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Minimum Wage to scale up to $15/hr in CA, NY
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Joined: 18 Oct 2014

PostPosted: Tue Apr 05, 2016 6:33 pm    Post subject: Minimum Wage to scale up to $15/hr in CA, NY Reply with quote

California, New York Launch 60 Million Americans Into A $15 Minimum Wage Economy

Quote:

With the strokes of two pens on opposite sides of the country on Monday, nearly one-fifth of the U.S. population began walking toward a $15 minimum wage.

Roughly 60 million Americans living in New York and California will soon live in economies defined by a baseline wage roughly double the minimum required by federal law. Gov. Andrew Cuomo (D) made New York the first state to adopt the $15 pay floor on Monday morning. California Gov. Jerry Brown (D) put pen to paper on a more ambitious version of the same idea roughly an hour later.

In California, the minimum wage will jump from $10 to $10.50 next year, and then $11 in 2018. After that, it will rise by one dollar annually through 2022.

New York’s more complex version sets up three different tempos for its wage hike. New York City employers will have to hit $15 an hour for all workers by the start of 2019. Workers on Long Island and in Westchester County will see a slower rise, reaching the $15 benchmark at the start of 2022. Those two areas are home to over 15 million of the state’s 19.8 million people. For the rest of the state, minimum wages will reach $12.50 at the start of 2021 and then rise on a yet-to-be-determined schedule toward $15.

Both laws borrow a key mechanism from the Seattle municipal wage law enacted a year ago, the first $15 minimum wage requirement in the country. California firms with fewer than 25 employees get an extra year to reach the new $15 floor. In New York City, businesses with 10 or fewer workers get four years instead of two. Seattle’s law also set a slower schedule for businesses deemed “small,” though it defined the category as any firm with fewer than 500 employees nationwide. The move helped cement a deal that labor leaders, community groups, and business owners could all agree to.

Each of the laws signed Monday allows the governors to pause the wage hike if economists decide it is hurting economic growth.

. . .

Right-wing messaging guru Frank Luntz surveyed 1,000 business executives recently on the minimum wage and other policy issues, and found that 80 percent of them support minimum wage hikes of some magnitude. Luntz’s firm presented that information to state Chambers of Commerce, which almost all oppose higher wage laws, in a recent web presentation that was obtained by the Center for Media and Democracy.


Some good news for a change. The $15/hour will not happen tomorrow, as California and New York will scale up the minimum wage increases each year. Most will see $15/hour by 2022.
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matthews_world



Joined: 15 Feb 2003

PostPosted: Wed Apr 06, 2016 4:54 am    Post subject: Reply with quote

I predict Americans will definitely see rises in consumer good prices and housing (except for in rent-controlled Manhattan Very Happy )

$15 per hour is roughly equitable to making 2.6 per month in Korea.

Would most go home and work a dead end job for that money? Of course, these jobs would disappear for Mexico in the long run.
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northway



Joined: 05 Jul 2010

PostPosted: Wed Apr 06, 2016 8:10 am    Post subject: Reply with quote

matthews_world wrote:
I predict Americans will definitely see rises in consumer good prices and housing (except for in rent-controlled Manhattan Very Happy )

$15 per hour is roughly equitable to making 2.6 per month in Korea.

Would most go home and work a dead end job for that money? Of course, these jobs would disappear for Mexico in the long run.


For the most part, these jobs can't disappear for Mexico (or China, India, the Philippines, etc.), as most of the jobs that fall under this umbrella are in the service industry. Unfortunately, that doesn't mean that there won't be negative consequences. The $15 minimum wage is being used as a bandaid for the poor housing policy that has predominated in our urban centers, whereas in reality it will just give rise to inflation in both goods and services and housing.

I don't know where you get the idea that rent-control is the norm in Manhattan, or that low-wage workers typically have rent-controlled apartments. If anything, it's well-off individuals who have been able to hold onto their rent-controlled dwellings for long enough for it to make a difference, or they bought homes back when things were cheap. I live in Manhattan and I think this is going to be a disaster.
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trueblue



Joined: 15 Jun 2014
Location: In between the lines

PostPosted: Wed Apr 06, 2016 2:02 pm    Post subject: Reply with quote

Quote:
in reality it will just give rise to inflation in both goods and services and housing.



Why do people not understand this?
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Leon



Joined: 31 May 2010

PostPosted: Wed Apr 06, 2016 3:42 pm    Post subject: Reply with quote

trueblue wrote:
Quote:
in reality it will just give rise to inflation in both goods and services and housing.



Why do people not understand this?


