I have already tried this topic on an ultra liberal group who view my comments on this topic as somewhat conservative, lol. I have a feeling I am going to get a different response on WSO. It is probably only a matter of time before the minimum wage rises across states I am not sure if the federal government can do much about a minimum wage. I think the federal minimum wage is $7.25 per hour, which equates to about $15,000 per year. I am not sure who can live on $15,000 per year but I sure as hell cannot.
I guess there are two issues here:
1) Is there an economic basis for raising the minimum wage?
2) Is there a moral basis for raising the minimum wage?
I am not an economist and certainly do not have the answers to the economic question. I kind of feel from a moral perspective people should not have to work two/three jobs and/or rely on the government for assistance. If the minimum wage rises, companies may or may not suffer financially. I guess, the corporate response would depend on how much they can raise prices or manage the work force ( lay offs potentially). From a financial perspective, does it make more sense for companies to pay workers more or pay less but have the government supplement with social programs. I would lean towards requiring companies to pay their workers better wages. Wages in the United States have been mostly stagnant for decades. If you want to factor in employee benefits, which have dropped substantially over time, the average worker may be is worse off today. Today, companies require that employees contribute a much larger percentage of heath insurance costs compared to decades ago. The trend in retirement plans has gone in the same direction. Dollar for dollar matches up to 7-8% are no longer common.
If minimum wages are raised, should this impact all companies and workers the same way. I am thinking that larger companies would be better able to afford higher wages compares to smaller companies. Another issue to consider which was actually raised on this other website is differential in cost of living across states. $15 per hour might be to low for CA but to high for North Dakota.
What does WSO think?
The cost is definatley going to be incorporated into the products and services. Its all about the money, get what you can and to each their own.
We saw this with PPP loans highly profitable businesses not affected by the pandemic receiving thousands to millions in PPP funds. It's kinda nice not having to deal with that shit anymore in this line of work.
How liberal does this group have to be where financeabc is considered conservative? These people must be straight up commies
No one has identified as a commie as far as I know. Most liberals are capitalists, especially those who work in finance. One of my former colleagues frequently called Warren Buffett a commie. There is actually another world of people out there who don't post on WSO.
I doubt it
But seriously, I'd rather pay a few extra cents on a burger than the government being forced to give out billions in welfare. I guess I'm "right wing" on most issues except minimum wage, that's the one that I think fears are totally overblown on and yes when you factor in cost of living inflation with wage inflation, it is undeniable that the average worker is way, way worse off than they were decades ago through no fault of their own.
Agree with this. The fact of the matter is, the current minimum wage system is a lot closer to socialism than anything else. Or rather, a system in which taxpayers subsidize corporate profits. Employees get paid under the minimum wage and as a result need all sorts of social assistance, have lots of problems which the citizen body bears the cost of, and all so corporate profits stay higher.
Frankly, there is no world in which paying someone an extra 3-4 bucks an hour is going to have a meaningful impact on prices. The only people who get truly hurt in a price increase of 15 cents for a Big Mac are the very people now being paid more.
Consider myself a moderate/quasi-progressive liberal. Definitely support a $15 minimum wage. If a company can’t figure out how to pay $15 and turn a profit, then that business probably shouldn’t be running. This is fundamental free market competition - what you can’t do, someone else will. However, I’m opposed to the leftists calling for $20-$25+ minimum wage. Like I get that every job requires some sort of skill, no matter how menial, it’s a fact of life that some jobs are of more value than others. Leftists seem to completely disregard supply and demand. Tech/finance workers are the most highly compensated workers in the country because a relatively small amount of the population can fill that demand. Fast food workers get low wages because pretty much anyone can be a cashier or fry cook. If a fast food worker wants higher wages then go develop valuable skills and negotiate higher wages on the open market. I also acknowledge minimum wage levels are better left to the states. $12 minimum wage may be sufficient in Kanas but Illinois may need $18. But overall, the federal government should set the base at $15. Nobody in America should have to settle for paltry wages like $7.25, no matter how unprestigious the work is.
Lol investment bankers make like 25 an hour. Can you imagine if they made that the minimum wage
Lol you must be a pretty shitty investment banker.
