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Posted by on Oct 21, 2015 in Economy, Government | 90 comments

Raising the Minimum Wage: Good for Your Business, Good for the Economy

American history is defined, in part, by the tug-of-war between the world of business and the world of politics. Issues like workers’ rights and collective bargaining, along with the debate over what constitutes a “living wage” all rank among our most divisive issues, and have for quite some time.

I titled this article deliberately; we’re here to talk about the minimum wage. But first we need to understand that the call for a living wage in America is only the tip of a very large iceberg called “corporate responsibility.” The truth is, while the Fight for Fifteen movement seems to have taken the country by storm, their agenda is a very old one; they’re speaking to issues that have hounded political and corporate America for dozens, if not hundreds, of years.

But at the end of the day, we’re here to answer a simple question: Will paying your workers a fair living wage (whether or not it’s demanded by law) help your business thrive in the long run? I do have an answer for you today, but first we need some context.

The Current State of Things

As I said, the question of a higher minimum wage is tied closely to corporate responsibility. And to be clear, corporate responsibility is what’s supposed to happen even when the government and its big bad “regulations” aren’t pulling the strings. So let’s take a look at how some of the largest corporations are—or are not—acting responsibly with Congress’ hands tied by inaction.

First: Walmart. The world grudgingly applauded the retail giant’s rare show of charity earlier this year when they announced higher wages for their employees. Their decision was obviously well-timed; the campaign for a $15/hour “living wage” is reaching a fever pitch all across America, and it’s clear Walmart wanted to capitalize on that kind of publicity.

But we live in a world where political savviness is essential for businesses large and small, which makes Walmart’s motives suspect. The truth is that Walmart, under the stewardship of the Walton family (which owns more wealth than 42% of American families combined), was operating not with charitability in mind, but rather their bottom line. As pointed out by a number of authoritative voices, Walmart has been experiencing high employee turnover and worsening productivity for some time now, due in no small part to wages that border on starvation-level. Many Walmart workers have had to take second or third jobs just to make ends meet. In short, Walmart’s was an unsustainable business model.

For another example of questionable motivations, we need look no further than Shell, which recently signaled its intentions to cease exploratory drilling in the Arctic. As with Walmart, it would be tempting to attribute this move to corporate responsibility, but the truth is a little different. The truth is that Shell pulled out not because of some concern for the natural world, or because they want to focus their considerable resources on renewable energy, but instead because there didn’t appear to be any profit in the venture.

Walmart’s and Shell’s recent headlines should serve as a reminder that there was a time in our history when big business did the right thing simply as a matter of course.

Figures from History

Indeed; the call for a $15/hour minimum wage is not some utopian daydream. It is, in fact, the sum paid by Henry Ford to his factory workers, adjusted for inflation, some 100 years ago. But corporations today would have us believe a living wage is beyond us. That we can’t afford it.

They also tell us that unions are a relic from the pages of history with no role to play in modern America. But the truth is, unions, even today, are our last line of defense when it comes to corporate abuses of the average worker. We’re seeing our right to engage in class-action lawsuits slowly but surely eroded by ever-more-aggressive Terms of Use. Even worker’s compensation, which has long been an American ideal enshrined in law, is now under attack: ranking Democrats on Senate and House committees are calling for expanded federal oversight for workers’ compensation. This is in response to what they’re calling a “pattern of detrimental changes in state workers’ compensation laws.”

Want another example? I’ll point you to my hometown of Johnson City in upstate New York. Bridges and highways throughout the area still bear the name George F. Johnson, who back in the early 1900’s was the co-owner of Endicott-Johnson shoes. Even today, Johnson City is known as the “Home of the Square Deal,” which refers to Johnson’s particular brand of “welfare capitalism.” Under this social contract, EJ workers had access to affordable, high-quality housing, profit-sharing programs, worker recreation facilities, parks, and libraries. And EJ workers weren’t the only ones who benefited; the area as a whole was uplifted by the Johnson family’s generosity and fair-mindedness.

A Fringe Issue Becomes a National One

History lessons are one thing. To really see how this argument is playing out in the real world, we need to dive in to some case studies. So what’s going on in the world today?

While Congress continues the immortal debate about raising the minimum wage, there are those in the business world that have chosen to lead by example instead of waiting for Washington to do the right thing.

One such example takes us to Ivar’s Salmon House, in Seattle, where the purported cost of higher wages—namely, fewer jobs—is being put to the test. This summer, Ivar’s took the unusual step of adopting Seattle’s new $15/hour wage a full two years early. In practical terms, this means the restaurant’s menu prices have risen by 21 percent, but here’s the important part: customers are no longer expected to tip their servers.

Instead, Ivar’s chooses to pay its staff a living wage; for some workers, the bump to $11 constitutes a 60 percent raise over their previous earnings. As you may or may not be aware, servers are exempt from the national minimum wage, which means their livelihood is effectively subsidized by the kindness of perfect strangers. And so we’re clear, America’s fixation on tipping makes us fairly unique in the modern world.

So how’s it working out? Has this been the job-killing death knell that those on the Political Right have long foretold? The short answer is no. The slightly longer answer is We don’t have a lot of data, but the signs so far are very encouraging. Ivar’s is experiencing soaring revenue, while their workers are seeing their annual pay rise by (in some cases) several thousands of dollars. And if you can believe it, some of their more enthusiastic and supportive customers are still leaving tips, even though it’s no longer expected of them.

