Franchise group files to block [Seattle's] $15 minimum-wage phase-in

[coloradoatheist]

So doesn't then the argument become where along a curve or a straight line before the effects become seen?

That would be an argument along the lines of "The negative effects of a higher minimum wage can be seen a $X/hr <insert relevant data to backup claim of X here>. Since $X/hr is lower than the $15 Seattle minimum wage, negative effects will be seen as a result."

Unfortunately, that is not the argument you made, and the one you did make was rather ridiculous, but not unexpected.

Not necessarily. The argument is over how the curve or straight line is and the effect of job loss on an increase in minimum wage.

 

[coloradoatheist]

So doesn't then the argument become where along a curve or a straight line before the effects become seen?

That would be an argument along the lines of "The negative effects of a higher minimum wage can be seen a $X/hr <insert relevant data to backup claim of X here>. Since $X/hr is lower than the $15 Seattle minimum wage, negative effects will be seen as a result."

Unfortunately, that is not the argument you made, and the one you did make was rather ridiculous, but not unexpected.

and the opposite argument gets made that an increase in minimum wage has no affects and can be positive.

 

[KeepTalking]

That would be an argument along the lines of "The negative effects of a higher minimum wage can be seen a $X/hr <insert relevant data to backup claim of X here>. Since $X/hr is lower than the $15 Seattle minimum wage, negative effects will be seen as a result."

Unfortunately, that is not the argument you made, and the one you did make was rather ridiculous, but not unexpected.

and the opposite argument gets made that an increase in minimum wage has no affects and can be positive.

And that argument is generally backed with data from where the MW was raised to a similar amount (i.e. Australia) without any negative effects, and with positive effects.

 

[Tom Sawyer]

But things being backed by data is only relevant in situations where you agree with what the data shows. When that's not the case, whatever the data might show is irrelevant for reasons.

 

[Emily Lake]

Typically an increase in wages comes out of profits if a single business does it in a competitive market. If you believe in supply and demand setting prices this is pretty obvious, you have done nothing to effect either supply or demand. But even if you take the more reasonable approach that the business is setting their prices to maximize their profits it also stands to reason that increased wages come out of profits since you have already maximized your profits, increased wages have to cut profits.

But that is not what we are talking about here, a single business increasing wages. We are talking about all of the competitors having to increase wages.

Actually, in this case, it's more akin to the former than the latter. In the short term, only large businesses are required to increase their wage to $15 per hour. Small businesses have up to 7 years longer to scale up to that rate from the current $10 (I believe). That's a fairly substantial discrepancy in minimum wage between small and large businesses.

In this particular case, the position of the franchise association is that many of them are more like small businesses than like large businesses. They believe that it is detrimental to their businesses to hit them with this increase in wages when their similar sized competitors do not face the same increase in operation costs. It places them at a government-sponsored competitive disadvantage. Now, it might be all well and good to say that McDonald's should be paying the $15 just like the other big companies... but not all franchises are McDonald's.

To be honest, I'm not entirely certain why they aren't scaling in the wage increase over a specified time line for all businesses, rather than giving some small businesses preferential treatment.

 

[ksen]

It's because they hate America.

Plus socialism.

 

[Jimmy Higgins]

Typically an increase in wages comes out of profits if a single business does it in a competitive market. If you believe in supply and demand setting prices this is pretty obvious, you have done nothing to effect either supply or demand. But even if you take the more reasonable approach that the business is setting their prices to maximize their profits it also stands to reason that increased wages come out of profits since you have already maximized your profits, increased wages have to cut profits.

But that is not what we are talking about here, a single business increasing wages. We are talking about all of the competitors having to increase wages.

Actually, in this case, it's more akin to the former than the latter. In the short term, only large businesses are required to increase their wage to $15 per hour. Small businesses have up to 7 years longer to scale up to that rate from the current $10 (I believe). That's a fairly substantial discrepancy in minimum wage between small and large businesses.

In this particular case, the position of the franchise association is that many of them are more like small businesses than like large businesses. They believe that it is detrimental to their businesses to hit them with this increase in wages when their similar sized competitors do not face the same increase in operation costs. It places them at a government-sponsored competitive disadvantage. Now, it might be all well and good to say that McDonald's should be paying the $15 just like the other big companies... but not all franchises are McDonald's.

To be honest, I'm not entirely certain why they aren't scaling in the wage increase over a specified time line for all businesses, rather than giving some small businesses preferential treatment.

Small businesses are like the Middle Class. All politicians need to vocally support it or be considered Pol Pot. And according to the propaganda, small businesses
employ about 145% of the nation, so they are crucial and important.

 

[Axulus]

Why the F is there an exception for a small business or small employer anyway? Are leftists fine with small businesses paying "unlivable wages" and having their employees be in poverty, or something?

This type of bullshit is a contributing factor to the much smaller GDP in Portugal, Spain, Italy and Greece. Stupid regulatory burdens that favor smaller firms and/or only apply to larger firms.

