Thanks for the latest minimum wage increase!

[Johns]

I just returned from having dinner with Jim,a friend of mine that owns a small manufacturing company. He laid of 3 workers today so that his company could absorb the latest increase in the minimum wage. It wasn't a huge increase, but when you figure that it's not just the wage, but the taxes and benefits that are affected, he had no choice. This increase was legislated back in 2007, and was supposed to be the savior for the working folks, ironically, in many cases, it resulted in folks losing their jobs. Jim's a nice guy, and a good employer. He only pays minimum wage for some of his workers, but he helps out with daycare, and pays into a generous health care plan. He's going to be cutting back on that as well.

Ironically, another friend of mine, Bob McGrath, called today and said he was interviewed by USA today. (His big "15 minutes of fame" he said). I looked up the article, and he said almost the exact same thing as Jim had said. Bob's cutting hours to make up for the increase. Wow, the minimum wage bill is really paying big dividends.

This is not politics. These are just folks that are running (trying to) businesses and making changes to adapt to the current economic climate, but more importantly, a law that was touted as "good for the workers". The people that pushed for the law still have their jobs, and got their backslapping media attention, but years later, after the lights are down and the cigar smoke has cleared the air, it's the workers who will suffer. You won't see any of the politicians commenting on this one anytime soon...





I'm not going to comment any further on this, just wanted to bring it up to show the results of the change. I'm sure the canuks will want to chime in and tell us what a great law it is, but that's fine...I don't really care what most of them have to say. No offense, that's just how I feel.

Oh, and here's the link to the interview w/ my friend Bob. He's the one that owns the chocolate store:

http://www.usatoday.com/money/smallb...mum-wage_N.htm

[Bill West]

I liked Bob's final remark in the article. "It's really a challeging time".
If he thinks that's so,let him try living on mimnium wages.

[Johns]

I liked Bob's final remark in the article. "It's really a challeging time".
If he thinks that's so,let him try living on mimnium wages.

I said I wouldn't comment on the subject, but I will comment on my friend. Right now, he's not taking a paycheck, and his wife has taken a job in Texas to help make the payments on their building. He's working about 85 hours a week, and would love to be making $5 an hour right now.

[Spexvet]

... Jim's a nice guy, and a good employer.

Are you serious? You say he's a guy who

only pays minimum wage for some of his workers,

But when he has to increase those workers wages by $0.70 an hour, he

laid of 3 workers

and

He's going to be cutting back on that [helps out with daycare, and pays into a generous health care plan] as well....

Yeah, nice guy. What did he give up to help his minimum-wage employees make ends meet? I mean, since he's a nice guy, and all, ya know. I hope you picked up the check for him, being as how he needs every penny these days. Think he'll have to lay off the cabana boy, too?

I liked Bob's final remark in the article. "It's really a challeging time".
If he thinks that's so,let him try living on mimnium wages.

Well said, Bill.

[Spexvet]

I said I wouldn't comment on the subject, but I will comment on my friend. Right now, he's not taking a paycheck, and his wife has taken a job in Texas to help make the payments on their building. He's working about 85 hours a week, and would love to be making $5 an hour right now.

So why doesn't he? Sounds fishy, to me.

[k12311997]

So why doesn't he? Sounds fishy, to me.

Spex,

What do you think someone performing a "minimum wage job" is worth? and are you willing to give up what ever you make over that?

[Spexvet]

Spex,

What do you think someone performing a "minimum wage job" is worth? and are you willing to give up what ever you make over that?

That's pretty vague.