And Ivar’s is hardly alone. The lightbulb is coming on for small business owners all across America, as it did for Zazie in San Francisco, and William Street Common in Philadelphia. By eliminating tipping and providing workers with decent wages and other benefits, both the local and national economies can reap significant benefits. And best of all, the individual businesses making these bold choices are experiencing growth and prosperity—a far cry from the economic Armageddon we’ve been promised by opponents of a living wage.

I’ll speak as plainly as I know how: this is the shape of things to come, and it’s going to mean an almost complete rewrite of a significant chapter of the Social Contract. It’s true that the intersection between business and government will always be tricky to navigate, but it gets a lot less complicated when we stop listening to politicians and answer instead to our consciences.

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  • Slamfu

    While I certainly agree with the overall case being made here, I would caution against the use of rose colored glasses regarding corporate responsibility in the past. Companies like the ones you’ve cited were by far the exception and not the rule. At no point was the public welfare being well handled by corporations being generous with their money. While a handful were mindful of their role in society, it took Unions and politicians who were backed by them to spear head the movements that made the laws that had to be made to turn us into a nation with decent wages, working conditions, and levels of pollution.

  • Lorie Emerson

    Was reading on CNBC that the average workers income is in the $40k range. Reading further over 68% of the population makes at or less than 28k (the median). So, basically the majority of workers don’t make $15 an hour now (assuming full time)- 600×52= 31,200. Unfortunately, our society has become so divided that people think along the lines of “why should they get 15 for flipping burgers when I only make 12 at this job I have had for 10 years?” Not realizing that raising the minimum does transfer up to higher wages/ benefits for those above. I would really like to see some studies that clearly line out median income over time vs the usually available stats of household or average.
    As to working two or three jobs, another 5hing that is ignored is that many corps make that virtually impossible by switching your schedule each week. I’ve seem Walmart schedules where it’s 3 hours this day, 6 hours the next, etc going from early morning to evening (they don’t usually 8nclude the graveyard in their switch arounds- but all other days and times seem to be up for grabs. If you say you are ‘unavailable’ for certain times, they just cut your schedule or don’t hire you to start with.

  • J. Jones

    There’s also more than a bit of worker responsibility involved in the minimum wage argument, too.

    • shannonlee

      I would really like to hear an expansion of this argument.

      • J. Jones

        Consider, for instance, the minimum wage worker that doesn’t make the effort to be other than a minimum wage worker.

        • shannonlee

          You mean someone that goes to work, does their job, and goes home or someone that doesnt do their job at all or someone that does just enough to not get fired?

          because for all of those people, an employer has to decide whether or not to keep those people on. Some employers need people like that and there are jobs out there for them. well, except those that wish to do nothing.

          as a society, we have to decide on the minimum QoL level we give to someone that does not want to work at all or wants (or has no choice for whatever reason) to be a minimum wage worker for life.

          A person that works a 20 hour week in a wealthy society like ours does deserve a certain QoL. The minimum wage is one way that we can ensure they can eat.

          I personally dont understand why a person would not want to continuously better themselves, but I also have not walked in those people shoes…had their life experiences.

          • J. Jones

            Working for minimum wage is a choice. Nonetheless, the number of those working at or below the minimum wage has been trending down since the early 80s. The quality of life one experiences is largely a personal decision.

          • JSpencer

            Sure it is… just as survival is a “choice” ;-). Quality of life is in part a “personal decision”, but just as often it’s about the cards you’ve been dealt. Upward mobility is a lot harder now than it was in the 20th century. A fair minimum wage would at least confer a bit of dignity and the opportunity of a step on the ladder.

          • J. Jones

            Quality of life is a choice. If you feel you’re lacking in dignity, then only you can give yourself that dignity. We have a fair minimum wage that is close to where it needs to be. As for “survival,” we have the government’s social safety nets for that.
            So am I to understand that you’re not “upwardly mobile?”

          • JSpencer

            At 63 I’m right where I want to be, no additional mobility necessary thanks. As for the minimum wage, what you call “fair”, I call disgraceful.

          • J. Jones

            So you’re making the minimum wage? Yes? No? And do you not understand that increasing the minimum wage doesn’t add a step to the ladder?

          • JSpencer

            I’m retired, no longer in the rat race. My concerns are for the millions of people who work the menial jobs that make life more convenient for the rest of us. I view the current minimum wage as exploitive. Most of those who argue against it (from what I’ve seen) have formulated their views without much firsthand experience or familiarity with the people who work those jobs.

