A movement is afoot to demand a $15 minimum wage, both at the state and federal level.
If it happens, it will mean a better life for many, but will it be a disaster for many as well?
How will businesses respond to a minimum wage that's roughly double what it is now? I suspect this is what we'll see:
1) increased streamlining of workplace processes and the use of workplace technologies to replace workers or make workers work faster, resulting in...
3) greater use of part-timers.
4) a ripple effect of increased prices across the economy, affecting those employees who keep their jobs as well as everyone else.
Still think an increased minimum wage (a living wage) is a good idea?
As I've said before $7 is a cruel and pathetic salary. It's borderline sociopathic to come up with excuses as to why earning $7 an hour is okay in the developed world. Do we really need to rationalise cruel and pathetic salaries?
First things first - is the US really capitalist? US is closer to corporatist.
Many of the wealthy 1% in Wall Street became wealthy not through honest endeavour, but through corruption, which is supported by the State.
The problem is not capitalism, the problem is corporatism (incestuous relationship between State and Big companies).
Income inequality is not really a big problem in US as upward mobility still holds - provided you have a father in the house (http://www.econ.brown.edu/fac/glenn_Loury/louryhomepage/teaching/Ec...(JEG)%201996.pdf)
It is family breakdown that is the primary cause of income inequality, that's a social problem that capitalism cannot address.
Good points. When it comes to restaurants, they have been instituting efficiencies as it is. I have known several food servers, and some of them actually worked two short shifts. One for lunch from 11:30 am to 1:30 pm and a dinner shift from 5:00 pm to 8 pm, which is a pain under any circumstances but especially so if you are taking public transportation across town. Do you go home for a couple hours or hang out somewhere in the interim? Some of the wait staff who worked from 11:30 am to 8 pm suddenly find themselves earning less and in a very inconvenient work situation.
Some restaurants are already replacing waiters with iPads or Android tablets linked to the kitchen. Wait staff ends up just delivering food for much lower tips.
It all comes back to wealth distribution, unbalanced systems always fail.
A economic system that requires a minimum wage is a broken system.
The Economic Policy Institute receives most of it's funding from organized labor, not really an impartial voice.
A free-market economic system is a greed based system, the wealth generated each period is 100%, all of this wealth is generated at the bottom of the system, the distribution of the wealth thru-out the players within the system is what determines the system's robustness and health.
A minimum wage is a tool used to try and maintain a percentage of the wealth production at the bottom of the system where it is produced.
Unfortunately a minimum wage is useless without a income cap.
Making the minimum wage $15 dollars an hour is just another feel-good stop-gap measure like all those before it. Without controlling the wealth percentage distribution per period the system will continue to become more unbalanced until it collapses under it's own weight.
You are missing the point.
It is the wealth distribution balance that matters to the health of an economic system, not where you set one wage marker.
This issue can only really be address thru law by having a "Fair Wage Act" which establishes a Maximum Wage as well as a Minimum Wage, short of something along those lines you are just moving the deck chairs once again as the Titanic continues to sink.
BTW all think tanks are biased.
And the fact is the CEO of GE is overpaid and the minimum wage doesn't affect him at all.
GM you have my permission to set the minimum wage at any level you would like, it will be the same feel good band-aid it has always been.
Business owners operate on a profit basis, when their fixed costs go up they adjust accordingly to maintain their profit margin. The idea that an increase in minimum wage will create more jobs is ludicrous, that never happens.
In the end the cycle repeats and in a few years the minimum wage will need raising yet again.
Over 650 economists-- including 5 Nobel prize winners and 6 past presidents of the American Economic Association-- signed a statement in 2007 (when the recession was in full swing) indicating support for a minimum wage increase:
"We believe that a modest increase in the minimum wage would improve the well-being of low-wage workers and would not have the adverse effects that critics have claimed. In particular, we share the view the Council of Economic Advisors expressed in the 1999 Economic Report of the President that "the weight of the evidence suggests that modest increases in the minimum wage have had very little or no effect on employment." While controversy about the precise employment effects of the minimum wage continues, research has shown that most of the beneficiaries are adults, most are female, and the vast majority are members of low-income working families."
I don't sense any support for anything close to the $15 minimum wage that this discussion is about. Here in Ohio, starting January 1, hourly workers got a modest increase in minimum wage amounting to $.40/day (10 cents per hour) for someone whose minimum wage job has them working a 20/hr week. Oh, and of course that is before taxes.
If I am getting $15 per hour for doing a difficult job where I have to do grunt work or deal with most of the problems of others and you raise the minimum to $15 then why shouldn't I quit that annoying job and go be a greeter at Walmart. It will simply make employers have to pay more for every job on up from minimum wage.
The end result is inflation. Those who have money in the bank will now have less value for that money so it kinda takes their money down a notch or two. The big winner is taxes. It will push people into a higher tax rate so they now pay a higher percentage of their income on taxes. (Of coarse that money will have an inflated value) You will still have people who can't make ends meet but they will have more money in their pockets and not qualify for gov't help like food stamps and other forms of gov't assistance. Of coarse the gov't will have to increase the line of poverty etc. People on fixed incomes or living off their savings will get less bang for the buck. So you will redistribute the wealth. You take from the thrifty and give to the ...... well you know. Some people will be better off for sure and some will be worse off. It is like raising taxes as far as I am concerned.
So just skip the whole façade and just give more gov't support to poorer people. It's like a kid that wants two pieces of pie. Just cut the one piece in half and now you have two. Happy now? Not. Some people need help. So help them. Or turn the economy upside down and make everyone shuffle to the right. Now $15 is worth $7.50.
Need a bit of "economic scaling" here. We are talking about people who own 0.2% of the wealth. Giving them a raise (leaving the other 99.8% of wealth alone) will devalue all wealth by 50% ?
As Americans, we have no idea how wealthy our country really is. We don't get to see it. The bridge on the pot-holed road near my house was about to fall into the river and the legions of homeless have descended to my ever warmer Florida town. I'm no military expert, I guess I am pretty sure we need all 19 operational aircraft carriers (+3 on order) at a total cost of around $22 Billion each. The Russians have 1, so do the Chinese.