Leaving for Las Vegas: California's minimum wage law leaves businesses no choice

[Snuffleupagus]

This is how it should be.

In reality, share holders are #1, business owners are #2, and consumers rank somewhere in the #100's while employees are in the #1000's.

Welcome to the real world.

[Wolfheart9]

It's all well and good to talk about raising the minimum wage, but we live in a global economy. Someone is going to do it cheaper, unless you work in a technical field like engineering (and even then, grunt work can be outsourced).

We can circlejerk about what's "right" in a closed system, but when you have south east Asian countries providing decent services for less than a local worker, you can't blame employers for looking elsewhere. It's the same principle for interstate labour. The only thing you can do is impose import duties and other such taxes (Trump has proposed this).

This invariably backfires, because the markups coming out of low wage countries can be scaled back to counter most reasonable import taxes. Australia recently passed legislation to try and collect consumption tax on all online purchases (previously there was a $1000 grace area). Local retailers blame their requirement to collect this tax (GST) for their inability to compete with e-commerce. In a few months, online shops will either ignore the legislation (it's unenforceable) or simply take slightly less profit (400% down to 375% profit margins is not a big deal if you're smart at running a business).

The takeaway here is that if someone else can do it cheaper and for the same quality, then in the business world, this is a choice that is made for you. Loyal customers may prop you up for a few months (or even years), eventually you need to compete with low cost workers.

Then the solution is to.. what? Because if we don't increase minimum wage, more and more government spending will happen to keep people alive. Healthcare will HAVE to go to a tax system to keep up (Which isn't a bad thing mind you), sales will continue to drop, so on so fourth. Do we lower the minimum wage to make those problems happen even worse and faster to 'compete' with the low wage countries? Or do we force the free market to lower the price of everything they sell so we can actually afford it.

This isn't even counting the automation that will happen with or without any wage changes, nor the amount of gouging healthcare will continue to take until it's overhauled from the ground up.

Other countries seem to be doing plenty fine with having higher wages than the US does, but at the same time there's not as much of a freakishly huge gap between the business owner/CEO of a place and their workers in terms of money earned per year.

[Glorious Leader]

It shows that a minimum wage goods basket ends up with an inflation figure the same as CPI?

Last time i checked yea

[NineSpine]

I never advocated that level of "the sky is falling." All I stated was that people would likely lose their jobs and businesses would look offshore as a long term business plan to reduce spend....at least one of which is true. I've found no solid source to definitively show businesses move off shore as a direct result of a wage increase, I'm working off of my experience within my industry.

Found a few sites and reports that discussed these.

Link

Link

Link

Link

I did also find articles saying there is no effects based on minimum wage hikes.

Link

This is exactly why this is up for so much discussion and debate, both sides have solid evidence backing them up. Basically wage increase DOES mean job loss, but the increased spending power of those still employed results in an increase in company profits which then results in a new hiring period sometimes resulting in an overall increase in employment.

The problem is that the evidence you are citing for the idea that the minimum wage seriously effects employment rates isn't very good. Look at that first article, for example, and you'll see some curious jumps back and forth between the teen rates and the overall rates, which is very misleading. Your article from Forbes does similar tricks and does a whole lot of deflection by referring to what WOULD HAVE BEEN, an impossible metric that anyone can twist to be what they want. Even at worst, the evidence shows that the effect is small and temporary.

[God Save The King]

The wage went up $0.50 from last year. $10.00 to $10.50. 5% increase. Oh no, an extra $1000~ a year for a full time employee. How will they ever survive

[Snuffleupagus]

Then the solution is to.. what? Because if we don't increase minimum wage, more and more government spending will happen to keep people alive. Healthcare will HAVE to go to a tax system to keep up (Which isn't a bad thing mind you), sales will continue to drop, so on so fourth. Do we lower the minimum wage to make those problems happen even worse and faster to 'compete' with the low wage countries? Or do we force the free market to lower the price of everything they sell so we can actually afford it.

This isn't even counting the automation that will happen with or without any wage changes, nor the amount of gouging healthcare will continue to take until it's overhauled from the ground up.