Let's just say that I'm not greedy. If someone were generating income for me, actually creating the money that I use to pay my bills, I would not cheap-out on them. And I wouldn't live a lavish lifestyle. Johns presumably wants me to feel sympathy for his friend. Well, sorry, that's not gonna happen. He's, obviously, a guy who has been successful in the past. If he can afford to work for no paycheck, he must have been very successful. But it's not the minimum wage that is causing his problems - it didn't kick in until yesterday (?). If he's currently not taking a paycheck, there are other problems - don't blame the people who are struggling to make a living. And - OH MY GOD! - his wife had to take a job!!!!! My wife has been working for a loooong time, so no sympathy there, either. What did this guy make in 2007, compared to his minimum wage employees? In this forum, people on welfare get bashed all the time. I cannot feel bad for john's friend. He owns the building, fer Chrissake! Maybe he should sell the building, lease it back, and use the profit from the sale to keep his employees and maintain their benefits, and give himself a paycheck. I interpret this type of behavior as being vindictive. It's like he's saying "raise the minimum wage will ya? I'll show you - I'll lay off some of my employees. Maybe next time you'll think twice about taking my money. So there".

I think I feel a little better now.:)

[k12311997]

My question is do you pay the people what they are worth or what the job is worth?

Does a 40 year old colege educated person with a family deserve to make more to flip burgers than a high school kid?

Does a 40 year old colege educated person with a family deserve to make less because he has savings and property than a single mother?

neither you pay for the job and hopelfully the people either rise in the ranks or move on and better their situation or remain at their level of stagnation.

[For-Life]

It is not an easy answer. This is one that I thought quite a bit about. We do know that in the absence of a minimum wage, employers will continue to pay less and less, because there will be people willing to work for less (fyi illegal immigrants). So it is determining the equilibrium. I do not know if the current rate is above or below that equilibrium. I know Ontario is increasing its minimum wage to $10.25 next year, which I think is at least a couple of dollars too much.

Here are some pros and cons of the deal


Pros
- Workers are better able to take care of themselves - this is the obvious one and is debated quite a bit. I would like to not focus on this one, because it has been discussed to death
- Encourage people to get off welfare. If they can make a decent wage working, more will be inclined to work
- Encourage people to become larger contributors to society. I have a MBA. I spent 6 years in post-secondary education (undergrad and grad) and now am making good dough, contributing to society, pushing through new ideas to make my community better, and paying good taxes to provide for the whole Country. But it is not easy to pay for University while working for minimum wage. My education cost me $30k in tuition and that is not even counting the books, which was probably another $10k. I hear that down there the rates could easily be double that. Now I do not think it is a good thing that only people of old money can afford to better themselves, and it truly is not the Land of Opportunity if you put in mechanisms that block people from bettering themselves.
- Also, if I make more, I pay more taxes, so it takes some of the pressure off of the rich people

Cons
- Companies only have so much money. If you raise minimum wage, that means the money has to come from somewhere. Usually it is salaries. That means, that someone has to be laid off. So the cost is increasing one person at the expense of someone else. With that said, as it is argued by many of you, someone should be wanting to improve themselve, so then the person who is laid off should be looking for a better job
- Communism. Not everyone is worth the same wage, and we have to create some motivation for moving up the ranks
- How much money goes into the workers pockets, if they are bumped up a tax scale?

[Bill West]

I know countless small an some not so small business owners that pay as little as possible. If not for the minimum wage law what would they pay. If you can't afford to pay a decent wage maybe you should cut back and do it yourself. You want to keep the money anyway. The chain burger stores should hire fewer people and pay more,$10 an hour, and get better people who would give better service and keep the place clean. Some of the poor slobs they hire just seem to hang out and et in the way of the better workers.
As Spex said, ouch I hate to agree with him, the problem was already there before the "huge" raise. This economic slow down will cause some struggling business to shut down, does GM ring a bell?
I truly feel sorry for the people John is talking about. I admire anyone who has the guts to go it on their own. However, the failure rate is and always has been high for small business. I feel that when they draw up a business plan they should be fair in allowing what they will be able to pay and still have a decent bottom line. If it's not there,forget it.

