Yeah
That will not result in an exeoudous of head offices and capital out of the country
Perhaps you may want to consider separating your disgust for a specific individual from the economic outcomes of a fruitless attempt to punish him
why the minimum wage is bad
- Thread starter msog87
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That will not result in an exeoudous of head offices and capital out of the country
Perhaps you may want to consider separating your disgust for a specific individual from the economic outcomes of a fruitless attempt to punish him
Such as the other layers of govt regulations?
it is a whole lot more realistic than yours
Fuji I mostly love your writings, 9/10 things you are correct on. But this one you're wrong.
You're own logic is flawed on this one. Why wouldn't the $10/hour people go back to school and upgrade their skills to get a higher level job anyway? Why do they need the minimum wage raised to do this?
The minimum wage is nothing more than incentive to get a better paying job. And yet millions of people are content to have these minimum wage jobs but complain that they're below the poverty line.
It's a good question, but the reality is people don't -- indeed there are people out there earning minimum wage, and indeed if you raised the minimum wage, over a medium time frame, those people would be forced to upgrade their skills. Considering how many subsidized programs there are for the poor to help them upgrade their skills you would think these people would find a program to take advantage of and upgrade--but they just don't do it.
Moreover there are people who make apparently economically braindead choices like dropping out of highschool to work--raising the minimum wage cuts off their "opportunity" to do that and encourages them to stay in school longer.
Perhaps it is risk aversion--going back to school is a high risk venture and people who are borderline poverty tend to be highly risk averse. Raising the minimum wage forces them into unemployment, at which point they are simultaneously incented to go back to school (nothing to lose) and in addition eligible for a variety of programs based on their unemployment status.
Homer my point is just that people tend to focus too much on the impact of the minimum wage on EMPLOYER incentives. Things get a lot more interesting when you start looking at what it does to EMPLOYEE incentives.
In the policy gobbledegook it's always presented as forcing employers to pay a living wage, but in a more practical sense it outlaws Canadians from working below a certain skill level, and that has implications which aren't necessarily negative if our goal is to build a higher skilled workforce and intentionally specialize into being a skills/knowledge economy.
In the policy gobbledegook it's always presented as forcing employers to pay a living wage, but in a more practical sense it outlaws Canadians from working below a certain skill level, and that has implications which aren't necessarily negative if our goal is to build a higher skilled workforce and intentionally specialize into being a skills/knowledge economy.
In the words of homerjsimpson: "Beautiful"...
It's very easy for people who don't operate a small business (10-15 employees) like myself to say "up the minimum wage" and everyone will be happy. They have no idea what goes into operating a company, it's no 9-5 job. I treat my employees well, give them a nice bonus at Christmas but I can only charge so much for the products I sell, so legislating me to pay them more per hour would probably mean I would have to cut back on my staff.
I have employees who ask for raises all the time because they have 2 or 3 kids to support. I'm sorry but it was their decision to have that many kids, they don'y have a skilled trade and I simply can't afford to pay them more.
People think it's so easy running a business. If that's the case, start your own and quit bitching about your wage. I work double the hours my employees do each week.
You're confused. You talk about internships, minimum wage jobs and entry level jobs as if they mean the same thing. No they don't. For example most internships pay $0.0.
Whereas entry level pay for a Harvard MBA on Wall Street can be as high a $100K. Many minimum wage jobs are just that, they don't have a skill component whatsover.
There is no shortage of minimum wage jobs in Canada or the US. CNN reported recently that in some parts of the US companies are having a hard time finding people that will work for $12/hour. Many people choose not to take jobs that do not pay a living wage. Anyone who says that they can't find a job that pays minimum wage is just not looking hard enough.
JOBS GO BEGGING
http://jobs.aol.com/articles/2012/11/30/seasonal-jobs-go-begging-are-the-unemployed-getting-picky/
With unemployment hovering around 8 percent, you'd think unemployed workers would be champing at the bit to take a job -- any job. But shipping companies such as UPS Inc. and GSI Commerce Inc. can't find enough workers to staff warehouses in Louisville, Ky., a region with a 7.5 percent jobless rate.
According to the local Courier-Journal newspaper, UPS still had 200 openings paying $8.50 an hour on four shifts this week, three months after it announced plans to hire 1,000 temporary workers. To help recruiting efforts, the Atlanta-based parcel-delivery company has offered employees $150 bonuses for referring new hires, who also get the bonus.
Meanwhile, GSI Commerce, an eBay Inc. subsidiary, needs 300 people in the Louisville area, offering applicants wages of $9.25 to $10 an hour plus bonuses tied to attendance and performance. Online retailer Amazon.com Inc. is also hiring in the region, offering a starting wage of $12 an hour for positions in packing and shipping, among others.
So why are the jobs going unfilled? In part, the shortage is caused by the large number of shipping companies in the area -- dozens of which have been attracted by the UPS Worldport sorting hub at the Louisville International Airport.
"We have attracted so many companies to come to the area and bring jobs here that they are competing for some of the same workers that we would like to have out in our hub," UPS spokesman Mike Mangeot told the newspaper.
