though not quite as well as it should have), the purchasing and economic power of the lowest-level remains mostly unchanged. When that drops off due to politics or any other cause, you begin to see a shift of the money sources and spend.

Effect 1: greater reliance on public assistance to get by results in a drain on government resources.
Effect 2: Lower spending on "luxury" or nonessential goods / entertainment with the obvious results to the economy.

Now, the really interesting piece that every study pointed to was this: the minimum wage has NO MEASURABLE net effect on inflation. None. This was counter-intuitive to me, and as I dug deeper I found that the reasons for inflation are actually tied much more strongly to the world money supply and the spending levels at higher income brackets. There HAVE been anecdotal studies linking inflation and welfare increases, but those also hit the same issue as before - if wages don't keep pace with inflation, assistance becomes necessary for more people. (in other words, the correlation and causation are in the opposite direction than what was intuitive to me).

I can't publish my paper here due to NDA on a large portion of it, but the research is out there and very easy to find if you look for scholarly sources. Avoid industry-funded / thinktank funded studies, as they tend to start with a conclusion and look to back it with evidence then found to fit.

Was the study that you are prohibited from disclosing based on a single-step leap from $7.25 to $15.00 in one fell swoop? Or was it more incremental?

NPR (a source chosen because I would expect you to trust it, not because I do) reports that a worker earning the federal minimum wage in 1968 would be earning $10.00 in today's dollars.

I think that a single step jump from $7.25 from $10.00 would be more than enough shock to the system for now. Can't we start there? A 28% increase is too little?

Now, let's just presume theoretically of course, when I have a three-pay month, my little businesses have to come up with an extra $600,000 that month to cover salaries. That's just wages. Never mind total employee cost, although usually I don't have to pay benefits on the third pay. (I pay 24 paydays worth of benefit cost base and there and 26 paydays.) People are talking about DOUBLING wage costs. Imagine my concern when some armchair cowboy throws around a theoretical increase of $600,000 per pay, or $15.6M per year because they think it would be really cool and they did this neat study. And that's just wages. The increase in FICA alone would be $1,193,400. (That's 1,989,000 boxes of mac and cheese at Wal Mart.)

The bottom line that I'll boil down for you mostly works like this:

A McDonald's operator is now expected to pay nearly $50,000 per year, per entry level employee including wages, FICA, and mandated health care???? (We forgot Ohio BWC, didn't we?)

I know, I know... Big Macs wouldn't go up at all. That's just "political" propaganda.

Smaller employers would simply say "screw it."
(They spent the last two years scrambling to get out in front of the ACA rollercoaster anyway.)

I'll be dammed. There's that runaway inflation and death blow to small business "dogma" again.

posted by justread on Jun 05, 2014 at 03:37:25 pm     #   6 people liked this

Maybe we need one thread for those who think that people's "ignorant" opinions are just politics and one thread for people who actually have skin in the game.

posted by justread on Jun 05, 2014 at 03:44:58 pm     #   3 people liked this

By the way, all my managers want a raise now.

posted by justread on Jun 05, 2014 at 03:51:30 pm     #   2 people liked this

And your flexibility is gone. You can't afford overtime.

Also, the skill level has to equal the $15 an hour. The employee who calls off sick a lot, or has a child sick a lot, comes in late, again you can't afford the overtime to cover for him/her.

Think of the small business that has no way of making up that difference. They just close leaving the business to the big national companies, which in turn take the profits out of the region.

posted by Molsonator on Jun 05, 2014 at 04:31:27 pm     #   1 person liked this

You're not wrong to have your concerns, but the facts are what they are. No credible study in the last 30 years (historical surveys, current surveys, raw data analytics, descriptive analysis, trend analysis, macro and micro scale data collection, etcetera) has managed to connect inflation to minimum wage hikes in any country. There are theories on both sides of the issue which present very convincing arguments, but there's no actual concrete evidence that minimum wage changes have anything to do with inflation. Inflation happens, and will continue to happen - wages either follow or they don't. That is what the evidence shows.

Monetary supply and policy at the worldwide level dwarf ANY change that happens at the lower echelons of pay and economic activity (where you and I an pretty much everyone you or I know operate and live). You and your employees are a rounding error on those levels.

Buuuuut.... you can stay with your anecdotal assurance. I don't see much of a point to posting in this thread again, honestly. We're talking different languages and scopes. Have a nice day!

posted by endcycle on Jun 05, 2014 at 04:39:19 pm     #   1 person liked this

Yeah. I don't know anybody outside of the lower echelons of pay and economic activity. Umkay. :)

We are indeed talking different languages and scopes.

