Minimum Wage debate - USA

[fathertime]

In McDonalds in America, one can buy a burger, fries, chicken sandwich, chicken nuggets, sausage muffin, breakfast burrito, or a large soda for a dollar each. Water is free. A homeless person can eat 3 meals a day with water for $3 plus tax. Is this possible in any McDonalds outside of America? Minimum wage goes further here than in other places. Gas is cheaper, food is cheaper, products(many thanks to China) are cheaper.

Well Billyb, I think overall you have made some good points.  Using 10 dollars as a minimum wage...if a worker works all month he will bring in about 1732 a month....if that worker has a wife and two kids, he normally will have Rent, Food, Health Ins, as some big outlays each month...BUT he would qualify for section 8, (if he isn't on a long wait list)....he would qualify for food stamps, and he would qualify for obamacare....these programs would likely cover quite a bit if not virtually all of those expenses.  Of course there are many other expenses...like clothing, some discounted utilities, transportation costs, car insurance (if necessary) occasionally a piece of furniture or a trip to the ballpark....all that said, I feel our minimum wage is artificially low, because of the safety net in place...if not for that safety net, people would be hard pressed to get by, and getting by would be about all they could do...and of course desperately hope not to get ill and miss a week of work.   


Fathertime!   

[Anotherkiwi]

...and of course desperately hope not to get ill and miss a week of work.

Do people in the USA not get paid sick leave?

[lordtiberius]

Most the big companies do.  Full time workers get it.  Most illegals have 2 to 3 part time jobs.

[Boethius]

Do people in the USA not get paid sick leave?

Many states do not have strong employment laws so, if a worker is sick, unless the illness is covered by the Family Medical Leave Act or similar state legislation, his/her employment could be terminated, and there would be little recourse for the worker.

[fathertime]

Do people in the USA not get paid sick leave?

The people at the low end jobs generally do not get paid if they are out sick....


Fathertime!   

[calmissile]

Do people in the USA not get paid sick leave?

It depends on the company.  Most companies that are larger than a mom-and-pop operation have medical insurance and sick leave.  The practices vary widely.  In some, you can convert unused sick leave into vacation or get paid for it, others it resets at the end of the year.  Also some occupations are less likely to be covered by sick leave such as laborers and part time or transient workers.

I suspect all union workers are covered by some kind of sick leave and medical plans.  These benefits are analyzed by employees when they evaluate what companies they want to work for.  In the free market, companies have to compete with each other in order to gain good employees and benefits is oftentimes a big factor in their decisions as well as commute times and the reputation of the companies toward employees.  I remember a time in the late 60's when Boeing had a such a bad reputation that they had a very hard time getting  employees to move to Seattle to build their airplanes. 

[Shadow]

No wonder Americans regard Europe as socialist.

[calmissile]

No wonder Americans regard Europe as socialist.

Your absolutely right.  In fact is was very educational for me to learn that Europeans have a totally different view on what is socialism than the US.  I thank the forum for allowing these differences to be brought out.  For those of us that had never been to Europe or studied it only had Canada to compare to and their socialized health care system was the only thing obvious to many of us.

Some of these discussions has been very helpful to me to understand the other points of view.

Our system worked quite well when we had a balance of labor and industry.  Unions also prevented the large corporations from turning employees into slaves.  Unfortunately the welfare state programs and the masses of illegal aliens has upset that balance of power and we are now faced with more labor that industry can handle.  Plus our corrupt politicians moving much of our manufacturing overseas has also contributed to our current mess.

[fathertime]

These two articles from today and yesterday discuss relevant aspects:


http://finance.yahoo.com/news/needed-in-2015--middle-class-wealth-gains-165008103.html
In this link you will see a chart that shows how much wider the gap has become between the wealthy and the poor....


http://www.reuters.com/article/2014/12/24/us-walmart-wages-idUSKBN0K20AE20141224


This article discusses among other things how Walmart is going to raise pay for some of the minimum wage workers by paying others less...although it appears they are taking from middle income workers to pay the minimum wage workers more...nowhere does it indicate upper level workers will be affected....interesting.