          • J. Jones

            Heh… I started out working minimum wage in high school. I enjoyed the work and made enough to meet my needs as a live-at-home kid still in school. I also quickly learned that there wasn’t any way I could do what I wanted when I struck out on my own on a minimum wage income. I accordingly made the effort to pick up some marketable skills that at least offered the chance of employment in a non-dead-end minimum wage job (e.g., a true entry level job.) I made the conscious decision to *not* work for the minimum wage unless it was absolutely necessary for me to do so. The first thing one must do to make more than the minimum wage is to do whatever it takes to make more than the minimum wage. So when I see stories about people that started working in a fast food restaurant years ago and still don’t make more than the minimum wage then I’ve got to wonder what it is they haven’t “figured out.” And then I wonder why they should be paid the same as those that figured out how to make more than the minimum wage.
            So did you know that the number of people that make at or below the prevailing minimum wage has been trending down since the early 1980s? I cannot help but wonder why we would want to stop that downward trend by increasing the minimum wage so much that we’re actually causing workers that now make much more than the minimum wage to become minimum wage workers by decree?
            I’m also concerned that many of the current minimum wage workers I run into don’t really seem to do anything useful at work. I suppose one benefit of a large increase in the minimum wage would be that it would offer management an excuse to replace marginal and sub-marginal workers with workers actually worth the money.

          • JSpencer

            Yours are common sentiments based on old information. I could tell the same story, but it’s one that doesn’t translate well to the present. A great many low wage workers are elderly people who have already climbed the ladder, only to fall again through no fault of their own. And many younger workers have few prospects, so they end up working two or three jobs to get by, which leaves them too exhausted to go looking for those proverbial bootstraps. Your belief that they “don’t really seem to do anything useful” doesn’t match my own at all. There are always a few slackers in the mix, just as there are among professionals, but most work hard and do things the rest of us benefit from, yet wouldn’t want to do ourselves. Some are able to pull themselves into a better position, others aren’t. Either way, the bottom line is this: People who work hard should be paid fairly. There’s nothing complicated about it.

          • J. Jones

            Say what? My views are based on my own experiences and observations and include current observations. We have the social safety net for those that have fallen regardless of reason. And those young workers should improve their prospects.
            As for those that don’t seem to do anything useful… I can see them daily at the local Walmart and the few fast food places I still might go to in “emergency.” People that work should be paid a fair wage that’s consistent with the job market.

          • JSpencer

            Of course you’re welcome to your views, but apparently you haven’t walked the walk in a long time. My views are based on three years of recent experience stocking on the night shift for a major retailer, not glimpses leading to casual opinion. It wasn’t the most enjoyable experience, but I can assure you, it was educational. Give it a try – but you’d better have stamina. I can almost promise you’d change your views; if not, you’d have something more credible to base them on.

          • J. Jones

            “Walk the walk?” I thought we were talking about minimum wage jobs. So now you’re holding the fact that I no longer have to work for minimum wage against me? That’s cold. So did you know that only 2% of all workers work for minimum wage? Are the 98% or so of all workers that make above the minimum wage not “walking the walk,” too?

          • JSpencer

            Yes, there was a time when things were different, more opportunities to climb out of bad situations, anyone willing to work hard could find a decent paying job, buy a house and raise a family, college tuition was even affordable – one could work their way through college, students didn’t graduate with ridiculous debt (not everyone has rich parents to foot their bills), even the minimum wage was higher than it is now. Ah yes, those were the days! Of course people who are determined and smart can still find a way to rise up, but it’s considerably more challenging these days when one is starting with nothing, and a lot more people are starting with nothing. As for your 2% figure (as Lorie mentioned) wages can be above minimum, fall into the 98%, and still be shamefully low. The minimum should at least be adjusted for inflation don’t you think? But set aside numbers for a moment and think about the people who put in their time and work hard doing necessary jobs. They deserve to be paid fair and reasonable wages, meaning wages that take into consideration the cost of living in the year 2015. Again, not complicated, just common sense.

          • J. Jones

            So I have 3 children that entered the workforce this century. One grew tired of college and entered the workforce in the early 2000s starting in a minimum wage job. It was hard on her for awhile, but she no longer makes the minimum wage as she put out the effort it takes to move past the minimum wage. She’s now paying for a house.
            My second child initially struggled with college, dropped out, and took a minimum wage job. It didn’t take long for her to realize a minimum wage job wasn’t enough, so she dropped back into college, took the loans, and got her BA in history. She finished after the crash so she worked minimum wage for a few months before she found a job that put her into the lower middle class. In recent months she has determined that she needs to go back to school part time to get her master’s so she can end up where she wants to be. And, yes, she will take some loans to cover tuition costs.
            My son pretty much always seemed to know what he wanted to do, so he took the loans and got the scholarships need to stay in school until he got his master’s. He actually sweated getting a job for almost a full month before he got a job that put him squarely in the middle-middle class.
            As far as having to take on “ridiculous debt” to attend college – none of my children did that. Indeed, the debt they took on was less than the price of one of the new cars one sees the kids driving these days. As you might guess, I don’t buy into the argument that getting ahead is very hard in the US.
            If minimum wage workers don’t want to work for the minimum wage then why do they do it? The people that actually do the “necessary” jobs do tend to make more than the minimum wage. I note that we are in a period of deflation, so your inflation argument falls a bit flat. 😉

          • JSpencer

            Congrats to your kids, many of us can recount similar experiences, but they aren’t nearly typical enough and we know anecdote isn’t analysis. Too bad your arguments aren’t as convincing as they are repetitive. If there was some indication they’d been informed by any of the discussions you’ve had on this topic here or in other forums, I’d be more willing to continue this, but in the absence of that I’m wasting time. Instead I’ll leave you with a couple links you have the option of learning something from – or ignoring. Btw, the minimum wage adjusted for inflation from sixties would be around eleven bucks an hour today, which goes to my use of the word disgraceful in describing the current state of the thing.

            http://www.pewresearch.org/fact-tank/2015/07/23/5-facts-about-the-minimum-wage/

            http://www.dol.gov/minwage/mythbuster.htm

          • J. Jones

            I see. You think I’m uniformed? Cool. 😉

          • JSpencer

            I don’t think your attitude has anything to do with access to information.

