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posted by janrinok on Monday December 08 2014, @06:49PM   Printer-friendly
from the consumers-with-more-money-to-spend dept.

NPR (formerly National Public Radio) reports:

By a 44-5 vote, Chicago's City Council set a minimum-wage target of $13 an hour, to be reached by the middle of 2019. The move comes after Illinois passed a nonbinding advisory last month that calls for the state to raise its minimum pay level to $10 by the start of next year.

The current minimum wage in Chicago and the rest of Illinois is $8.25. Under the ordinance, the city's minimum wage will rise to $10 by next July and go up in increments each summer thereafter.

[...]The bill states that "rising inflation has outpaced the growth in the minimum wage, leaving the true value of lllinois' current minimum wage of $8.25 per hour 32 percent below the 1968 level of $10.71 per hour (in 2013 dollars)."

It also says nearly a third of Chicago's workers, or some 410,000 people, currently make $13 an hour or less.

[...][In the 2014] midterm elections, voters in Alaska, Arkansas, Nebraska, and South Dakota approved binding referendums that raise their states' wage floor above the federal minimum.

Media Matters for America notes that The Chicago Tribune's coverage tried to trot out the *job-killer* dead horse once again, to which the response was

According to a March 2014 report(PDF) prepared for the Seattle Income Inequality Advisory Committee titled "Local Minimum Wage laws: Impacts on Workers, Families, and Businesses", city-wide minimum wage increases in multiple locations--Albuquerque, NM; Santa Fe, NM; San Francisco, CA; and Washington, DC--produced "no discernible negative effects on employment" and no measurable job shift from metropolitan to suburban areas.

Related:

Seattle Approves $15 Minimum Wage

Mayor's Minimum Wage Veto Overridden by San Diego City Council

States That Raised Their Minimum Wages Are Experiencing Faster Job Growth

 
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  • (Score: 3, Insightful) by linuxrocks123 on Monday December 08 2014, @07:55PM

    by linuxrocks123 (2557) on Monday December 08 2014, @07:55PM (#123833) Journal

    States That Raised Their Minimum Wages Are Experiencing Faster Job Growth

    Yes, and if I do a rain dance in India and not in Libya, India will get more rain, and that will prove what I did was a good idea.

    Having a minimum wage is just bad economics. It's a price floor. Price floors do nothing if they are below equilibrium and mess things up if they're above equilibrium. It's been a fad among a minority of politically liberal economists like Krugman to try to handwave this away with a demand inelasticity argument, but, even if labor demand is inelastic in the short term, in the long term employers will find a way to use fewer employees. Maybe they'll work them harder. Maybe they'll force them to do unpaid overtime (illegal, but doable). Maybe they'll just shut down the restaurant during unpopular hours, or convert it to self service, or respond in any number of clever and hard-to-measure ways.

    There are better ways to help the poor than through minimum wage. We should focus on those rather than on distorting the labor market.

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  • (Score: 3, Informative) by Kromagv0 on Monday December 08 2014, @08:07PM

    by Kromagv0 (1825) on Monday December 08 2014, @08:07PM (#123836) Homepage

    Or instead they might do what one business did here which was to add a minimum wage surcharge [twincities.com] when it last went up.

    --
    T-Shirts and bumper stickers [zazzle.com] to offend someone
    • (Score: 4, Interesting) by ikanreed on Monday December 08 2014, @08:21PM

      by ikanreed (3164) Subscriber Badge on Monday December 08 2014, @08:21PM (#123845) Journal

      These things mostly just help highlight how small the employees' chunk of your bill is. It's great marketing for the portion of your audience that are republicans, but it's crummy as an actual political message.

      "Hey, this is costing you a penny on the dollar, so the people helping you aren't below the poverty line, how unfair is that?" just isn't a resounding message with most people.

