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Martell Spy

Minimum Wage: Fight For Fifteen

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1 minute ago, Kalbear said:

I don't think they have seasonal workers, no. They do have a points-based immigration system that is transparent and pretty awesome, and not a day goes by that I don't wonder if I should have taken that job there. 

Sounds like a bunch of open-borders nut-jobs. What kind of job, the programming thing?

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4 hours ago, Tywin et al. said:

So I have a personal experience that could speak to this. My mom co-owns (around 20%) a small to medium size business that has roughly 75 employees.

How much do the shareholders earn from the business per annum?

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2 hours ago, Kalbear said:

Also, looking at the almost perfect model for everything political, New Zealand - they have a really good idea for minimum wage.

$15 an hour for everyone above 18.

$11/hour for 16-17. 

No minimum wage for anyone under than 16 who is eligible to work. 

Going to assume they're pretty much running the same model as Australia in NZ.

Currently the over 18 rate is $19.49 in Aus (approx $US14 at the mo). This is reassessed by a non-partisan commission yearly, who take into account inflation, effect on business etc and readjust it. This means it generally goes up by a few % every year. I believe this is how things function in the UK as well.

Then we've got a 25% loading for non-contract (casual) employees who work irregular hours. This is to compensate for no holiday or sick pay, and no real job security. And then additional wages (I believe around 25% most of the time) for people rostered on weekends or after 6pm, though this can be renegotiated through employment contracts for businesses which primarily function outside the usual 9-5 weekdays.

Even with all that we've still got a pretty healthy unemployment rate of approx 5%. Businesses bitch and moan that the sky will fall in every increase. It never does. However the current conservative government is doing all it can to unwind the current system.

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3 hours ago, Kalbear said:

Also, looking at the almost perfect model for everything political, New Zealand - they have a really good idea for minimum wage.

$15 an hour for everyone above 18.

$11/hour for 16-17. 

No minimum wage for anyone under than 16 who is eligible to work. 

This is more or less the UK approach too. Current rates are:

April 2019 £8.21(25+) £7.70(21-24) £6.15(18-20)

£4.35(under 18)

 

£3.90(apprentices)

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Sorry, double post but the previous one is weirdly formatted because i copied that table in. Anyway, quick google shows the current minimum wage for 25+ is roughly the same as NZ offers. Its a right for both workers (including part-time, temp and agency workers) and employees, which is important. Circling back to effective and affordable enforcement i mentioned earlier, the Supreme Court ruled Employment Tribunal fees unlawful when they were introduced, to sighs of relief for all. Though i suspect a Tory government would love to reintroduce them. Fortunately theyve been too occupied by Brexit for the past few years. Small blessings...

This is different to the National Living Wage btw, which is calculated by the Living Wage Foundation. It differs between London and the rest of the UK. Here is a handy link showing employers who offer the living wage

https://www.livingwage.org.uk/accredited-living-wage-employers

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meanwhile, the 'fight for 15' thing has caught up with Sanders and probably Warren -

 

https://www.msn.com/en-us/news/politics/bernie-sanders-responds-to-complaints-staff-don-t-earn-15-an-hour/ar-AAEA5vW?ocid=ob-fb-enus-580&fbclid=IwAR0svSCwBBMM_NG6RjV5mnHtaAAPXR-bQbiZ5JAu8flv9fZ3jrl_3qN8ukk

 

I'm very proud to be the first presidential candidate to recognize a union and negotiate a union contract," the Vermont senator and presidential candidate told the Des Moines Register in an interview Friday. "And that contract was ratified by the employees of the campaign, and it not only provides pay of at least $15 an hour, it also provides, I think, the best health care benefits that any employer can provide for our field organizers."

He also expressed frustration that staffers had taken their complaints to the media.

"It does bother me that people are going outside of the process and going to the media," he said. "That is really not acceptable. It is really not what labor negotiations are about, and it's improper."

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On 7/20/2019 at 2:01 PM, Kalbear said:

Also, looking at the almost perfect model for everything political, New Zealand - they have a really good idea for minimum wage.

$15 an hour for everyone above 18.

$11/hour for 16-17. 

No minimum wage for anyone under than 16 who is eligible to work. 

That''s not quite right. We don't have a youth minimum wage. We have a starting out wage, which for anyone 16 or 17 applies for their first 6 months of employment. After 6 months for 16 and 17 year olds the standard minimum wage applies. So we only have one actual minimum wage and it applies to everyone who's 16+, it just doesn't always kick in on day 1 of your employment. It's still arguable why someone 16-17 wioth no experience should be paid less than someone 18+ with no experience. But at least that injustice only lasts 6 months. Also with businesses only being able to terminate people for cause it's difficult to legally operate a revolving door of dismissing youth workers after 6 months and hiring newbies. But I'm sure some employers try it on because a lot of young people have no idea of the law.