Fathertime!   

[Shadow]

Your absolutely right.  In fact is was very educational for me to learn that Europeans have a totally different view on what is socialism than the US.  I thank the forum for allowing these differences to be brought out.  For those of us that had never been to Europe or studied it only had Canada to compare to and their socialized health care system was the only thing obvious to many of us.

Some of these discussions has been very helpful to me to understand the other points of view.

Our system worked quite well when we had a balance of labor and industry.  Unions also prevented the large corporations from turning employees into slaves.  Unfortunately the welfare state programs and the masses of illegal aliens has upset that balance of power and we are now faced with more labor that industry can handle.  Plus our corrupt politicians moving much of our manufacturing overseas has also contributed to our current mess.

The balance is not disturbed by the illegal immigrants, as those are part of keeping the balance.
The actual disturbance of the balance was there being a lack of money in an economy that depends on constant growth.
Most companies and people expected that everything grows and rises each year, and when it does not get in to trouble.
Companies fund their future on borrowed money, and needed to continue reporting positives in order to keep their funders happy.
Similar people expected to be able to obtain ever larger credit to fund their expenses.
In the end, there was not enough money to keep affording this, which caused the financial crisis.
The result is that still a lot of people are in deep trouble, and only if a new era of growth emerges this can be solved.

[LiveFromUkraine]

People have more to spend so things cost more. I understand our European friends disgust with how low our minimum wage is but our dollars go farther. I think Americans eat more and own more junk than anybody.

I used to believe that line but realized I was merely regurgitating what I have read.  I don't think any increase will be substantial enough to negatively impact most people. 


I am more than happy to read more about this if you have any links.

Yes, we do have a pretty good deal here when it comes to purchasing power and I suspect it will continue even with a wage hike.

As an example, Walmart is restructuring how they pay people because of minimum wage hikes.  They are not raising prices.


http://www.reuters.com/article/2014/12/24/us-walmart-wages-idUSKBN0K20AE20141224

In McDonalds in America, one can buy a burger, fries, chicken sandwich, chicken nuggets, sausage muffin, breakfast burrito, or a large soda for a dollar each. Water is free. A homeless person can eat 3 meals a day with water for $3 plus tax. Is this possible in any McDonalds outside of America? Minimum wage goes further here than in other places. Gas is cheaper, food is cheaper, products(many thanks to China) are cheaper.

Well, I am not understanding how homeless people are entering into this equation.  Again, I do agree prices are much lower here compared to other countries but believe we can afford some hikes in prices where it wouldn't affect most people.


Looking at the study I posted, restaurant prices being raised 2 to 3 percent wouldn't stop people from enjoying or being able to enjoy a night out at their favorite eatery.  Even the proposed 7 percent increase at a minimum wage of 15 an hour wouldn't hinder most people from eating out.


I'm not sure you read the link since you got the city wrong, but the study found companies were able to absorb the higher costs in several ways.  One being a lower turnover rate since they got a higher quality candidate.  It costs a lot of money to train people and a high turnover rate is a big problem. 

Washington State has the highest minimum wage in America. Seattle is an expensive place to live. People also make more and can pay more so raising the minimum wage there won't have a big impact compared to other places. Cost of living is more in Seattle. Seattle's minimum wage may not go as far as the minimum wage, which is less, where Turboguy lives. Turboguy said $500 a month get a person a decent place to live. $1200 may get a person a decent place to live in Seattle. As everybody's wages go up in Seattle, so will cost of living and we'll ride the circle again and again.

I believe the study was done in San Francisco but your point remains.  I don't agree that it would be much different.  With higher costs of living such as San Francisco and Seattle, the rents are much more for these places of business but they were still able to offer prices that people where willing to purchase at.

