4 ways employers respond to Minimum Wage Laws( Besides Layoff)

[KLATTU]

O. After all, the right wing is all about greed worship

Ges

everybody's all about greed. You ever see the line to buy lottery tickets when the prize goes into the hundreds of millions?

 

[What if...?]

Funny you'd accuse me of ad homs in a post were you drop one yourself. self-awareness not a strong suit, eh?


My "programming" is to depend on facts and data, and that's what I did. Your programming is "if Trump is involved deny it"

My ad hom was in response to yours.

And I still don't see your support of your claim.

 

[iguanaman]

All right. Let's see if I understand your argument here. You are saying that since 1985 we have seen about 3.5 million jobs across the country go empty because people have decided that it just wasn't worth working for minimum wage?

In other words, the demand for workers in these jobs has at least remained constant yet the supply of workers has reduced by eightfold? Yet somehow the economic theory of the effect on wages due to the law of supply and demand does not apply here?

There are less minimum wage jobs because more companies are paying more than minimum wage.

Target said Thursday it will raise its wages by $1 from $12 this summer as it continues to commit to reach $15 an hour by 2020.

The move comes as retailers have been struggling to attract workers with U.S. unemployment at its lowest level in nearly 50 years and a record number of job openings.

“It’s always been hard for retailers to find good employees. Smart employers are now realizing that it’s not only a matter of finding good staff members, but keeping them. When employees stick around, retailers have less turnover and can instead invest in the long-term growth of their team," Bob Phibbs, CEO of New York-based consultancy The Retail Doctor,

Minimum wage on the rise, these companies are in the lead | Fox Business

 

[CLAX1911]

Well, you obviously don't remember when store clerk wasn't an entery level job.

Yeah I want born in 1875.

The guy at the shoe store or the clothing store or the hardware store knew about what they were selling. Knew their customers, etc.

people can be higher paid more knowledgeable salesman I was once.

Business just declared it a job not worth paying for and that was that.

yeah when you hire out somebody you have to work for what they're going to pay you if it's not enough find something else.

Dynamically this was in response to our statusheads coming into competition with statusheads in other countries with vast pools of desperate people.

Our poor status addicts found themselves in a losing position. Too much of the capital they needed to get "ahead" of others trying to do the same thing was hemorrhaging away as wages for greedy American commodities (people).

it seems to be politicians which is why illegal immigration is such a problem. as long as there is extremely low skilled people crossing the border in abundance they will always undercut the lowest class.

 

[MTAtech]

Cut Hours Rather Than Workers
Make Employees Work Harder
Cut Other Elements of Remuneration
Hire Fewer People, More Robots

Economists Grace Lordan and David Neumark analyze how changes to the minimum wage from 1980 to 2015 affected low-skill jobs in various sectors of the US economy, focusing particularly on "automatable jobs – jobs in which employers may find it easier to substitute machines for people,” such as packing boxes or operating a sewing machine. They find that across all industries they measured, raising the minimum wage by $1 equates to a decline in "automatable" jobs of 0.43 percent, with manufacturing even harder hit.

They conclude that

groups often ignored in the minimum wage literature are in fact quite vulnerable to employment changes and job loss because of automation following a minimum wage increase.

Minimum wage hikes are bad public policy. Economics, like all social sciences, has difficulty testing its models against data, but even where
we can, the evidence bears this out.

4 Ways Employers Respond to Minimum Wage Laws (Besides Laying Off Workers) - Foundation for Economic Education

Comments?

From Wiki:

The Foundation for Economic Education (FEE) is a libertarian economic think-tank dedicated to the "economic, ethical and legal principles of a free society."[4] FEE publishes books, daily articles, and hosts seminars and lectures.[5]

I am not saying what they are saying is false. What I am saying is they have an agenda.

There findings are also illogical. They stated that employers responded by cutting hours. The only time employers would ever cut hours is when workers aren't utilized. That is true regardless of wages.