          • J. Jones

            Oh. So you don’t like my uninformed attitude? Cool. 😉

          • JSpencer

            Trust me, I don’t have anything invested in your attitude. 😉

          • SteveK

            My concerns are for the millions of people who work the menial jobs that make life more convenient for the rest of us. I view the current minimum wage as exploitive.

            Well said JSpencer… Thanks.

            I often wonder what it would take for the ‘Me… Me… Me’ crowd to actually give a damn about anyone but themself.

            I’m embarrassed and shamed by the selfish attitudes of the J.Jones of the world but I’ll say no more other than I’m thankful that aging hasn’t turned me into an angry old man.

          • JSpencer

            Well Steve, seems to me that empathy is a pretty essential part of human existence. Some of us put a higher premium on it than others, just as some of us put a higher premium on facts and fairness. We live in interesting times…

          • J. Jones

            What’s selfish about my attitude?

          • dduck12

            Good question, perhaps the eye of the beholder.

          • J. Jones

            Or a default argument.

          • dduck12

            Would be nice without the personal insults though for all parties to the argument.

          • J. Jones

            That’s to be somewhat expected in political arguments. It doesn’t bother me, though I wonder why some aren’t able to communicate the insult direct to its intended target.

          • dduck12

            LOL, exactly.

          • SteveK

            What’s selfish about my attitude?

            Your ignorance and obvious lack of interest of what others stuck in low paying jobs have to endure.

            Most WalMart employees work for such meager wages that they qualify for Medicaid… While many who are against raising the minimum wage (let them pick themselves up by their bootstraps) are also against expanding Medicaid.

            I take from your comments that you fall into this category and therefore I consider you a very ‘self’ish person. You seem very comfortable and ‘right’ with your position… I feel the same with mine. c’est la vie.

          • J. Jones

            I see. So I seem to be selfish because I don’t agree with all your thoughts. Cool
            Let me address some of your points:
            1. Based on my own interactions with Walmart employees in recent years, a lot of them are lucky Walmart will hire them. That view has changed over time – Walmart employees generally used to be much more useful. Even so, it’s my understanding that Walmart pays more than the minimum wage. Yes?
            2. So one has a simple choice when in crisis – one can wait around for some external force to resolve the crisis or one can take a little initiative and work to improve one’s situation. In the case of the minimum wage, all the government can do is raise the minimum wage. Raising the minimum wage still leaves existing minimum wage workers and creates new minimum wage workers from the pool of those that already make more than the minimum wage. That doesn’t seem a desirable outcome.
            3. Speaking as a democrat, I’m fine with Medicaid being expanded. That, however, has nothing to do with the seeming inability of so many minimum workers not knowing how to make more than the minimum wage.
            3. I’m for helping people that need to get ahead learn how to get ahead. I’m not so much in favor at throwing money at that problem just to maintain the status quo or, worse, to expand the number of minimum wage workers.
            4. I’m comfortable with my opinions – they are informed by 60+ years of experience and by data that’s easily accessible to all. Is there any reason I shouldn’t be comfortable with my views? If so, can you mention and enlarge upon those reasons?

          • dduck12

            I respectfully ask this, it is not intended to be a gotcha.
            You sound like a DINO or a very moderate person or a Rep disguised as a Dem. Can you clarify?

          • J. Jones

            DINO? 😉
            I’m a centrist democrat . I see you have a need to classify people. It’s OK. My experience is that the further people get from the political center the greater their need to classify those that didn’t join them in the move.

          • dduck12

            No need, just curious, since some Reps have similar views on minimum wage, especially center moderates like me. I do classify you as a person who likes to be argumentative though. What move, BTW?

          • J. Jones

            I’m a political pragmatist. I normally vote for democrats but I’m also fine with joining those outside my party when we can find some common purpose. I have yet to choose who will get my vote if Sanders gets the democrats’ nomination… probably a third party candidate with little chance of changing the status quo. 😉

            I’m OK with a small increase in the federal minimum wage, but the current deflationary times do not offer a good environment in which to implement a large increase in the minimum wage. In particular, I think that a large increase in the minimum wage will too much strain those on fixed incomes who are unlikely to get a COLA in 2017 even with the inflationary pressures a large increase in the minimum would produce.
            If you’re a center moderate, then you probably haven’t made any extreme moves in your political moves. 😉 I enjoy fair exchange.

          • Lorie Emerson

            The $15 an hour is a labor push. The President proposed the 10.10 an hour (two years ago?). The minimum is always increased in steps. You pass an increase, it goes in to effect in stages usually starting a year out from when its put into law than several years before it reaches the proposed amount. The most reasonable idea is to get it to a certain level than do annual increases based on inflation or COLA.