You have a nice day too.

posted by justread on Jun 05, 2014 at 04:56:25 pm     #   2 people liked this

So, Endcycle. Obviously we are both passionate about this issue. I understand that your research and what I am seeing among businesspeople and financial analysts do not mesh.
I appreciate the quality of your commentary, and I mean no disrespect. We are both frustrated, so I appreciate your leadership in disengaging. I will follow that lead. Regards.

posted by justread on Jun 05, 2014 at 06:20:43 pm     #  

Speaking of business, last week the local gasoline retailers spiked their prices 10% as a virtual syndicate to apply upward pressure in the market on gasoline retail prices. There was no other cause.

Sweet, huh?

A person making $7.25 per hour would have to WORK NEARLY TWO MORE HOURS to afford the gas to get their Chevrolet Cobalt (which is sorely need of repair) from central Toledo to Owens in Booneyville that week.

See, I have not lost touch. :)

posted by justread on Jun 05, 2014 at 07:11:54 pm     #  

I give you a "B" . You forgot to mention a Mega Church or El Burrito.

posted by Molsonator on Jun 05, 2014 at 07:40:26 pm     #   2 people liked this

Is this Seattletalk.com?

posted by bucknut on Jun 05, 2014 at 09:37:06 pm     #  

A lot of fuss over 5% of the hourly workforce. For the math challenged, that means those evil raping companies are paying 95% of hourly workers above minimum wage.

Not to mention that 25% of minimum wage workers are teenagers and 50% are between 18-24 years old. You know, people with oodles of experience they bring to the table and surely the breadwinners of the family.

This wouldn't be about getting indoctrinating young voters to vote (D) would it? It wouldn't be about the visuals of those nice (D) politicians trying to double your wages, but those heartless f*#king business owners--the one's who took risks to get rewards--are just sitting on a pile of cash just won't give it up to you...it's not about that right?

Nah...of course not. I'm just being cynical. And I'm sure that the golden goose will just keep on giving because a fiat from Washington D.C. or 50 state capitals says so.

Maybe if we had a few politicians that actually ran a business...an honest-to-god goods-trading, capital-producing, employee-hiring, market-based business--instead of a body of lawyers imagining they know everything, passing laws with consequences they do not fathom, perhaps things would be better.

posted by oldhometown on Jun 06, 2014 at 01:05:28 am     #   2 people liked this

You see, people keep talking as if the wages or the supply of money was really the important thing. It is not. It does not matter how much money there is. What counts is the creation of goods and services and people doing, creating, and making things people need and want. Unless you expand that, you can create all of the "money" you want, and it will not make a difference. I am also convinced that a large segment of population actually believe that the best thing is to have people do, create, and make less and that this somehow benefits it. The older I get the more I am absolutely totally convinced that most peoples' understanding of work, wealth, wages, and economy in this nation is totally wack and we probably all deserve what is coming.

posted by ilovetoledo on Jun 06, 2014 at 08:42:44 am     #   1 person liked this

It's all about fairness. Not about what the market will bear. Fairness, acceptance and inclusion. What we should do is pay everybody the same no matter what they do or how much training or education that they need. In fact, we should eliminate the roadblocks to success that are created, like medical school for example. If a young person wants to be a doctor, we should let them be a doctor. They'll get the hang of it. If they want to be a pilot, it isn't fair to make them pass a test that could have unfair bias. People who were previously wealthy will see what a wonderful world it would be and would share their wealth, knowing that all their needs would be met by The System.

Just start paying people when they reach 16 and get a social security number and pay them until they die. They'll pick a vocation, or heck, even an avocation and the nation will be rich with creativity and diversity. No more good or bad neighborhoods. No more prejudice. No more racism. Equal opportunity for all. This will make our country so strong that everybody will want our goods. And certainly as many people will want to be production workers as food critics, as many will want to clean toilets as run multi-billion dollar companies. I think I'll be a Senior Dreamer of Dreams and Substitute Professional Golfer. And do a little fishing. Check please.

posted by justread on Jun 06, 2014 at 09:34:06 am     #   4 people liked this

Quite seriously, I think the following things would help:

First and foremost the economic leadership needs to have a better understanding of how the economy works. By that I mean move beyond profit for profit sake and getting as much money or possessions as you possibly can and to hell with everyone else.

Once that is established they need to have a greater vision for what this nation could be. With money and power, leadership and responsibility falls upon them. If they articulate a vision for an equitable, just, fair, productive, educated, hard working, creative society of individuals of integrity who all want to make a contribution in which everyone had a stake then it would go a long way.

