Showing posts with label Minimum Wage. Show all posts
Showing posts with label Minimum Wage. Show all posts

Monday, September 07, 2015

The Objective Reality of Raising the Minimum Wage

People laughed at Pizza Punch owners John Puckett and John Soranno two years ago when they raised their minimum wage to $10 an hour for entry level employees and $13 for management. Predictions of their demise were heard from the usual sources. Of course, that didn't happen

Instead, their company is doing quite well. In fact, they've opened two more restaurants bringing the total to 10 now in the Twin /Cities area. Puckett said the higher wages did not cause Punch to increase prices. He also said it “has had a big impact culturally in the company.” He said that retention of employees is up, which helps them save money on hiring and training. He estimates the average worker in the front — cashiers and waiters who are often students — work about three years, while the kitchen workers average five years of employment, which is very high for this transitory industry. “Our retention is light years ahead of most restaurants,” Puckett said.

“We just weren’t getting the quality of applicant before. Now we have a lot more applications that we don’t have jobs for. If you pay people more, I think you can demand more. When we did this, we got everybody together and said, we need to blow people away with our service.” Asked about those strange, angry calls when he increased raises, Puckett laughed.

“The cynics didn’t win,” he said.

Yet this is just one example in one state. It's also a micro examination. To find a macro example, one need look now further than Seattle which, one year ago, mandated a $15 an hour minimum wage. Those same critics claimed that unemployment would skyrocket as businesses would not be able to retain employees. When the law was passed, Seattle's unemployment rate was 4.4 percent. Today it's 3.7 percent.

I think their prediction on this Labor Day 2015 was not correct:)

Saturday, August 01, 2015

How's That $15 An Hour Working Out For Seattle?

Well, it's still too soon to tell, obviously, but Ivar's Salmon House in Seattle seems to be handling it just fine.

As Washington, D.C., and other cities consider following Seattle, San Francisco and Los Angeles in phasing in a $15-an-hour minimum wage, Ivar's approach, adopted in April, offers lessons in how some businesses might adapt. Ivar's Seafood Restaurants President Bob Donegan decided to raise prices, tell customers that they don't need to tip and parcel the added revenue among the hourly staff. 

For some of the restaurant's lesser-paid workers - including bussers and dishwashers - that's meant as much as 60 percent more. Revenue has soared, supportive customers are leaving additional tips even though they don't need to, and servers and bartenders are on pace to increase their annual pay by thousands, with wages for a few of the best compensated approaching $80,000 a year. 

It is staff, not diners, who feel the real difference, with wages as much as 60 percent higher than before. One waitress is saving for accounting classes and finding it easier to take weekend vacations, while another server is using the added pay to cover increased rent

"It's been a surprise," Donegan said. "The customers seem to like it, the employees seem to like it, and it seems to be working, at least in this location." 

Rochelle Hann, 25, is a second-generation worker at Ivar's. Like her mom, she has performed a variety of roles, including serving, bookkeeping and even dressing up as a giant clam. If she keeps working 30 hours a week, her annual pay will jump about $12,000 - money she's socking away for accounting classes at a community college.'a almost as if the economy is improving and becoming (gasp!) not quite as hierarchical in nature. Speaking of adding customers, look who else has had to add more staff.

Could we see a return to the golden age of capitalism?:)

Friday, May 29, 2015

Fantastic Words

I've been posting in a conversation about the minimum wage over at Real Clear Politics. Check out this gem from a fellow posting under the title "Actual Moderate Conservative."

Minimum wage laws address imbalances in bargaining power due to an oversupply of labour at lower level positions. While capitalism is by far the superior economic system, that imbalance is a natural outcome of capitalism, like it or not. Many things are a natural outcome of capitalism, and yet reasonable people (excluding hard libertarians, of course) will agree that our social compact dictates that we maintain laws to prevent some of them - monopolies, child labour, unsafe work conditions, etc. It is for this reason that America, and every other western nation, has always had a mixed economy of mostly capitalism, with some limitations (such as those above) mixed in to facilitate capitalism. 

Most even-handed people that i know fully acknowledge that minimum wage laws are necessary as part of that package of laws that establish limits on the natural outcomes of capitalism and maintain social order. If that is the case, then it is not a matter of having a minimum wage or not. It is, rather, what that level should be. To do that, one must establish what one is trying to accomplish with it - in other words, go back to first principles. 

