Political Discussions
Minimum Wage Hikes Are Hurting Mom & Pop
Posted by CynergyDiva • 8/07/09 • Subscribe to this Discussion [RSS] • Report This Topic
Topics: commentary, minimum wage
I've posted a blog about a commentary that was featured yesterday on my local radio station about minimum wage hurting small business. I'd be interested to know your thoughts on the subject
Thanks
Here's the link: linkbee.com/minwage
User Comments
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If Mom and Pop can't afford minimum wage, which in real terms is still lower than when I had my first job at $3.35 per hour, then maybe Mom and Pop have no business hiring people. Maybe Mom and Pop need to keep it in the family instead. -
Not normally in support of the minimum wage, but I can see how it might be a politically convenient way to stabilize prices under these particular set of conditions. 1) It kills a lot of production, and thus inventory. 2) It increases the buying power of the productive/consumptive forces still available. Only trouble is that the minimum wage hike would likely be permaneant, and that could cause long-term structural damage that might dampen recovery. After all, if you take away a businesses abillity to cut wages you take away a lot of their insurance against sudden meltdown and loss of value. I'm not sure which effect would be greater, and I fear that this scheme would probably work better in a dictatorship rather then a democracy where self-interested politicans would never cut the minimum wage.
EDIT: As for Ma & Pa in particular, yeah, you're killing a lot of their insurance policy against a sudden loss of customer base. It hurts them. The question is does it help the rest of the country enough to be justifiable. My guess is, probably not, just because of the nature of our political system.-
@MS: I've read enough economic "analysees" from Time Magazine to not trust anything they publish on the issue. But I have read Mother Jones on the left-wing, the Economist (generally right-wing but really more iconoclast), and the Wall Street Journal on the right. If these assumptions are so "questionable," why don't you name them and explain why.
@Agit8r: I know there are hoovervilles (called Nickelsville, after Seattle's most BELOVED mayor, or temporary ones called Tent Cities) in Seattle.
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Not really sure what you are saying, jeremy, but maybe some links about the past would be in order, since there is nothing new about any of this.
Here is a graph (at the top of the page) of federal minimum wage history that includes information about what that means in real buying power: oregonstate.edu/instruct/anth484/minwage.html (There's more chart fun there too.)
Here is the federal govt's chart, but without the data in real terms: www.dol.gov/ESA/minwage/chart.htm
And here's a history from the federal govt: www.dol.gov/esa/minwage/coverage.htm
I hadn't realized that such legislation goes all the way back to FDR.
Of course, states have their own laws, often at rates above the federal government's. Here's a map that shows them: www.dol.gov/esa/minwage/america.htm-
I see Time magazine published a history of the minimum wage a few weeks ago: www.time.com/time/nation/article/0,8599,1912435,00.html
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I'm saying that the minimum wage in general is not that great of an idea (because in the end it just kills off production and thus what money buys - show statistics to the contrary and I will simply point out that the minimum wage is not the only actor on the economy) but in this case that may actually be what we need.
Sort of like the Cash-for-Clunkers scheme, killing off large numbers of productive businesses through a forced wage hike could potentially reduce stockpiles, thus raising prices and bringing our deflation to an end. It would also create a slight increase in buying power (temporarilly) for the people who keep their jobs, allowing them to buy from the stockpile as well, further increasing prices.
Trouble is though, government won't want to reduce it afterwards. -
Okay, that depends on some questionable economic assumptions, but it's creative. Have a look at the Time piece, which addresses the discourse (pro and con) that has been around for decades.
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I don't know...
Go to the people in tent cities, and ask them if they'd rather have a job making $5 an hour or stay in their tents.
Some jobs that require doing isn't worth 7 bucks an hour. Instead we are using people that could be better used in other areas to do those tasks.
Allowing people to offer a job at any pay, and then letting people decide if they think its worth it or not seems like a good idea to me. If nothing else, it could serve as entry ways to the job market.
I find it incredible that the government tells people they aren't allowed to bid their own time at whatever price they think is fair to offer it.
The only people suffering from this are the bottom tier workers, who are overworked at their current pay because the company can't justify another employee at minimum wage to offload the most menial tasks. -
are there actually Hoovervilles where you live? -
The one here in Fort lauderdale / Miami isn't big, mostly they are spread out over several smaller areas. But i hear that real-estate under the freeway overpasses are at a premium right now.
The one in Tampa is a lot bigger.
m.tampabays10.com/news.jsp?key=199242&rc=lo -
Is that one of those articles transmitted via Twitter?
*tries to refocus eyes* -
@MS: I've read enough economic "analysees" from Time Magazine to not trust anything they publish on the issue. But I have read Mother Jones on the left-wing, the Economist (generally right-wing but really more iconoclast), and the Wall Street Journal on the right. If these assumptions are so "questionable," why don't you name them and explain why.
@Agit8r: I know there are hoovervilles (called Nickelsville, after Seattle's most BELOVED mayor, or temporary ones called Tent Cities) in Seattle.