The present politics of greed, avarice and selfishness will destroy our nation. It is only by working together instead of against each other that we will have a future. Mark my words, if we do not do this it will only be so long before the Chinese come and "collect." And it will not be hard with a nation as divided, polarized and demoralized as we have become.

posted by ilovetoledo on Jun 06, 2014 at 10:12:51 am     #   1 person liked this

jimavolt posted at 01:48:13 PM on Jun 04, 2014:

I guess we'll just assume that Sohio can cite some "sound science indicating a rise in minimum wages will not have a damaging effect on the economy"?

I maintain that it will hurt the economy. No need to re-post my position on this thread. I've done that already on the first thread below, which likewise showed the issue to be polarizing.

http://toledotalk.com/cgi-bin/tt.pl/article/161050/Fast_Food_workers_demanding_15hr

Maggie cites some interesting links on this earlier TT thread on the matter.

http://toledotalk.com/cgi-bin/tt.pl/article/85433/Suggested_Changes_for_Minimum_Wage_Laws_in_Ohio

Sure thing, Jim. Here are some places to start, all of them attributed:

http://www.americanprogressaction.org/issues/labor/news/2011/06/07/9747/an-increased-minimum-wage-is-good-policy-even-during-hard-times/

http://thinkprogress.org/economy/2013/07/08/2256851/study-a-minimum-wage-hike-would-stimulate-the-economy/

http://www.thedailybeast.com/articles/2013/12/09/what-does-an-increase-in-the-minimum-wage-do-to-the-economy.html

http://www.npr.org/2012/07/08/156458470/raising-minimum-wage-a-help-or-harm

posted by Sohio on Jun 06, 2014 at 10:34:58 am     #  

justread posted at 01:28:34 PM on Jun 04, 2014:
Sohio posted at 12:13:42 PM on Jun 04, 2014:
justread posted at 08:20:26 AM on Jun 04, 2014:

I'm sure I can too.

And I am sure that to prove you can...you won't.

Why would I need to prove that I can? Is that why people engage in discussion forums? Does "proving" a reasonable and intuitive point on a discussion forum at your demand provide some validation that the responsibilities of my professional roles and achievements do not?
You may be here for "threadwinning." I'm here for the chat and humor. For a simple-minded diversion. Maybe rank and file needs the validation. I don't.

I think most people can wrap their head around the simple fact that such a large incremental increase in labor cost for the businesses who rely on minimum wage employees would exert considerable pressure on wages throughout the economy and impact the cost base for small employers to an unsustainable point. I don't think that it is necessary for me to go hunt for studies to "prove" what I know is fact from my experience and resonates as reasonable for anyone with any insight into how business and the economy work.

If you don't agree with the assertion, you are welcome to refute it. I'll let the little green box around the point do the validating.

If I were to do a research project for this thread, it would be on the causal factors that put us here in the first place. Why so many grown up Americans are forced to make careers out of the meaningless jobs that our high-school kids used to do as a right of passage. That would be much more interesting, and a better use of time than "proving" the reasonable generalization that small business can't sustain the nearly doubling of wage overhead and that it would cause massive upward pressure on wages overall and ultimately on the CPI, which is already edging up.

Ok, so...you don't need a "thread win"...but you're going to let a green highlight validate your point for you?

Makes sense. Justread sense, anyway.

posted by Sohio on Jun 06, 2014 at 10:38:24 am     #   1 person liked this

The green highlight suggests that it's more like common sense.

posted by justread on Jun 06, 2014 at 10:48:19 am     #   3 people liked this

Sohio posted at 10:34:58 AM on Jun 06, 2014:
jimavolt posted at 01:48:13 PM on Jun 04, 2014:

I guess we'll just assume that Sohio can cite some "sound science indicating a rise in minimum wages will not have a damaging effect on the economy"?

I maintain that it will hurt the economy. No need to re-post my position on this thread. I've done that already on the first thread below, which likewise showed the issue to be polarizing.

http://toledotalk.com/cgi-bin/tt.pl/article/161050/Fast_Food_workers_demanding_15hr

Maggie cites some interesting links on this earlier TT thread on the matter.

http://toledotalk.com/cgi-bin/tt.pl/article/85433/Suggested_Changes_for_Minimum_Wage_Laws_in_Ohio

Sure thing, Jim. Here are some places to start, all of them attributed:

http://www.americanprogressaction.org/issues/labor/news/2011/06/07/9747/an-increased-minimum-wage-is-good-policy-even-during-hard-times/

http://thinkprogress.org/economy/2013/07/08/2256851/study-a-minimum-wage-hike-would-stimulate-the-economy/

http://www.thedailybeast.com/articles/2013/12/09/what-does-an-increase-in-the-minimum-wage-do-to-the-economy.html

http://www.npr.org/2012/07/08/156458470/raising-minimum-wage-a-help-or-harm

Every one of those articles deals with a small increase. In one case, $1. In another case, moving it to the formerly Obama Approved $10.10.