The study is also at odds with other studies:

UC Berkeley research examines effects of minimum wage increases

Economists Are Learning to Love the Minimum Wage - CityLab

 

[Bullseye]

My ad hom was in response to yours.

So, basically your defense is . . ."But Mommy, Bullseye did it first"?

And I still don't see your support of your claim.

That would imply I think this discussion it worth continuing.

 

[Glitch]

Well, they've done it for decades, so....

So if someone commits murders every year for decades before being caught they should be allowed to continue murdering people? Is that really what you are arguing?

The IRS has nothing at all to do with wage or overtime laws, and none of that sounds correct about overtime and who is exempt and non-exempt, but it's good you could pay a lot more than minimum wage.

The IRS has everything to do with the enforcement of minimum wage, overtime, and holiday pay. You clearly were never in business. The IRS has a great deal of control, including controlling your work environment.

You might want to reference the Fair Labor Standards Act of 1938, which is what created the unconstitutional federal minimum wage and gave the IRS a great deal more authority.

 

[Beowulf]

Oh, so we should do nothing and continue to let companies underpay their workers, [...]

Workers aren't underpaid. They are paid what they choose to sell their services for.

[...]treat them like ****. Continue to take all the profits, continue to pollute the enviornment, and hell, get rid of all regulations and just let them do what they want. After all, the right wing is all about greed worship

Gee, how do all those companies function in other countries where they have to pay livable wages

 

[JasperL]

So if someone commits murders every year for decades before being caught they should be allowed to continue murdering people? Is that really what you are arguing?

No, I'm arguing that your preferences for what is constitutional or not is contradicted by reality. It's constitutional if the courts say it is, and they have said minimum wage laws are constitutional. You thinking they are wrong isn't relevant to anything.

The IRS has everything to do with the enforcement of minimum wage, overtime, and holiday pay. You clearly were never in business. The IRS has a great deal of control, including controlling your work environment.

I run my own business doing taxes and accounting, so deal with IRS on a very regular basis. They don't get involved in overtime pay, minimum wages, etc.

You might want to reference the Fair Labor Standards Act of 1938, which is what created the unconstitutional federal minimum wage and gave the IRS a great deal more authority.

Right, administered by the Department of Labor, not the IRS. IRS is part of the Treasury Department.

Access Denied

The U.S. Department of Labor enforces the Fair Labor Standards Act (FLSA), which sets basic minimum wage and overtime pay standards. These standards are enforced by the Department's Wage and Hour Division.

 

[Glitch]

No, I'm arguing that your preferences for what is constitutional or not is contradicted by reality. It's constitutional if the courts say it is, and they have said minimum wage laws are constitutional. You thinking they are wrong isn't relevant to anything.

Actually, the courts have never ruled on the Fair Labor Standards Act of 1938. The courts have not ruled on a great many federal laws that violate the US Constitution either. The way it actually works is that there is a "presumption of constitutionality" with every law enacted by Congress. That doesn't mean that the law is constitutional, just that it is presumed to be constitutional. Until the Supreme Court says otherwise, all laws are assumed to be constitutional. Even those that blatantly violate the US Constitution, like the Social Security Act of 1935 or the Fair Labor Standards Act of 1938.

I run my own business doing taxes and accounting, so deal with IRS on a very regular basis. They don't get involved in overtime pay, minimum wages, etc.

They do, and I already provided you the law which gave the IRS that authority, which you obviously never read. It gets even better, the IRS' control over businesses varies depending on the business. This is the current law that governs the IRS and the application of wages, overtime, and other benefits: Individual Tax Reform Act of 2018, Public Law 115–97.

 

[JasperL]

Actually, the courts have never ruled on the Fair Labor Standards Act of 1938. The courts have not ruled on a great many federal laws that violate the US Constitution either. The way it actually works is that there is a "presumption of constitutionality" with every law enacted by Congress. That doesn't mean that the law is constitutional, just that it is presumed to be constitutional. Until the Supreme Court says otherwise, all laws are assumed to be constitutional. Even those that blatantly violate the US Constitution, like the Social Security Act of 1935 or the Fair Labor Standards Act of 1938.