      • (Score: 1, Informative) by Anonymous Coward on Tuesday December 09 2014, @12:53AM

        by Anonymous Coward on Tuesday December 09 2014, @12:53AM (#123972)

        Not even that much.
        A $10.10 minimum wage would add 1c to a $16 item [googleusercontent.com] (orig) [thinkprogress.org]

        The amount of profits that are skimmed off by people who perform no labor is astounding.

        The last items on that page mention companies that ALREADY pay better wages and are doing great.

        -- gewg_

        • (Score: 1) by khallow on Tuesday December 09 2014, @01:14AM

          by khallow (3766) Subscriber Badge on Tuesday December 09 2014, @01:14AM (#123982) Journal

          A $10.10 minimum wage would add 1c to a $16 item

          I see that they're claiming only a $200 million annual increase in labor costs for Walmart across over 2 million employees. That's bullshit from the start since it's not only the lowest wages that will increase as a result. Further, if it's that little a change, then how about the people who care, actually pay for that increase themselves?

  • (Score: 5, Insightful) by VLM on Monday December 08 2014, @08:28PM

    by VLM (445) on Monday December 08 2014, @08:28PM (#123848)

    The problem is you'd have to smoke all the rest of the .gov programs, otherwise its basically just a "rob the middle class, give to the rich" system.

    What I'm getting at is walmart paying below a living wage doesn't mean the employees cease to live. The .gov just figures out how much extra they need for all kinds of programs, taxes me about 200% more than that expense, and keeps the substantial change. Whole herds of social workers and accountants graze like bison on my tax dollars so the walmart family can get richer at my expense. Let those cheap welfare queens pay for their own employees, instead of making me pay for their employee's expenses, then it might be fair.

    One problem is the .gov is terribly inefficient and Americans are fairly stupid. The .gov needs like $3 from me to give a walmart employee $1 worth of food stamps. Stupid Americans think they're saving money because they pay 10 cents less for a pack of toilet paper, while they pay $3 extra in taxes because walmart won't pay a living wage.

    An private organization that relies on the government to provide for their workers is inherently parasitical in nature and those welfare queens SHOULD go out of business. As a nation we're better off without them distorting the free market.

    I'd much rather pay Target 10 cents more for a roll of TP while also paying $3 less in taxes because their employees don't have to take my tax money to buy their food. That is a much fairer, freer, more ethical way to do business.

    • (Score: 1) by RedGreen on Monday December 08 2014, @09:24PM

      by RedGreen (888) on Monday December 08 2014, @09:24PM (#123865)

      Shocking a comment that makes sense on this hot button, thoroughly abused by the right, issue to have mod points...

      --
      "I modded down, down, down, and the flames went higher." -- Sven Olsen
    • (Score: 1, Informative) by Anonymous Coward on Monday December 08 2014, @09:30PM

      by Anonymous Coward on Monday December 08 2014, @09:30PM (#123871)

      I have found places other than Target to purchase TP.
      I also make sure the brand I buy doesn't have anything to do with Georgia-Pacific (Koch brothers).

      I recently mentioned how Wal-Mart hands out forms/instructions to new hires to help them sign up for federal assistance programs.
      I also mentioned that the workers at a single Wal-Mart location require over $900,000 each year in gov't assistance to get them out of poverty while having a job.

      Bad ecomonics indeed.

      -- gewg_

    • (Score: 1) by khallow on Monday December 08 2014, @11:50PM

      by khallow (3766) Subscriber Badge on Monday December 08 2014, @11:50PM (#123943) Journal

      An private organization that relies on the government to provide for their workers is inherently parasitical in nature and those welfare queens SHOULD go out of business.

      This is a typical consequence of a welfare society. There's a simple solution: end the welfare. No food, no parasites.

      • (Score: 3, Insightful) by sjames on Tuesday December 09 2014, @12:16AM

        by sjames (2882) on Tuesday December 09 2014, @12:16AM (#123957) Journal

        No society.