I don’t think that’s true. Even my internship is paying us $40/hr with $60 for OT
The legal working age starts at 14 in the US - you think they should automatically get $15/hr for the limited value they provide? No. The wage should be set by the market.
100% set by the market would be terrible and we might as well go back to working in sweat shops.
Limited value they provide? That’s nonsense. Assuming both a 21 year old and 14 year old are flipping burgers at the same fast food joint: why should the 21 year old be entitled to a higher wage? The minimum wage should not discriminate based on age due to your ill perceived assumption that the younger candidate is “less skilled”.
Doesn’t this kind of allude to the point though? There are businesses that can’t afford to pay people $15/hr. Are the employees better off earning less than $15/hr or being perennially unemployed?
Those businesses that can’t afford to pay $15/hour shouldn’t even be allowed to run in America if that’s the case
Biggest issue with minimum wage hike (or even its existence) is that it destroys small business.
It's so hypocritical. Left wingers love to decry "Big business doing terrible shit" and how we need to "protect small and medium sized business" but they constantly push for policies that kill small and medium sized businesses and barely does anything to big businesses. Classic Crony Capitalism.
Also, there is another side of the coin here that is hypocritical here.
Small business is seen as the hero.....although they pay really low wages. While Wal-Mart and Starbucks are the ones paying considerably above minimum wage, but are the bad guys....
Note also that some of these businesses WANT a higher minimum wage. If you're paying $13 per hour already, raising it to $15 isn't so bad. But if you're a mom and pop paying $8 per hour, you will get crushed at $15 per hour. Minimum wage can be a backdoor way to crush your competition while seeming righteous at the same time. Great deal in a way for the Wal-Marts and Starbucks of the world.
Really not a big deal to pay $15. Look up minimum wage by state...most are significantly above the federal minimum wage of $7.25 already. And the $15 wouldn't even go into effect all at once; it would get there in 2-3 years.
Mom and pop businesses can slightly raise prices and/or compress profit margins a tad and it would all work out just fine. If an operator can't figure out how to pay $15/hr and still be profitable, then it's not a viable business/model or the operator is inefficient. Survival of the fittest. And many "small" businesses aren't that small and are actually quite lucrative. For example, my uncle owns 75+ Arby's. Each store is considered a seperate business, but in aggregate, his stores generate $80MM in revenue. Started with a single store decades ago, opened some, bought some, and the rest is history. Sole shareholder and owns some related real estate as well. But obviously he relies on his employees to keep the operation going smoothly-- he no longer gets his hands dirty, but he's paying his employees double his state's minimum wage + benefits (so you can rule out CA, haha).
Quite frankly, not paying $15/hr is a disservice because underpaid employees will need to rely on government welfare (i.e. tax payer dollars).
Inflation bouta pick up we need minimum wage to go down.
Until we fix healthcare this problem is gonna keep rearing it's head up.
No business should be allowed to run in America that can’t pay a living wage for its employees
~45% of minimum wage earners are 16-24. This group only makes up like ~5% of the force.
Included in the other 55% are many part time workers who supplement other household income.
Liberals love to talk about the use case for higher min wage as some 40 year old supporting three kids. While this person exists of course the reality is that there’s much more nuance than they would have us believe.
Raising the min wage too much severely limits economic opportunities for young people and older people who may go in and out of the labor force throughout their lives w/ aim of supplementing other income.
You just don’t like the fact that this is truly a transfer of wealth from the rich to the poor. No one bats an eye when tax policies are skewed towards helping the rich, which is a transfer of wealth from the poor to the rich. Our economy is stronger and actually would benefit everyone (Even the rich!) if the bottom rung of society is helped.
You are missing the whole point of raising the minimum wage. Teens are not the only people in this country making crap wages. There are plenty of adults who earn compensation that is difficult to live on and then they turn to government for help. Raising the minimum wage would get these people off of government programs.
Why should teenagers be paid $15/hr when:
a) Their parents are already paying for everything and it’s just spending money
b) They aren’t doing enough value to demand $15/hr especially in low COL areas
c) They should be paid based on what they produce
Well I doubt a teenager is working 40 hours for 50 weeks in a year, so your argument doesn’t make sense
Why do you think people are working two/three jobs? When the government forces wages up, companies either fire workers or cut back on the number of hours they can work. Now, instead of giving out consistent yearlong, 40hr/week jobs, employers are saying "ok, we'll pay you $xx/hr, but you can only work this many hours per week." The total amount they pay isn't enough, so the employee has to find another place to work and they say the same thing: "we'll pay you, but only for this many hours."
