Queer Geek: The Consequences of Raising The Minimum Wage

Hey RHU!  Long time, no post. 

I’ve been mostly sharing on our FB page under my moniker QG so feel free to friend request me!  Anyway, I wanted to write something a bit more serious that got a long trend our on FB site.  It concerns minimum wage.  Now if you’re like me, then you know that we slaves who work in the service oriented industry bust our humps for practically very little pay.  That is why in the U.S. , President Obama wants to up the average pay between $7.25-$8.00 to $9.00.  Sounds like good idea, right? 

Well there are some issues concerning this which I'd liked to put my two cents in.

In America, the median wage is between $7.00-$8.00 if you do not work in an industry where a tipping system is incorporated.  Servers earn even less, between $2.00-$3.00, and rely on tips to make a decent wage to survive on.  This is relative to the area and the cost of living in that particular region or state.  In other countries, minimum wage might be more than it is in America but then you have to consider the cost of living in that particular area and it all becomes relative.

Now how does this affect the average slave?  Well, you have to consider the cost of living.  Rent, housing, sales taxes, bills, groceries, utilities, childcare, etc.  That meager income can only cover so much that eventually many people have to turn to other resources like government aid and welfare.  Then you have to consider other important factors like health insurance.  In the U.S., some companies don’t offer health benefits and if they do they’re not always affordable so a slave like me usually takes the chance of skipping out on their health since they can’t afford the expensive costs of medical coverage.  Other countries that do offer good healthcare for their citizens, I salute you.  Here in America, you’re on your own.

Then there are the hours.  Normal full time hours should average 30-40 a week.  Usually, the 40 is reserved for upper management while struggling slaves earn an average 30.  Take into the consideration this troubled economy and companies have to scale back and administer less than 30 hours and if you’re earning minimum, there isn’t much of a paycheck to take home.  Hence, slaves are having to seek out other alternatives or multiple employment to make a decent income.

Call me cynical but Obama’s $9.00 bill won’t really change anything.  Even if wages increase so will prices on goods.  The inflation of products, rents, and even utilities will only put us back to square one.  Companies might even cut hours and benefits just to pay their employees so in the end it’s all relative.  Higher wages doesn’t mean a resolution but simply more problems to come.

So RHU, I post this food for thought for you. 

What do you foresee in the future if they do increase wages?

--Queer Geek 

Comments

[Spritzy]

Honestly, I think what would help most is some sort of way to prevent the CEO's and such from giving themselves $100,000 raises and bonuses when at the same time they claim cutbacks due to lack of funds.
Bitch please, if the company is so hard up, then take those insane corporate bonuses and use them to give the workers that support your fucking ass the ability to afford things like food and a place to live.

[Spritzy]

Also, despite the fact that I totally see where you're coming from and understand what you're saying...I predict a flame war of epic proportions just due to the fact that political topics were mentioned...so lets keep it civil here kids. :P

[hardwarenutz]

I agree, companies will claim hardship and cut hours everywhere but the upper echelon. Middle level managers will scramble to justify their jobs and those of us in the trenches actually making money will get the shaft again.

[spaghettipocket]

there's a nice little thread on reddit about this, actually.

http://www.reddit.com/r/AskReddit/comments/19j3an/why_is_everyone_talking_about_obama_raising_the/

[Query Queen]

I agree with part of your statement, in that states where minimum wage is at the current $7.25/hr, employers will freak out at a $1.75/hr per employee raise and probably cut hours. However, as someone who lives in a state where minimum wage is over $9/hr (including for servers), I respectfully disagree that a higher minimum wage is a bad idea.

The state minimum wage for Washington is now $9.19/hr. It increases every year. Still, the average rent in Western Washington near Seattle is $1500/mo, while in the east of the state in Spokane, it's about 1/2 that at $765/mo. Compare that to other major cities:

New York City: $2953/mo. $7.25/hr min. wage
Boston: $2328/mo, $8/hr min. wage
Chicago: $1726/mo, $8.25/hr min. wage
San Francisco: $2106/mo, $8/hr min wage

I could go on and on, but my point is that a higher minimum wage does not seem to correlate with a higher cost of living.