People who earn minimum wage accounts for 2.6% of all employees. It's okay for people to start at the bottom before working their way up. Chart below shows minimum wage moving around the same pace as inflation.

Where are the jobs for these people to work towards?  You got more and more people coming out of college to nata, nothing and with big loans.  The jobs aren't there anymore but everyone keeps telling people to do better.

[LiveFromUkraine]

http://www.reuters.com/article/2014/12/24/us-walmart-wages-idUSKBN0K20AE20141224


This article discusses among other things how Walmart is going to raise pay for some of the minimum wage workers by paying others less...although it appears they are taking from middle income workers to pay the minimum wage workers more...nowhere does it indicate upper level workers will be affected....interesting.




Fathertime!

ha! I just posted that link in response to Billy before I saw your posts.  I tend to think that many of these things will happen instead of simply raising prices like many suspect would automatically happen.  I'm not saying prices won't be raised, I think prices won't be raised substantially because some of the increased expenses can be met in other ways.

[lordtiberius]

Our system worked quite well when we had a balance of labor and industry.  Unions also prevented the large corporations from turning employees into slaves. 

The unions in the country are more corrupt than the organizations they were supposed to fight against.  I say that as a member of union AFGE local 1801

[AC]

Washington State has the highest minimum wage in America. Seattle is an expensive place to live. People also make more and can pay more so raising the minimum wage there won't have a big impact compared to other places. Cost of living is more in Seattle. Seattle's minimum wage may not go as far as the minimum wage, which is less, where Turboguy lives. Turboguy said $500 a month get a person a decent place to live. $1200 may get a person a decent place to live in Seattle. As everybody's wages go up in Seattle, so will cost of living and we'll ride the circle again and again.

This is the problem with raising the minimum wage to an artificially high level.  The moment it goes up the "gains" are immediately eaten up by increases in rent, food, gas and other expenditures.

We don't need higher minimum wages, we need more middle class well paying full-time jobs being created.  As long as our government steals Billions of dollars from the USA economy in the form of taxes instead of allowing companies to invest in new manufacturing plants and higher wages for their employees, the false and artificial narrative will continue.

[Shadow]

This is the problem with raising the minimum wage to an artificially high level.  The moment it goes up the "gains" are immediately eaten up by increases in rent, food, gas and other expenditures.

We don't need higher minimum wages, we need more middle class well paying full-time jobs being created.  As long as our government steals Billions of dollars from the USA economy in the form of taxes instead of allowing companies to invest in new manufacturing plants and higher wages for their employees, the false and artificial narrative will continue.

Stop paying taxes. Things like roads are not needed, police is only comitting race crimes and nobody at all needs to protect the US from foreigners willing to add to their economy.

[AC]

Stop paying taxes. Things like roads are not needed, police is only comitting race crimes and nobody at all needs to protect the US from foreigners willing to add to their economy.

I realize you are trying to be funny however I did not say that.  Those services are important however there is much room for cutting waste in the Federal budget.  Scott Walker did it in Wisconsin and it can be done on the Federal level.

In Germany a Socialist country their Post Office has apparently been privatized.  Many US services could also be privatized in order to not only cut waste but improve quality.  Beginning with the VA healthcare which is a corrupt and bloated bureaucracy.  From there privatize the US Post Office.  Allow private companies to bid on building new roads and freeways.  Lower Corporate tax rates.  Not because government services are not needed, but because when tax rates are too high companies simply shift money overseas to tax shelters.  Some tax when the rates are in balance is far superior to zero taxes being obtained which is what happens when companies remain overseas.

[Shadow]

I realize you are trying to be funny however I did not say that.  Those services are important however there is much room for cutting waste in the Federal budget.  Scott Walker did it in Wisconsin and it can be done on the Federal level.

