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Gulp..!
Feb 13, 2013 16:06:52 GMT -5
Post by Fingerplucked on Feb 13, 2013 16:06:52 GMT -5
I don't buy the inflationary argument.
Obama's talking about raising the min wage from $7.50 to $9.00 per hour. That $1.50 per hour is an extra $60 for a 40 hour week. To minimum wage earners, it's a 20% pay raise. For them, it's huge.
Will it be passed on to customers and cause inflation? Maybe. Maybe even probably. But that big 20% pay increase is insignificant when applied to the economy as a whole. If there are 1.8 million minimum wage earners, the pay increase for all of them combined would amount to 0.037% of our GDP. I don't know about the rest of you, but I'm not even going to notice if inflation goes up 4/100ths of one percent next year.
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Gulp..!
Feb 13, 2013 16:38:01 GMT -5
Post by Doug on Feb 13, 2013 16:38:01 GMT -5
All those people making $8-9 wages will go up too. And most likely also the people making $10-15 wages will go up too. Not so much on the higher wages.
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Gulp..!
Feb 13, 2013 17:01:08 GMT -5
Post by Fingerplucked on Feb 13, 2013 17:01:08 GMT -5
All those people making $8-9 wages will go up too. And most likely also the people making $10-15 wages will go up too. Not so much on the higher wages. Maybe. And maybe the 20 or so states that currently have higher minimum wages than the federal standards will also raise theirs again. It doesn't change the fact that you're talking about changes that are important to the lowest wage earners, but insignificant in the big picture.
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Gulp..!
Feb 13, 2013 17:02:35 GMT -5
Post by Supertramp78 on Feb 13, 2013 17:02:35 GMT -5
It is important to the lowest wage earners who will still be employed after the raise. Not so much to those who are let go in order to pay for it.
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Gulp..!
Feb 13, 2013 17:21:57 GMT -5
Post by Fingerplucked on Feb 13, 2013 17:21:57 GMT -5
Tramp, you're assuming that there are extra workers now, employed not because they are needed, but because they're cheap enough to keep on the payroll for other reasons. And in some cases I'm sure your assumption is valid. Other times, not so much.
We were talking about small retail shops before. If one of those has 6 employees, odds are that it's because they need 6 employees. If minimum wage goes from $7.50 to $9.00, the owner will have to make a decision. He had been paying $45/ hour for 6 workers. He can now pay $54/ hour for 6 workers, or $45/ hour for 5 workers. I'm sure he'd like to keep his total labor cost the same, but the loss of an employee should result in a loss of service, which should result in a loss of sales.
Since all retailers, big and small, will now have to pay their employees more (assuming they're paying minimum wage) I think the most logical decision is to raise prices to cover the extra cost, since every other retail shop (assuming minimum wage) is in the same situation.
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Gulp..!
Feb 13, 2013 21:17:09 GMT -5
Post by Doug on Feb 13, 2013 21:17:09 GMT -5
I'll tell you what the shop owner with 6 employees does. He fires one and works the extra himself. That's small business.
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Deleted Member
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Gulp..!
Feb 13, 2013 21:31:14 GMT -5
Post by Deleted on Feb 13, 2013 21:31:14 GMT -5
I'll tell you what the shop owner with 6 employees does. He fires one and works the extra himself. That's small business. That is not, I think, a likely universal scenario. If five employees would have done the job in the small business, maybe the business owner would never have employed unnecessary extra staff. The picture internationally does not seem to show a simple correlation between paying a minimum wage that just barely hints at once in a while having two spare cents to rub together for the minimally waged employee and rising jobless totals if their earnings are raised to a little more than stagnant and ultra-minimal.
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Gulp..!
Feb 13, 2013 23:06:16 GMT -5
Post by Cosmic Wonder on Feb 13, 2013 23:06:16 GMT -5
And I liked Kens gif of Ted Nugent strapping on his guitar.
Mike
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Gulp..!
