Minimum Wage Thoughts...
I live in Ontario (Canada) where minimum wage may be set to rise to $15/hour in the near future. I've heard a lot of the rhetoric on both sides and most people are very strong proponents of one side or another and have no interest in thinking about things rationally.
Let me start with, if I had to choose a side, it would be to be in favor of increased minimum wage.
But, I will quickly diverge by stating that the approach proposed is terrible. Jacking it up so quick, and with no safety nets in place for businesses is a terrible idea. Before you open your idiotic mouths... YES I believe in paying people a living wage. I also believe people WILL lose jobs as a result of this. Are you dumb enough to proclaim that unemployment is better than receiving less than a living wage? Are you naïve enough to believe that all people working are in a state where they, individually NEED to make a living wage?
I see a few arguments hurled against those who dare challenge. The first is, these big corporations can afford to trim some money off exec salaries or take in less in profits. And to an extent this is probably true. Unfortunately, let's take the classic case... Wal-Mart. I don't have accurate numbers for this... but Walmart employees some 91k people in Canada per Wikipedia. If we assume, say 50% are in Ontario and currently make an average of $12/hour with an average 24 hours a week. That will be 45.5k people making an extra $2/hour OR... an extra $170M a year... oops! I don't think the execs combined make that much. So... actually, even in the extreme cases this line of thinking is wrong.
Aside from the percentage of employees, I think I stayed on the generous side of things. The $12 an hour is higher than current minimum wage, and 24 hours is a best guess at mix between full time and part time hours. Could easily be more. The point is, the larger the business and the greater their perceived ability to absorb a loss like this, the more likely it is that you're just flat out wrong.
But, while the argument falls flat on its face... I personally have little or no sympathy for mega-stores anyway. These stores will likely suffer the least amount of losses of employees anyway. While they probably can't absorb the full shock of a rapid increase in pay for a large number of employees they can weather a lot more of it than others.
Furthermore, whether they CAN afford to weather the loss or not... they are still totally able to decide NOT to absorb the loss and fire the employees ANYWAY. So, you're STILL an idiot if you cling to this.
But, my focus is largely on small businesses. My wife ran an alterations shop here. When she heard about it, the first thing she said was that she would no longer be able to afford to pay her sister. People who have expressed similar concerns have often met the following: "if you can't afford to pay them a living wage in the first place, then you shouldn't be in business". This is a tone deaf, idiotic response. As I stated earlier, not everyone needs a living wage and every industry is different.
I know many small business owners who already take in far less than minimum wage on their own to support their staff. These are not heartless people trying to deprive people of money. They are providing employment for people who may not have any employment otherwise. They are providing essential goods and services to their communities. How much money they are able to make is often, partly a function of the industry they are in.
It isn't that I'm against a greater minimum wage. I am totally for it. But, the delivery needs to strike a balance to grant business additional funds, etc... to weather to adjustment period. Increasing minimum wage should, in theory, boost the economy and get more people out and spending money. And spending money on the sorts of things traditional businesses sell. But, the two problems are that it won't happen overnight, and market prices won't stabilize immediately once it starts.
And guess what, the only businesses well positioned to survive this upheaval are the mega-stores who whether they pay it or not, don't really care about giving you a living wage.
Initially, most people who have fallen behind on payment will focus on those areas where they are in arrears. They will gradually adapt to their new found windfall, but it will take time for people to be in a place where they can actually spend the extra money and feel safe doing so. Similarly, businesses will take time to adapt as well to find the new prices they need to charge to keep or draw in customers while making ends meet.
I'd say, a bare minimum is 2 years for this to happen on any appreciable scale. And within that timeframe, the government needs to be willing to help out, both with additional tax cuts and perhaps even direct funding.
One thing you might have noticed... prices will change, and they will go up. This isn't as scary as people think. One article circulating on Facebook indicated that if minimum wage went up $3 an hour the cost of goods would go up $3 as well, and then things which were once affordable are no longer affordable.
Well, that is just patently wrong. The only reason for the price of something to go up by the exact same amount as the hourly minimum wage would be if it was tied to a product which met all of the following criteria: it was made by a single person, that person made the current minimum wage, it took exactly an hour of that person's time, his effort produced just the single unit you're purchasing, and there was no margin in the product whatsoever.
The example I saw was a jug of milk. Which is lunacy... the amount of man hours spent on a single jug of milk... is probably in the seconds. Even if the full price of the wage increases are passed directly on to the end consumer, it will likely amount to pennies in cost increase.
Fact is, most products are mass produced and highly mechanized. Actual labor is something industries always aim to minimize.
Service might get more expensive... but that is likely to be more a function of an increased cost of living. Most skilled laborers already get paid well above even the new proposed minimum wage.
There are some products created in smaller batches and some services at the lower end of the spectrum. These will go up the most... but unless it is a product or service you use or purchase every single day you will still likely be better off.
Some of you may have been smart enough to notice one tiny problem with this whole "living wage concept". If $15 an hour is considered a living wage today, BUT, raising the minimum wage will increase cost of living over time (at a pace faster than inflation) then $15 an hour will cease to be a living wage almost as soon as it is implemented.
Not really an argument against it. Just pointing out the lunacy in some of the arguments. This is really a form of wealth redistribution. In theory, it should shrink some of the income inequality. Frankly, I still think a universal basic income which is financed by increased taxes from the top tax brackets down would do more to deal with income inequality. I still see this as a positive move. UBI get's a lot of pushback, whereas the support for minimum wage increases in generally a lot better. It sucks that minimum wage increases also hurt some people at the bottom of the food chain as well.