In Germany a Socialist country their Post Office has apparently been privatized.  Many US services could also be privatized in order to not only cut waste but improve quality.  Beginning with the VA healthcare which is a corrupt and bloated bureaucracy.  From there privatize the US Post Office.  Allow private companies to bid on building new roads and freeways.  Lower Corporate tax rates.  Not because government services are not needed, but because when tax rates are too high companies simply shift money overseas to tax shelters.  Some tax when the rates are in balance is far superior to zero taxes being obtained which is what happens when companies remain overseas.

Germany is far from being Socialist. As for privatizing, it is a different word for abolishing.
Healthcare in the Netherland is privatized, and it is still a corrupt and bloated bureaucracy, the promised lower fees were never realsied and instead people are obliged to take part in a private service, which raises prices yearly while reducing service and making millions of profit. Public transport is similas. As for the Post.. does anybody still use that ?

Bottom line is that the Government is controlled by the public and there for can be much more efficient and transparent in taking care of issues where not just money ocunts but also the benefit to society.
As I mentioned the tax rates in the USA are low to me, however so is the level of public service.

[lordtiberius]

Stop paying taxes. Things like roads are not needed, police is only comitting race crimes and nobody at all needs to protect the US from foreigners willing to add to their economy.

More false dichotomies from a believer in falsehoods.  You don't care about poor people or America.  Anyone else sick of this crap?

[Turboguy]

Bottom line is that the Government is controlled by the public and there for can be much more efficient and transparent in taking care of issues where not just money ocunts but also the benefit to society.
As I mentioned the tax rates in the USA are low to me, however so is the level of public service.

If tbat is true of yor government that is great.  Here i don't think it can be totally said that the government is controlled by the people or that there is much it does that is efficient or transparent.

[Anotherkiwi]

Where I live, Yes...Around here you can buy a livable house for $ 20,000.00 or so or a pretty nice house for $ 50-60,000.00. 

I've been mulling this over for a few days, Turbo, and I still find it just so hard to believe.  I know that your town has only about 9,000 residents, but those house prices suggest an incredibly depressed, derelict area with everybody running for the hills.  The only comparable prices here would be in nearly empty mining villages.  I know that big cities are completely different, but the average house price in Auckland is around $NZ 750,000 (roughly $US 600,000), and you can't find any freehold house for under about $300,000 (and you probably wouldn't want to live there, anyway).

Even if you rent, $ 400-500.00 will get a decent place.

For what period?  Is this for a month?  Here we always quote rentals at a weekly rate, and that $400-500 (a week) would only get an average three-bedroomed home in an average neighbourhood.

Groceries at Aldis maybe $ 80-100 a week for a family of 4.  (The two of us eat for about $ 50.00  a week).  I could go further but yes, someone could live on that income.

Maybe 30-40% more here in actual dollars (but only 10-20% more in US dollars after you allow for the rate of exchange), but at least this differential is nothing like that for housing.

Now, turning to the actual debate about minimum wages -

Our minimum wage is $17 an hour.  That applies to all workplaces (including McDonalds), and there are very few firms that could honestly claim they've gone bankrupt because of having to pay increased wages.  As was shown upthread, we were the first country to implement a statutory minimum wage, and the increases over the years have never been such that they've caused a catastrophic increase in costs.  All companies manage any such increases in their own way - some absorb all (or most) of the cost; others pass it all on to customers.  The bottom line is that it is not such a huge deal here any more, unlike in the US, because we're used to it.  It also means that service staff don't have to rely on tips to survive.  The 7% increase in the cost of a restaurant meal that someone quoted earlier should seriously not be a big deal to anyone intending to dine out.

It follows on from the paid leave which employees are allowed.  There is a minimum allowance of four weeks annual leave, plus statutory holidays (11 days), but companies are free to offer more if they wish.  There was a huge furore when the minimum was raised from three weeks, because companies felt they would have to hire extra staff to cover the 33% increase in absences but, again, that died down pretty quickly.  Most firms in Europe give five or six weeks paid vacation per year, so their costs for replacement (or temporary) staff would be considerably higher, but you don't hear about huge riots by the employers to keep the holidays shorter.