[k12311997]

It is not an easy answer. This is one that I thought quite a bit about. We do know that in the absence of a minimum wage, employers will continue to pay less and less, because there will be people willing to work for less (fyi illegal immigrants). So it is determining the equilibrium. I do not know if the current rate is above or below that equilibrium. I know Ontario is increasing its minimum wage to $10.25 next year, which I think is at least a couple of dollars too much.

Here are some pros and cons of the deal


Pros
- Workers are better able to take care of themselves - this is the obvious one and is debated quite a bit. I would like to not focus on this one, because it has been discussed to death
- Encourage people to get off welfare. If they can make a decent wage working, more will be inclined to work
- Encourage people to become larger contributors to society. I have a MBA. I spent 6 years in post-secondary education (undergrad and grad) and now am making good dough, contributing to society, pushing through new ideas to make my community better, and paying good taxes to provide for the whole Country. But it is not easy to pay for University while working for minimum wage. My education cost me $30k in tuition and that is not even counting the books, which was probably another $10k. I hear that down there the rates could easily be double that. Now I do not think it is a good thing that only people of old money can afford to better themselves, and it truly is not the Land of Opportunity if you put in mechanisms that block people from bettering themselves.
- Also, if I make more, I pay more taxes, so it takes some of the pressure off of the rich people

Cons
- Companies only have so much money. If you raise minimum wage, that means the money has to come from somewhere. Usually it is salaries. That means, that someone has to be laid off. So the cost is increasing one person at the expense of someone else. With that said, as it is argued by many of you, someone should be wanting to improve themselve, so then the person who is laid off should be looking for a better job
- Communism. Not everyone is worth the same wage, and we have to create some motivation for moving up the ranks
- How much money goes into the workers pockets, if they are bumped up a tax scale?

the only thing I disagree with I've highlited in red other wise this may be the most lucid post on this board in the last 5 years.:cheers:

Why I disagree with that statement is the lowest incomes have the greatest potential for post secondary education at no or little cost.

[rbaker]

The vast majority of minimum wage workers are between the ages of 16 and 21 years old or are really deficient in either education or work and social skills. Minimum wage jobs are at best temporary as one climbs the socio-economic ladder and are not intended to pay a living wage to the American worker.

The problem is that many workers feel that their reward in life should be provided by social legislation and not through education and hard work; that is to say they espouse Marxist principals.

The future financial burdens to be placed upon business owners such as increased health care costs, cap and trade, State and Federal taxes and fees and whatever else will further reduce the business productivity and more low skill, low value employees will find themselves suckling on the public teat. More and more business owners will close up the shop and retire.

[Johns]

Companies only have so much money. If you raise minimum wage, that means the money has to come from somewhere. Usually it is salaries. That means, that someone has to be laid off. So the cost is increasing one person at the expense of someone else. With that said, as it is argued by many of you, someone should be wanting to improve themselves, so then the person who is laid off should be looking for a better job

:cheers::cheers:

[For-Life]

The vast majority of minimum wage workers are between the ages of 16 and 21 years old or are really deficient in either education or work and social skills. Minimum wage jobs are at best temporary as one climbs the socio-economic ladder and are not intended to pay a living wage to the American worker.

The problem is that many workers feel that their reward in life should be provided by social legislation and not through education and hard work; that is to say they espouse Marxist principals.

The future financial burdens to be placed upon business owners such as increased health care costs, cap and trade, State and Federal taxes and fees and whatever else will further reduce the business productivity and more low skill, low value employees will find themselves suckling on the public teat. More and more business owners will close up the shop and retire.

I don't think most people feel that. I think most people that are in a bad position are having troubles finding ways of improving. I have met too many people in bad situations trying to improve themselves, but instead being hit by barriers. They succeed, somewhat, but can only do so much. The future financial burden is encompassed in these barriers.