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The laws of supply and demand operate in every aspect of the market: Offer an attractive price and people will flock to sell you their stuff; hold firm at an unrealistically low price and you'll starve. When everyone who wants the same thing has crowded into the same market to get it, the price will go up. The only way to make it go down is to figure out how to flood that market with suppliers competing on price (in this example the classic American solution would be undocumented aliens, but big public companies have trouble staying under that radar). That likely means waiting while you advertise ever wider, until you finally reach the notice of suppliers willing to deliver at your price. Or you suck it up and pay the higher price that attracts the closer sellers faster.
Sometimes managers aren't bright enough to see that on their own—many have real trouble seeing workers as sellers at all—and governments wind up doing it for them.
After reading this thread, there seems to be a lot of false assumptions made by some who don't seem to want to justify why they are taking the view they do.
While I am traditionally not for large government or large social net programs, I do believe that raising the min wage would be a positive thing for all involved. Here is why.
Those that say that they will have to lay-off staff if faced with a higher min wage I think are completely out to lunch. I'm a small business owner myself and I live and breath this stuff every day. If the gov't mandates a new fee or cost increase, as an industry, we don't just start laying off people to cover the cost increase, we increase prices to our customer to cover the cost increase because equally, all of us in the industry are faced with the same cost increase so we are all in the same boat. I can't recall ever seeing some kind of government imposed cost increase that is even for all employers in a sector (like an increase in WSIB or CPP) that resulted in mass layoffs....it usually results in cost increases to the customers. So if the min wage increases, the waitress at the local breakfast joint isn't going to lose her job, the restaurant is going to raise the price of their meals a few points to cover off the cost increase because their competitors are in the same boat as them and unless they all choose to lower their margins accordingly, they will all raise their prices and keep their existing clientele. Obviously this is a win for the employee but its also a net wash for the employer.
Now another win I see from this is gov't spending on social programs. There are a lot of posts here stating that even with a jobless rate of 8%, many areas can't attract employees for even unskilled jobs. I believe that the main reason for this (beyond some of these individuals just being unemployable) is that there isn't much of a difference in net take home money between working min wage and staying on welfare or EI. I would be quite confident in saying that an increase in min wage would increase the gap between what the employee could make working vs on a social program and this would result in some individuals moving away from a social program to a min wage job. The big question is how many, I don't know the answer to that but it would definately entice some individuals that's for sure which reduces the deficit for taxpayers which is good for all.
I see this as a win-win for everyone (except the customer at the restaurant who will have to pay an extra $0.20 for his eggs)
While I am traditionally not for large government or large social net programs, I do believe that raising the min wage would be a positive thing for all involved. Here is why.
Those that say that they will have to lay-off staff if faced with a higher min wage I think are completely out to lunch. I'm a small business owner myself and I live and breath this stuff every day. If the gov't mandates a new fee or cost increase, as an industry, we don't just start laying off people to cover the cost increase, we increase prices to our customer to cover the cost increase because equally, all of us in the industry are faced with the same cost increase so we are all in the same boat. I can't recall ever seeing some kind of government imposed cost increase that is even for all employers in a sector (like an increase in WSIB or CPP) that resulted in mass layoffs....it usually results in cost increases to the customers. So if the min wage increases, the waitress at the local breakfast joint isn't going to lose her job, the restaurant is going to raise the price of their meals a few points to cover off the cost increase because their competitors are in the same boat as them and unless they all choose to lower their margins accordingly, they will all raise their prices and keep their existing clientele. Obviously this is a win for the employee but its also a net wash for the employer.
Now another win I see from this is gov't spending on social programs. There are a lot of posts here stating that even with a jobless rate of 8%, many areas can't attract employees for even unskilled jobs. I believe that the main reason for this (beyond some of these individuals just being unemployable) is that there isn't much of a difference in net take home money between working min wage and staying on welfare or EI. I would be quite confident in saying that an increase in min wage would increase the gap between what the employee could make working vs on a social program and this would result in some individuals moving away from a social program to a min wage job. The big question is how many, I don't know the answer to that but it would definately entice some individuals that's for sure which reduces the deficit for taxpayers which is good for all.
I see this as a win-win for everyone (except the customer at the restaurant who will have to pay an extra $0.20 for his eggs)
Agreed slider2. As long as the new min wage applies to everyone in the jurisdiction, we would see lower profits (if the business decided not to pass the increased costs along) or higher costs to the customer (if the business did pass the costs along). Job losses? Not likely, especially in front-line customer service jobs like McD's. Nobody's going to drive to another province/state for a $1 hamburger.
Minimum wage jobs are also typically not the type of jobs that a large employer (e.g. multinational) would get much economic benefit from outsourcing. Many of the jobs they could outsource/offshore are already gone.
I don't pretend that raising the minimum wage modestly will end poverty. We also need tax reform, social support services, affordable and accessible education and skills training, basic financial literacy, etc, etc, etc. But it is one step, and a good step at that.
Minimum wage jobs are also typically not the type of jobs that a large employer (e.g. multinational) would get much economic benefit from outsourcing. Many of the jobs they could outsource/offshore are already gone.
