Minimum Wage - Change my mind, or point me somewhere that can

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or your own qualified opinion

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I wrote this up the other day:

Raising the minimum wage devalues my labor while artificially overvaluing less skilled labor which in reality leads to inflation, less available jobs, small businesses that can’t compete, etc. increasing the minimum wage does nothing but hurt everyone who currently makes minimum wage

The current minimum wage is 7.25. So here’s an example to help you understand:

I own a local grocery store.

I have 1 parking lot attendant- $8 per hour
3 cashiers - $10 per hour
1 customer service cashier - $12 per hour
1 floor manager- $15 per hour

A total of $65 per hour operating cost.

All of my employees are happy currently, I pay more than minimum wage to everyone, I’m generous with raises for those who stay a few years, and I have competitive pricing to the big stores and carry some local brands.

The government suddenly raised the minimum wage to $15.

Now suddenly I’m required to pay every single employee I have the managers rate. I can’t afford that, so here’s what I have to do just to keep my business a float:

Parking lot attendant: fired
1 cashier: fired
2 cashier: $15 per hour
1: customer service cashier: $15 an hour
1: Floor manager: $20 per hour

While that looks like raises on paper you have to view it in reality:

I fired two employees and the employees I kept actually got a pay decrease relative to minimum wage instead of the great money they were making and that hurts in the long run as the economy inflates to meet the difference.

In your perfect world I would fire no one and this would happen after the increase, considering relative value to minimum wage:

have 1 parking lot attendant- $16 per hour
3 cashiers - $20 per hour
1 customer service cashier - $25per hour
1 floor manager- $32 per hour

Now my operating costs went from $65 per hour to $133 per hour due to government imposed regulations and I’m somehow just supposed to eat a double in my operating costs? Most of not all small businesses are not operating on margins anywhere near that. But the big box stores can float it out.

So I either raise my prices and alienate my customers and eventually close due to the inability to compete with Walmart.

Or I fire 2 employees and effectively give everyone else a pay decrease.

Or I just close my store and find a new job somewhere. Probably as a manger at Walmart.

Or what often happens and is terrible for communities is I fire all of my skilled labor and managers and just do those jobs myself. Now there is no room for raises or growth and I run a business full of minimum wage unskilled labor with no opportunity for improvement.

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Couldn't have said it any better myself.

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Good luck getting a Democrat on your side. They think someone who picks up buggies at a grocery store should make a wage large enough for a family of 4. There should no longer be starter jobs. A buggy boy should make fireman salary.

Is the proposed pay increase done all at once or is it a phased in minimum wage increase over a certain time period? The biggest thing I see here is it hasn’t been touched in over 10 years so it hasn’t even kept up with inflation.

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So I either raise my prices and alienate my customers and eventually close due to the inability to compete with Walmart.

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It’s almost like this is the plan

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My personal opinion is that no one working a full-time job should be below the poverty line or reliant on government subsidy

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Should dependents be factored into this equation?

Also you do realize that the poverty line is $12,760 for individuals, which is less than minimum wage equivalent

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My personal opinion is that no one working a full-time job should be below the poverty line or reliant on government subsidy - that to me is a failing

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I had this exact same argument on the politics board and got shredded to pieces on this statement

If they're working full-time I would assume yes? Or potentially that's a subset that's a part of the proportional minimum wage? If you're a dependent you fall within a separate compensation bracket? Idk - again, not an economist.

My use of the "poverty line" may not be up to snuff but I think $12,000 is insanely low - that's essentially the median rent of a 1-br in the US alone. I would think all of that would be important to factor into the minimum proportional wage I referenced.

It’s a pretty tough situation. If you require companies to pay a higher wage they will close shop and move operations to a country they can pay pennies an hour to do work. The pay gap between lower income and upper income is getting bigger and bigger. Why is it that wal mart can pay so little and result in employees getting government assistant but they can find millions of dollars for executive bonuses and perks? And then the government gives a bail out to these companies using tax payer dollars. Yes ideally you would have high schoolers working the minimum wage jobs but you can’t have a high schooler stocking shelves in the middle of the day on a weekday they are in school. Full time working people still need to fill these jobs as they can’t all be filled with high schoolers. High schoolers can’t be makin those mcspicy arse burners during lunch rush at McDonald’s they are in school.

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tgdk11

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I agree. In short, what happens when the cost of goods adjusts accordingly and the buying power of that $15/hr minimum wage becomes the same as the current minimum wage? Do we go another round of "everyone needs to be paid more because they're scraping by" and raise it yet again, thus causing a vicious cycle of raises, inflation, raises, etc?

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Isn't that what we experience now? Hasn't inflation severely outpaced real wages for quite some time?

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No.

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