Feb 14, 2013 7:40:29 GMT -5
Post by Doug on Feb 14, 2013 7:40:29 GMT -5
I'll tell you what the shop owner with 6 employees does. He fires one and works the extra himself. That's small business. That is not, I think, a likely universal scenario. If five employees would have done the job in the small business, maybe the business owner would never have employed unnecessary extra staff. The picture internationally does not seem to show a simple correlation between paying a minimum wage that just barely hints at once in a while having two spare cents to rub together for the minimally waged employee and rising jobless totals if their earnings are raised to a little more than stagnant and ultra-minimal. ;D ;D That's why owners of small businesses work 16+ hrs a day.
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Gulp..!
Feb 14, 2013 10:36:35 GMT -5
Post by PaulKay on Feb 14, 2013 10:36:35 GMT -5
Tramp, you're assuming that there are extra workers now, employed not because they are needed, but because they're cheap enough to keep on the payroll for other reasons. And in some cases I'm sure your assumption is valid. Other times, not so much. We were talking about small retail shops before. If one of those has 6 employees, odds are that it's because they need 6 employees. If minimum wage goes from $7.50 to $9.00, the owner will have to make a decision. He had been paying $45/ hour for 6 workers. He can now pay $54/ hour for 6 workers, or $45/ hour for 5 workers. I'm sure he'd like to keep his total labor cost the same, but the loss of an employee should result in a loss of service, which should result in a loss of sales. Since all retailers, big and small, will now have to pay their employees more (assuming they're paying minimum wage) I think the most logical decision is to raise prices to cover the extra cost, since every other retail shop (assuming minimum wage) is in the same situation. Since every business is a unique situation unto themselves, there is no way to generalize a universal impact. Each business will have to make an adjustment "of some kind". The list provided earlier represents a wide swath of possible effects. Higher prices for some, less overtime for some, layoffs for some, less new hiring, or a combination of any of these. The bottom line is that it isn't going to be free and it would be severely shortsighted for Democrats to assume that there isn't downside impacts to this. Particularly if they link the minimum wage to inflation. As an independent, I tend to see both sides of these kinds of issues and in this case, the opposition of the Republicans on this are spot on IMHO.
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Gulp..!
Feb 14, 2013 11:16:01 GMT -5
Post by Fingerplucked on Feb 14, 2013 11:16:01 GMT -5
Paul, I agree with the first part. Everyone will make their own evaluations and decisions. I don't agree with the second part though.
I looked for an average labor cost for retail and all I could find was one lone guy in Illinois who said his total labor cost varies from 20% to 25% of total expenses, but that figure then decreases when sales increase. Other than that in retail, I found a lot of links to sites explaining how to calculate the percentage spent on labor. I came away with the impression that a lot of retailers either don't know what their labor costs are, or don't want to say.
I did find average figures for restaurants. For restaurants charging $15 or less per meal on average, labor costs average 32% of total expenses. As the average meal cost increases, labor cost percentage decreases.
Using the highest of those figures (32%), an across the board 20% increase in labor costs would result in a 6.4% increase in total costs. A 6.4% total cost increase sounds a little more significant and I'm sure it would apply to some operations, but considering that there are only 1.8 million minimum wage earners across all industries, it would have to be a much lower impact on most businesses that have some minimum wage earners.
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Gulp..!
Feb 14, 2013 11:19:11 GMT -5
Post by Fingerplucked on Feb 14, 2013 11:19:11 GMT -5
I'll tell you what the shop owner with 6 employees does. He fires one and works the extra himself. That's small business. That's why owners of small businesses work 16+ hrs a day. You said the first one then you said the second. Now I'm just waiting for a science guy like yourself to remember how many hours there are in a day.
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Gulp..!
Feb 14, 2013 12:28:05 GMT -5
Post by Doug on Feb 14, 2013 12:28:05 GMT -5
I'll tell you what the shop owner with 6 employees does. He fires one and works the extra himself. That's small business. That's why owners of small businesses work 16+ hrs a day. You said the first one then you said the second. Now I'm just waiting for a science guy like yourself to remember how many hours there are in a day. I never met a small business owner who didn't wish he had 50hr days to work with so that he could get some sleep sometime. ;D
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