In NO case do any of those articles discuss the effects of a massive jump from $7.25 to $15.00.

I am all for raising it by small incremental steps. Going from $7.25 to $15.00 in one move would create unintended consequences not discussed in your articles because none of them even consider such a leap.

posted by justread on Jun 06, 2014 at 10:55:14 am     #   2 people liked this

Wait, I know... if raising it by $1.00 would be good for the economy. Raising it by $100 would be fantastic.

posted by justread on Jun 06, 2014 at 10:56:20 am     #   2 people liked this

Eventually they will run out of other peoples money.

posted by MIJeff on Jun 06, 2014 at 10:58:43 am     #  

Ok, wait. Here's what we do: Raise the minimum wage to $25,000 per hour and then all the minimum wage people can retire at the end of the year, opening up those jobs to the next wave of workers. Imagine the buying power and the tax base. We'd pay off the national debt in like 6 months.

I swear, if somebody runs for president on that platform, the idiots in the majority would elect them for sure.

posted by justread on Jun 06, 2014 at 11:01:58 am     #  

justread posted at 10:56:20 AM on Jun 06, 2014:

Wait, I know... if raising it by $1.00 would be good for the economy. Raising it by $100 would be fantastic.

Not really.

Eating food when you're hungry will sustain your body. Eating to the point of gluttony could kill you.

Justread, you & I always manage to have a good time and find common ground. So, I'll meet you halfway on the idea that $15 could have more of an effect on the economy than the hypothetical $10 that has been vetted to death; if you can meet me on the idea that even that $15 has yet to show PROVEN--not anecdotal--detriments?

You could very well prove correct on the specific amount. I mean, after all...$15 is quite a jump; and would reverse the pattern of the minimum wage lagging behind inflation and actually put it somewhat AHEAD of inflation. I guess there must be some reserves that could absorb that shift, right? I mean, that money must have gone somewhere.

Deal?

posted by Sohio on Jun 06, 2014 at 11:20:48 am     #  

justread posted at 11:01:58 AM on Jun 06, 2014:

Ok, wait. Here's what we do: Raise the minimum wage to $25,000 per hour and then all the minimum wage people can retire at the end of the year, opening up those jobs to the next wave of workers. Imagine the buying power and the tax base. We'd pay off the national debt in like 6 months.

I swear, if somebody runs for president on that platform, the idiots in the majority would elect them for sure.

25 grand per hour would be nice. Probably not in the cards, though. How about just $15 per hour? That is exponentially less than 25k, and would make a lot of people very happy.

posted by Sohio on Jun 06, 2014 at 11:24:17 am     #  

justread posted at 10:48:19 AM on Jun 06, 2014:

The green highlight suggests that it's more like common sense.

No, it suggests it's more like popular. Nothing more.

But hey, if you need that little green pat on the head, like the rest of the "rank and file," then tell yourself whatever makes you feel good.

posted by Sohio on Jun 06, 2014 at 11:26:39 am     #   2 people liked this

ilovetoledo

You see, people keep talking as if the wages or the supply of money was really the important thing. It is not. It does not matter how much money there is.

oh man.

posted by MrGlass419 on Jun 06, 2014 at 11:32:56 am     #  

To Sohio: Thanks for the links. I'll read through them.

To Ilovetoledo: How can we possibly establish an "equitable, just, fair, productive, educated, hard working, creative society of individuals of integrity who all want to make a contribution in which everyone had a stake." All opportunities for developing such a society went away with the establishment of the welfare state and it's entitlement programs.

Even though I'll acknowledge that the concept of providing a temporary safety net for people is a noble one, how do we get people to get off the public dole and into a position where they can make a contribution to the creative society you cite?

The best an individual can do is to work hard to provide for their family as best they can without screwing others to get ahead. There are examples of abuse of the system on both ends of the financial spectrum.

posted by jimavolt on Jun 06, 2014 at 11:37:40 am     #  

Sohio posted at 11:20:48 AM on Jun 06, 2014:
justread posted at 10:56:20 AM on Jun 06, 2014:

Wait, I know... if raising it by $1.00 would be good for the economy. Raising it by $100 would be fantastic.

