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Minimum Wage Hikes Reduced Employment of Low-Skilled Workers

Papa bull said:
Costco pays it's employees more and, therefore, they get the first choice of employees. That's where the best employees are going to go. That's their business model and if you want more, your best bet would be to raise your game enough to get hired by them instead of complaining that BJ's doesn't pay as much.
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Failure to address the actual point is duly noted.


As for Costco having better employees....that's laughable. That's saying that anywhere there is a Costco, there must be superior employees, lol. Your model only works if there is a Costco in every single town, waiting to employ the best of the best of each town. Otherwise, you are forced to admit that a lot of times, employees are stuck working for the employers that are accessible to them. Oh sure, you can say that we should all move to where the jobs are, or some other laughable conservative meme. Truth is, if we applied those silly conservative memes on a national scale, our entire way of life would collapse within a fortnight. This is why people tend to say things like "micro economic solutions don't work on a macro economic scale".
 
Papa bull said:
The price of a deck screw isn't dependent on the size and grandeur of the deck, Kevin. And the price of the hourly wage for a security guard doesn't change because it's the big mall instead of the strip mall. If you want to know what you're worth, go out and find out what's the most anyone will pay you for the skills you have. That's what your skills are worth. You don't have to like reality but you do have to live in it whether you like it or not or accept it or not.
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Actually, you're dead wrong. A larger structure by definition requires different materials to build, than a smaller counterpart.

And pay absolutely fluctuates from type of place to type of place, for the same job.

The GM of a Bed Bath and Beyond is going get paid nothing CLOSE to what the GM of a BJ's does. Even though they do the same job, for all intents and purposes.

Scale changes everything. As for finding out what I'm worth, it depends on what I'm doing. You see, people aren't paying for ME, they're paying for a service I provide. Be that professional photography, restaurant management, or HR/Efficiency advice. They don't value ME. They value the job they need done, and whatever criteria they need met within that job. So the question isn't so much what I'M worth, it's what the job any given employer needs done is worth to them.
 
KevinKohler said:
Actually, you're dead wrong. A larger structure by definition requires different materials to build, than a smaller counterpart.
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Same screw = same price. What you build with it is irrelevant. You are arguing DIFFERENT screw, different price. If you need better screws, you pay what you must for better screws.

And pay absolutely fluctuates from type of place to type of place, for the same job.
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It CAN but it's not necessarily true. You pay what you must to get the QUALITY you need or want to attract for your business model.

The GM of a Bed Bath and Beyond is going get paid nothing CLOSE to what the GM of a BJ's does. Even though they do the same job, for all intents and purposes.
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It isn't the same job. The different organizations have different strategies and their pay structures are part of that strategy.

A company pays what it needs for the quality of help it wants to attract and keep. It's just that simple. If you don't think the wage is right for you, seek employment elsewhere.

Scale changes everything.
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No it doesn't. Not in the sense we've been discussing. Stocking shelves at Wal-Mart isn't an inherently more valuable task than stocking shelves at dollar general despite the vast difference of scale.

As for finding out what I'm worth, it depends on what I'm doing. You see, people aren't paying for ME, they're paying for a service I provide.
Cha-Ching! That is exactly right.

Be that professional photography, restaurant management, or HR/Efficiency advice. They don't value ME. They value the job they need done, and whatever criteria they need met within that job. So the question isn't so much what I'M worth, it's what the job any given employer needs done is worth to them.
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It sounds like you get it, after all. Your job is worth whatever someone is willing to pay you to do it. After all that, you ended up at the right place after all!
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Papa bull said:
Same screw = same price. What you build with it is irrelevant. You are arguing DIFFERENT screw, different price. If you need better screws, you pay what you must for better screws.



It CAN but it's not necessarily true. You pay what you must to get the QUALITY you need or want to attract for your business model.



It isn't the same job. The different organizations have different strategies and their pay structures are part of that strategy.

A company pays what it needs for the quality of help it wants to attract and keep. It's just that simple. If you don't think the wage is right for you, seek employment elsewhere.

Scale changes everything. As for finding out what I'm worth, it depends on what I'm doing. You see, people aren't paying for ME, they're paying for a service I provide.

It sounds like you get it, after all. Your job is worth whatever someone is willing to pay you to do it. After all that, you ended up at the right place after all!
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And that distinction, that difference....the difference between attaching value to the worker, vs attaching value to the job, makes ALL the difference.