As to healthcare, I am lucky that my employer has an affordable plan that I can use to cover myself and my husband. Once the Affordable Care Act comes into effect, it's going to make a HUGE difference to low-wage earners. Adults who make 133% or less of the Federal Poverty Level (right now, that's $15276 annually for one person) will be eligible for Medicaid. That means many retail wage slave will now be eligible for medical coverage - whether your company wants to give it to you or not. Even in my state where workers get $9.19/hr, part-timers will still be under the income limit.

Right now, the only way most adults can get Medicaid is to be old, disabled or pregnant - which leaves a huge chunk of people unprotected. Now, people who work hard for their money won't have to suffer without coverage or go bankrupt if something bad happens.

And for anyone who poo-poos the ACA as a 'tax-increase' - fuck yeah, I will gladly pay more in taxes so hard-working people don't have to go without medical insurance.

[unshackled]

why a increase in the minimum wage is bad:
It WILL increase the cost of living, rent may not go up, as many places have rent control (a whole other topic) but the cost of goods will go up. it is basic economics, if the cost of providing a good goes up then a company has two options: 1)take a hit on their profits (yeah, right!)or 2) raise the price of the good being provided. so there will be no net gain for those getting minimum wage.
second it harms young and inexperienced workers these are workers who do not have the experience necessary to produce enough to warrant a higher wage, and it removes their one main bargaining chip. the ability to work for a lower wage in order to gain a valuable skill.
third the people it hurts the most are the ones making just OVER the new minimum wage. if you are making 9.10/hr and minimum wage is 9 then you wont see a raise, but your paycheck will not go as far.

my final argument is thus. why stop at 9/hr?why do you only want to help the poor by such a piddling amount? why dont we just raise it to $100/hr that way everyone makes 6 figures?

for the sake of brevity I wil not get into the myriad of ways that the ACA is not as great as all of its supporters think it is

[Bored at the Bookstore]

I own a small bookstore. It's so small that I can no longer afford to pay the Mass. Minimm wage ($8).

When I bought the place back when dinosaurs roamed the Earth and books were hand-written on papyrus (1989), there were eight part time employees. Some worked only a few hours a week; some worked as many as 17 or 18 hours. As the years have passed, the minimum has risen again and again - and every time someone left s/he was not replaced. Now, I do the majority of the hours myself, and there's no way I can afford more help.

It's not just the wage - it's also employer's share of the FDIC (we have to match what's withheld) and the State withholding, the Workmen's Comp (which I have to carry even if the only person working is me - In case I get injured at work or if someone , even a family member, comes in to help for free, there must be coverage), and unemployment insurance, again, just in case I do get an employee! Honestly, I am -thisclose- to having to give up on a profession I love, because quite frankly, people aren't spending on books much any more. And then I won't be able to employ even myself.

*sadness*

[Bored at the Bookstore]

Oops. "Minimum" wage, please. Typo.

[AmigaTech]

Inflation? It won't. The minimum wage is such a trivially small contributor to the economic system that it won't even notice. Compared to the devaluation of the dollar by printing trillions to spend on war and bailing out the banks, it's effectively zero, and doubling it wouldn't make any difference.

Note that there's been plenty of inflation and cost-of-living increases while the minimum wage remained the same.

Unfortunately, Bored at the Bookstore, times change. The local video shop where everyone knew each other and brought in their dogs is gone however much they loved their eccentric old movie collections.

And unshackled? No. The cost of living is not going to change. See the 1st paragraph of my response. No, it's not going to hurt young people from being employed, because it's still cheaper to hire people for many jobs than to automate them. McD's is still going to need and hire teenagers whatever the minimum wage is.

Nobody's proposing making it $100/hr. because that argument is ridiculous. We're talking about just enough money to have a place to live and something to eat and just enough entertainment to make life worth living. If you have a problem with everyone having that, as a minimum, I'm not sure I want to be in the same species as you.

Finally? As per the original article? No, it won't change much. $9 is better than $7, but just through inflation *without* changing the minimum wage and other cost of living increases, it should be more like $15 already.

--AT

PS - That "tipped" employees get even further screwed is a colossal shame, and it too should be outlawed. "Waiter" should be an honourable and respected profession as it is in Europe. AT.