They do, and I already provided you the law which gave the IRS that authority, which you obviously never read. It gets even better, the IRS' control over businesses varies depending on the business. This is the current law that governs the IRS and the application of wages, overtime, and other benefits: Individual Tax Reform Act of 2018, Public Law 115–97.

DOL =/= IRS.

Believe what you want, but you're wrong... E.g. Supreme Court Broadly Interprets Overtime Exemptions Specified in the Fair Labor Standards Act - Lexology

 

[StillServing]

There are less minimum wage jobs because more companies are paying more than minimum wage.

Minimum wage on the rise, these companies are in the lead | Fox Business

Fantastic! A great demonstration of the market working! Let companies react to market demands on their own accord.

 

[Waddy]

The real economics of it is when the majority of low paid workers reach $15 per hour, that will become the new poverty wage. And prices, rent, food, clothing, will increase enough to eat it up. But what the $15 wage mostly does is have an effect on the higher paid workers. Often their wages are tied to the lowest wage, at least indirectly. And as that trickles upward, the people most benefiting from a $15 minimum wage will be those on the higher rungs on the ladder. And higher prices for everyday stuff doesn't affect them very much.

 

[SDET]

22 million people just got huge raises from state minimum wage hikes. 50% or more.

This almost certainly accounts for the 1% or so over inflation we are now seeing.

Then leave it at the state level. Mississippi and New Jersey having the same minimum wage is off kilter.

 

[Individual]

Why would it? Most of the jobs created are at more then minimum wage. According to the Bureau for Labor Statistics only about 2-3% of all workers earn the federal minimum wage. And they tend to be young, unattached, part timers. They likely move up the wage ladder as they grow skills and experience. One of the results of the current booming economy is a growth of wages - year over year gains of over three percent are being reported with the lowest earners seeing some of the best gains.

Employed: Percent of hourly paid workers: Paid total at or below prevailing federal minimum wage: Wage and salary workers: 16 years and over | FRED | St. Louis Fed
2018 - 2.1%

1979 - 2018
DATE VALUE
1979-01-01 13.4
1980-01-01 15.1
1981-01-01 15.1
1982-01-01 12.8
1983-01-01 12.2
1984-01-01 11
1985-01-01 9.9
1986-01-01 8.8
1987-01-01 7.9
1988-01-01 6.5
1989-01-01 5.1
1990-01-01 5.1
1991-01-01 8.4
1992-01-01 7.7
1993-01-01 6.7
1994-01-01 6.2
1995-01-01 5.3
1996-01-01 5.4
1997-01-01 6.7
1998-01-01 6.2
1999-01-01 4.6
2000-01-01 3.6
2001-01-01 3.0
2002-01-01 3.0
2003-01-01 2.9
2004-01-01 2.7
2005-01-01 2.5
2006-01-01 2.2
2007-01-01 2.3
2008-01-01 3.0
2009-01-01 4.9
2010-01-01 6.0
2011-01-01 5.2
2012-01-01 4.7
2013-01-01 4.3
2014-01-01 3.9
2015-01-01 3.3
2016-01-01 2.7
2017-01-01 2.3
2018-01-01 2.1

Ignore the attached images, the link at the top is what I was trying to attach.