It's the difference between advocating for a minimum wage so that people can live a better life, vs advocating for a minimum wage so that people spend more in a consumer economy.
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KevinKohler said:
Papa bull said:
Same screw = same price. What you build with it is irrelevant. You are arguing DIFFERENT screw, different price. If you need better screws, you pay what you must for better screws.



It CAN but it's not necessarily true. You pay what you must to get the QUALITY you need or want to attract for your business model.



It isn't the same job. The different organizations have different strategies and their pay structures are part of that strategy.

A company pays what it needs for the quality of help it wants to attract and keep. It's just that simple. If you don't think the wage is right for you, seek employment elsewhere.



And that distinction, that difference....the difference between attaching value to the worker, vs attaching value to the job, makes ALL the difference.

It's the difference between advocating for a minimum wage so that people can live a better life, vs advocating for a minimum wage so that people spend more in a consumer economy.
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It is the difference and you still get it wrong. An employer pays what A JOB is worth. Your desire to live a better life doesn't change or drive that. And advocating for a higher minimum wage to "improve the economy" only makes sense if you think you can stand in a bucket and lift yourself by pulling on the handle. Artificially increasing cost with minimum wage hikes doesn't change anything except to devalue the currency.
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Papa bull said:
KevinKohler said:
It is the difference and you still get it wrong. An employer pays what A JOB is worth. Your desire to live a better life doesn't change or drive that.
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I don't give a **** about a better life.



Well, yeah, I do. You see, in order for MY bonus to get me into 6 figures this year, I need people to spend more. At least 14% more. And the best way I can figure to make people spend more is for them to have more to spend. Paying people more means they have more to spend. Sure, it will mean a FEW will have LESS to spend, but then, they have so much money, they could hardly spend it all anyway. Unless they're just idiots with their money, anyway.
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KevinKohler said:
Papa bull said:
I don't give a **** about a better life.



Well, yeah, I do. You see, in order for MY bonus to get me into 6 figures this year, I need people to spend more. At least 14% more. And the best way I can figure to make people spend more is for them to have more to spend. Paying people more means they have more to spend. Sure, it will mean a FEW will have LESS to spend, but then, they have so much money, they could hardly spend it all anyway. Unless they're just idiots with their money, anyway.
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Well, raising minimum wage MUGHT benefit you short term IF most of your customers make minimum wage AND they spend all their extra income in your store. With less than 3% of all employees making minimum wage, good luck with that. Meanwhile, jobs will get cut and prices will increase so you can hope maybe it might help you get closer to making your six figure salary with bonus.
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Papa bull said:
KevinKohler said:
Well, raising minimum wage MUGHT benefit you short term IF most of your customers make minimum wage AND they spend all their extra income in your store. With less than 3% of all employees making minimum wage, good luck with that. Meanwhile, jobs will get cut and prices will increase so you can hope maybe it might help you get closer to making your six figure salary with bonus.
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Most of my companies customers make more than minimum wage. Most of my companies employees make minimum wage...or at the least, start OUT at minimum wage. Of course, those employees are OTHER people's customers, too. And those OTHER people? They are my companies customers. So when my company puts more money into THEIR customer's pockets, they have more money to spend at BJ's.

As for jobs being cut, which jobs are being cut as a DIRECT result of increases to minimum wage? Thus far, no one has presented any credible evidence to support such a theory. And as stated before, prices will not increase because market competition will keep them as low as possible. You can thank a generous man at Costco for that, in other words.
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But enough about my crazy theories.



Tell me YOURS. How would YOU go about increasing the growth of a CONSUMER economy?
 
KevinKohler said:
But enough about my crazy theories.



Tell me YOURS. How would YOU go about increasing the growth of a CONSUMER economy?
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You seem to have some sort of crazy idea that strong economies are built by governments instead of industry. If you want a strong economy, stop screwing around with free market principles. They're not broken and attempts to "fix" what isn't broken aren't helping. Bin fact the attorney to "fix" the free market with policies to promote homeownership to people that haven't proven they are responsible enough to own homes caused this mess.
 
Papa bull said:
You seem to have some sort of crazy idea that strong economies are built by governments instead of industry. If you want a strong economy, stop screwing around with free market principles. They're not broken and attempts to "fix" what isn't broken aren't helping. Bin fact the attorney to "fix" the free market with policies to promote homeownership to people that haven't proven they are responsible enough to own homes caused this mess.
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There is no such thing as a free market. There never has been, there never will be. These free market principles you speak of...what are they? Just what regulations upon our market would you get rid of? No minimum wage at all? Is that what you advocate? No too big to fail? No rules at all? Or some rules....as long as you approve of those rules? Tell me about these principles you hold dear.
 