I don't pretend that raising the minimum wage modestly will end poverty. We also need tax reform, social support services, affordable and accessible education and skills training, basic financial literacy, etc, etc, etc. But it is one step, and a good step at that.
You were on the right track until you implied the government knows better than business
In isolated cases perhaps, however as a general statement it is the other way aound
this argument dos not apply when a company is trying to compete internationally
As a country we have a brutal productivity record and need to improve, adding costs makes the rate go down
It is not a win-win
less government is a win-win
it is ironic you use the restaurant business as an example as that sector has one of the highest failure rates (>50% in the first year)
Adding an additional layer of costs in a fruitless effort to affect poverty will not improve that rate
If you want social programs to impact poverty, they must focus on upgrading marketable skills, not the handouts that just promote dependency
Far too much of the money spent on our precious social programs is wasted on gov't bureaucracy and payments that do not result in a change in the need for assistance
I recall an East Coast woman protesting recent EI changes that will result in the loss of her EI benefits. She was a seasonal worker at the fish plant and collected EI in the off season , for the last 35 years
She has made this a lifestyle and expects it to continue
That is totally unacceptable as she willingly become dependant and made no effort to correct the long term problem
Perhaps she could have become a net benefit to Canada as opposed to the burden she is , if the first five years of EI benefits had been directed to providing her with a marketable skill rather than paying her to sit on her ass half the year for the next three decades
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Again, this fails the logic test. So increasing the minimum wage increases the prices of goods and services across the board... which increases the cost of living. So what good did the increase do? The minimum wage needs to be raised again.
I am also a small business owner but I don't pay anyone in my company the minimum wage. I suppose I would if I wanted lousy employees. Because you get what you pay for.
A change in the minimum wage doesn't increase the prices of goods and services "across the board". You demonstrated that with your second paragraph, since you don't pay anyone in your company the minimum wage. Your payroll would not be affected.
There might be incremental price changes in industries predominated by minimum wage workers, but since wages are only one component of business costs it wouldn't result in a proportional increase in overall cost of living. i.e. a 10% increase in the minimum wage would not result in a 10% increase in business costs (though the precise impact would vary), and also certainly would not result in a 10% increase in the overall cost of living.
So, a minimum wage? Prevent high school dropouts from finding employment by making sure the minimum wage demands at least a highscool education to justify the salary, encouraging kids to stay in school longer, upgrading their skills.
I was replying to slider, and that's what he was implying.
edit to add: before someone argues this, I'll get in here. I guess he was referring to a specific industry that generally employs minimum wage earners. Which isn't exactly "across the board". But many industries that do employ minimum wage earners affect all of us. How many minimum wage earners work in the food industry? Doesn't that mean the price of groceries is going to have to go up? And since we all buy groceries, I'm pretty sure that means our cost of living is going up.
Fuji, I'm not sure I follow your logic on this one. Why does raising the minimum wage suddenly mean you need more education for a minimum salary job?
Presumably employers aren't going to overpay, so as the minimum wage climbs, the minimum available job becomes higher skill. It presumably means a switch from more manual to more automated work, and a corresponding shift to slightly higher skilled workers to operate the machinery. Think of how automated a McDonald's is these days--a single worker performs a greater variety of tasks now, thanks to all that automation, and thus requires more training.
(In the short term they may just overpay for the minimum job rather than adapt their processes but in the longer term they should seek to maximize efficiency.)
Well at least you were realistic enough to allow for the possibility. Nothing about business gives it a monopoly on good sense or intelligence. The example of a whole flock of shippers establishing their plants where the infrastructure was good but predictably exhausting the labour pool, and then imagining they were competing by holding the line on wages no one was willing to work for was a beaut. Neither sensible nor intelligent.
But let the government dictate an 'anti-business' field leveller like a minimum wage they'd all have to pay that was high enough to attract workers and they'd be chuckling quietly back to the bank, even if publicly they were mouthing doctrinaire fairy-tales like your 'business knows better'. In many cases perhaps—there are more businesses after all—but there are also more bankrupt businesses than governments. No natural law says businessman=smart. The silly folks who do keep leaving out necessary adjectives like 'smart', 'good' or most importantly 'successful'.
something that is missing in this argument is the simple fact a minority (20%) controls a majority(80%) of the wealth
and with this control they not only offer nothing to society but instead create economic bubbles that destroy the economy (the great depression, the recent collapse) as they seek even more wealth
the solution is to find a way to have a free market without such grossly unfair distribution of wealth
but as long as the rich control society such an economic solution will never be sought and they will kill those who lead such a revolution as the elite has always done
and with this control they not only offer nothing to society but instead create economic bubbles that destroy the economy (the great depression, the recent collapse) as they seek even more wealth
the solution is to find a way to have a free market without such grossly unfair distribution of wealth
but as long as the rich control society such an economic solution will never be sought and they will kill those who lead such a revolution as the elite has always done
Article and stats showing there is no place in the US where a minimum wage employee can afford a two bedroom apartment.
http://www.juancole.com/2013/02/beggaring-employment-infographics.html
http://www.juancole.com/2013/02/beggaring-employment-infographics.html
