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Thread: Los Angeles Raises Minimum Wage to $15 an Hour

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by donsutherland1 View Post
    "Well-positioned" means that the industry structure (knowledge-oriented economy reliant to a larger extent on skilled workers than many other local economies), educated populace (57% with a bachelors degree or higher), prevailing wages (some three quarters of workers already earn above the $15 per hour figure), etc., will result in a smaller economic shock than what one will likely see in a city such as Los Angeles where more than a quarter of the population lacks a high school diploma.
    But the 'economic shock' is just a euphemism for the harmful economic effect on businesses and labor. As such it has nothing to do with how educated the work force is - all other things being equal assuming that 25 percent of the workforce in LA or Seattle is getting a raise, then some will retain their jobs and some won't. The only difference is that in Seattle the average education of the unhired/laid off will be higher.

    The only variables that mitigate impact on a work force is the gap between the minimum and market wage, and the percent of folks in the workforce that earn below the new minimum wage. I don't know what the 'gap' will be in LA, nor the percentage of the LA workforce who earns below that wage, but if they are statistically similar, then the impact on LA will be similar.

    In any event, 25 percent of the workforce is a huge number to be affected by a new minimum wage. In 2013 the number of workers affected by the new federal minimum wage was about 2 million. Among those paid by the hour, 1.6 million earned exactly the prevailing federal minimum wage of $7.25 per hour. About 2.0 million had wages below the federal minimum. Together, these 3.6 million workers with wages at or below the federal minimum made up 4.7 percent of all hourly paid workers. THAT is modest.

    But it is implausible that a major 50 percent wage increase (from 9.50 to 15 an hour, for example) could be characterized as having "modest impact", especially on the businesses and employees of that "25 percent". One would expect it to have an impact significantly greater than that historically experienced.

    Of course, there will be some labor market dislocations, but those could be relatively modest based on the characteristics of Seattle's economy and workforce. Of course, we'll have to wait for the data to become available to better assess the impact. By the beginning of 2017, large firms (500 or more employees) will have been required to have raised their wage to $15 per hour, so a body of data will be available.
    We don't need to wait for 'data'; economic factor theory, minimum wage experience, and common sense already tells us what will happen - disemployment, redistribution of jobs shutting out the unskilled, young, etc., reduced schooling-training, and lower job creation for this group. And we know that wage costs tend to redefine the kind of businesses that survive (or thrive). For example, fast food outlets may tend to gain business as less labor efficient diners and small resteraunts tend to be more severely impacted.
    Last edited by maxparrish; 05-20-15 at 10:22 PM.

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by ludin View Post
    yep your right and those rules are fluid with market changes.
    one of those rules is as you raise the floor so do the several things.

    it raises the cost to do business.
    which means businesses have to increase revenue. there are only 3 ways they can do this.

    1. let it eat their profit. (not going to happen)
    2. Increase prices (can only increase it so much before people won't buy it)
    3. Replace staff with more automation or fire people and work less hours.

    well there is a 4th option.
    hire more people working 20 hours a week which is about the same they would make working 40 hours now.

    the next problem you have is called scale in pay.

    if the cashier is making 15 an hour then the supervisor who is making a few dollars more is going to want a raise.
    the IT guys is going to want a raise everyone is going to want a raise above what the lowest guy on the pole got.

    it is called economy of scale. so now you have caused massive inflation as prices have to go up in order to pay for it all.
    you also have priced some people out of a job.

    I no longer hire no skilled workers. the training costs are just to much to bare.
    basically you eliminate jobs for people that need them the most.

    you lessen the ability for them to enter the job market.
    You seem to be all about concern for business expense an not at all for business income... which also goes up when the floor is raised as customers have more to spend.
    Ive been around for a long time and it just seems that the economy does better under the Democrats than the Republicans. -- Donald Trump

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by ernst barkmann View Post
    let me see if i can get what you are saying:

    raise the wage to $15.....allow people who are not Citizens, to work legally by work visa........

    so according to you every person would be a legal working person in america........and because everyone in america is legal, the businesses of america are only going to hire american citizens?..is that correct?
    Not all but most yes. The average education of an American citizen faaaaarr outstrips the average education of the Mexican and Central American immigrant that is moving here. And if an employer has to choose an employee where subverting the wage isn't a bonus for that employer... then they'll go for the more educated one more often than not.