          • J. Jones

            The President’s $10.10 is too high in the current economy, though I thought better of it when it was first proposed.
            As increasing the minimum wage is an inflationary process, it is folly to tie to inflation unless deflation can decrease the minimum wage. My view is there should be no automatic increases in the minimum wage.

          • Lorie Emerson

            MW is minorly inflationary in the meanwhile, housing has risen to a higher share if income. Wages have tayed largely stagnant while other costs have rig wages low

          • J. Jones

            A large jump in the minimum wage is more than just little inflationary. The minimum wage should never be used to as a de facto subsidy for the housing industry.

          • SteveK

            @ J.Jones – You’ve made your position very clear. It’s nice to know that your views are held by an ever shrinking minority.

            CBS News/New York Times Poll. May 28-31, 2015

            “As you may know, the federal minimum wage is currently $7.25 an hour. Do you favor or oppose raising the minimum wage to $10.10?”
            Favor – 71%
            Oppose – 26%

            Set minds are hard to change but fortunately there’s help on the horizon.

          • J. Jones

            The Tea People can tell you about polls.

          • Lorie Emerson

            The increases being discussed would never be a large jump. They would he phased in. Meanwhile we have inflation in all kinds of areas that effect workers ability to survive. Housing prices are taking an ever increasing percent of workers budgets. Labor costs are one small aspect of inflationary pressure/ cost of goods sold. When other prices are rising but wages are stagnant, you keep growth suppressed along with economic mobility.

          • J. Jones

            A doubling of the minimum wage in 4-5 years is a large jump. We are in a deflationary period, so “inflation” isn’t much of an argument. As for housing prices, one should move to where they can afford housing.

          • dduck12

            As a fly on the wall of history, I don’t make moves.

          • Jim_Satterfield

            We have government safety nets that are drastically underfunded and do not take care of anything approaching the number of people who need them. And even at that the political right in this country want to drastically cut them in favor of military spending and/or tax cuts for those who don’t really need them

            As far as “upwardly mobile” is concerned it’s only applicable to a minority of the population. Here’s a couple of articles on papers about it. One says that it hasn’t changed that much recently but also admits that some of the economic forces might just take longer to be noticeable. The second is a year newer than the other and uses a different methodology. The question left by both of them is this. Does economic mobility on the part of a minority justify leaving a much larger number of people unable to make a living even as they work a full time job.

            http://www.theatlantic.com/business/archive/2015/07/america-social-mobility-parents-income/399311/

            http://www.economist.com/news/united-states/21595437-america-no-less-socially-mobile-it-was-generation-ago-mobility-measured

          • SteveK

            Good links Jim… Thanks.
            It would be nice if J. Jones would take time to read them and reply to what they say regarding mobility.

            Picking yourself up by your bootstraps when you don’t own a pair of boots is as hard today as it was 100 years ago.

          • J. Jones

            What makes you think I didn’t read the articles for which Jim provided the links?

          • SteveK

            What makes you think I didn’t read the articles for which Jim provided the links?

            Because both articles pretty well disprove your talking points yet you still seem to think you know more than those who have researched the problem.

          • J. Jones

            No, both articles don’t disprove my points, but I’m willing to listen to your explanation of both articles do disprove my points.

          • J. Jones

            When last I looked, SNAP enrollment was up to somewhere about 45.5 million people. I’m curious – how many people do you imagine need government welfare? Nonetheless, I’m a democrat that supports our welfare system expenditures. I don’t mind that welfare is available to minimum wage workers. Indeed, my feeling is that if welfare support wasn’t available to minimum wage workers then many of those current minimum workers would not have a job at all. As a general aside – I’ve never taken any sort of welfare, even when I was eligible for it.
            With regard to mobility – there’s not much the government can do to change the number of upwardly mobile except, maybe, providing educational resources to those that need help learning how to be upwardly mobile. Adjusting the floor wage doesn’t really affect one’s “mobility.” Welfare, in my view, also works against upward mobility.
            I make more than my parents. I do so because that was their expectation and, of course, they did what they could to insure it was so. In talking to my grandparents, I knew they expected their children to make more than they did. I expect the same for my children. The jury’s still out on my kids, but they’re off to a decent start. In particular, my daughter seems to be doing the same with her own children. I pretty certain my other kids will continue the tradition when they have children of their own.
            I rather suspect your question is better framed as “Does the minority without the skills needed to make some make some arbitrary living wage justify their taking of the difference between the income (including government supports,) and that arbitrary living wage from the people able to make or better that said living wage. Probably not.

          • Jim_Satterfield

            Actually taking the money from other people is not what I’m worried about. I’m worried about people who insist on sticking to old paradigms even when they are failing us miserably.

            You ask how many people I imagine need help from the government though you use the phrase that is a pejorative in the minds of many Americans, welfare. Why is that? In fact that’s very much the wrong question. The proper question is why do that many people need it. In fact study after study shows that many people who are eligible for these programs aren’t enrolled for them. The simple truth is that the American model of capitalism is failing many millions of its citizens. It has inherent structural weaknesses for the kind of economic environment we currently exist in. It makes assumptions that just aren’t true. But I have yet to see a person with your viewpoint acknowledge any of these problems.

