But there is still a lot of labor in manufacturing and raising the min wage will hasten elimination of those jobs (either by export or automation).
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- Thread starter gwb-trading
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But there is still a lot of labor in manufacturing and raising the min wage will hasten elimination of those jobs (either by export or automation).
Its weird how the right support companies paying employees as little as possible,are against a living wage, and not raising the minimum wage or eliminating it but than get upset when people look to and vote for the government to assist them with healthcare and food etc because their employers aren't paying them enough to afford it.Almost as big a contradiction as being pro life but want no government funding to help the kids they were fighting for to be born,don't care if millions of people have no health care,support the death penalty,love wars etc.
http://fortune.com/2015/07/30/15-per-hour-fast-food-prices/
Here’s what a $15 per hour wage means for fast food prices
Claire Zillman
Jul 30, 2015
moved closer to approving a $15 per hour wage for fast food workers last week, there was speculation about what such a hike would mean for consumers. A new study provides this answer: prices will increase ever so slightly.
Researchers at Purdue University's School of Hospitality and Tourism Management found that raising pay for fast food restaurant workers to $15 an hour—the minimum wage that cities like Seattle and San Francisco have already adopted—would result in an estimated 4.3% increase in prices at those restaurants. That means the price of a $3.99 Big Mac would jump to $4.16. The study also found that offering health care benefits to fast food workers at restaurants with fewer than 25 full-time employees would have a minimal effect on prices because of current tax credits in the Affordable Care Act.
http://www.nytimes.com/2013/12/05/business/15-wage-in-fast-food-stirs-debate-on-effects.html
But even experts who support some increase worry that a raise to $15 an hour would have profound effects on the industry. Arindrajit Dube, an economics professor at the University of Massachusetts, Amherst, said an increase in pay to $15 would push up fast-food prices by nearly 20 percent. With the industry estimating that one-third of its costs go to labor, he said a $15 wage would mean wage increases averaging around 60 percent, raising the cost of a $3 hamburger to $3.50 or $3.60.
Ken Jacobs, chairman of the University of California, Berkeley, Center for Labor Research and Education, differed slightly on the effects, saying a $15 wage would cause a somewhat lesser price increase, perhaps 10 percent, and adding that higher pay would save restaurants some money by leading to less turnover and higher productivity per worker. In addition, he said, franchisees might swallow some of the increases instead of totally offsetting them with higher prices.
Only because no one is acutely aware of it. If that happened in the United States (because of the reversion of labor laws), you can bet your arse there would be a massive outcry. What you're suggesting is that if we removed labor laws protecting employees, you'd see forced child labor return to the US? Come on.
You can't regress on labor laws as easily as you think - not here in the United States.
I have pointed out several times in other ET Forums why a rise to a $15/hr would amount to a very small increase in the price (in almost all cases) of the finished product. It is nice to see my calculations backed by those of a real economist. So thank you for posting that.
We also have direct proof that these calculations are correct because we have areas of the country where the minimum wage is $15/hour and the increase in a McDonalds hamburger price is negligible.
What raising the minimum wage will do however is decrease tax payer subsidy of private business by bringing the wage closer to the true cost of minimum wage labor.
This idea that a minimum wage well below the true cost of minimum wage labor is good for anyone, including the employer, the laborer, or the tax payer, represents an extreme perversion of free market, capitalist economic principles, because it requires government subsidy to be maintained.
The "economist" in the article, and you, really need to look at the economic impact outside the price of the burger. Raising the wage to $15 an hour has more effects than just bumping up the price of a burger 50 cents (or so). Simply considering the wage - price relationship is incredibly short sighted. Not that I would expect much more from academics.
Let us not be so naive to believe that the economists quoted don't understand the full ramifications. They're responding to all the absurd and misguided, popular nonsense that raising the minimum won't accomplish anything other then putting teenagers out of work because everything will just shift accordingly and we will be right back where we started. I read this nonsense all the time from traders right here, who obviously have only the most rudimentary understanding of macro economics.
See my previous posts if you're after more depth regarding the many effects of raising the minimum -- most of them good, by the way! The good far out weighs the bad. Don't look for Germany, the number one exporter, to be copying the U.S. by reducing wages well below what it takes to survive. Apparently Germans understand economics much better than Americans do! Read Economist John Quiggan's book if you want to understand what's wrong with Republican supply-side economics -- there is a long list.
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We still have textile sweatshops in the United States manned by immigrant women working for less than minimum wage. American Apparel (a very popular brand in malls here) was widely publicized for abusively using this cheap labor. Against the media negative publicity the company responded with a marketing campaign claiming is was "sweat-shop free" which was immediately torn apart with bad publicity after its own employees revealed further on-shore sweat-shop practices (and that the company did not really provide medical, "high wages", and all the other stuff they claimed). Yet despite all the publicity (including Immigration enforcement in 2009 forcing the firing of over 25% of their sweat-shop workforce) the brand kept selling and very little was done to stop the practices.
It was only their failure to keep up with desired fashions, bad financial practices, and endless sexual harassment claims against their CEO Dov Charney (gotta love the risque advertising they had in this context) that caused their demise -- they maintained their onshore sweatshop to the bitter end in 2017 despite layoffs.
In my area some McDonalds franchises pay their workers 9-10 bucks an hour and their combo meal prices are only around 50 cents more than the McDonalds in the area that pay minimum wage
I hardly think wanting to preserve or bring back minimum wage manufacturing jobs is the right direction for the U.S. Quite the opposite. We can accommodate most of those who are not skilled with job tasks that are not easily moved off shore. We must expand the size of our skilled work force. That's where we can be fully competitive. We should be looking to compete on quality, innovation, engineering and design rather than price. Lets not pine for the sweat shop days of yore. The purpose of automation is not only to maintain profits but also to relieve mankind of drudgery. As a matter of fact, via automation, we can compete quite effectively with off-shore sweat shops, if that's our desire.