    Quote Originally Posted by ernst barkmann View Post
    note to you: if the u.s. gave a work visas to any person who wanted one, people around the world would see a potential of making $15 an hour in america, the u.s. would be overwhelmed with applications for work visas from foreigners who would give up everything to get here, and once here if they did not get hired what would they do?
    People around the world wouldn't come here because they couldn't get hired.

    Quote Originally Posted by ernst barkmann View Post
    remember that most of the people coming here would not speak the language, know the laws, have little to no money, no body is going to hire someone who looks and smells like they slept in a dumpster.
    Exactly. So they won't come here because no one will hire them. You are making my point here.

    Quote Originally Posted by ernst barkmann View Post
    they would have to resort to crime or the system would have to care for them, making the tax payer pay the bill.
    If they don't have a job, they don't get a work visa. If they have no work visa they can't come here or stay here.

    Quote Originally Posted by ernst barkmann View Post
    you have not thought into the details of your idea at all.
    Clearly I have. You are spinning in circles trying to fabricate excuses and you are doing nothing but making my point for me and you can't even see it.
    Ive been around for a long time and it just seems that the economy does better under the Democrats than the Republicans. -- Donald Trump

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by KevinKohler View Post
    And there are non CEOs that can place an order with a food distributor.


    Pulling someone to wash the dishes means by definition that that person is no longer doing some other job they were originally slated to do. What you are failing to address is the simple fact that, truly, the dishwasher is more important to the daily operation of a restaurant than an owner, or a CEO, unless part of that person's job description IS to wash dishes, in a pinch, lol.

    Ultimately, the JOB of dish washing, when not done, results in a closed restaurant MUCH faster than the JOB of a CEO not done does.
    no he isn't anyone can wash dishes that is the whole point not everyone can run a business.
    so no it doesn't. you seem to think it takes a special person to wash dishes and it doesn't.

    anyone can do it which is why they don't need 15 bucks an hour little skill involved.

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by Glen Contrarian View Post
    Guy, stores close every year...and restaurants close more than any other. You posted showing how a store was closing and I posted in return showing how it had less to do with minimum wage than with good ol' competition - in other words, I know Seattle better than you do.
    are you calling her a liar? please prove she is lieing? ol yea you can't.

    And when it comes to CA, you'll find as time goes on that a rising tide lifts all boats - which is why raising the minimum wage is not nearly so destructive as you seem to think.
    unless the boats sink because the water goes over them. tell that to the business owners having to shut down and lose their business that it isn't so destructive.

    Tell you what - why don't you go visit some nations where there's little or no minimum wage and the unions are weak or nonexistent...and after you spend some time there, get back to us and tell us how wonderfully strong their economies are.
    and here is the strawman. go figure on that one.

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by Glen Contrarian View Post
    ONE store owner does not speak for all store owners...as you would know if you'd actually READ the articles which included statements from several other store owners.
    *sigh* strawmans. I never said it was all business owners. you asked for an example I gave you 3 of them.

    Like I said in the other reply, why don't you go visit some nations where there's little or no minimum wage, where the unions are weak or nonexistent, and after you spend some time there, come back to us and tell us how wonderfully strong their economies are.
    again strawman.

    how about address the fact that skilled labor positions such as mine are going to want more money? if not you have devalued not only my education but my job position as well on top of that I am faced paying higher prices because of no skill labor.

    no one is going to give me a 60% raise and my job is way more demanding than flipping a burger or putting a box in a bag.

    how about this you try and justify paying someone 15 bucks an hour when the job doesn't have the requirement to make that kind of pay.
    ol yea you can't.

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by Chomsky View Post
    I live in a state where the minimum wage is barely half the $15 minimum proposed here, and self-bag & automated check-outs are now prevalent (& growing).

    It appears your logic may be flawed as to this specific example, at least.
    not at all. they are not in all places. they are becoming more prevalent as states pass these obscene minimum wage laws.
    I don't need waitresses anymore. I just need a few people to run food out and refill drinks.

    I don't need cashiers or bag boys. you bag your own stuff.