Other countries seem to be doing plenty fine with having higher wages than the US does, but at the same time there's not as much of a freakishly huge gap between the business owner/CEO of a place and their workers in terms of money earned per year.

Executive remuneration is certainly an issue that needs to be addressed. But most of these high wage countries have:

1. High living costs
2. High taxes
3. High investment into R&D

Conventional wisdom tells us that manufacturing (of cars for instance) requires low wages on the factory floor. Yet Germany manages because they have the efficiencies and procedures from decades of R&D. Same with Japan.

American workers want low taxes, high income, and no one thinks to invest in R&D.

There's no easy solution, but throwing our hands up and saying "just raise wages" ignores the reality of the situation and long term implications.

[Wolfheart9]

Executive remuneration is certainly an issue that needs to be addressed. But most of these high wage countries have:

1. High living costs
2. High taxes
3. High investment into R&D

Conventional wisdom tells us that manufacturing (of cars for instance) requires low wages on the factory floor. Yet Germany manages because they have the efficiencies and procedures from decades of R&D. Same with Japan.

American workers want low taxes, high income, and no one thinks to invest in R&D.

There's no easy solution, but throwing our hands up and saying "just raise wages" ignores the reality of the situation and long term implications.

I think we're in agreement that just raising wages alone won't fix everything forever, but the issue is we HAVE to raise wages as a patch job until we're willing or able to do other things. I would happily pay high taxes and high living costs as you quoted there if it meant I could afford to do so. A lot of those high tax areas also have social healthcare too so sign me the fuck up.

More needs to happen than wage increases, but keeping it where it is now while we shuffle our feet to fix the other issues either means more aid spending, or they let people die in the streets.

[NineSpine]

Executive remuneration is certainly an issue that needs to be addressed. But most of these high wage countries have:

1. High living costs
2. High taxes
3. High investment into R&D

Conventional wisdom tells us that manufacturing (of cars for instance) requires low wages on the factory floor. Yet Germany manages because they have the efficiencies and procedures from decades of R&D. Same with Japan.

American workers want low taxes, high income, and no one thinks to invest in R&D.

There's no easy solution, but throwing our hands up and saying "just raise wages" ignores the reality of the situation and long term implications.

The German model also includes what basically amounts to mandatory union power in control over large corporations, which both increases the overall quality of their products and negates the need for a lot of government protections.

[Wolfheart9]

The German model also includes what basically amounts to mandatory union power in control over large corporations, which both increases the overall quality of their products and negates the need for a lot of government protections.

And the party currently in power absolutely hates unions, so that ain't happening.

[PACOX]

Sounds like someone who doesn't believe in paying his employees. Either this company was already hemorrhaging money, something simply moving won't fix, or the owners don't believe in splitting profits with their employees.

[Cthulhu 2020]

Welcome to the real world.

And yet we have the ability to do things about it. We just have a lot of people who don't want us to.

[Paranoid Android]

Called it.

You do see that min wage adjusted for inflation has been decreasing, right? Even in your own source? That means it hasn't been increased fast enough to keep up with inflation.

Guess they didn't teach you simple math in business school.

Remember he owns a business. So...

[Captain N]

And the party currently in power absolutely hates unions, so that ain't happening.

And that's unfortunate especially since there are jobs here that cannot be outsourced. Customer Service and Food Service establishments bend over backwards to prevent unionization because there really isn't much they can do if a workforce actually pulls together and unionizes. Sure they can do what Wal-Mart did and close stores in an attempt to run away from the issue, but how many times can you do that before you eventually have to face the American Worker?

[Wolfheart9]

Sounds like someone who doesn't believe in paying his employees. Either this company was already hemorrhaging money, something simply moving won't fix, or the owners don't believe in splitting profits with their employees.

Usually it's the last option. Old company I worked for wouldn't give anyone raises, kept them just above minimum wage stating "Well we already pay you guys above minimum, we're doing you a favor, we can't afford to do more than that'. Their house was one of the most expensive in my city, they have actual suits of armor lining their main hallway, have 3 collector cars, each owner had 2 different cars if they wanted to drive something different that day, and bought a summer home that year that they intended to stay in for only two weeks out of the year.. So yea.