The figures you've quoted are a bit old. As at April this year minimum wage is $17.70, which in USD terms is $12 at today's exchange rate. The living wage here has been calculated at about $21/hr in a full time job (USD $14.20), so the minimum wage is a ways off being a living wage. If you have any dependent children you do get a working for families supplement, but I'm not sure how that shakes out in terms of being a living wage for more than one person. Essentially it's not possible for a multi-person household to survive with relative dignity on a single minimum wage even with the family support payments.

On 7/20/2019 at 2:42 PM, Kalbear said:

I don't think they have seasonal workers, no. They do have a points-based immigration system that is transparent and pretty awesome, and not a day goes by that I don't wonder if I should have taken that job there. 

Yes, we do have foreign seasonal workers, but it's limited to South Pacific Island citizens and capped at about 13,000 people per year. The minimum wage applies under this seasonal employment scheme, and it's pretty tightly managed, i.e. employers have to qualify to employ workers under this scheme. It's limited to South Pacific countries because we see it as an important way of helping the economies of those countries. The workers normally send a large % of their income back to their families. Many people work like this for several years with the same employer. and people with decent experience get paid considerably more than the minimum wage.

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Posted (edited)

Was recently looking at an old micro text book of mind. And I saw a diagram of labor supply curve intersecting with a labor demand curve, and of course where they cross is where the equilibrium wage was supposed to be set.

And I snorted with laughter. That kind of model, where the labor market is concerned, probably ought to be banned from economic textbooks.

What I want to say here is probably already understood by anyone that has actually spent anytime looking for a job. And if you have looked for a job, at some point during your working career, which probably includes most us, you know that its an enormous time cost. There is time in researching jobs and interviewing and so forth. Finding out what kind of wages pay and finding out about the working conditions of the company. And of course companies are spending time trying to find out about workers.

The point here is that the labor market is shot through with informational problems that makes the purely competitive demand and supply model inappropriate. Accordingly, anyone that says that minimum wage laws are likely to lead to lots of unemployment probably don't know what they are taking about.

Put it this way. Supposing your employer says they are going to pay you 10 dollars less every week. If the purely competitive model were true most of use would simply leave and go a find a job paying the market wage which would be well known to everyone. But, in reality, most of us wouldn't just walk out. And the reason is that most of us know that finding a new job would be costly. So we would likely just eat the 10 dollars less per week. Or at least we wouldn't quit right then and there.

Edited by OldGimletEye

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On 7/19/2019 at 9:40 PM, Kalbear said:

My personal take is that having a living wage is not the panacea that giving everyone medical benefits is

That, and subsidized child care.  Being a working mother in France is something that actually works for the mother and the children.

 

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On 7/20/2019 at 1:40 PM, Kalbear said:

My personal take is that having a living wage is not the panacea that giving everyone medical benefits is. 

Neither is a panacea in any way. Each of these is merely one element in achieving prosperity and social justice for every one. And in health care specifically prosperity isn't affordable access to the medical system, it's not getting sick in the first place and not needing to use the healthcare system at all. Within that there's a whole slew of stuff that needs to happen for those at the bottom of the economic pile to achieve true prosperity: good housing, good nutrition, good education, good clothing, good life balance.

There is no panacea because no one thing fixes everything.

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5 hours ago, OldGimletEye said:

Was recently looking at an old micro text book of mind. And I saw a diagram of labor supply curve intersecting with a labor demand curve, and of course where they cross is where the equilibrium wage was supposed to be set.

And I snorted with laughter. That kind of model, where the labor market is concerned, probably ought to be banned from economic textbooks.

What I want to say here is probably already understood by anyone that has actually spent anytime looking for a job. And if you have looked for a job, at some point during your working career, which probably includes most us, you know that its an enormous time cost. There is time in researching jobs and interviewing and so forth. Finding out what kind of wages pay and finding out about the working conditions of the company. And of course companies are spending time trying to find out about workers.

The point here is that the labor market is shot through with informational problems that makes the purely competitive demand and supply model inappropriate. Accordingly, anyone that says that minimum wage laws are likely to lead to lots of unemployment probably don't know what they are taking about.

Put it this way. Supposing your employer says they are going to pay you 10 dollars less every week. If the purely competitive model were true most of use would simply leave and go a find a job paying the market wage which would be well known to everyone. But, in reality, most of us wouldn't just walk out. And the reason is that most of us know that finding a new job would be costly. So we would likely just eat the 10 dollars less per week. Or at least we wouldn't quit right then and there.

I do recollect an extremely high turnover in fast food land.  More than once, I'd come in, find out two or three people who'd been there for years had just up and quit for some trivial reason (a few times because of stunts like the ones described).  I'd see them weeks later at some other eatery or retail job. 