        Just a bunch of people killing people for food.

        • (Score: 1) by khallow on Tuesday December 09 2014, @07:20AM

          by khallow (3766) Subscriber Badge on Tuesday December 09 2014, @07:20AM (#124102) Journal
          If everyone is a parasite, then you're going to get this sort of outcome anyway.
    • (Score: 4, Interesting) by frojack on Tuesday December 09 2014, @12:02AM

      by frojack (1554) on Tuesday December 09 2014, @12:02AM (#123946) Journal

      An private organization that relies on the government to provide for their workers is inherently parasitical in nature and those welfare queens SHOULD go out of business. As a nation we're better off without them distorting the free market.

      And in these days, when every thing goes through computers nearly instantaneously, this situation would seem to be solvable in short order.

      The extent to which the government has to subsidize an employee to bring them up to some standard, could be charged back to the employer at some rate designed and calculated to induce higher wages and full time employment vs permanent part time.

      Especially when the entire staff is made up of part time employees given enough hours such that the employer does not have to pay various government mandated benefits.

      However, your statement...

      An private organization that relies on the government to provide for their workers is inherently parasitical in nature and those welfare queens SHOULD go out of business.

      ...just doesn't fit with the rest of your post.

      It was the government that created these loop-holes and incentives to keep hours low and escape paying the full burden. If there wasn't a financial incentive to hire 6 half time employees to avoid paying 3 full time employees, companies wouldn't do it.

      Walmart is simply doing what is economically the most expedient and financially responsible thing to do: Minimizing costs. They are doing exactly what the government enables them to do.

      [I don't discount the possibility that walmart and friends lobbied the government strongly in favor of these provisions, or that congress didn't fill their own pockets in passing them.]

      --
      No, you are mistaken. I've always had this sig.
    • (Score: 2) by BradTheGeek on Tuesday December 09 2014, @01:06AM

      by BradTheGeek (450) on Tuesday December 09 2014, @01:06AM (#123979)

      VLM, this is one of the mot insightful posts I have read in a while. While agree in theory, in practice the cynic in me thinks that the $3 saved would go to other herds of useless waste and not back to the taxpayer. Or, perhaps more likely, instead of causing a reduction in personal taxes, it would cause a reduction in corporate taxes instead. After all they are paying more and earning less.

    • (Score: 3, Interesting) by khallow on Tuesday December 09 2014, @07:10AM

      by khallow (3766) Subscriber Badge on Tuesday December 09 2014, @07:10AM (#124099) Journal
      This post demonstrates the unrealistic expectations of minimum wage supporters and the resulting blame games, (here, scapegoating) they play, when things don't go their way.

      I notice here that a number of people are bashing Walmart because it's not willing to pay an imaginary and arbitrary, "living wage" to its employees. There is absolutely no consideration or understanding of the value such businesses provide to society or the difficulties that these businesses face. Nor is there understanding of the economic consequences of punishing these employers for bad social policy. There are numerous things wrong with this viewpoint and argument and it's worth it, I think, to go through these flaws of reasoning.

      First, Walmart does a variety of things that help the poor. They provide a huge variety of goods at cheaper prices. That is, they directly reduce the cost of living and indirectly, by creating more efficient delivery of goods, reduce the demand for goods that the poor use, like fuel and land. They also employ over two million people directly. Finally, they help match developed world wants with developing world labor. Millions of people are being helped out of poverty throughout the world as a result of Walmart's efforts. When one advocates bankruptcy of such a useful business, they aren't just advocating the harming of a couple of million employees and several hundred million customers or the increased consumption of a variety of scarce resources, but also the vast supply chains that deliver these goods sold by Walmart and the billions of people whose economies benefit from this trade.