            Another thing I notice about your posts is that you never answered the seemingly valid criticisms of your viewpoints. shannonlee is right about it taking money to move in today’s world. If you’re flat broke with no job how do you come up with the money to move, the money for first and last month’s rent for an apartment and the other expenses necessary to relocate?

          • J. Jones

            I asked because you led with

            “We have government safety nets that are drastically underfunded and do not take care of anything approaching the number of people who need them.”

            My question seems a fair one and if it’s pejorative, I note that you raised the issue of number, not I. Still, I’m sorry that you feel the question was improper – I now suspect I may have fell into a trap you set. 😉

            All the government can do is make the programs available and periodically remind people they should ask for the help if they think they might need it. I know that I didn’t ask for government help when my family was eligible for it – in my case, my pride got in the way. I suspect that is true with a number of us that don’t easily accept what we considered “charity.”

            Our capitalistic system “works” for those that participate in it. Very many more participate in it than those that don’t. Bumping the minimum wage doesn’t really change participation.

            No, I answered the question about moving. Nonetheless, I will enlarge and mention several points about moving to greener pastures. Firstly, “if you’re flat broke with no job,” then how do you afford to live where you currently are? One doesn’t need first and last month’s rent to find a place to sleep. And how is one paying for lodging in their current situation? Have you not heard of people living out of their car… or “at the Y?”
            Look, I understand that the idea of moving from a known bad situation can be scary, but doing so is more useful then continuing to wallow in a situation you’ve already determined is “bad.” Americans, even now,have the ability to move toward opportunity and often do.
            I choose to ignore your personal digs.

          • shannonlee

            It is a lot harder to get out of the ghetto than one would think.

          • J. Jones

            One can’t just walk out, then? If there’s no opportunity where one is trying to live and one needs opportunity to live a better life, then one should move toward opportunity. Moving toward opportunity is something Americans have been doing for generation upon generation.

          • shannonlee

            you need the money to move… ever been that poor? So poor that the only place you can afford to live is the ghetto? no money for a deposit somewhere else… life is hard at the bottom

          • J. Jones

            No. You don’t need any more money to move toward opportunity than you do to live in a bad situation. Again, generation upon generation of Americans have shown that.

          • shannonlee

            I would argue that the past … and the “American Dream” no longer exist in America… at least statistically it is far far easier in the socialist EU to improve your economic status.

          • J. Jones

            I don’t buy that argument as my own family’s experience doesn’t support it. But it sounds as though you’ve figured out the opportunity to which you might want to move.

          • Slamfu

            Here’s something I think your take on it doesn’t take into account. The fact that SOMEONE is going to be doing those jobs. Yes some people will rise above and climb the economic ladder, but there will always be dishwashers, toilet scrubbers, basic unskilled labor positions and minimum wage laws allow those people to live like humans and not animals.

            Put it this way, say this country was populated by 300 million genetic copies of you. All equally smart and with drive. Some of you will be CEO’s, but most of your clones will be at a lower level. And a lot of your clones will be digging ditches and cleaning toilets. That is just how it works. So given that no matter what there will always be people at that level, it seems any system designed to make life more equitable would take that unavoidable truth into account. That is what this law is about. Drive and intelligence it turns out are not the sole determining factors in what level of success you achieve, in fact in many studies they appear to be minor factors compared to many circumstances out of our control.

          • J. Jones

            I think what you’re missing is that no one has to be doing a minimum wage job. It’s a personal decision. If one doesn’t think the compensation earned is too low, then one simply should endeavor to be something else other than a dishwasher. No one makes anyone become a dishwasher. BTW, the mean annual wage of a dishwasher in our country is $19,540… that’s quite a bit above the poverty threshold.

            This country is populated with all sorts. Be that as it may, only 3.9% of hourly workers make at or below the prevailing minimum wage. Even more, only 2% of all employees in our country make at or below the prevailing minimum wage. That tells me that drive and ability still counts for much in the total success one receives. Don’t put too much faith in your “many studies” as they seem somewhat out of touch with reality.

          • Jim_Satterfield

            I’ve tried to point out the problem with the arguments from the J. Jones of the world with the same thought experiment before. Somehow they never, ever address the point. Just look at the org chart of any typical business. There are far more people on the bottom. every step up has fewer and fewer positions. There used to be more of the jobs in the middle. But those were deemed to be “fat” and removed.

          • shannonlee

            I live in Germany soooo…

          • J. Jones

            Soooo… you’ve got it made, eh?

          • shannonlee

            well, I’m a former welfare kid who has been extremely fortunate… of course it helps being white

          • J. Jones

            That sort of thing counts in Germany?

          • shannonlee

            it counts everywhere… particularly in asia

          • Lorie Emerson

            Apparently you didn’t red my post above. 67% of workers make 28k or below. That men’s that the majority don’t make 15 an hour now. My dad with a high school diploma was making 20 an hour w/ benefits in the early 70’s as a pressman (after 9 years on the job). Check around and see how many peie are making that same money now. If you are making 10 cents an hour over min wage, its not included in the stat but honestly has no bearing on your quality of life.

          • J. Jones

            No, I don’t recall you addressing another post to me, but if you did and I missed it, then please accept my apologies. I didn’t see your post when I “looked above.”