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by poweRob View Post
    You seem to be all about concern for business expense an not at all for business income... which also goes up when the floor is raised as customers have more to spend.
    there is no evidence of this at all as any increase in money is offset by the increase in prices. not to mention increased taxes on that money.
    it also has no effect when you work 24 hours a week if that and make the same amount of money.

    there is also no evidence that they will spend it in that business.

    no when the floor is raised business costs go up and so do prices and reduced staff to offset costs.

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by maxparrish View Post
    But the 'economic shock' is just a euphemism for the harmful economic effect on businesses and labor. As such it has nothing to do with how educated the work force is - all other things being equal assuming that 25 percent of the workforce in LA or Seattle is getting a raise, then some will retain their jobs and some won't. The only difference is that in Seattle the average education of the unhired/laid off will be higher.

    The only variables that mitigate impact on a work force is the gap between the minimum and market wage, and the percent of folks in the workforce that earn below the new minimum wage. I don't know what the 'gap' will be in LA, nor the percentage of the LA workforce who earns below that wage, but if they are statistically similar, then the impact on LA will be similar.

    In any event, 25 percent of the workforce is a huge number to be affected by a new minimum wage. In 2013 the number of workers affected by the new federal minimum wage was about 2 million. Among those paid by the hour, 1.6 million earned exactly the prevailing federal minimum wage of $7.25 per hour. About 2.0 million had wages below the federal minimum. Together, these 3.6 million workers with wages at or below the federal minimum made up 4.7 percent of all hourly paid workers. THAT is modest.

    But it is implausible that a major 50 percent wage increase (from 9.50 to 15 an hour, for example) could be characterized as having "modest impact", especially on the businesses and employees of that "25 percent". One would expect it to have an impact significantly greater than that historically experienced.



    We don't need to wait for 'data'; economic factor theory, minimum wage experience, and common sense already tells us what will happen - disemployment, redistribution of jobs shutting out the unskilled, young, etc., reduced schooling-training, and lower job creation for this group. And we know that wage costs tend to redefine the kind of businesses that survive (or thrive). For example, fast food outlets may tend to gain business as less labor efficient diners and small resteraunts tend to be more severely impacted.
    Several points:

    1. I never suggested that there would be no adverse impact. I've noted repeatedly that there would be some adverse impact (i.e., low-skilled/unskilled labor, low-wage labor-intensive firms, etc.). How much is uncertain, but it would be less than such cities as Los Angeles where unskilled or low-skilled labor plays a larger role.

    2. Just because 24% of workers earn less than the threshold wage does not mean that all of them would lose their positions. Indeed, only a fraction of them would. In its study concerning a possible hike in the federal minimum wage to $10.10 per hour, the Congressional Budget Office estimated that of the 33 million workers earning $11.50 or less per hour (as near-minimum wage rates would also rise due to market adjustments), 1.5% would lose their jobs. Moreover, at least some share of businesses will be sufficiently creative to mitigate the impact. One example (Ivar).

    3. Some share of the 24% of workers earning less than $15 per hour (those under age 18 and certain independent contractors) would not be subject to the full minimum wage, reducing the at-risk labor pool.

    4. The empirical literature on the minimum wage is in consensus on the idea that the very low-skilled and low-skilled workers would be at greatest risk of job loss.

    5. Some positive benefits found from past hikes entailed a share of the population ultimately receiving more education than would otherwise have been the case (http://www.nber.org/papers/w16355.pdf) and increased education provides economic returns.

    Overall, I suspect that the adverse impact will be somewhat above what the proponents of the minimum wage law expected, but will decimate restaurants, among other firms employing lower wage workers. It is plausible that given its economic structure (including but not limited to prevailing wages), Seattle may still have an unemployment rate that is below the national unemployment rate by January 1, 2017 when the first tier of firms are expected to be paying their workers $15 per hour. I'm notably less optimistic about Los Angeles.

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    Re: Los Angeles Raises Minimum Wage to $15 an Hour

    Quote Originally Posted by poweRob View Post
    You seem to be all about concern for business expense an not at all for business income... which also goes up when the floor is raised as customers have more to spend.
    Not the ones who lose their jobs.
    Give a man a fish and he eats for a day. Teach a man to fish and he stops voting for the Free Fish party.

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