[Annoying]

1/hr is roughly equal to 2000 a year (actually a little more but 1/hr makes the math easier), x18 = 36k straight out of the owners pocket. let me tell you a little secret, people with 18 employees are NOT rich or even fucking close unless its a tech company. definitely not a low end no name fashion company.

while i consider you smart you obviously have a lot to learn about life, get to it boy!

I don't know why people continually do what you're doing here. You assume I asserted some position. All I said was that a company that can't afford a $1/hr increase in employment costs must be running real slim on funds. Nothing about whether they're "rich" or "close" or a "no name fashion company". Stop assuming I'm taking a position or a side. I stated a fact and corrected an incorrect part of the OP.

lmao you going to believe polls? you mean the same ones that said hillary was going to crush trump

here from your own source

Nearly six in 10 now approve of unions, up from 48% in 2009

so yeah 60% of the respondents somehow equal the USA? please stop, just stop

More than 1000 people surveyed is a plenty large sample size to gauge the population of the USA, assuming good methodology. It's pretty reasonable to say that "very few americans want to see more unions" isn't correct -- 58% of the US isn't "very few" at all. One set of polls being wrong (they weren't even that wrong...) doesn't suddenly make all polls incorrect.

[NineSpine]

lmao you going to believe polls? you mean the same ones that said hillary was going to crush trump

here from your own source

Nearly six in 10 now approve of unions, up from 48% in 2009

so yeah 60% of the respondents somehow equal the USA? please stop, just stop

The polls didn't say Hillary was going to crush Trump.

[Wolfheart9]

The polls didn't say Hillary was going to crush Trump.

I think the polls they were talking about were in an overall popularity vote, and that was before the second half of the email mess. You know these types, they'll use that as an excuse to discredit all polls forever if it suits them.

[NineSpine]

I think the polls they were talking about were in an overall popularity vote, and that was before the second half of the email mess. You know these types, they'll use that as an excuse to discredit all polls forever if it suits them.

They were both very unpopular. The polls had it very, very close, and it was. There were certainly some idiots interpreting the polls to fit what they wanted to be true, but that's not the polls. That's like someone misunderstanding 2+2=4 and blaming arithmetic.

[Snuffleupagus]

Usually it's the last option. Old company I worked for wouldn't give anyone raises, kept them just above minimum wage stating "Well we already pay you guys above minimum, we're doing you a favor, we can't afford to do more than that'. Their house was one of the most expensive in my city, they have actual suits of armor lining their main hallway, have 3 collector cars, each owner had 2 different cars if they wanted to drive something different that day, and bought a summer home that year that they intended to stay in for only two weeks out of the year.. So yea.

Because for the most part, the average worker sucks with money. Giving most people a raise has a short term benefit with their expenses eventually outstripping the increase before inflation is even an issue. When I got raises, I went out and celebrated once. Then every raise after that had the increased earnings (and sometimes bonus) funnelled into savings.

I run my own business, pay my overseas staff well over my local minimum wage (Australia), and still charge half what local competitors do. I have no intention of handing money over to someone who thinks a shitty diploma and two years work experience entitles them to earn management wages. And that's the unfortunate reality of the situations. More than 75% of the people I've tried to interview locally for entry level positions manage to talk about the following in their interview:

- Their expectation for a management role within 12 months.
- Their expectation for six monthly wage reviews.

And they manage to have the latest iPhone and Apple Watch for their interview. I'm only 29 and I don't bother with that shit.

If I was forced to hire local only, the reality is that I would shelve half my services and not hire anyone new. My business model works just fine without the outsourced elements, but it's a nice cherry to have. So in the end, no one local gets work and my overseas staff lose their jobs.

Real nice.

[Snuffleupagus]

The polls didn't say Hillary was going to crush Trump.

How many people lied?

There were a lot of people shamed into not talking about their intention to vote for Trump. Instead of shaming them, opening a reasonable discourse would have been the better option.

- - - Updated - - -

No it doesn't.

Is it not adjusted or are you saying the CPI doesn't factor in cost of living?