      Second, these low-end jobs serve a very important societal purpose. They allow one to demonstrate that they can be a valuable and trustworthy worker and they enable the would-be worker to pick up useful work skills. That in turn allows one to command a higher wage than a person who has sat out of the labor market for years. It is painful to have to note that in the US, there is vast unemployment among youth and various highly urbanized ethnic groups (particularly, African Americans) and that minimum wage law has a big role in making that happen.

      Third, there is this fantasy that merely paying more to workers makes for a stronger economy. What is routinely and roundly ignored is that the other side of the coin here is that workers are employed to do useful things. And unfortunately, quite often, there are a bunch of employees who just can't do that much in the way of useful things. Raising minimum wage doesn't help these employees become more valuable. It doesn't give businesses more money with which to pay these employees. Thus, it is folly to expect a higher minimum wage to result in no decrease in employment. Similarly, why expect that massive bankruptcy of the businesses that employ people near the minimum wage are somehow going to create more such businesses or help anyone's economy? I think one of the worst aspects of this debate is the Pollyanna assumption that something I want is automatically good for society or the economy. Sorry, that just isn't true.

      I'd much rather pay Target 10 cents more for a roll of TP while also paying $3 less in taxes because their employees don't have to take my tax money to buy their food. That is a much fairer, freer, more ethical way to do business.

      This last line is typical example of how such do gooding creates problems. If there were no social programs, then there would be no such claims of parasitism. It's only a problem because you insist on paying for such things (at a claimed rate which is grotesquely inefficient no less). Why is it that Walmart gets singled out for being a parasite rather than the grazing social workers and accountants? For example, by your admission, if we culled the herd by 50%, then we would save $1 of your money. That's the same as the savings from ten rolls of toilet paper. At least Walmart provides something of considerable value for that alleged parasitism (which kind of makes it not parasitism, you know?).

      Further, this is a classic example of how a social program creates zero sum thinking. Walmart is collectively benefiting the entire world, but it's all about how they're milking social benefits for cheap labor. Would you rather that businesses just not employ low skill people than that they enjoy a slight benefit of a social program which was intended to provide such benefit?

      All these social policies and the various problems they create are textbook examples of the principle of "unintended consequences" as well as callous disregard of the actual circumstances of the poor. They also promote zero sum thinking (such as the scapegoating of businesses) and magic thinking (such as "what I want has to be good for society" meme). Humanity has a vast capacity to rationalize anything.

      Finally, this whole mess ignores the fundamental dynamic of labor today: namely, that the global labor market has over the past fifty years, expanded by something like a factor of five due to the access by the entire world's labor to global markets, which is called "globalization". This process won't halt until most labor is near parity with developed world labor. If you want your country to be on the high end of that eventual labor market, then you need to enact policies that make your workers more valuable and less costly. Minimum wage laws just don't help.

  • (Score: 2) by richtopia on Monday December 08 2014, @08:33PM

    by richtopia (3160) on Monday December 08 2014, @08:33PM (#123849) Homepage Journal

    I thought the point of raising the minimum wage was to drive the people looking for minimum wage jobs elsewhere. Particularly for something the size of a city, a raise in the minimum wage encourages businesses requiring those workers to relocate outside of the city borders. Additionally, the higher wage means better qualified applicants would be willing to perform the jobs remaining in the city.

    • (Score: 0) by Anonymous Coward on Monday December 08 2014, @08:56PM

      by Anonymous Coward on Monday December 08 2014, @08:56PM (#123856)

      better qualified applicants would be willing to perform the jobs remaining in the city
      Unless you do not even have the means to pay to move somewhere else.

      Min wage laws long term hurts the very people it is trying to help.
      http://steshaw.org/economics-in-one-lesson/ [steshaw.org]
      http://steshaw.org/economics-in-one-lesson/chap19p1.html [steshaw.org]

      There is only one cure for low wages. That is more jobs, not limiting jobs people are willing to offer. Jobs are a commodity like bubble gum and socks. Scarcity and demand drive the price market for jobs the same as socks. You do not pay 500 dollars for a stick of gum. Why? Because it is common. The same with jobs. The more people than there are jobs the less demand there is for them. Less demand means less pay. You can game the system short term (min caps) because short term the market is sort of inelastic. But long term that never works. Within 2-3 years business owners *will* adjust. Either by going out of business or hiring less people.