KevinKohler said:
There is no such thing as a free market. There never has been, there never will be. These free market principles you speak of...what are they? Just what regulations upon our market would you get rid of? No minimum wage at all? Is that what you advocate? No too big to fail? No rules at all? Or some rules....as long as you approve of those rules? Tell me about these principles you hold dear.
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So now I say "free market principles" and you pretend that you have no idea what they are and then go on to argue some asinine tangent about me saying we ARE a free market. Do you really have no clue at all that there is a difference between free market principles and the idealistic state of a free market? Or do you know the difference but find it convenient to pretend you don't.

Google "free market principles" if you are truly that clueless. Educate yourself. I'm not about to try to teach you the fundamentals of free market principles just so we can have a reasonable discussion. You need to do your own homework.
 
KevinKohler said:
Minimum wage went up to 9.15 in CT. From 8.25, or something. My company employees a lot of minimum wage workers. None of them got laid off. Not in any of the stores.


The bottom line is this...a company doesn't hire or fire based on the expense of doing so, their primary reason is need. We NEED those employees, so even though the cost to employ them just went up, we can't AFFORD to let any of them go.

We have also not raised prices....well, except for beef. Beef is skyrocketing all over the place, though.
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Prices do increase when the Goverment steps in with their arbitrary mandates that increase cost .

These cost increases aren't justified through efficient and effective free market principles.

They're justified politically, with narratives and plattitudes based on " equity ".
 
Papa bull said:
So now I say "free market principles" and you pretend that you have no idea what they are and then go on to argue some asinine tangent about me saying we ARE a free market. Do you really have no clue at all that there is a difference between free market principles and the idealistic state of a free market? Or do you know the difference but find it convenient to pretend you don't.

Google "free market principles" if you are truly that clueless. Educate yourself. I'm not about to try to teach you the fundamentals of free market principles just so we can have a reasonable discussion. You need to do your own homework.
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I am perfectly familiar with free market principles, I listed a few. The problem is, I don't know which ones YOU value, which is what we are now discussing, yes? You see, I asked YOU how YOU would go about increasing economic growth in this country, and your answer was "free market principles".

Well, free market principles are ideas surrounding free trade, reduced regulation, or no regulation of markets, thus allowing supply and demand set prices, and let the buyer beware.
 
Fenton said:
Prices do increase when the Goverment steps in with their arbitrary mandates that increase cost .

These cost increases aren't justified through efficient and effective free market principles.

They're justified politically, with narratives and plattitudes based on " equity ".
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So, no minimum wage, then?

And by your like of this post, I am to surmise that you agree with this as well, Papa?

Be less vague, folks. Come out and say it, do you, or do you not, support a minimum wage?
 
And still, not a single post with any evidence backing up the claim in the OP.


What is one to think?
 
KevinKohler said:
Minimum wage went up to 9.15 in CT. From 8.25, or something. My company employees a lot of minimum wage workers. None of them got laid off. Not in any of the stores.


The bottom line is this...a company doesn't hire or fire based on the expense of doing so, their primary reason is need. We NEED those employees, so even though the cost to employ them just went up, we can't AFFORD to let any of them go.

We have also not raised prices....well, except for beef. Beef is skyrocketing all over the place, though.
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Never read an economics book have you?

No to all.

I have run and owned a few companies. The COST of hiring is one of the most difficult and costly aspects of running a business. The rule is fast and hard. You need to hire when the demand is there and you have to expand to meet it. If the cost of hiring is too great, you simply do not expand, and if margins are low, as they are now, and borrowing is risky, you down size, lay people off.

In a stalled or slow growth economy, there is no margin headroom, you dare not increase prices to meet the cost of labor, you will lose all and more of the business you are trying to chase.

Sometimes, you can meet a spike in demand with overtime, which is cheaper than hiring a new, full time, breaking them in etc.

There is NOT ONE business text nor plan, there is NOT ONE economics text that does not directly correlate government regulated cost of hiring increases and LESS employment.
 