Not really.

Eating food when you're hungry will sustain your body. Eating to the point of gluttony could kill you.

Justread, you & I always manage to have a good time and find common ground. So, I'll meet you halfway on the idea that $15 could have more of an effect on the economy than the hypothetical $10 that has been vetted to death; if you can meet me on the idea that even that $15 has yet to show PROVEN--not anecdotal--detriments?

You could very well prove correct on the specific amount. I mean, after all...$15 is quite a jump; and would reverse the pattern of the minimum wage lagging behind inflation and actually put it somewhat AHEAD of inflation. I guess there must be some reserves that could absorb that shift, right? I mean, that money must have gone somewhere.

Deal?

$15 has yet to show proven detriments because it hasn't happened. Exactly like jumping off a 20 story building won't show proven detriments until you do it. I'm just the guy saying "don't jump, you'll die." It's just based on a fundamental understanding of the forces at work. I haven't tried it myself.

Let's say that the impact of a massive >100% uptick would only be psychological. That would then lead to actual negative outcomes.
People with their own money in the game are downright skittish about these things.

Btw... the McDonald's operator from yesterday's example called. He said he has no full time employees anymore. Can't afford it. I'm sure he'd be able to afford the jump to $15 though, on account of all those extra Big Macs that would be going in bags if we'd only double minimum wage, and of course adjust all the rest of the wages up too.

posted by justread on Jun 06, 2014 at 11:45:08 am     #  

You never know for yourself what jumping off of a 20-story building will do to your body if you haven't tried it yet. But there is a fairly large pool of past evidence as to what the outcome will be...

posted by Sohio on Jun 06, 2014 at 11:48:15 am     #  

Yeah. A LOT more than what $15 per hour would do, right?

posted by justread on Jun 06, 2014 at 12:39:22 pm     #  

People do realize some jobs are not worth $15 an hour, right? Heck, some jobs aren't worth $7.25 an hour. And what happens to those jobs when the minimum wage is $15 an hour? They go away, which leaves those workers with no jobs at all, or they go underground, which leaves those workers with little room to address any problems they have with work conditions.

The minimum wage is a price floor for labor. If you know Econ 101 you know what happens with price floors.

posted by tolbuck on Jun 06, 2014 at 12:48:42 pm     #   1 person liked this

No there are real world examples of the high minimum wage, look at France and Greece, cradle to grave welfare and once it went bust look at it now. There is a reason France and England are rejecting the very ideas you espouse , they dont work and they have real experience with the results. But as always the self imposed intellectuals think they can make it work this time with just a few more tweeks to the system. I tell you what you start a company and pay every worker on down to the least experienced and laziest 15 bucks an hour and tell me how that works out for you.

posted by MIJeff on Jun 06, 2014 at 03:42:51 pm     #   2 people liked this

A hallmark of this type of liberal legislation is that reactions to the regulations are never considered. As regulations that are designed to help downtrodden masses are forced onto entities, be they people or businesses, reactions that affect the situation occur.

When small businesses have to provide health insurance to all workers if they have 50 or more employees, they react and keep staff levels below the trigger point. The small entrepreneur may not be a graduate of the Wharton School of business, but is certainly going to act to protect his/her business and maintain profitability.

Will small businesses have a reaction to a significant increase in the minimum wage? Absolutely, I believe both hours and employee levels will be slashed AND pricing for goods and services will increase because the new wage levels will be blamed.

posted by jimavolt on Jun 06, 2014 at 06:47:21 pm     #   1 person liked this

Shall we table this for about a year, and see what sort of horrors result is Seattle, and debate it then?

Is one year long enough for you guys to prepare your No-True-Scotsman arguments? Two years, maybe?

posted by Sohio on Jun 06, 2014 at 08:10:36 pm     #  

It will take more than a year - beginning April 1 of next year Seattle will be phasing in the new minimum wage annually over 3 to 7 years, depending on the size of the employer.

posted by Mike21 on Jun 06, 2014 at 08:36:01 pm     #  

I think we should wait for this to roll out beyond Seattle. And we should rule out volcanoes as acts of God pro or con. No true Scotsman would capitalize on a volcano.

posted by justread on Jun 06, 2014 at 08:38:05 pm     #  

Agreed, to table the discussion. It's time for my nightcap. Cheers!

posted by jimavolt on Jun 06, 2014 at 09:06:47 pm     #  

Me too. Cheers.

posted by justread on Jun 06, 2014 at 09:36:38 pm     #