    • (Score: 3, Insightful) by VLM on Monday December 08 2014, @08:58PM

      by VLM (445) on Monday December 08 2014, @08:58PM (#123857)

      encourages businesses requiring those workers to relocate outside of the city borders

      Those businesses are welfare queens and the city has a net benefit if they leave.

      Lets say it costs 2 units to live a minimal life. A honest .gov and honest business (LOL as if either exists) would pay 2 units. I pay 2 units total of product cost and tax. All is well with the world.

      A welfare queen of a business will cry and moan that it can only pay 1 unit. Reality is they're just skimming off ever more profit. Now it costs 2 units to live and they only get 1 unit, and .gov isn't going to just let them die in the streets, however much of a neocon wet dream that would be. So .gov being incompetent skims off maybe 3 units of tax revenues and 1 unit of the 3 units goes to the employee, the rest to .gov salaries and waste. So the employee needs 2 units to live, and gets 1 unit from her welfare queen employer, 1 unit from gov. Meanwhile the welfare queen employer skimmed off an extra unit of profit. And the .gov social workers and program coordinators and tax collectors get paid 2 units worth of money in salaries. Sounds like everyone wins, right, oh whoops as one of the few remaining customers and few remaining taxpayers, I paid 5 units total of product cost and tax for only 2 units worth of product. What a horrible deal.

      For the sake of argument, say it costs $13/hr to live in Chicago. Now you decide if you life big government or not. If you're a big government sympathizer type, you'll want the minimum wage to go back to $3/hr and let the .gov collect and redistribute wealth from the remaining taxpayers at the rate of almost $10/hr. It'll probably only cost them like $30/hr. That means as a taxpayer and a consumer you'll be paying $33/hr to keep that store clerk alive. If you believe in small government, you'll want the minimum wage to be about $13/hr so the employees don't rely on .gov anymore. That means as a taxpayer and a consumer you'll be paying a mere $13 to keep that store clerk alive.

      Seems like a no-brainer decision, unless you're a big government supporter aka socialist, you'll support a higher minimum wage like a real free market capitalist.

  • (Score: 0) by Anonymous Coward on Monday December 08 2014, @08:44PM

    by Anonymous Coward on Monday December 08 2014, @08:44PM (#123852)

    Would you like a time machine so you could go try out your ideas working for a coal mine? Earn less than they charge for room and board, become an indentured servant through the power of economics! Without minimum wage we'd have working conditions lime China, but maybe you think that's fine?

  • (Score: 0) by Anonymous Coward on Monday December 08 2014, @11:30PM

    by Anonymous Coward on Monday December 08 2014, @11:30PM (#123929)

    You know, I may live in a different country (New Zealand) but every single thing you list as "If you have a minimum wage this happens..." absolutely occurs with my employer.

    They pay us minimum wage, and steal a chunk of it back.

    We work at least 45 minutes for free every week, that's when my employer doesn't choose to steal my wages to cover his budget. Some of us have worked more than 10 hours a week unpaid overtime.

    They refuse to pay for public holidays, which we are entitled to be paid for, and won't pay for more than 40 hours a week regardless of how much work they give you.

    All of this is in violation of the law. There is a catch, though: approximately a third of our regular staff are unpaid (volunteer) staff.

    But one assumption that you're making is that if we had no minimum wage all would be well, and people would be paid what they're worth. This is wrong.

    I don't know what it's like in America, but in New Zealand if we're on unemployment we are contractually obligated to accept any job offered to us, no matter what the pay rate, no matter what the conditions.