It seems to me that this is the critical "hidden" paragraph:

In July 2009 roughly half of US states were bound by the new federal minimum to increase their minimum wage rates by 70 cents, from $6.55 to $7.25 per hour. The remaining states’ minimum wage rates changed by an average of roughly 10 cents. The first dimension of our analysis thus compares changes in the employment of low-skilled workers in ‘bound’ relative to ‘unbound’ states.
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About half of U.S. states had minimum wage laws near the 7.25 target. Things didn't get worse in those states. The point that seems to be lost, then, is that minimum wage as such doesn't lead to worse employment outcomes, but rather, changes to minimum wage, and presumably, quite a few other factors. I don't have a lot of time, but consider that if profits to shareholders remained constant across all industries, costs were raised a little behind wages (as is normal), and wages were raised in proportion to gross revenues, there wouldn't be any problem. The problem occurs because we don't control everything that needs to be controlled in order to have a good economy.

It really should be a no-brainer to have a minimum wage; anyone who looks at labor conditions before the reforms of the 20's and 30's should learn this lesson. The complaint from those who oppose minimum wage hikes is really that because the wealthy have become accustomed to ever greater shares of wealth, minimum wage increases lead to lower employment levels. An almost exact analogy occurs when someone is on the road to becoming obese: because the person is becoming accustomed to consume ever more calories, any increase in exercise will lead them to eat still more. The ridiculousness of such an argument against exercise should be obvious, but it's more or less just what opponents of minimum wage increases are really saying.
 
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The COST of hiring is one of the most difficult and costly aspects of running a business. The rule is fast and hard. You need to hire when the demand is there and you have to expand to meet it.
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Yes, human resources tend to be the most costly investment most businesses will make. And yes, you hire, or add payroll, when there is more demand, IE, labor needing to be executed.

If the cost of hiring is too great, you simply do not expand, and if margins are low, as they are now, and borrowing is risky, you down size, lay people off.
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If the cost of hiring MORE employees exceeds the amount the increased business would earn you, you have a flawed business model, one that was flawed BEFORE any increase to minimum wage to begin with. Think about it. What you are suggesting is that you can't AFFORD to bring in more business. I've run businesses, too. And I know that a business that can't afford to keep up with it's business, has problems in other areas, beyond human capital. You lay people off when there is less work, IE, less business....you don't stick your middle finger out at customers just because you have to pay your employees more. If the cost of employing people exceeds the money your business brings in, you close your doors.

In a stalled or slow growth economy, there is no margin headroom, you dare not increase prices to meet the cost of labor, you will lose all and more of the business you are trying to chase.
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So to sum up, increases to minimum wage, according to you, means massive business closures, since they don't dare increase prices, and paying their employees now exceeds income from business.

Sometimes, you can meet a spike in demand with overtime, which is cheaper than hiring a new, full time, breaking them in etc.
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Planning your business around limited time increases in demand is a poor business model. You're either growing, or you're dying.

There is NOT ONE business text nor plan, there is NOT ONE economics text that does not directly correlate government regulated cost of hiring increases and LESS employment.
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Correlation does not equal causation. The periods of highest minimum wages were also the periods of greatest economic largess in this country, and of all the countries in the world, the wealthiest all have the highest minim wages.
 
ashurbanipal said:
It seems to me that this is the critical "hidden" paragraph:



About half of U.S. states had minimum wage laws near the 7.25 target. Things didn't get worse in those states. The point that seems to be lost, then, is that minimum wage as such doesn't lead to worse employment outcomes, but rather, changes to minimum wage, and presumably, quite a few other factors. I don't have a lot of time, but consider that if profits to shareholders remained constant across all industries, costs were raised a little behind wages (as is normal), and wages were raised in proportion to gross revenues, there wouldn't be any problem. The problem occurs because we don't control everything that needs to be controlled in order to have a good economy.

It really should be a no-brainer to have a minimum wage; anyone who looks at labor conditions before the reforms of the 20's and 30's should learn this lesson. The complaint from those who oppose minimum wage hikes is really that because the wealthy have become accustomed to ever greater shares of wealth, minimum wage increases lead to lower employment levels. An almost exact analogy occurs when someone is on the road to becoming obese: because the person is becoming accustomed to consume ever more calories, any increase in exercise will lead them to eat still more. The ridiculousness of such an argument against exercise should be obvious, but it's more or less just what opponents of minimum wage increases are really saying.
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Well said. For some reason, the like option is down.
 
Anyone who looks at the fact that over 97 percent of all employees make more than the federal minimum wage should see that there is no reasonable basis for claims that minimum wage is all that keeps everyone from working for slave wages.
 
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