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Minimum Wage Increase On the Horizon?

Minimum Wage Increase On the Horizon?

Old Dec 5th 2013, 2:45 pm
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Default Minimum Wage Increase On the Horizon?

http://www.bbc.co.uk/news/world-us-canada-25239433

An increase from $7.25 to $10.10 is apparently 'in discussions' in the house - should such a thing ever happen (which it won't) what do we think would be the repercussions?

Mass unemployment?

More people being employed to wheel in the fatties?

Or would businesses be able to cope with it, which shedding some staff, over the long term? Discuss.
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Old Dec 5th 2013, 4:35 pm
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Default Re: Minimum Wage Increase On the Horizon?

Originally Posted by civilservant
http://www.bbc.co.uk/news/world-us-canada-25239433

An increase from $7.25 to $10.10 is apparently 'in discussions' in the house - should such a thing ever happen (which it won't) what do we think would be the repercussions?

Mass unemployment?

More people being employed to wheel in the fatties?

Or would businesses be able to cope with it, which shedding some staff, over the long term? Discuss.
Historical data and studies of the subject show that increases in the minimum wage have not been shown to increase unemployment at all.
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Old Dec 5th 2013, 4:51 pm
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Default Re: Minimum Wage Increase On the Horizon?

$15,000 a year is not enough to live on in this area.
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Old Dec 5th 2013, 4:55 pm
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Default Re: Minimum Wage Increase On the Horizon?

http://mynorthwest.com/813/2388512/A...-wage-increase
$15 an hour isn't enough to live on where I live!

Last edited by markonline1; Dec 5th 2013 at 4:59 pm.
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Old Dec 5th 2013, 4:56 pm
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Default Re: Minimum Wage Increase On the Horizon?

Speaking for myself, I'd love a wage hike of over $1 an hour, but I also know that in a small regional hospital like this that's struggling to survive that the next sentence would be 'OK so who is essential and who isn't'... and I'd probably be in the 'isn't' category.
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Old Dec 5th 2013, 5:05 pm
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Default Re: Minimum Wage Increase On the Horizon?

I don't see an increase in the minimum wage creating significant unemployment, if any at all. Too many businesses have been winnowing staff for years and are already at minimum staffing levels. For many, a further reduction in staff will result in unacceptable levels of service.

My sense is that most of the increased cost of an increased minimum wage will show up in prices.

Regards, JEff
Originally Posted by civilservant
Mass unemployment?
Originally Posted by Speedwell
Historical data and studies of the subject show that increases in the minimum wage have not been shown to increase unemployment at all.
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Old Dec 5th 2013, 5:05 pm
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Default Re: Minimum Wage Increase On the Horizon?

Originally Posted by Speedwell
Historical data and studies of the subject show that increases in the minimum wage have not been shown to increase unemployment at all.

The minimum wage in Oregon goes up every year and is almost $10. Hasn't caused mass unemployment here.
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Old Dec 5th 2013, 5:37 pm
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Default Re: Minimum Wage Increase On the Horizon?

The minimum wage effects about 1% of Americans so a raise to $10 will have little if any effect on unemployment. Even democrats realize that there is a point where it can be raised where it can be damaging to the economy. For example, in the 1990s, France raised the minimum wage so high in relation to medium incomes that 20% of the workers ended up making minimum wage and there was a lot of dissatisfaction among workers since they felt they were in dead end jobs and unemployment rose since the service industry had to make cuts to stay in businesses.

In the 1980s, France also cut the maximum work week to 35 hours to try to reduce unemployment but it had the opposite effect and also created worker dissatisfaction since reduced hours meant reduced pay. That was the main reason they raised the minimum wage so high in the 1990s.

But raising the minimum wage to about $10 will likely only increase the number of American making minimum wage to about 2% of the workforce and should have little effect on unemployment. However if it was raised to $13-$14 per hour, that would likely cause the French effect.
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Old Dec 5th 2013, 7:10 pm
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Default Re: Minimum Wage Increase On the Horizon?

Some interesting statistics here: http://oregonstate.edu/instruct/anth484/minwage.html

Particularly noteworthy is that a raise in the minimum wage to $10.55 an hour would mean that the effective minimum wage in today's dollars would roughly equal the spending power of the minimum wage in 1968. The best consensus I can find online is that 40 percent of the workforce makes that or less today. One organization calculates that if the minimum wage had kept pace with overall income growth in the American economy, it would now be $21.16 per hour. But that says more about the economy than it does about the minimum wage itself, I think.

Last edited by Speedwell; Dec 5th 2013 at 7:17 pm.
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Old Dec 5th 2013, 7:33 pm
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Default Re: Minimum Wage Increase On the Horizon?

40% of the workforce make less than $10.55?
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Old Dec 5th 2013, 7:47 pm
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Default Re: Minimum Wage Increase On the Horizon?