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Well raising wages makes everything go up for the company. Doesn't take a genius to figure that out.-
I have noticed this phenomenon here in WA (where we have the highest min. wage in the nation). I've also noticed that merit-based wages simply don't occur in lower tier occupations, and that upward mobility toward higher-skilled jobs becomes less attractive, because pay is not much higher. It is decidedly a double edged sword.
Edit: The costs of goods and services go up as well -
Is the small wage differential you've noticed the only factor inhibiting ambition, if I can put it like that, or is lack of insurance another factor?
Regarding costs and companies, the other side of that is that workers spend the money they earn, because they are not in a position to save. That money goes right back into the consumer-driven economy, unless it's getting soaked up by banks in the form of interest.
Costs of goods and services going up? Maybe they should. Maybe we should pay a fair price for what we want. -
I'm just saying, that there are consequences.
in my own experience, I became educated for the trade of CAD drafting, only to be offered dead end jobs making -$1.00 to +1.00 of what I was making as a janitor.
Granted, I was making a bit above minimum wage.
The costs of goods and services is of course mitigated by those retailers who themselves recieve enormous sums of welfare... -
It doesn't have to. Raising prices and reducing jobs is just a spiteful reaction by corporations that just want to maintain their huge bottom lines. God forbid a CEO couldn't afford all the options on his luxury car
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Mark,
"Fair Price" has a real downside. Those with a fair amount of cash really don't care if the milk is 3 or 3.50.
The ones at the bottom do, and what people don't get is that price is a calucation on cost and profit, profit being a percentage in most cases.
So you get a percentage increase that takes out the minimum wage increase. And for people making minimum wage, this turns out as a negative.
Like you said, the real wage is lower than it was, and it will always be lower than it was as long as minimum wage is in place. The difference being that the more you raise minimum wage, the less it will be worth as purchasing power.
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By the way, did you guys actually read the blog I posted?
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Diva, I was going to but sheesh the things you gotta go thru just to leave a comment. After about the third screen asking me to try one of the offers, I gave up. Sorry.
It is an interesting piece and I like your commentary. However I will say this. The big box stores are a double edged sword. On one hand they can wreck a community's economy, but on the other they bring low price goods to folks who have small incomes. I guess I am a fence sitter on this one.
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This looks to be an interesting history on earlier debates about wages in the United States:
Lawrence B. Glickman. A Living Wage: American Workers and the Making of Consumer Society. Ithaca: Cornell University Press, 1997.
Here's a review that offers food for thought: www.h-net.org/reviews/showrev.php?id=1846
(Here's another, which is also interesting, but less accessible to general audiences, because it discusses the specific historiographical implications of the book: www.h-net.org/reviews/showrev.php?id=1860) -
I have to agree with Mark on his first comment.
I've always found the minimum wage debate a peculiar one - it was instituted after the depression because companies refused to pay employees on lower levels wages that were high enough to cover the basic cost of living. When I hear large companies complain about minimum wage I can't help but think that they would pay less than a living wage to employees - why else complain about it, then?
And for the small businesses - if you can't afford to pay minimum wages to your employees, then you have too many employees for your business budget.
There is also the old adage of "you get what you pay for". A lot of companies around here pay dismal wages (relative to the COL) and constantly complain that their employees are unreliable, steal, lie about their time cards and so forth. Well, what do you expect? You either want good employees who are happy to work for you and can afford to work for you without having to work one or more other jobs or wind up stealing from you to make up what you won't pay them!-
No, you don't get what you pay for. Minimum wage means you pay what you have to, and get something else.
It's an artificial means to nothing. Except create a lasting unemployment for people who are worth less or jobs that aren't worth paying the full minimum wage for. -
Yes, actually you do get what you pay for.
If you want good employees, then you have to pay decent wages. That's what you're always saying about CEO's, right? Well, it applies to everyone else, too.
But I suppose it's perfectly fair in your book to amass net profits rather than pay people living wages ("you pay what you have to" - oh God the horror of paying people barely enough to live on!)....of course, we've already tried that here. It gave us a poverty rate of 60%.
That worked out well.
Just because a job seems menial doesn't mean that the person doing it can be treated like a second class citizen or slave. -
Subaltern resistance will come back to bite an employer in the ass. Best pay as fairly as possible and also treat the employees as fairly as possible, even in tough economic times.
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Yep - it's also hard to get people to buy things to keep the economy bustling when you refuse to pay them enough to cover all of the necessary expenses, never mind the luxury items that retail stores and restaurants provide.
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For all his opposition to organized labor, that's one thing Henry Ford understood. (He does still count as a capitalist, no?)
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Absolutely you should pay employees what the job they do is worth, that's what i'm talking about all along.
The problem occurs with all the tasks that aren't worth paying someone minimum wage to do, so instead, they get folded into everyone elses job descriptions.
This takes valuable time away from qualified employees doing the job they should be doing.