Also, for many people the minimum wage is the first rung on the ladder. They get their first job that pays $8 or $10 per hour, build up some work experience and then move on to a higher paying job. If we hike the min wage, that first rung on the ladder is raised higher, making it more difficult for people to enter the job market in the first place. Typically, it is the most disadvantaged and inexperienced workers (rough childhood, working class, no college) who get priced out of work. Then things like automation step in because a machine suddenly becomes less expensive than a human and boom, low skill jobs disappear. I get your concern to help out workers, but a minimum wage does a lot of harm too. Honestly don't know what the right solution is to making sure people are paid well. The economy was fine before COVID. Wages were even rising for the lower half of the income spectrum and people could find jobs. It seems that the best we can do is return to a strong as fuck economy, not screw things up with wage controls.
There’s a reason the minimum wage is implemented. It’s so that employers don’t take advantage of slave labor wages.
Of course that is the reason to have a minimum wage. A lack of a minimum wage would not affect investment banking but it would affect other industries. Companies can not completely regulate themselves. Without regulations on labor practices, low skilled workers would be paid very poorly and in some cases, have to endure terrible working conditions. If a low skilled worker gets a very low salary and can't afford basic necessities, the government will have to pick up the tab. As a result, US citizens would have to pay higher taxes. The burden should not be mostly on US citizens and the government. Corporations have the right to make a profit but at the same time, they should be required to pay a living wage.
I support a living wage, however I also don't see the value in having cashiers at places like McDonald's or bank tellers. I also think that people have different ideas of what a living wage is, which ultimately means that the minimum wage worker will never stop complaining.
If they put digital kiosks replacing cashiers at McDonald's they could pay the cooks a living wage and service more customers (everybody wins except cashiers).
In my college town the Bank of America branch was run so poorly that it would take an hour (sometimes longer) for 2 tellers to cash 3 peoples checks (they didn't have ATM's where you could deposit cash or checks at the time). I got paid in cash so I would always go into the bank to deposit the money into my account since it was around the corner and the service there was so bad I switched banks. The people working there were beyond incompetent.
The median home price in LA county is $700k and many people with college educations and white collar jobs (MO/BO people) struggle to afford living there. Once you give the minimum wage workers an increase they'll then start to complain about how the COL is ridiculous and that they'll never be able to afford a home or that if they do they have to commute several hours to and from work. I'm not saying that they don't deserve the right to buy houses, however at some point there needs to be an outline for a what a living wage entails. Its a privilege to spend $1300 on an iPhone and not a right, which I think is lost on a lot of people.
$15 an hour seems arbitrary, but I can't fathom an argument where minimum wage isn't tied to some form of inflation (CPI, housing costs, whatever). I don't know what the number should be, but if it was illegal to pay someone less than $7.25 in 2009 it seems absurd that we've since printed trillions (and doubled or tripled rent in many cities) such that people are making far less than $7.25 in real 2009 dollars in 2021.
$7.25 is also some arbitrary number because some states do have higher minimum wages and some companies pay higher than minimum wages. Your argument about inflation is a good one. There are also plenty of people making higher than $7.25 who still need government assistance.
Y’all just don’t like the fact that your wealthy owner and/shareholders will bear the brunt of a minimum wage hike
The minimum wage should be $0.00.
Back in the old days, people were mainly fine without a minimum wage.
The Federal Reserve is one of the biggest reasons why inflation has made the cost of living high. Those artificially low interest rates have definitely helped Wall Street make money but really hasn't helped the poor that much.
Raising the minimum wage won't help anyone since most people don't work the minimum wage for that long. Usually you'll get promoted and get a pay raise within a year. Minimum wage jobs are usually targeted at teenagers who are living with their parents.
I think it would be better if more people moved out of expensive cities like LA, NYC & SF, and move to smaller towns where it is more affordable.
Unfortunately, many people are so poor, they can't even afford to move away.
On top of that, $15 is still not that much, hence, these activist groups will be demanding for $18/hour next, then $20 and even $22.