            The median pay for press workers in 2012 was $16.40/hr. Between 2012-2022, it is expected that the number of press worker jobs will decrease by 14,500 jobs. Raising the minimum wage will do nothing to improve that situation. Encouraging young worker to set their sights on better jobs might help though.
            The casual observer notes that we aren’t talking about raising the minimum wage by 10 cents/hour – we’re taking about doubling the minimum wage in many cases. It’s not a small thing.
            If one is not happy with one’s “quality of life” then one should make some effort to improve one’s quality of life. Raising the minimum wage a large amount doesn’t help in the long run, you know, unless you figure out a way to hold back those that strive to make more than the minimum wage. Good luck with that.

          • Lorie Emerson

            You realize that the min wage now would need to be much higher to be equivalent to what it was in the 70s and that the better jobs don’t exist in much of the country? My parents did well because they worked in union jobs. My mother was one of the first three women to be hired by an oil refinery in the US. My father was actually pushed into early retirement. The unions have lost their power along with the manufacturing base. The majority of workers don’t make 15. I. College now they tell you that we are becoming a service economy. A service economy furthers the divide. Then, even in a service economy, every service job that can be outsourced is. In AZ, they have outsourced government call center jobs to India. The same goes for student loans. Have a question? Navient directs your call to India. To get a “better job” you have to attend college, the costs for which have risen astronomically, while supporting yourself in a job maybe paying $8 an hour (wow, not min wage!). Meanwhile rent is higher as a percentage of income than ever before. When you do graduate, you find that the market is flooded with other graduated so you still keep that MiB wage job and get a forbearance on your student loans (where they are still accumulating interest).
            Our economy is becoming more and more directed toward accumulating wealth on the high end and people stuck on the low end. Its unsuccessful long term and can be seen the world over when flavor and wages are not protected.

          • J. Jones

            Don’t you expect that everyone’s wages would have to be higher to provide the same purchasing power those wages provided in 1970? Yes? No?
            I expect your parents did well because they made the effort to do so, don’t you think?
            It sounds as if AZ voters need to elect someone that favors giving government work. I don’t, however, recall that my children’s college loans required them to talk to call centers in India… if that was the case then it didn’t seem to make a difference. Indeed, it seemed that the bulk of communications concerning their school loans is accomplished via the post office and email.
            So two of my children graduated college after the end of the recession of 2007. Neither had any serious problem obtaining a job… even the one with a degree in history. My view is that if someone with a degree can’t get better than a minimum wage job then he’s doing something wrong or not doing enough.
            If you can’t afford the rent where you live then move. That’s what Americans do.

          • Lorie Emerson

            How old are your children? With a degree in history, I am assuming a government job….
            My parents did well because their jobs were unionized and paid a living wage. I’m not sure, again, what is so hard to understand about that. You can check wage scales, and you can check union membership over time, and easily see the correlations between the drop.
            As to the outsourcing, AZ is also a state where the politicians get the majority of their funding from these same companies along with the privatized prison industry and is ruled by Republicans. Complaining about people who won’t get a job, then sending state jobs overseas. That’s what happens when you privatize government and give the contracts to multinationals- at the same time, you actually shrink your tax base. Leading to more budget cuts… and so on.
            I am actually currently in Broward County, Florida- but, I, luckily, could afford to move when I needed to.

          • J. Jones

            My youngest is 30. He is a research scientist.
            So you judge your parents incapable without the union? Or are you just trying to point out the union membership was helpful? My Grandfather was a union member, but he held the job he held based on his capabilities.
            I’m against the privatizing of government functions. I vote accordingly. I note, however, most of the jobs lost in my part of the country weren’t lost due to government outsourcing. Most were lost due to competition.

          • Lorie Emerson
          • J. Jones

            And?

          • JSpencer

            Lorie, you can lead a horse to water, but you can’t make it drink. (Yes, I know all the old sayings. 😉

          • J. Jones

            Your arrogance is beginning to show. If you want to provide a link with no indication as to what you think the link provides then the question “And?” is quite appropriate.

          • JSpencer

            Not arrogance, just realism. You seem to be ignoring the many opportunities provided here to help clear up your confusion. Of course it’s your right to cling to pet beliefs, but most people here are going to find greener pastures when arguments become disingenuous. Sorry bout that.

          • J. Jones

            No, arrogance. So I notice you’re still here.

          • J. Jones

            So since you didn’t tell me why you offered at link to https://www.ssa.gov/oact/cola/central.html , I will tell you what I got from it:

            1. It is part of the SSA’s attempt to explain what all goes in to their cola calculations.
            2. The page is mute with regard to the nominal subject which we are discussing.
            3. Whether one chooses look at the median or the mean net compensation, both represent incomes that I would judge to be comfortably above the net income offered by a minimum wage job. It’s also worth noticing that net compensation rather than gross compensation is being presented so the total compensation being offered employees is even greater.
            4. Other than noting the median net compensations, the chart offers nothing that indicates the distribution of wages above or below the median.
            So what was it that you thought I should get from the charts? Anything that pertains to the minimum wage?