[unshackled]

let's see when Oregon (the state i live in) voted to raise its minimum wage from 6.50 to 7.25 hr (it's now 8.80) the price of a 20 oz bottle of coke was 99c the day the new minimum wage went into effect the price went to 1.20 it is now 1.50.
you ignore my main point that when the cost of producing and providing a good goes up (ie increased labor cost from higher minimum wage) what is a company to do? just eat that cost and have a lower profit margin? pass the cost on to the consumer? or find another way to cut labor costs (hire less workers or reduce the hours of the current ones)? that doesn't help anyone. I agree with you that printing billions of dollars out of thin air does more to cause inflation than raising the minimum wage, MW still plays a part.
and why is it ridiculous to say raise the minimum wage to 50 or 100/hr but not to say only to 9? it is the same principle we want to make sure people have a living wage so why don't we up it so everyone can earn a comfortabe salary of over 50k/yr? i am simply taking the argument to it's logical conclusion. if 9/hr is good then 50/hr is better. then almost EVERYONE can get a raise.
i am not opposed to people being able to make enough to live comfortably however i do believe that you need to prove that you have the skills to be worth that salary. does the high school kid working at mcdonalds while living with his parents NEED to be making 20k/yr? no he doesnt. now the kid trying to put themselves through college might but because mcdonalds has to pay the high school kid more money they aren't able to pay the college kid. raising the minimum wage sounds good in theory but in practice it does more harm to those it is meant to help than good.

[Queer Geek]

All of these are valid points. As of now the proposal is still being negoiated. Who knows if it will go into affect?

[AmigaTech]

My point was that the minimum wage of the employees is pretty much irrelevant to the cost of providing a good, although it can be used as a cheap example of profiteering.

Most of the workers involved (particularly the expensive ones - engineering and management) have costs that are completely unrelated to the minimum wage.

It's not a logical conclusion, incidentally, it's an illogical conclusion. Allow me to illustrate with a metaphor - Because some crimes warrant the death penalty, and that both deters other criminals and prevents recidivism, therefore to reduce crime, we should make every offense, from a parking ticket on up, punishable by death. Ever exceeded the speed limit, citizen?!?

It would reduce crime - Everyone would be dead or cowering at home in terror, possibly including the cops...

If you don't like metaphors, why stop at $100? Pay everyone a million dollars an hour! A billion dollars an hour! Your 'logical conclusion' doesn't even go far enough. Hell, at a trillion dollars an hour, President Obama could pay off the national debt by just having his daughters mow the lawn of the Capitol Building!

Nobody's proposing that. It's a straw argument. That's why it's ridiculous. If you want to make the minimum wage relevant to the economy at large, you can do that, but at the moment, it isn't.

And yes, the kid living at home may very well need to make 20k / yr if their parents are seriously ill, the house is falling down, and they're a major contributor to the family income. Why shouldn't the kid at home be saving up for college, or starting a business, or just saving money?

Another point being that scut-jobs like this are somewhat inflexible economically, like gasoline, to price changes. You can automate some stuff (banks love ATMs) but not everything (banks still need tellers). You can raise gas prices, but people will only very slowly change demand, because everyone still needs to drive to work, and most can't afford to instantly buy a Prius just because gas went up 10c a gallon.

Furthermore, putting in the hours is the qualification. Note that your claim of "20k / yr" equates to $10 per hour, 40 hours a week, and 50 weeks a year, which even itself is more than even the proposed minimum wage, even if you could get assigned forty hours a week!*

No. It helps more than it harms.

--AT

* I gave our poor hero two weeks vacation. Unpaid. AT

[Skittles]

As far as minimum wage goes I think it's already been discussed. I still feel that the approach of raising an hourly rate will not solve the issue. As to the issue of inflation AmigaTech hit it spot on with talking about inflation. However when you talk about the disparity between the 1% and the rest of us which I get the impression is wha this is really about. The problem is expectations. You can not reasonably expect 1000% profits, which is essentially what is going on accross the board with virtually every company. If you were to invest say $100 and get back $150 over the course of six months that would be phenominal right? Of course it would. What really needs to be adressed is how the entire system is working, wuite frankly capitolism works on two concepts hope, and the delusion that anyone can make billions of dollars. Don't get me wrong I'm not promoting communism, despite the fact that in theory it would be a much better system, I know it can't work. I mena heck it has never succesfully been used. Socialism is a much better choice and one that we need to move towards. It's a much better common ground. People can still get rich under socialism, maybe not Bill Gates rich but certainly wealthy enough to never have to work again should they choose. Which obviuosly they wouldn't because then they wouldn't likely have gotten rich in the first place. I know I sound like a "We Are The 99%" guy, and in part I am. As a people we need to realize that it is unconsionable for a very small group of people to live like gods at the cost of other people having the basic necesseties.