This can be true, but have you lived in a place with high minimum wages? Australia has them and things are more expensive, but not so much that the high wages do not offset them. The 'just' above is wrong, and in reality we subsidize low wage companies with benefits with the working poor, so changing this is not the economic dom and gloom some would have you believe.
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Plain Meaning



Joined: 18 Oct 2014

PostPosted: Wed Apr 06, 2016 4:02 pm    Post subject: Reply with quote

I had read so many articles debunking the common arguments against a rising minimum wage that I had honestly forgotten that some people dislike it. The real problem: capitalists have eaten labor's productivity increases without granting wage gains, particularly on the lower end of the income scale. In addition, firms (Walmart and others) will lean on food stamps and other social services to fill the gap for its low wages. It costs the Federal government a great deal through the Earned Income Tax Credit to close the gap.

Plus, in New York and California, the cost of housing already demands $15/hr. No, the cost of housing is not driven by the low end of the wage spectrum, my god, do I have to explain this? As for the other stuff, I will place some links when I have more time.

Goods will not rise in price appreciably. Of course the price of services will rise a little bit. It is fine.
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Fox



Joined: 04 Mar 2009

PostPosted: Wed Apr 06, 2016 5:53 pm    Post subject: Reply with quote

Plain Meaning wrote:
Goods will not rise in price appreciably. Of course the price of services will rise a little bit. It is fine.


Kuros is correct here: the price of labor is only a small portion of the price of goods and services, and further, only a portion of goods and services are produced by minimum/near minimum wage labor, so the total impact on the price of goods and services would be relatively low. What a minimum wage really does more than anything is provide some of the benefits of unionization to the people who need them most, without imposing upon them the logistical burdens of unionization. To the extent that there's a problem with a national minimum wage, it's that regional standards of living vary, but $15 an hour is sufficiently low that there's no region in the entire country in which that would be unreasonable or excessively burdensome. To oppose a remotely liveable minimum wage is to essentially say, "Our economy actively demands poverty, and demands it in perpetuity. The poor must be poor, and moreover, be poor forever, because otherwise, my Big Mac might cost a few cents more, and that is absolutely unacceptable." In short, vigorous opposition to minimum wage is, for lack of a better term, class warfare, with the amoral middle class and the clever upper class aggressively trying to force the lower class to absorb the costs of production.
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trueblue



Joined: 15 Jun 2014
Location: In between the lines

PostPosted: Wed Apr 06, 2016 7:39 pm    Post subject: Reply with quote

Leon wrote:
trueblue wrote:
Quote:
in reality it will just give rise to inflation in both goods and services and housing.



Why do people not understand this?


This can be true, but have you lived in a place with high minimum wages? Australia has them and things are more expensive, but not so much that the high wages do not offset them. The 'just' above is wrong, and in reality we subsidize low wage companies with benefits with the working poor, so changing this is not the economic dom and gloom some would have you believe.


We are talking about California, here...in the United States, of all places. Great for Australia, though.
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northway



Joined: 05 Jul 2010

PostPosted: Thu Apr 07, 2016 12:18 pm    Post subject: Reply with quote

Leon wrote:
trueblue wrote:
Quote:
in reality it will just give rise to inflation in both goods and services and housing.



Why do people not understand this?


This can be true, but have you lived in a place with high minimum wages? Australia has them and things are more expensive, but not so much that the high wages do not offset them. The 'just' above is wrong, and in reality we subsidize low wage companies with benefits with the working poor, so changing this is not the economic dom and gloom some would have you believe.


I'm speaking specifically to the big city context where wages aren't the issue, housing - and to a lesser degree transportation - is. There are already tons of people in the New York Tristate who are making upwards of $15/hour and can't find affordable housing. The movement to increase the minimum wage isn't doing anything to fix the city's most pressing problems.

Anyway, as someone who is starting a masters in public policy with a focus on these issues in the fall, at least this gives me something to study.
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Plain Meaning



Joined: 18 Oct 2014

PostPosted: Thu Apr 07, 2016 7:53 pm    Post subject: Reply with quote

northway wrote:
Leon wrote:
trueblue wrote:
Quote:
in reality it will just give rise to inflation in both goods and services and housing.



Why do people not understand this?


This can be true, but have you lived in a place with high minimum wages? Australia has them and things are more expensive, but not so much that the high wages do not offset them. The 'just' above is wrong, and in reality we subsidize low wage companies with benefits with the working poor, so changing this is not the economic dom and gloom some would have you believe.


I'm speaking specifically to the big city context where wages aren't the issue, housing - and to a lesser degree transportation - is. There are already tons of people in the New York Tristate who are making upwards of $15/hour and can't find affordable housing. The movement to increase the minimum wage isn't doing anything to fix the city's most pressing problems.


This is a tepid criticism of the minimum wage movement.

The cost of housing is a global problem. You should say what you propose to fix it. I am anxious to hear what you would think New York State or New York City could do to fix it.
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bigverne



Joined: 12 May 2004

PostPosted: Fri Apr 08, 2016 12:10 am    Post subject: Reply with quote

This will simply speed up the drive towards automation. Robots will provide better service and will also speak better English.