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Quote

 

Too tantalizing for CEOs to resist. Today, the abuse of stock buybacks is so widespread that naming abusers is a bit like singling out snowflakes for ruining the driveway. But somebody needs to be called out.

So take Craig Menear, the chairman and CEO of Home Depot. On a conference call with investors in February 2018, he and his team mentioned their “plan to repurchase approximately $4 billion of outstanding shares during the year.” That day, he sold 113,687 shares, netting $18 million. The following day, he was granted 38,689 new shares, and promptly unloaded 24,286 shares for a profit of $4.5 million. Though Menear’s stated compensation in SEC filings was $11.4 million for 2018, stock sales helped him earn an additional $30 million for the year.

By contrast, the median worker pay at Home Depot is $23,000 a year. If the money spent on buybacks had been used to boost salaries, the Roosevelt Institute and the National Employment Law Project calculated, each worker would have made an additional $18,000 a year. But buybacks are more than just unfair. They’re myopic. Amazon (which hasn’t repurchased a share in seven years) is presently making the sort of investments in people, technology, and products that could eventually make Home Depot irrelevant. When that happens, Home Depot will probably wish it hadn’t spent all those billions to buy back 35 percent of its shares. “When you’ve got a mature company, when everything seems to be going smoothly, that’s the exact moment you need to start worrying Jeff Bezos is going to start eating your lunch,” the shareholder activist Nell Minow told me.

 

The Stock-Buyback Swindle
American corporations are spending trillions of dollars to repurchase their own stock. The practice is enriching CEOs—at the expense of everyone else.

https://www.theatlantic.com/magazine/archive/2019/08/the-stock-buyback-swindle/592774/

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Posted (edited)
On 7/19/2019 at 10:50 PM, felice said:

How much do the shareholders earn from the business per annum?

Think you asked me this in another thread. The answer is it depends. Since 2008, the business has been more or less operating at a loss with my father in law not taking a salary in 15 years. Employees get paid $15 an hour or more but manufacturing in NY (taxes, permits, increasing regulations, etc), with tariffs on steel/aluminum and cheap Chinese made goods, has made it pretty hard. I know the presiding thought here is to close the business and just do something else but that's 20 long term employees who will lose their job and an owner who has done nothing else for 40 years. Easy decision for some of you on this thread but reality is much different.

Edited by Mexal

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5 hours ago, Mexal said:

Think you asked me this in another thread. The answer is it depends. Since 2008, the business has been more or less operating at a loss with my father in law not taking a salary in 15 years.

Ok, that seems like a reasonable justification for not wanting labour costs to go up in this specific case. But it's obviously not a sustainable situation in the long term; something has to change.

5 hours ago, Mexal said:

with tariffs on steel/aluminum and cheap Chinese made goods

That really should be the other way around - tarrifs on cheap imports made by underpaid workers with inadequate environmental regulations, not on raw materials for local production. Buying local might be popular in principle, but in practice price will be a bigger factor for most people most of the time.

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Posted (edited)
59 minutes ago, felice said:

Ok, that seems like a reasonable justification for not wanting labour costs to go up in this specific case. But it's obviously not a sustainable situation in the long term; something has to change.

That really should be the other way around - tarrifs on cheap imports made by underpaid workers with inadequate environmental regulations, not on raw materials for local production. Buying local might be popular in principle, but in practice price will be a bigger factor for most people most of the time.

Yea well, unfortunately small businesses that rely on those raw materials don't have millions of dollars to throw at lobbyists or Trump.

That being said, my father in law's business isn't in a unique position. Might be different if they were more service oriented but a lot of his peers that make things are in a similar boat. Changing economy and all that.

Edited by Mexal

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Posted (edited)
17 hours ago, ThinkerX said:

I do recollect an extremely high turnover in fast food land.  More than once, I'd come in, find out two or three people who'd been there for years had just up and quit for some trivial reason (a few times because of stunts like the ones described).  I'd see them weeks later at some other eatery or retail job. 

Having worked some low wage craptastic jobs in my youth its not surprising that people bolt fast food restaurants often.

In my personal opinion, low wage customer service jobs, where you have to deal with the public, are even worse than low wage physically demanding jobs. About 95% customers you deal with are okay. The other 5% are either knuckleheads or assholes. And that 5% will wear your ass out. Personally, I'd rather dig ditches in the summer heat for low pay, than work a customer service job for low pay. That's of course my personal preference. Still, those kinds of jobs are tough gigs.

There are of course lots of jobs that do have high turnover. Partly because some employers choose low pay as a business strategy. And partly because of management incompetence. High employee turnover is usually a fairly strong signal of poor management. Anyway, low wages do persist ,in part, because of informational problems. It takes quite a bit of work to find a decent job. If everyone had full information about every job, its characteristics, and the wages it paid, it's likely places like McDonalds would have to pay more.