Most of the posts here are simply arguing about issues like the impact of minimum wages as if there was no data on the subject. There is plenty, and there are plenty of real-world examples in the US AND (I cannot emphasize this enough) around the world. While the data is mixed, it seems clear from the evidence that minimum wage increases - at least at the levels that have actually been done, rather than silly $1,000/hour thought experiments - are washed out in the economy, as there are too many moving parts in any modern economy. 

So you have something that has virtually no macro impact but affects the real lives of hundreds of thousands of people. My suggestion is that people should be talking not about what the impact is, so much as they should be thinking about what the purpose of minimum wage laws are, and whether the current levels are accomplishing that goal.

I wish there were more conservatives out there like this person!

Wednesday, May 20, 2015

Los Angeles Joins the $15 An Hour Club

Los Angeles has now joined a chorus of other cities in raising its minimum wage to $15 an hour. I can hear the shit squirting out already from all the bowels blown on the right. There are several myths about what raising the minimum wage can do to economies. Let's dispense with all of them right now because it's pretty easy.

The minimum wage has never even come close to market equilibrium so anyone that caterwauls about how it ruins businesses has absolutely zero evidence to back this up. The minimum wage has been so low for so many years that all discussions about the effects of raising it are theoretical, really. With a variety of cities across the nation from different regions of the country, the next few years will show us exactly what happens when you raise the minimum wage to a livable level (see: more people have more money, they buy shit, businesses hire more people, economic growth).

Further, if you look closely at each of these laws, small businesses are exempt from many of them. So, the whole sob fest about Mom and Pop's store on Main Street going out of business because of liberals is a giant pile of shit. In reality, Mom and Pop's store on Main Street is going out of business because of the large corporations (supported largely by the same people who are blowing bowels about the minimum wage) moving into a town.

It will be interested to note how the minimum wage naysayers engage in motivated reasoning as the facts come in...:)

Friday, January 02, 2015

A Big Test For The Minimum Wage

This year, 21 states will be raising the minimum wage so we will finally get a broad look at how this action affects economies. My hope is that the following question will not be answered: will the rise in low-paid workers' salaries and their increase in spending in the economy (thus creating more jobs) outweigh any costs in slower job creation?

My answer is YES

Sunday, September 21, 2014

Saturday, May 17, 2014

Minimum Wage=$25 An Hour?

Is Switzerland poised to have a minimum wage of $25  an hour? It will be interesting to find out. If they do, we could finally see exactly how much of an effect raising the minimum wage would have on unemployment and inflation. Could the effect turn out to be negligible because wage increases lead to a rise in aggregate demand that exceeds layoffs? Thus negating any layoffs and/or inflation?

Regardless, the article notes how much of an effect discussions of raising the minimum wage are having.

Supporters have something to show whether it passes or not: Some large companies such as clothing retailer H&M and supermarket chain Lidl have already agreed to raise their wages to the proposed minimum.

The same thing is happening here and will likely increase as the wealthy of the United States are realizing just how much of a destabilizing effect inequality has on our country.

Friday, May 09, 2014

Mitt Romney: "Raise the Minimum Wage."

I, for instance, as you know, part company with many of the conservatives in my party on the issue of the minimum wage. I think we ought to raise it, because frankly, our party is all about more jobs and better pay, and I think communicating that is important to us

--Mitt Romney, May 9, 2012


Wednesday, May 07, 2014

Sunday, April 06, 2014

Saturday, December 14, 2013

Sunday, October 27, 2013

Bill Echoes Nikto

Check out the video below. Does Bill read our site?:)


Thursday, August 08, 2013

Saturday, April 06, 2013

To Hike or Not To Hike

There have been lot of rumblings of late regarding the minimum wage. The president has suggested that it be raised to $9 per hour. Elizabeth Warren has been a staunch champion lately on this issue has been summarily raked over the coals by the usual collection of mouth foamers with the same bullshit argument that claims they know something about economics and that liberals know nothing. Well, here are the facts, based on the simple economics they claim to grasp so easily.

If the minimum wage is set below the market equilibrium, it will have no effect on the efficiency of the market. Even though the government has set a price floor, the market is bearing a higher price so it doesn't matter. Yet, if the price floor is set above the market equilibrium, unemployment will occur because employers would be induced to higher fewer workers, given the higher cost they must now pay their employees. More people would enter the labor market and jobs would be scarcer.

So, the question becomes...where is the market equilibrium? Well, with so many different markets out there in this country, it would depend on which market you are talking about and that's why the mouth foamers can get away with painting with such a broad and dishonest brush. If there is to be a minimum wage increase, then there should be a series of studies that examine the market equilibrium for those markets most affected my the hike. I would think the service industry and the retail industry would be good places to start.