    If we had no minimum wage, my employer - and the bulk of employers in my city, Dunedin - would offer just a couple of bucks an hour. I know this, because I've been (indirectly) privy to senior management meetings where they were plotting the best ways to rip off employees.

    Hell, they hired one of our current staff members because he's already independently wealthy so he wouldn't complain if they demanded overtime without pay.

    My previous employer demanded 50 hours a week, minimum, but only paid me for 40 (and it was above minimum wage).

    Minimum wage is a safety net to stop the sociopaths running businesses from paying less than it costs to live, transferring the remainder of the costs to the state unemployment benefit.

    • (Score: 2) by Immerman on Monday December 08 2014, @11:44PM

      by Immerman (3985) on Monday December 08 2014, @11:44PM (#123940)

      So, is there no place to drop an anonymous tip to get the place investigated for such illegal practices?

      Why even have a law on the books if it has no teeth?

    • (Score: 0) by Anonymous Coward on Tuesday December 09 2014, @12:09AM

      by Anonymous Coward on Tuesday December 09 2014, @12:09AM (#123953)

      Just sayin'...

      -- gewg_

  • (Score: 2) by sjames on Tuesday December 09 2014, @12:09AM

    by sjames (2882) on Tuesday December 09 2014, @12:09AM (#123954) Journal

    By all means, best policy is to keep them starving untill they start roasting rich people on a spit in the park!

    I keep hearing all about the horrors of a raised minimum wage complete with doom and gloom forecasts and yet everywhere that does it, life goes on or improves. It seems reality disagrees with your political ideology.

    Perhaps you enjoy subsidizing the payrolls of some of the wealthiest corporations in America with your tax dollars, but I don't.

  • (Score: 0) by Anonymous Coward on Tuesday December 09 2014, @06:31AM

    by Anonymous Coward on Tuesday December 09 2014, @06:31AM (#124089)

    Walmart, Fast Food, and day care are run by minimum wage job employees. Raising their prices will hurt the middle class.

  • (Score: 1) by terryk30 on Tuesday December 09 2014, @11:38AM

    by terryk30 (1753) on Tuesday December 09 2014, @11:38AM (#124140)

    Up front I don't know enough about economics, but having said that I'd still like to know why a minimum wage couldn't be regarded as a cost like that of a raw material - e.g. since all restaurants need to pay more or less a certain nonzero amount for ground beef or all manufacturers a nonzero amount for electricity, they just shrug and pay the invoice along with all the others. Although from time to time they may adjust their efficient use of that resource and/or negotiate a slightly better price, they know that there's a level below which it just can't go - but they don't get indignant about it, they just get on with things.

  • (Score: 2) by urza9814 on Wednesday December 10 2014, @05:49PM

    by urza9814 (3954) on Wednesday December 10 2014, @05:49PM (#124793) Journal

    even if labor demand is inelastic in the short term, in the long term employers will find a way to use fewer employees. Maybe they'll work them harder. Maybe they'll force them to do unpaid overtime (illegal, but doable). Maybe they'll just shut down the restaurant during unpopular hours, or convert it to self service, or respond in any number of clever and hard-to-measure ways.

    ..as opposed to the current situation, where most employers are perfectly happy to hire people to sit around all day doing nothing? Even if the minimum wage was $1/hr, they'd still be trying to minimize their workforce. That's what businesses do. If they're not reducing costs, they're going bankrupt. Or getting bailed out....

    I do agree though that raising the minimum wage is not the ideal solution. The problem is unemployment -- as long as there's a significant number of people unemployed, businesses will always be able to find someone willing to work for less. We can directly limit how low their wages can get with a minimum wage, but it seems like a better and more fair approach would be to simply try to shrink the available labor supply, altering the supply/demand equation to give more power to labor. Either remove people from the job market and let them do something else (lower the retirement age; relax restrictions on social security benefits; increase funding to higher education) or remove them by hiring them for some other purpose (like fixing our public infrastructure).