Originally Posted by Speedwell
Some interesting statistics here: http://oregonstate.edu/instruct/anth484/minwage.html

Particularly noteworthy is that a raise in the minimum wage to $10.55 an hour would mean that the effective minimum wage in today's dollars would roughly equal the spending power of the minimum wage in 1968. The best consensus I can find online is that 40 percent of the workforce makes that or less today. One organization calculates that if the minimum wage had kept pace with overall income growth in the American economy, it would now be $21.16 per hour. But that says more about the economy than it does about the minimum wage itself, I think.
I don't know where you got that consensus from but medium family income is over $50,000, two workers in a household is about $72,000, and about $37,000 per individual in the workforce. So at $37,000, that means at least 50% is making $37,000 or more. So it would be hard to believe that incomes drop to $22,000 in the first 10% below medium income. However a minimum wage of $13 per hour would be $27,000 and then I could possibly see 20% of the workforce making minimum wage.

Last edited by Michael; Dec 5th 2013 at 8:03 pm.
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Old Dec 5th 2013, 7:48 pm
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Default Re: Minimum Wage Increase On the Horizon?

Originally Posted by markonline1
40% of the workforce make less than $10.55?
I had to do some looking to see how they calculated this, so it turns out to be a little different. I'm not thrilled about how they appear to have fudged the number... other sites I found while I was looking estimate something more like 25 percent, instead. Here's what the reasoning was, anyway.

The 1968 minimum wage was 1.60 per hour. In today's dollars, that comes out to 10.74 per hour, or about 21,480 per year for a full time job with two weeks of vacation. According to the Social Security Administration, about 40 percent of workers make less than 20,000 per year. See, I don't know whether this includes only full-time workers, or if it includes part-time, occasional, or self-employed workers.

4.7 percent of the hourly paid workforce was paid the hourly minimum wage in 2012 according to the Bureau of Labor Statistics.
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Old Dec 5th 2013, 11:25 pm
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Default Re: Minimum Wage Increase On the Horizon?

Originally Posted by Speedwell
I had to do some looking to see how they calculated this, so it turns out to be a little different. I'm not thrilled about how they appear to have fudged the number... other sites I found while I was looking estimate something more like 25 percent, instead. Here's what the reasoning was, anyway.

The 1968 minimum wage was 1.60 per hour. In today's dollars, that comes out to 10.74 per hour, or about 21,480 per year for a full time job with two weeks of vacation. According to the Social Security Administration, about 40 percent of workers make less than 20,000 per year. See, I don't know whether this includes only full-time workers, or if it includes part-time, occasional, or self-employed workers.

4.7 percent of the hourly paid workforce was paid the hourly minimum wage in 2012 according to the Bureau of Labor Statistics.
Social Security only calculates based on contributions and doesn't distinguish between students, full time, part time, teenagers in or out of school, retirees, seasonal worker, etc. and calculates percentages for everyone that contributes to FICA.

I believe even the Bureau of Labor Statistics fudges things a bit since not everyone works the full year. Therefore they have to account for people going into and out of the workforce with some complex algorithm since there may be housewives, retirees, and students that only work during the holiday season and/or summer. So 4.7% could be possibly only be 1%-2% but could also possibly be near 4.7% since 2012 is in the middle of a recession if only full time workers were counted. The 1% I quoted earlier was the pre-recession rate.

Even the figures that I previously quoted for medium income could possibly be higher if only full time employees are counted but I'm not sure how that is calculated but the figures are calculated in the same way as all OECD countries. Unemployment rates are also calculated the same for all OECD countries except for Japan (woman are counted differently in Japan).

Last edited by Michael; Dec 5th 2013 at 11:32 pm.
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Old Dec 6th 2013, 1:06 am
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Default Re: Minimum Wage Increase On the Horizon?

Originally Posted by Michael
I believe even the Bureau of Labor Statistics fudges things a bit since not everyone works the full year. Therefore they have to account for people going into and out of the workforce with some complex algorithm since there may be housewives, retirees, and students that only work during the holiday season and/or summer. So 4.7% could be possibly only be 1%-2% but could also possibly be near 4.7% since 2012 is in the middle of a recession if only full time workers were counted. The 1% I quoted earlier was the pre-recession rate.
Possibly, but my understanding from the Bureau's own site was that they were counting the people who made minimum wage per hour regardless of the actual number of hours they worked. Just to clarify that point. Otherwise I agree with you.
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Old Dec 6th 2013, 1:47 am
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Default Re: Minimum Wage Increase On the Horizon?

Originally Posted by Speedwell
Possibly, but my understanding from the Bureau's own site was that they were counting the people who made minimum wage per hour regardless of the actual number of hours they worked. Just to clarify that point. Otherwise I agree with you.
That would significantly skew the statistics because holiday, summer, or seasonal workers are usually minimum wage and if that is 3% of the workforce during the year, then 4.7% becomes 1.7% if you only consider other workers. Also the Bureau doesn't count farm workers when calculating unemployment rates so they may not include them in the minimum wage count either. If they are counted, that could go either way since most are paid by the amount they pick and good pickers will make above minimum wage and workers that don't pick enough to meet minimum wage are usually not rehired during the following season but minimum wage for farm workers is lower than other workers.
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