"According to Brand Eating, fast food king McDonald's has been spotted testing a self-serve McCafe coffee station/kiosk out in downtown Chicago. The station is located in the restaurant but apart from the counter and looks to be a theoretically more convenient way for those who just want a cup of coffee to skip the regular line (while also freeing employees from having to make each drink in the back)."

http://www.zerohedge.com/news/2016-04-06/mcdonalds-responds-minimum-wage-hikes-launches-mccafe-coffee-kiosk
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Titus2



Joined: 06 Sep 2015

PostPosted: Fri Apr 08, 2016 8:21 pm    Post subject: Reply with quote

Employers in California will do what they've been doing for decades to avoid higher wages. They'll employ illegals.

And robots.

We need new ideas.
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Fox



Joined: 04 Mar 2009

PostPosted: Fri Apr 08, 2016 8:59 pm    Post subject: Reply with quote

Titus2 wrote:
Employers in California will do what they've been doing for decades to avoid higher wages. They'll employ illegals.

And robots.

We need new ideas.


Basic income. Cut out the middle man, appropriate whatever savings a business accrues through automation/outsourcing/hiring illegal aliens/etc through taxes, pool it with savings from the abandonment of military adventurism and virtually all other social programs, and use it to provide all non-criminal citizens with a basic living wage which will be in no way means tested. This simultaneously discourages crime (if you are convicted of a felony, you lose your basic income for at least a certain period of time) and avoids the "poverty trap" (absence of means testing means working will always be a net profit for you). Even at current tax levels, America could afford to pay out thousands a year to every non-criminal adult citizen. Couple it with a national ID system to virtually eliminate fraudulent payouts (this also resolves any issues vis a vis voting and other citizenship rights).
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bucheon bum



Joined: 16 Jan 2003

PostPosted: Fri Apr 08, 2016 9:42 pm    Post subject: Reply with quote

northway wrote:
matthews_world wrote:
I predict Americans will definitely see rises in consumer good prices and housing (except for in rent-controlled Manhattan Very Happy )

$15 per hour is roughly equitable to making 2.6 per month in Korea.

Would most go home and work a dead end job for that money? Of course, these jobs would disappear for Mexico in the long run.


For the most part, these jobs can't disappear for Mexico (or China, India, the Philippines, etc.), as most of the jobs that fall under this umbrella are in the service industry. Unfortunately, that doesn't mean that there won't be negative consequences. The $15 minimum wage is being used as a bandaid for the poor housing policy that has predominated in our urban centers, whereas in reality it will just give rise to inflation in both goods and services and housing.

I don't know where you get the idea that rent-control is the norm in Manhattan, or that low-wage workers typically have rent-controlled apartments. If anything, it's well-off individuals who have been able to hold onto their rent-controlled dwellings for long enough for it to make a difference, or they bought homes back when things were cheap. I live in Manhattan and I think this is going to be a disaster.


How is it going to be a disaster? I'm truly curious. And yes, i know about econ 101 (just to pre-empt certain posters on this board, not necessarily you).

And I agree, it won't really help with the affordable housing problem. I just don't see there being any kind of disaster in NYC or San Francisco.
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Plain Meaning



Joined: 18 Oct 2014

PostPosted: Mon Apr 11, 2016 7:20 am    Post subject: Reply with quote

bigverne wrote:
This will simply speed up the drive towards automation. Robots will provide better service and will also speak better English.

"According to Brand Eating, fast food king McDonald's has been spotted testing a self-serve McCafe coffee station/kiosk out in downtown Chicago. The station is located in the restaurant but apart from the counter and looks to be a theoretically more convenient way for those who just want a cup of coffee to skip the regular line (while also freeing employees from having to make each drink in the back)."

http://www.zerohedge.com/news/2016-04-06/mcdonalds-responds-minimum-wage-hikes-launches-mccafe-coffee-kiosk


As you say,

Want Innovation? Raise the Minimum Wage

Quote:
So what happens if a company suddenly finds that it has to pay higher wages? It might just take the hit to its profit margins and continue operating as before. It might decide to downsize, laying off workers and shrinking its operations.

Or, it might decide to invest in labor-saving technology.


And then this article, too, cites the McDonald's kiosks.

Quote:
In the past, when companies implemented labor-saving technology -- whether assembly lines or computers -- their workers didn’t simply go on the unemployment rolls. They became more productive than before, and commanded higher wages. If they got laid off, they eventually found jobs at other companies -- and since the economy overall was more productive because of the innovation, more new companies were started. In the past, automation has always complemented human beings instead of making them irrelevant. That might change in the future, but so far the old pattern is still holding.

For workers to become more productive in order to take advantage of new technologies, they often have to improve their skills. Workers have always been able to do this quite successfully. When the Industrial Revolution demanded that people learn to read, they learned to read. When the Information Revolution forced people to use computers, they learned how. Low-skilled workers might have skimped on education because they were focused on the short term; the pressures of a technologically advancing workplace may force them to think longer term and develop new skills.

So minimum-wage laws, by forcing us to abandon low-skilled labor, might actually increase technological innovation.


Minimum wage increases often also raise wages above the minimum.
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