Now, there are obvious ways around this, and we'll see more and more of them as this depression continues. -
Which tasks aren't worth paying minimum wage to do? And who do you propose will do them?
Right now I'm imaging all of the little things that people do at work while working that no one person is paid to do - such as clean up after themselves in the break room, or perhaps refill the coffee pot if you've taken the last cup - or pull out anew roll of toilet paper in the bathroom - filling ketchups and salt shakers after your shift is done - things like that.
I don't see how such small - individually based tasks take away from anything as they are part and parcel with being a responsible adult (you do it at home and at work!). But perhaps those are not the tasks you are talking about? -
You don't see it.. Exactly my point.
Being a responsible adult has nothing to do with it. TIME has to do with it.
It's like that old joke that Bill Gates would in essence loose money to stop and pick up a $5 bill off the street. Every action, based on time takes away from other things. And gathered up over the course of a year, small things make up a lot of money.
Yes, there are jobs like the one you described, that in themselves isn't worth minimum wage, if they were. You'd hire someone else to do them wouldn't you?
Take a situation like long term unemployed, past drug users etc, who have never held a job in their lives, and frankly make up a large risk when hiring, these are the people that would benefit from getting a foot in the door and showing their worth.
especially in this economy, when you pretty much need a college degree to get hired at minimum wage.
The only ones suffering are the ones that are risky to hire at a certain pay level. They're the ones that will be replaced by lower risk employees, the ones that have proof of past accomplishment.
Minimum wage doesn't protect anyone. It just makes the ones that really need a break less likely to get hired. -
How is paying someone less money than they can live on (but enough so that they don't qualify for benefits or shelters) helping them?
It's not.
If they have drug problems, they need rehab. And once they've been through rehab, they're no longer a risk. If they have mental problems, they need mental care - not a freaking job wiping someone else's ass because they can't be bothered to do it themselves.
And no - changing the toilet paper roll after you've used the last square is not time consuming enough to warrant paying someone pennies on the dollar just so they can "get their foot in the door".
My god, no wonder there's no work ethic anymore. Then again, I guess sou get what you pay for.... -
All or nothing all or nothing, the mantra of the left.
Since when is nothing better than something?
Instead of having the argument of (too much for benefits or shelters) how about changing THOSE rules so that someone who isn't making enough gets fully supplemented in that case. Instead of doing the mental sommersault of thinking that not working, and earning nothing so that you can get the FULL benefit is somehow better.
As far as Bonus checks and dividends, they're mostly based on accommplishments,
Collecting welfare on the other hand is the true measure of getting paid to do nothing. -
Dividends are base don accomplishments LMAO Yeah, choosing to put your money in bank/stock A and waiting for the pay out is a real accomplishment
It's waiting for a handout just the same as welfare - seeing as we all pay into welfare every month - getting a little benefit out of it is like getting your monthly dividend.
I'll tell you what - why don't you go get a job for $5 per hour or less, changing toilet paper roles. Then tell me how awesome it is to make a little something - not enough to have someplace to live or enough to buy weekly groceries (never mind pay for the utilities so you don't freeze) or to live 20 guys to a one bedroom apartment because you make slave wages.
Let me know how quickly the other guys and yourself turn to crime or stealing from the company who "employs" you just so you don't starve.
Or, maybe you could just pay living wages to everyone who has a job?
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Well to add my two cents, work is work and if it needs doing by someone, then it's worth paying decent wages for. Aside from the things that, as mentioned by Anok, we should do like clean up after ourselves; after all good breeding should dictate you do that wherever you are regardless of the situation. If someone needs to be hired for it, then it's not too menial to pay properly for it, and that would be a lot more than any going minimum wage.
The problem is the imbalance. It's not funny that people who work damn hard doing things their superiors think are beneath them still have to go to a food bank to make up the slack.
There's just too much money being paid to people who do nothing to truly "earn" it I.e. politicians, bank CEO's and the like, and so there isn't enough for the people who do.-
Yep. Sitting around collecting bonus checks and dividends is NOT work.
Those working two or three jobs because one doesn't pay enough for them to live on? They work. Those who work one or two jobs and has a spouse who has to make up the difference by freelancing because none of the jobs pay enough for both of them to have a job and pay for child care? They work.
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A jump in worker productivity is being announced all across the news today. latimesblogs.latimes.com/money_co/2009/08/us-worker-productivity-surged-in-...
That's good news for companies, though it must be hard on workers who are compensating for missing employees. Given the hard times, they're probably willing to put up with it, but that will change.
It's not clear to me if this report has anything to do with those doing the minimum wage jobs. If it doesn't include them, it must at least include relatively low wage jobs, and those can affect—or be affected by—the minimum wage labor market. -
I agree with the very first comment here. It's a new opinion of mine, but I'm just tired of the complaining. Some people have no business being in business. Come back when you can handle it. Managing a budget is nothing new in this country, whether your an SBO or Joe Shmoe.
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