 

[Bullseye]

Employed: Percent of hourly paid workers: Paid total at or below prevailing federal minimum wage: Wage and salary workers: 16 years and over | FRED | St. Louis Fed
2018 - 2.1%

1979 - 2018
DATE VALUE
1979-01-01 13.4
1980-01-01 15.1
1981-01-01 15.1
1982-01-01 12.8
1983-01-01 12.2
1984-01-01 11
1985-01-01 9.9
1986-01-01 8.8
1987-01-01 7.9
1988-01-01 6.5
1989-01-01 5.1
1990-01-01 5.1
1991-01-01 8.4
1992-01-01 7.7
1993-01-01 6.7
1994-01-01 6.2
1995-01-01 5.3
1996-01-01 5.4
1997-01-01 6.7
1998-01-01 6.2
1999-01-01 4.6
2000-01-01 3.6
2001-01-01 3.0
2002-01-01 3.0
2003-01-01 2.9
2004-01-01 2.7
2005-01-01 2.5
2006-01-01 2.2
2007-01-01 2.3
2008-01-01 3.0
2009-01-01 4.9
2010-01-01 6.0
2011-01-01 5.2
2012-01-01 4.7
2013-01-01 4.3
2014-01-01 3.9
2015-01-01 3.3
2016-01-01 2.7
2017-01-01 2.3
2018-01-01 2.1

Ignore the attached images, the link at the top is what I was trying to attach.

What's your point?

 

[Individual]

What's your point?

I was simply supporting YOUR point.

 

[Bullseye]

I was simply supporting YOUR point.

Ok, thank for that. Posting a list back to 1979 confused me.

 

[What if...?]

So, basically your defense is . . ."But Mommy, Bullseye did it first"?
That would imply I think this discussion it worth continuing.

That would he a good counter if you were my mommy and not the person who fired the first shot

And your responses belie your dismissal.

 

[JasperL]

The real economics of it is when the majority of low paid workers reach $15 per hour, that will become the new poverty wage. And prices, rent, food, clothing, will increase enough to eat it up. But what the $15 wage mostly does is have an effect on the higher paid workers. Often their wages are tied to the lowest wage, at least indirectly. And as that trickles upward, the people most benefiting from a $15 minimum wage will be those on the higher rungs on the ladder. And higher prices for everyday stuff doesn't affect them very much.

I understand your point but it's at best incomplete. Just for example, if someone is making $7.50 an hour and the MW goes up to $15, prices would have to double to absorb all his income gains, and they won't - the U.S. labor share of clerks and others working in Walmart that sells, say, a pair of shoes, is a very small part of the overall cost of getting that pair of shoes from raw material to the shopping bag. I'm pretty sure e.g. Nike's ad costs per pair will dwarf the labor cost of the retailer to sell that pair of shoes by orders of magnitude.

Bringing ALL that production back to the U.S. at $15 versus $2 an hour overseas would increase prices quite a bit, but that's not what we're talking about here.

 

[Sampson Simpson]

The same stupid argument of "oh, we can't regulated business because they will skirt the regulations" or "we can't increase wages becasue they will jsut try to skirt that" is so completely dumb and dishonest. Then do something about it to preventt hem from being able to do it. Wave your hands and say "oh well, Americans will just have to work for slave wages" is complete idiocy.

It's like saying "oh, we have criminals, so we should get rid of laws because the criminals break them anyway"

 

[jaeger19]

But there is another striking statistic that you can look at if you go to BLS's latest Characteristics of minimum wage workers, 2017. In 1985, there were just about 3.9 million people in the US working in jobs at the Federal Minimum Wage. Yet, in 2017, that had shrunk to just 547,000. Who is largely affected, easy. It's the youth.

The unemployment rate you cited is largely measuring those demographics who are usually not part of the minimum-wage earners. If you want to use employment information to see the effect that the increase of the minimum wage is, go to the BLS.gov website and look at the labor participation rate of 16-24 year olds who are enrolled in school. This is the demographic that is most commonly found working minimum wage jobs. Since 1985, we have seen about their participation rate go from 45% to 35%.


Why does this matter? Because minimum wage jobs have historically been the starter-set job for American youth. It is through these jobs that basic working skills are developed. With the increase of minimum wage, these jobs have shrunk a to about 1/8th the number that there were in 1985. The long-term implications are a loss of overall American productivity as now too often teenagers are not learning essential work skills until later in life. It also results in a larger issue of parent dependency even after leaving school. Let the market determine market rates.