[GAgal]

IMHO an increase in minimum wage, does not relate to an increase in quality of living. In any company, financial resources are limited and any company is expected to at least maintain, or increase, their level of profit. So, therefore the money has to come from somewhere. For the sake of argument, let's say that no one gets laid off:

1. Cost of raw materials goes up to cover increased employee wages
2. Wholesale cost of finished goods goes up to cover increased raw materials AND their employees wages
3. Retail cost of finished goods goes up to cover increased wholesale cost AND their employees wages
4. Sales tax goes up because cost of goods goes up
5. Income tax goes up because pay went up

So, the individuals who received an increase in mimimum wage, as well as everybody else, are now spending that raise and more on the goods that they need. So, what good does a minimum wage increase make? Now, I'm not saying that there should not be a standard, but I remember when the minimum wage was $3.80/hr and that was what I was making (am I showing my age here?)and I don't believe that the quality of living as a whole is any better now than in 1988.


Now, statistically, individuals in mimimum wage jobs are:

• 53% under the age of 23, 47% over the age of 23
• if under the age of 23, are enrolled in college or high school
• for those individuals over the age of 23, they are predominently high school dropouts or they are part time working for secondary income
• 2/3 are promoted and/or given a 10 to 14% raise within a year

So again, who is the miminum wage really helping? College students, high school students, individuals who are voluntarily working a second job?
These individuals don't need the help that the minimum wage increase is supposedly going to provide.

Actually, its going to hurt. It will hurt small business owners who, even if they don't layoff, are going to have to make the difference up somehow. And we need to remember, small business owners are the back bone of the nation. And, it will hurt the significantly poor, disabled, the elderly, and the mentally ill who are going to have to pay more for their basic necessities due to the increase in the cost of goods

[RT]

I'm with Spexvet and Bill West here (much to my shock). The math doesn't add up.

The change in minimum wage was $0.70 per hour. Multiply that times 2080 hours per year, and the increase was just under $1500 per worker per year. Hard to believe that we're making a big deal about $4,500 per year, so it sounds like maybe Johns friend must have a bunch of workers making minimum wage. How many would he have to have?

Laying off 3 workers making $6.55 per hour means a top line labor savings of about $41K per year (before any overhead). If there were 28 workers at Johns friend's company making minimum wage, then the mandated increase would have been the same $41K per year. So the question is, does Johns friend have 28 minimum wage employees on his payroll? Doubtful. He wouldn't be a "small business owner" if he did. Or else he's just really cheap.

It sounds like Johns friend laid off more labor than he needed to based solely on the mandated increase in minimum wage. He shed some payroll, and found a scapegoat other than his own inability to run a business at a profit. Thank God the bad guys won the last election...if his preferred party had won, who would he get to blame?

In other words, Johns friend is having business trouble, and chose this event as a convenient excuse to help him get over his feelings of failure. I'm having a hard time feeling sorry for him. Face it, any time you hire someone at minimum wage, they're looking for a new job the minute you hire them. Don't preach to me what a great employer you are.

I don't doubt that Johns friend is hard working and going through his own serious economic issues. He's probably a solid citizen and a fantasic person. But the fact of the matter is that he wasn't a successful business man BEFORE the increase in minimum wage. Blaming his failure on the change in minimum wage is a self-serving diversion.

[For-Life]

I'm with Spexvet and Bill West here (much to my shock). The math doesn't add up.

The change in minimum wage was $0.70 per hour. Multiply that times 2080 hours per year, and the increase was just under $1500 per worker per year. Hard to believe that we're making a big deal about $4,500 per year, so it sounds like maybe Johns friend must have a bunch of workers making minimum wage. How many would he have to have?

Laying off 3 workers making $6.55 per hour means a top line labor savings of about $41K per year (before any overhead). If there were 28 workers at Johns friend's company making minimum wage, then the mandated increase would have been the same $41K per year. So the question is, does Johns friend have 28 minimum wage employees on his payroll? Doubtful. He wouldn't be a "small business owner" if he did. Or else he's just really cheap.