          • Lorie Emerson

            it shows the growing gap between ‘average wage’ and ‘median wage’. I’m not sure how you interpret wage data as having to do with COLA. The net income from a min wage job is 15,080. At $15 an hour you are at $30k- over what the median income is now. I’m not sure what is so difficult to understand about that. If the average wage and the median wage spread is increasing, that means you actually have an increase in income disparity. Increases of income disparity are highly associated with a decrease in economic mobility. High levels of income inequality are also tied to corruption in government and are one of the hallmarks of ‘third world’ countries (along with failure to adequately supply healthcare and fund infrastructure).

          • J. Jones

            Apparently you didn’t notice where on the SSA servers the charts you offered reside? At any rate they don’t speak to the minimum wage in the least.
            No, the gross income from working at 52 weeks of 40 hours/week with no overtime is $15,080 in gross wages – the net or take home pay is less. It’s also worth noting that a full time job can offer as little as 35 hours/week.
            In the post to which you are replying, I noted that there both the mean and medians net compensations show in the charts are comfortably above the net compensations possible with a minimum wage job. I don’t have a problem with that. The chart calculates the ratio between the two measures of net compensation and not the gap between them. When I consider the economy we’ve been experiencing since the recession of 2007, I don’t find anything unexpected in the ratios and certainly not anything alarming.
            I don’t support making the median wage the minimum wage… as if such a thing were possible.

  • Rcoutme

    The minimum wage in this country needs to be $0 per hour.

    Caveat: we need to alter the Constitution so that all willing and able people (within a certain age bracket it you like, say 16-69?) are guaranteed that they can get a job with the Federal Gov’t. The “extra” jobs would be administered by the local communities (with appropriate oversight) and could consist of nearly anything that needs doing. For instance: meals on wheels; cleaning the streets, parks, forests, etc; practicing and performing arts for the public (plays, concerts, etc.) that would be either free or only nominal entry cost (similar to H.S. sports and plays); helping at local hospitals; helping at local schools (admin, cleaning, maintenance). The list goes on and on.

    Caveat: the “guaranteed” jobs need to be paid a living wage and benefits.

    Likely consequence: nobody would work for less than the “guaranteed jobs” [GJ] amount, since they would only have to be willing to take the gov’t job instead. Businesses that want to hire people would have to entice them by paying MORE than the GJ amount, since workers would be taking a risk that the private job might end. R’s would get their “let the market decide” way, but people would still be able to afford to live.

  • dduck12

    I don’t know where I come down on this issue. Unlike all of you, I don’t even know if they had a minimum wage way back when I was young. I had part time jobs in JHS and HS and was paid cash. My first year of college, I got a real job and it paid 85 cents an hour at S. Klein’s on The Square, which although the tuition was low (thank you NYS) was not enough for my carousing life style. A stint in the Army opened electronics as a career (with some night school) so I guess I was above the minimum wage after that.
    All that said, ideally I would like to see fair pay for the type of work performed. If it is considered menial, then yes, some sort of floor would be nice, probably indexed for inflation. But I also am not sure that SOME businesses might not be effected in a negative way by too high a minimum wage. So flat out, I am on the fence, but who can resist the shrill calls of those calling for a decent wage and the end of employer exploitation, all coached in heavy rhetoric (what isn’t?).

  • adelinesdad

    There were certainly many companies in Henry Ford’s era that were paying workers low wages, and certainly many companies today that are paying a living wage with benefits. So the case studies here are cherry-picked to make the point that “corporate responsibility” used to be the norm, which I highly doubt is true based on my understanding of history. There’s a reason unions were created in the first place.

    Secondly, if paying a living wage is so good for business, why do we need a law to force them to do it? I think the reality is that paying a living wage makes sense for some businesses and business models, and not for others.

    Personally I support abolishing the minimum wage and replacing it with work programs and welfare to ensure the poor are provided for and helped into self-reliance. I don’t think the concept of a government-enforced living wage makes sense since that amount varies greatly depending on family circumstances. Why should a high school or college kid not be able to work unless he brings enough value that a company is willing to pay him enough to support a family he doesn’t have yet? Or living expenses she doesn’t pay yet? Regardless of your view on that, I don’t think the argument in the post is sound.

    • Lorie Emerson

      There is already an exception built into the min wage for minors, along with regulations about how many hours they can work (so that it doesn’t interfere with their education).

      • adelinesdad

        I’m referring mostly to those who are not minors but not yet raising a family, or who are not the main breadwinner of a family. The idea that they should not work unless they can find work that will pay them for expenses they don’t have doesn’t make sense to me.

  • Lorie Emerson

    One of the biggest issues for employers is what the competition is paying. That’s why there is a minimum. It’s meant to be a floor that levels competition, even amongst the states. You will find many metro areas that enforce above the minimum along with some states.
    The usual supply/ demand doesn’t apply to labor in the same ways as many other products- You can’t just reduce the supply unless you go to war or just let people die. You also need increased demand for products (more people) in order for the economy to grow. You also need those people to have money in order to keep the demand. As an individual business, it might not help you to pay workers more- but it will more than likely help you if others are paying their workers well (increased demand). The governments job is to look out for the big picture, so that we have a balance between the individual and the overall society.
    We often enforce floors for other economic essentials through various mechanisms keep supply intact. Sometimes these programs are exploited (farm subsidies as an example) and other times they are incredibly useful for creating an economy that feeds people (farm subsidies again).

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