The thing you morons don't seem to understand is you aren't setting a minimum wage, you're just widening the gap of people who won't be employable anymore. The real minimum wage is $0. You're not employed, so you make nothing. If you aren't worth $15/hr to an employer, then the government imposed minimum wage is essentially saying you're not worthy of being hired. Being able to say you'll work for less to get into a lower level position, then use that get experience, and develop skills is the only real bargaining tool a new inductee to the working world has as a negotiation tactic vs someone who might be more qualified. A minimum wage is robbing them of the right to offer their labor for a price they're willing to sell it for, because the alternative to not being able to get a job at $15 under such a policy will be to go on welfare (what a coincidence, more people who will vote for more welfare and continue voting Democrat...).
The argument that a business not being able to hire someone for $15/hr means it doesn't have a right to exit is a load of bullshit and anyone who makes it is a buffoon of epic proportions who should be laughed at publicly by their peers. What they're saying in that same statement then is that Walmart, Coca Cola, and all these companies that use cheap overseas labor in their products shouldn't be allowed to exit either by that same ethical framework. But it's poor people in the 3rd world they're "oppressing" (which isn't even an accurate term to use since it's these shitty jobs that we scoff at that have helped industrialize their entire economies, not speaking of to the work camps in China for example which are literally nazi Germany 2.0) so in the Democrat's eyes it's totally fine.
You can't just mess with the market dynamics of determining the value of labor to try and think you're going to solve for the problem of increasing cost of living. You have to solve the problem that is causing the cost of living to increase. That's would be inflation. That's caused by handouts, welfare, mass printing of money, and things like raising the minimum wage. Every single other one of the Democrat's policies will be shot down by an economist with half a brain as causing inflation among other widespread issues, and the idea of raising the minimum wage is just yet another one to throw on that pile.
Left wingers love Sweden so much but Sweden doesn't do 99% of the stuff the left-wingers in the US wants to do.
Here are some facts about Sweden - No minimum wage, School choice, No inheritance tax, Low corporate tax (lower than the US), and mostly deregulated business environment.
Yes. But just to add some color, Sweden on average has the 2nd highest tax burden after Denmark. When you are charging that high the government takes care of you (health/social benefits/unemployment payment). Similarly in Denmark, Netherlands, Belgium and France. Not sure if it works similarly in America and how applicable Sweden's policies are in America.
Furthermore each industry/union has a set of minimum requirements (including wage, approx 36 days of vacation etc) for employers to adhere to. The Swedish think that if there was a country-wide minimum wage, it would most likely be exploited to “drag down” many if not most employees with basic jobs to a lower wage level than the current one.
The flip side is that there is always a number of people who are willing to work without any rights or contracts, for shitty pay. But these people can’t get the normal jobs
Ya I’m sure the Waltons family At Walmart will suffer so much From paying a decent wage to their starving employees.
You're so smart picking literally the largest employer in the world when the literal argument is they're the only people this policy benefits. All the smaller businesses do not have that flexibility, get run into the ground, then everyone has to go work for Walmart or whatever big box store is left. How about Amazon? That's such a good example because they're clearly evil and AOC did NYC a favor by running them out. Oh wait they already have a $15 minimum wage. Damn. Did you get into HBS/GSB with those sick critical thinking skills?
Much wow. Many chromosomyz. If you work in ER it now makes perfect sense why you sell-side analysts are largely trash.
That's the whole fucking point. Waltons don't give a fuck if the minimum wage is $15 or $10.
But John and Jane Doe living 2 blocks away from you who runs a local coffee shop or your favorite local Italian Restaurant are going to be devastated by any substantial minimum wage hikes or unnecessary regulations. Look at what Newsome did to CA. Big business is allowed to open while the small business scene completely fucking died.
A real problem with establish / increasing a minimum wage (already exists just at a lower level) is it covers too many scenarios. Big difference between head of household taking a second job because of minimum wage or at minimum wage to earn money to feed his/her family VS. a teenager working at McDs after school. The former certainly needs more and the latter doesn't need what they get. I would be in favor of some benchmark that was age and/or tax status/ filer status based. Again if I'm the primary income earner and we do fine and my wife wants to earn some extra money, who cares if she earns minimum wage?