Yeah.. this is not due to the minimum wage. This is due to a number of factors.. like older workers.. that normally would have retired and then died.. living longer and then getting back into the workforce part time etc for something to do and for a little supplement to their wage.

It also probably has to do with the constraints of school and the desire of students or ability for them to have the time to participate in work activities.

It also has to do with regulations that make it difficult for young people to find jobs. I have two sons and it was extremely frustrating for them to find work because jobs that I was able to do when I was there age.. like work in the hardware store.. or be a box boy are not available for a 14-16 year old now or even a 17 year old in some cases.. because now youth cannot work where they may have to mix paint.. or can't be a box boy because they can't operate the box crushing machine until they are 18.

Many employers wanted to hire my sons.. until they found out that they were not 18..

 

[jaeger19]

I understand your point but it's at best incomplete. Just for example, if someone is making $7.50 an hour and the MW goes up to $15, prices would have to double to absorb all his income gains, and they won't - the U.S. labor share of clerks and others working in Walmart that sells, say, a pair of shoes, is a very small part of the overall cost of getting that pair of shoes from raw material to the shopping bag. I'm pretty sure e.g. Nike's ad costs per pair will dwarf the labor cost of the retailer to sell that pair of shoes by orders of magnitude.

Bringing ALL that production back to the U.S. at $15 versus $2 an hour overseas would increase prices quite a bit, but that's not what we're talking about here.

Well.. the problem here is that something will have to absorb all those income gains.

So. either prices will go up..

OR employers will have to decrease cost by automating (thus getting rid of jobs)..

Or by squashing the wages of those making more than minimum wage.

The idea that the response from owners of corporations will be "well heck.. I will just make less money.. oh well"... seems to be a bit obtuse about how the real world works.

 

[Waddy]

I understand your point but it's at best incomplete. Just for example, if someone is making $7.50 an hour and the MW goes up to $15, prices would have to double to absorb all his income gains, and they won't - the U.S. labor share of clerks and others working in Walmart that sells, say, a pair of shoes, is a very small part of the overall cost of getting that pair of shoes from raw material to the shopping bag. I'm pretty sure e.g. Nike's ad costs per pair will dwarf the labor cost of the retailer to sell that pair of shoes by orders of magnitude.

Bringing ALL that production back to the U.S. at $15 versus $2 an hour overseas would increase prices quite a bit, but that's not what we're talking about here.

Over time prices will adjust to what the market will bear. Landlords in military towns know exactly how much Army privates and corporals make, and adjust their rent to what the market will bear. Same for college tuition. Tuition keeps pace with how much the government hands out in grants and loans. They know pretty close how much a student will have to spend, and charge accordingly.

BTW; Walmart has many thousands of employees. If they gave every employee $2 per hour more that would eat up their entire profit.

 

[JasperL]

Well.. the problem here is that something will have to absorb all those income gains.

So. either prices will go up..

OR employers will have to decrease cost by automating (thus getting rid of jobs)..

Or by squashing the wages of those making more than minimum wage.

The idea that the response from owners of corporations will be "well heck.. I will just make less money.. oh well"... seems to be a bit obtuse about how the real world works.

What I was actually assuming is costs might to up to FULLY offset the increases in wages, but that if that happens, those who benefit from a MW hike will still be far better off.

I just briefly looked at Walmart's financials. Cost of sales (rounded) are about $400B, and SG&A in total is about $100B. Let's say half that is wages paid to those impacted by MW - $50B - and that costs doubles. So total is now (400 cost of sales + 150 SGA) $550. That's a 10% increase in costs. So they raise prices by 10% or 12%. Well, if you make $10 and hour and go to $15, your wages go up 50%.

I'm sure you'd rather have a 50% increase in wages with 10% increase in your costs...

Besides, the argument is not that those impacted, who earn the higher MW, won't benefit (they will!), it's those who got fired, or jobs not created that we cannot really see that are the harm. That's a different analysis than the one I responded to.