It sounds like Johns friend laid off more labor than he needed to based solely on the mandated increase in minimum wage. He shed some payroll, and found a scapegoat other than his own inability to run a business at a profit. Thank God the bad guys won the last election...if his preferred party had won, who would he get to blame?

In other words, Johns friend is having business trouble, and chose this event as a convenient excuse to help him get over his feelings of failure. I'm having a hard time feeling sorry for him. Face it, any time you hire someone at minimum wage, they're looking for a new job the minute you hire them. Don't preach to me what a great employer you are.

I don't doubt that Johns friend is hard working and going through his own serious economic issues. He's probably a solid citizen and a fantasic person. But the fact of the matter is that he wasn't a successful business man BEFORE the increase in minimum wage. Blaming his failure on the change in minimum wage is a self-serving diversion.

I do not know how many employees the person has, so I am not going to say who is correct. But I do find it funny how many "Joe The Plumber's" tend to pop out with stuff like this. I call it "Joe The Plumber" because the person presented a twist in truth to make it seem like it was a deal that did not exist. Everyone talked about Joe the Plumber's company making over $250k, but no one talked about profit versus revenue. In Joe's case, revenue was presented, which therefore is not a basis of taxes. In truth, it would have to be profit, therefore, sales would probably be around $2.5 million.

I can tell you right now a funny story I encountered this week. I have one health care service provider who sent me an email telling me that next year minimum wage will go from $9.50 to $10.25. He asked if we gave additional funding toward that. He said that we as the government mandated the raise so we should pay for the difference. I do not necessarily disagree with him, but that is not something to get into here. Anyway, I told him that we give flat funding and they decide where to spend it in the best way to provide their service, and that we provided a 2.25 percent increase for the year. He did not like that, because $9.50 to $10.25 is far greater than 2.25 percent. So I went to his budget and saw that he spent $120k on salaries for the money we give him. I then looked at his book and he provides four services. I looked at the units of service and see that for three of the programs, the planned hours would be 2080 each. Therefore, I know that = 3 full time equivalents. I then know the other program we only fund 1/4 of. So I worked it out to each of his employees receiving around $30k+. At 2080 hours, that would mean at least $14 an hour, which means that he was not being truthful about the minimum wage and was just asking for more money with that as his card.

[cocoisland58]

Minimum wage jobs are at best temporary as one climbs the socio-economic ladder and are not intended to pay a living wage to the American worker. .

That is my feeling also. Minimum wage jobs are for students, part-time jobs for stay at home moms, second jobs for anyone who may need one and for retired seniors who may need a little extra or who choose to keep working. They were never meant to provide the means to support a family or even a single person. If someone is mentally deficient they may be working a minimum wage job while also receiving assistance from the state. If someone of average intelligence is attempting to live on one minimum wage job then they have somehow missed the boat as far as learning the type of skills needed to go forward in life.

[k12311997]

IMHO an increase in minimum wage, does not relate to an increase in quality of living. In any company, financial resources are limited and any company is expected to at least maintain, or increase, their level of profit. So, therefore the money has to come from somewhere. For the sake of argument, let's say that no one gets laid off:

1. Cost of raw materials goes up to cover increased employee wages
2. Wholesale cost of finished goods goes up to cover increased raw materials AND their employees wages
3. Retail cost of finished goods goes up to cover increased wholesale cost AND their employees wages
4. Sales tax goes up because cost of goods goes up
5. Income tax goes up because pay went up

So, the individuals who received an increase in mimimum wage, as well as everybody else, are now spending that raise and more on the goods that they need. So, what good does a minimum wage increase make? Now, I'm not saying that there should not be a standard, but I remember when the minimum wage was $3.80/hr and that was what I was making (am I showing my age here?)and I don't believe that the quality of living as a whole is any better now than in 1988.