Broad brush will not go far enough for those who need it and unnecessary for those who don't.
Biggest issue with minimum wage hike (or even its existence) is that it destroys small businesses, most of which work on very thin margins anyways.
It's so hypocritical. Left wingers love to decry "Big business doing terrible shit" and how we need to "protect small and medium sized business" but they constantly push for policies that kill small and medium sized businesses and barely does anything to big businesses. Classic Crony Capitalism.
There's a reason that majority of small and medium sized business owners vote Republican. Surprise it's not because they don't care about the environment or they want to keep their guns. They want to keep their businesses and keep their employees employed.
Like I've been saying all along, replace minimum wage with negative income tax. Left's favorite "Socialist Sweden" actually does some version of this - no minimum wage and essentially negative income tax for what would be low-income jobs.
Minimum wage increases Income Inequality
The level of economic nonsense above from both conservative and liberal posters is almost frightening.
Seriously, were 90% of you guys asleep during this chapter of microeconomics?
I sort of feel like writing a 3-page answer here, but honestly, if you still have your microeconomics textbook, see the chapter on minimum wage. It explains it all.
there's a fallacy in your choices because for example if McDonalds is forced to raise wages, they'll switch to more self-serve kiosks and similar automation, leaving more people out of the labour force and competing for other minimum wage jobs.
No one has yet to bring up the fact that some 42% of U.S. workers earn $15 an hour or less. Good or bad, this affects more than just your McDonalds worker (and owner) down the street.
Raising the miminum wage must absolutely be coupled with dramatic reductions in both illegal and legal immigration. Otherwise, it is all for nothing, and unscrupulous business owners will continue to find ways to circumvent paying Americans a livable wage.
Unrelated, but perhaps the best way to crack down on illegal immigration is to charge people who hire illegal immigrants with human trafficking (which they are technically doing). Maybe combine the punishment with a forfiture of wealth too. This way, the immigrants themselves aren't punished, but we also dramatically reduce the incentive against border control. Besides, what kind of creepy fuck likes hiring a workforce he can flout legally-mandated labor laws with and threaten with deportation whenever they piss him off? Someone who's probably cool with human trafficking, that's who!
Two economic myths coming from an IB analyst. Ooof.
No wonder why the US us so fucked up.
The increases to GDP associated with no minimum wage and wide open borders are true...it's just that increase really acculumates to very few people. Poor and working class Americans get the short end of the stick (as they have been every year since the 70s).
But yeah the US is fucked up because an IB analyst isn't an insane laissez faire absolutist.
People with high wages on WSO arguing against raising the minimum wage is very similar to how politicians with the best health care/insurance in the US will not support providing affordable healthcare/insurance to US citizens.
All my work experience in college has been below $15/hour. My first job I came on as an "independent contractor" and made about $5/hr.
I do not really understand what your point is here. There are lots of people on WSO making lots of money. $5 per hour? I hope you were doing it for the experience because that pay is terrible.
terrible problem in society
One of the main requests of society for many years is an increase in the minimum wages, and people can be understood, because the countries that are developing and the countries of the Third World do not receive many things and this affects their life's expectancy. The topic and problem are very controversial, I recommend you a useful source https://supremestudy.com/minimum-wage to study the most relevant selection of informative publications about the minimum wage, so that you feel confident during the discussion and can quickly lead arguments, factors, moves, actions, activities or inactivity of individual states, as well as you will be able to propose steps to resolve crisis cases in your country.
wow, sensible resource, useful article, thanks
I'm going to study
The federal minimum wage was implemented in 1938 under the Fair Labor Standards Act. It was the first time the federal government stepped in to establish a standard of pay for workers—and though it was originally drafted to be 40 cents an hour, it was pared down to a mere 25 cents per hour, in order to win support from southern state representatives.
The federal minimum wage has increased 22 times since its inception, inching its way up from cents on the dollar to today’s $7.25 rate. Through the 1940s-1960s, the wage increases kept pace with productivity growth (meaning more goods and services are produced per hour) and inflation. As America became economically stronger, workers throughout the labor chain were growing along with it.
Although economic productivity continued to grow, the pace of wage growth started slowing after 1968, and the minimum wage stopped rising with inflation. - forbes
there is no reason not to trust it..
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