[The Last Archimedean]

What we *really* need is a bill that provifdeds that no manager or executive of a company can get total yearly compensation of more than 50 times the *minimum* total salary of any contractor or employee the company hires. That would ensure that fat-cat executives would either have to take a massive pay cut or pay the people on the lowest end of the totem pole a decent salary.

It's a great way to redistibute some of the weatlh from the top 1% to the bottom 1%, which is really what needs to happen.

[Hellbound Alleee]

Minimum wage increase shown to not hurt employment:

http://www.nbcnews.com/id/26315908/ns/msnbc_tv-rachel_maddow_show/vp/50899561#50899561

[Former Grocery Slave]

Well, here's my two cents - I think the minimum wage increase from $7.25 to $9.00 is great and all, but it doesn't mean my wage will go from $12.50 to $14.25 (the only way I would get a raise is if the minimum-wage was raised over $12.50). Let's go one step beyond raising minimum wage and say as prices of everything from goods, services, housing goes up due to inflation, wages will also (which we all know they do not and will not unless someone tells corporations they have to). Seriously getting sick of being told I'm going to take on all management responsibilities (so my manager will have to do - what?) and still be paid just a few dollars more than "the help".

[Robert]

The extent that a minimum wage increase will change things will vary from industry to industry. For many/most retail slaves, the combination of ACA and a minimum wage increase will be painful. In nine years at Popcorn Palace, I've seen hours get slashed, shifts get cut, and it entered into high gear in early 2007 and has continued. Before ACA tracking kicks in come October, we are already cutting hours so that we can average under 30 for part-time employees.

[AmigaTech]

Former Grocery Slave, that is almost exactly the problem. The prices of everything have gone up, and the minimum wage has not.

It is time to correct that.

--AT

[Cosmetics Hellhound]

Um, I don't know what you guys are on about things increasing in prices to match. My province just had an increase from 8.25-10.25 and there was next to no change in pricing, at least none that I noticed at all.

[James K]

The flaw in your argument is this: the cost of living rises on average about 3% per year. This is what raises are about… you need raises to keep making the same money you do today. It has to do with the growth of the country and the increasing population (simplified explanation).

These increases APPLY TO BUSINESSES AS WELL. Over the years, restaurants charge more for the same items on their menu. How much was a glass of soda ten years ago? Nowadays $2.79 is not unheard of, even at casual restaurants.

So how does a restaurant justify increasing their prices over the years, but not wages?

In 1981, the minimum wage was $3.35. At an average CoL increase of 3% every year, that comes out to $8.63/hr for 2013. So even if we raise it to $8.50, we're not keeping up. These increases leap-frog, of course, so $9.00 is not unreasonable to hold us over for the next few years.

Some businesses may do as you say, cut people, benefits, hours, etc., but it would be a terrible business decision. If your business isn't making enough to keep your employees' wages current, it isn't truly profitable.

A chart: http://upload.wikimedia.org/wikipedia/commons/5/5f/History_of_US_federal_minimum_wage_increases.svg

The dark purple is actual wage increases; the light purple measures those wages in equivalent 2009 dollars. Note how that has steadily decreased since 1970.

[Racket_Man]

To adddress one sector of the working poor that no one else seems to want to:

Are they going to raise the minimum wage for servers/waitstaff, pizza delivery drivers and other occupations that are considered TIPPED???? Not likely as the server minimum wage was NOT risen in 23 years. Yes it is still at $2.13 PER HOUR in most states (there are only 7 states that disallow tip credit wages)

Delivery drivers have it just as bad. Most pizza delivery drivers in this country make well below minimum wage around $5.00 per hour and get crap reimbursement for the abuse of their personal vehicles (barely covers gas these days).

AND most tipped credit wage employees have had their wages FROZEN (as in NO RAISES whatsoever) and their employers solution: "Make more tips"

[Nocturnesthesia]

I don't presume to know enough about economics to intelligently discuss the specifics. But the root of the problem is the greedy bastards running rampant over the working poor, then blaming the government for trying to help them. As long as the people in power are old and out of touch enough to still be shitting themselves over "the communist threat" the USA will remain 50 years behind the rest of the Western world.