Let me start with, if I had to choose a side, it would be to be in favor of increased minimum wage.
But, I will quickly diverge by stating that the approach proposed is terrible. Jacking it up so quick, and with no safety nets in place for businesses is a terrible idea. Before you open your idiotic mouths... YES I believe in paying people a living wage. I also believe people WILL lose jobs as a result of this. Are you dumb enough to proclaim that unemployment is better than receiving less than a living wage? Are you naïve enough to believe that all people working are in a state where they, individually NEED to make a living wage?
I see a few arguments hurled against those who dare challenge. The first is, these big corporations can afford to trim some money off exec salaries or take in less in profits. And to an extent this is probably true. Unfortunately, let's take the classic case... Wal-Mart. I don't have accurate numbers for this... but Walmart employees some 91k people in Canada per Wikipedia. If we assume, say 50% are in Ontario and currently make an average of $12/hour with an average 24 hours a week. That will be 45.5k people making an extra $2/hour OR... an extra $170M a year... oops! I don't think the execs combined make that much. So... actually, even in the extreme cases this line of thinking is wrong.
Aside from the percentage of employees, I think I stayed on the generous side of things. The $12 an hour is higher than current minimum wage, and 24 hours is a best guess at mix between full time and part time hours. Could easily be more. The point is, the larger the business and the greater their perceived ability to absorb a loss like this, the more likely it is that you're just flat out wrong.
But, while the argument falls flat on its face... I personally have little or no sympathy for mega-stores anyway. These stores will likely suffer the least amount of losses of employees anyway. While they probably can't absorb the full shock of a rapid increase in pay for a large number of employees they can weather a lot more of it than others.
Furthermore, whether they CAN afford to weather the loss or not... they are still totally able to decide NOT to absorb the loss and fire the employees ANYWAY. So, you're STILL an idiot if you cling to this.
But, my focus is largely on small businesses. My wife ran an alterations shop here. When she heard about it, the first thing she said was that she would no longer be able to afford to pay her sister. People who have expressed similar concerns have often met the following: "if you can't afford to pay them a living wage in the first place, then you shouldn't be in business". This is a tone deaf, idiotic response. As I stated earlier, not everyone needs a living wage and every industry is different.
I know many small business owners who already take in far less than minimum wage on their own to support their staff. These are not heartless people trying to deprive people of money. They are providing employment for people who may not have any employment otherwise. They are providing essential goods and services to their communities. How much money they are able to make is often, partly a function of the industry they are in.
It isn't that I'm against a greater minimum wage. I am totally for it. But, the delivery needs to strike a balance to grant business additional funds, etc... to weather to adjustment period. Increasing minimum wage should, in theory, boost the economy and get more people out and spending money. And spending money on the sorts of things traditional businesses sell. But, the two problems are that it won't happen overnight, and market prices won't stabilize immediately once it starts.
And guess what, the only businesses well positioned to survive this upheaval are the mega-stores who whether they pay it or not, don't really care about giving you a living wage.
Initially, most people who have fallen behind on payment will focus on those areas where they are in arrears. They will gradually adapt to their new found windfall, but it will take time for people to be in a place where they can actually spend the extra money and feel safe doing so. Similarly, businesses will take time to adapt as well to find the new prices they need to charge to keep or draw in customers while making ends meet.
I'd say, a bare minimum is 2 years for this to happen on any appreciable scale. And within that timeframe, the government needs to be willing to help out, both with additional tax cuts and perhaps even direct funding.
One thing you might have noticed... prices will change, and they will go up. This isn't as scary as people think. One article circulating on Facebook indicated that if minimum wage went up $3 an hour the cost of goods would go up $3 as well, and then things which were once affordable are no longer affordable.
Well, that is just patently wrong. The only reason for the price of something to go up by the exact same amount as the hourly minimum wage would be if it was tied to a product which met all of the following criteria: it was made by a single person, that person made the current minimum wage, it took exactly an hour of that person's time, his effort produced just the single unit you're purchasing, and there was no margin in the product whatsoever.
The example I saw was a jug of milk. Which is lunacy... the amount of man hours spent on a single jug of milk... is probably in the seconds. Even if the full price of the wage increases are passed directly on to the end consumer, it will likely amount to pennies in cost increase.
Fact is, most products are mass produced and highly mechanized. Actual labor is something industries always aim to minimize.
Service might get more expensive... but that is likely to be more a function of an increased cost of living. Most skilled laborers already get paid well above even the new proposed minimum wage.
There are some products created in smaller batches and some services at the lower end of the spectrum. These will go up the most... but unless it is a product or service you use or purchase every single day you will still likely be better off.
Some of you may have been smart enough to notice one tiny problem with this whole "living wage concept". If $15 an hour is considered a living wage today, BUT, raising the minimum wage will increase cost of living over time (at a pace faster than inflation) then $15 an hour will cease to be a living wage almost as soon as it is implemented.
Not really an argument against it. Just pointing out the lunacy in some of the arguments. This is really a form of wealth redistribution. In theory, it should shrink some of the income inequality. Frankly, I still think a universal basic income which is financed by increased taxes from the top tax brackets down would do more to deal with income inequality. I still see this as a positive move. UBI get's a lot of pushback, whereas the support for minimum wage increases in generally a lot better. It sucks that minimum wage increases also hurt some people at the bottom of the food chain as well.
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