Edited by OldGimletEye

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Posted (edited)

Re: The "but, it will cost business" argument.

Supposing we pass a law  that will tax heavily monopoly profits. Bad idea because it will cost business? Nope. Not at least to basic economic theory because it suggest producers don't need monopoly profits in order to put factors (capital) into production.

The point here is whether "it will cost business" is a good argument depends on how the market is structured. In a monopsony model, wages can be raised and its even theoretically possible that employment will increase, even though it might cost business.

Ultimately, what I care about is whether we can make workers better off, by raising their wages, without causing too much unemployment in the process. Whether "it cost business" is only a concern if it impacts the rate of employment.

Edited by OldGimletEye

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13 minutes ago, OldGimletEye said:

Having worked some low wage craptastic jobs in my youth its not surprising that people bolt fast food restaurants often.

In my personal opinion, low wage customer service jobs, where you have to deal with the public, are even worse than low wage physically demanding jobs. About 95% customers you deal with are okay. The other 5% are either knucklehead or assholes. And that 5% will wear your ass out. Personally, I'd rather dig ditches in the summer heat for low pay, than work a customer service job for low pay. That's of course my personal preference. Still, those kinds of jobs are tough gigs.

There are of course lots of jobs that do have high turnover. Partly because some employers choose low pay as a business strategy. And partly because of management incompetence. High employee turnover is usually a fairly strong signal of poor management. Anyway, low wages do persist ,in part, because of informational problems. It takes quite a bit of work to find a decent job. If everyone had full information about every job, its characteristics, and the wages it paid, it's likely places like McDonalds would have to pay more.

Yeah, a low-wage employee has to factor in how much they are currently tolerating on the job, how much money will be lost getting another job, and if the management is abusive/wage thieves. The only real advantage they have is the job is probably crappy and they are not losing a lot if they get rid of it. Raising the minimum wage to the point the local market will bear increases the power of every individual worker. Any funds saved beyond living costs can be used to rid themselves of abusive employers or poor working conditions. 

Low wages do the opposite and cause workers to have to tolerate abuse and poor working conditions for longer periods of time. 

On the subject of wage theft, I've ignored wage theft before as well as stolen travel costs. Sometimes in jobs you just have to roll with the punches. That goes for things like supervisors that insult you and the like as well. You have to factor in how injured you feel you are and how bad a hassle it will be to quit or complain. When hundreds of dollars are left out of a check though I am all over that. The thing with pursuing wages, you are now doing free labor to get the money you are owed. And if is never paid, you will be out that labor in addition to what was taken. 

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1 hour ago, OldGimletEye said:

Re: The "but, it will cost business" argument.

Supposing we pass a law  that will tax heavily monopoly profits. Bad idea because it will cost business? Nope. Not at least to basic economic theory because it suggest producers don't need monopoly profits in order to put factors (capital) into production.

The point here is whether "it will cost business" is a good argument depends on how the market is structured. In a monopsony model, wages can be raised and its even theoretically possible that employment will increase, even though it might cost business.

Ultimately, what I care about is whether we can make workers better off, by raising their wages, without causing too much unemployment in the process. Whether "it cost business" is only a concern if it impacts the rate of employment.

Don't you also need to think about inflation? What's the point of raising wages if inflation is just going to eat it all up within a short space of time and workers at the bottom end still wind up struggling just as much as they did before the wage rise. Somehow a long term strategy needs to achieve rising wages at the bottom end of the labour market up to a point where a living wage is achieved. Which mean achieving it in a non-inflationary manner.

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14 minutes ago, The Anti-Targ said:

Don't you also need to think about inflation? What's the point of raising wages if inflation is just going to eat it all up within a short space of time and workers at the bottom end still wind up struggling just as much as they did before the wage rise. Somehow a long term strategy needs to achieve rising wages at the bottom end of the labour market up to a point where a living wage is achieved. Which mean achieving it in a non-inflationary manner.

Start with a monopsony model. Suppose the government mandates a wage that is no higher than what would exist in a competitive equilibrium.

Does inflation happen in this case. No it doesn't. Employment rises and so does output.

That said, there is some evidence that prices rise some with minimum wage laws. But, not enough to offset the gains by wage workers. Your assuming that an increase in the minimum wage will result in a one for one rise in prices. There is no reason to assume that.

Also lets play around with a general equilibrium model. Lets say there is some kind of friction in the labor market. Government mandates a minimum wage. It causes demand to rise because the people benefiting from the wage increase tend to spend on the margin than those who don't. The FED notices inflation starts to pick up. They raise the Federal Funds rate. Given how close the current rate is to 0, not a terrible result.

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