Now, statistically, individuals in mimimum wage jobs are:

• 53% under the age of 23, 47% over the age of 23
• if under the age of 23, are enrolled in college or high school
• for those individuals over the age of 23, they are predominently high school dropouts or they are part time working for secondary income
• 2/3 are promoted and/or given a 10 to 14% raise within a year

So again, who is the miminum wage really helping? College students, high school students, individuals who are voluntarily working a second job?
These individuals don't need the help that the minimum wage increase is supposedly going to provide.

Actually, its going to hurt. It will hurt small business owners who, even if they don't layoff, are going to have to make the difference up somehow. And we need to remember, small business owners are the back bone of the nation. And, it will hurt the significantly poor, disabled, the elderly, and the mentally ill who are going to have to pay more for their basic necessities due to the increase in the cost of goods

GA

do you have a link to those stats?

[GAgal]

GA

do you have a link to those stats?

Sure there are a couple of sources.
http://www.bls.gov/cps/minwage2008.htm
http://www.heritage.org/research/economy/wm1186.cfm

I hope this helps. I can't remember the site that mentioned the promotion rate, but I will look for it and try to get back to you

[Wes]

But I'm also a capitalist. So I'm thinking, a rise in minimum wage means a rise in the cost to produce cheap goods, which in general principle, are necesseties. By definition, I need them. Thus, my expenditures increase, making the money I have coming in insufficient.
That my friend, is really just government mandated inflation, done slowly so as to alleviate our massive national debt by devaluing our currency. But it makes my money not go as far. Which makes me poorer. I hope you're identifying with me right now, because if any of you OPTICIANS are making anywhere near minimum wage, then you STINK and should get out now!
Who is making minimum wage? School kids, Seniors, and adults with a part time job. And illegals; don't forget them. They don't really make minimum wage, but they can use the increase to get their wages bumped to three and a quarter an hour! So, the bottom line is this; If youre a skilled worker, prepare to be less wealthy than you were due to fantasy socialism.
Wes, up late and cranky.

[For-Life]

But I'm also a capitalist. So I'm thinking, a rise in minimum wage means a rise in the cost to produce cheap goods, which in general principle, are necesseties. By definition, I need them. Thus, my expenditures increase, making the money I have coming in insufficient.
That my friend, is really just government mandated inflation, done slowly so as to alleviate our massive national debt by devaluing our currency. But it makes my money not go as far. Which makes me poorer. I hope you're identifying with me right now, because if any of you OPTICIANS are making anywhere near minimum wage, then you STINK and should get out now!
Who is making minimum wage? School kids, Seniors, and adults with a part time job. And illegals; don't forget them. They don't really make minimum wage, but they can use the increase to get their wages bumped to three and a quarter an hour! So, the bottom line is this; If youre a skilled worker, prepare to be less wealthy than you were due to fantasy socialism.
Wes, up late and cranky.

Don't worry about it. Those goods are all made in Indonesia for $1 a week. You should drop your wages down to that that level to compete.

[Spexvet]

But I'm also a capitalist. So I'm thinking, a rise in minimum wage means a rise in the cost to produce cheap goods, which in general principle, are necesseties. By definition, I need them. Thus, my expenditures increase, making the money I have coming in insufficient.
...

Let's follow that logic. A hike in minimum wage raises prices across the board. Everybody's cost of living is increased (inflation). Or, the wealthy business owners could accept less in their own pocket and keep the price of their product/service the same as it was. But I digress. So who has been benefitting from the inflation since the last minimum wage increase? Wealthy people.

A study released in late January, from the Center on Budget and Policy Priorities and the Economic Policy Institute, found that the gap between the highest- and lowest-income families is significantly wider than it was 25 years ago.

I think it's about time that people other than the wealthy get a raise.

BTW, if you want people to get off welfare, make sure that entry level jobs provide a higher standard of living than welfare does.:cheers:

[DragonLensmanWV]

Just pay better than minimum and you'll be totally unaffected.