[fathertime]

I've been mulling this over for a few days, Turbo, and I still find it just so hard to believe.  I know that your town has only about 9,000 residents, but those house prices suggest an incredibly depressed, derelict area with everybody running for the hills.  The only comparable prices here would be in nearly empty mining villages.  I know that big cities are completely different, but the average house price in Auckland is around $NZ 750,000 (roughly $US 600,000), and you can't find any freehold house for under about $300,000 (and you probably wouldn't want to live there, anyway).

For what period?  Is this for a month?  Here we always quote rentals at a weekly rate, and that $400-500 (a week) would only get an average three-bedroomed home in an average neighbourhood.


 

Obviously this is Turbo's question, but I will chime in as I have some experience here.  He is 100% accurate with those prices.  I've owned out of state property in W. Virginia and Ohio, and both the monthly rental prices and home prices are accurate for the areas I've been in.  These are smallish towns, but not overly unsafe or fouled.  Here in Southern California, you couldn't get a two-headed outhouse for the price mentioned.


Fathertime!   

[Shadow]

If tbat is true of yor government that is great.  Here i don't think it can be totally said that the government is controlled by the people or that there is much it does that is efficient or transparent.

The mistrust in the goverment is always interesting. You are electing these guys.
Our government is far from perfect, however any government is more likely to take non-profit elements in to account as a company.

[Turboguy]

The mistrust in the goverment is always interesting. You are electing these guys.
Our government is far from perfect, however any government is more likely to take non-profit elements in to account as a company.

It isn't that I mistrust government.  It is just that I realize they are all a bunch of greedy crooks.  The only thing that keeps anything productie happening is their need to get reelected

[jone]

I've been mulling this over for a few days, Turbo, and I still find it just so hard to believe.  I know that your town has only about 9,000 residents, but those house prices suggest an incredibly depressed, derelict area with everybody running for the hills.  The only comparable prices here would be in nearly empty mining villages.  I know that big cities are completely different, but the average house price in Auckland is around $NZ 750,000 (roughly $US 600,000), and you can't find any freehold house for under about $300,000 (and you probably wouldn't want to live there, anyway).

For what period?  Is this for a month?  Here we always quote rentals at a weekly rate, and that $400-500 (a week) would only get an average three-bedroomed home in an average neighbourhood.



Maybe 30-40% more here in actual dollars (but only 10-20% more in US dollars after you allow for the rate of exchange), but at least this differential is nothing like that for housing.

Now, turning to the actual debate about minimum wages -

Our minimum wage is $17 an hour.  That applies to all workplaces (including McDonalds), and there are very few firms that could honestly claim they've gone bankrupt because of having to pay increased wages.  As was shown upthread, we were the first country to implement a statutory minimum wage, and the increases over the years have never been such that they've caused a catastrophic increase in costs.  All companies manage any such increases in their own way - some absorb all (or most) of the cost; others pass it all on to customers.  The bottom line is that it is not such a huge deal here any more, unlike in the US, because we're used to it.  It also means that service staff don't have to rely on tips to survive.  The 7% increase in the cost of a restaurant meal that someone quoted earlier should seriously not be a big deal to anyone intending to dine out.

It follows on from the paid leave which employees are allowed.  There is a minimum allowance of four weeks annual leave, plus statutory holidays (11 days), but companies are free to offer more if they wish.  There was a huge furore when the minimum was raised from three weeks, because companies felt they would have to hire extra staff to cover the 33% increase in absences but, again, that died down pretty quickly.  Most firms in Europe give five or six weeks paid vacation per year, so their costs for replacement (or temporary) staff would be considerably higher, but you don't hear about huge riots by the employers to keep the holidays shorter.

Here in LA, you can get a fairly nice home for $400,000.  During the real estate meltdown, there were whole city blocks out on the way to Palm Springs, with 20 houses, that you could pick up for under a million.

[lordtiberius]

Overpriced