With the advent of modern communications and information technologies, arguably the return to “small family firms” has fallen. The return to “largish projects consummated over large distances” has gone up. For Europe, the big winners here are the Nordic countries, which have worked very effectively with information technology and which do not rely so much on family ties to get efficient, non-corrupt management. The losers are Italy and Greece and Portugal too; read this superb paper on how Portugal is cursed by being stuck with all these small firms, inefficiently small for legal and regulatory reasons. These countries seem to be locked out from some of the major sources of contemporary economic growth.

http://marginalrevolution.com/margi...ch-worse-these-days.html#sthash.z02gwzVB.dpuf

It's crap like this that just drives me nuts about the left (and the right, to an extent)

 

[Axulus]

I'm trying to understand how you are trying to apply it here. If people do think that increasing the minimum wage doesn't cause other problems, then why can't we raise the minimum wage to a million dollars an hour?

Nobody thinks the minimum wage can be arbitrarily high, just that it can be higher than it is now without necessarily causing problems.

How do you know that $15/hr is not past the point where it causes problems?

 

[Keith&Co.]

But things being backed by data is only relevant in situations where you agree with what the data shows. When that's not the case, whatever the data might show is irrelevant for reasons.

Reasons involving words.
And grammar.

 

[Nice Squirrel]

Nobody thinks the minimum wage can be arbitrarily high, just that it can be higher than it is now without necessarily causing problems.

How do you know that $15/hr is not past the point where it causes problems?

Probably why small businesses in places like Minneapolis do just fine paying $15/hr minimum.

 

[bleubird]

http://www.usnews.com/opinion/econo...mall-business-owners-back-a-minimum-wage-hike
Just hate when facts do not agree with my ideology.

 

[Axulus]

http://www.usnews.com/opinion/econo...mall-business-owners-back-a-minimum-wage-hike
Just hate when facts do not agree with my ideology.

Why did they use $10.10 for the survey? Most pundits on the left consider anything under $15, plus full health care and retirement benefits, to be an unlivable wage.

 

[Loren Pechtel]

and the opposite argument gets made that an increase in minimum wage has no affects and can be positive.

And that argument is generally backed with data from where the MW was raised to a similar amount (i.e. Australia) without any negative effects, and with positive effects.

Except it's "backed" by "data" that shows we can't see the change--but neither can we expect to see the change.

On the other hand, when you look for changes in those areas more sensitive to the effects (say, teen unemployment) you do see a relationship.

 

[bilby]

... If people do think that increasing the minimum wage doesn't cause other problems, then why can't we raise the minimum wage to a million dollars an hour?

This is the Economics version of the (in)famous Creationist 'gotcha': "If people descended from monkeys, how come there are still monkeys".

The act of asking the question simply defines the asker as completely out of his depth, and desperate for a complex issue to be as simple as he naively imagines it could (or should) be. Sadly, reality doesn't give a fuck how simple we want it to be; it is as complex as it is, and we have to understand it in complex terms, or not at all.

In short, even if you were right that increasing the minimum wage was a bad thing, asking this question would be one of the worst possible ways of trying to demonstrate this to others. If that's all you have, you've got nothing. If you have something else - ANYTHING else - then using it instead of this stupid question would be a smart move.

"I don't think that the guy in the fast lane of the freeway should be driving at thirty miles an hour; I think he should go a bit faster".
"Well if you think going faster is a good idea, why shouldn't he drive at two hundred miles an hour??"

Yeah. It's a terrific argument. In fact, I take back what I just said; please use it as often as possible to support your position.

 

[ksen]

http://www.usnews.com/opinion/econo...mall-business-owners-back-a-minimum-wage-hike
Just hate when facts do not agree with my ideology.

Why did they use $10.10 for the survey? Most pundits on the left consider anything under $15, plus full health care and retirement benefits, to be an unlivable wage.

Probably because that was the number being considered at the federal level.

 

[Jimmy Higgins]

Why the F is there an exception for a small business or small employer anyway? Are leftists fine with small businesses paying "unlivable wages" and having their employees be in poverty, or something?

This type of bullshit is a contributing factor to the much smaller GDP in Portugal, Spain, Italy and Greece. Stupid regulatory burdens that favor smaller firms and/or only apply to larger firms.

With the advent of modern communications and information technologies, arguably the return to “small family firms” has fallen. The return to “largish projects consummated over large distances” has gone up. For Europe, the big winners here are the Nordic countries, which have worked very effectively with information technology and which do not rely so much on family ties to get efficient, non-corrupt management. The losers are Italy and Greece and Portugal too; read this superb paper on how Portugal is cursed by being stuck with all these small firms, inefficiently small for legal and regulatory reasons. These countries seem to be locked out from some of the major sources of contemporary economic growth.

http://marginalrevolution.com/margi...ch-worse-these-days.html#sthash.z02gwzVB.dpuf

It's crap like this that just drives me nuts about the left (and the right, to an extent)

You are absolutely nuts if you don't think the small business love fest isn't a bipartisan thing. I remember the Family Medical Leave Act... the company I work for has oodles of employees, but it is based on the number of workers within a certain radius. So we aren't qualified for the FMLA. Despite how interactive offices are these days.

 

[Nice Squirrel]

Why did they use $10.10 for the survey? Most pundits on the left consider anything under $15, plus full health care and retirement benefits, to be an unlivable wage.

Probably because that was the number being considered at the federal level.

And it is a negotiating tactic. Ask for $15 and get $12. Out state fast food workers get $10/hr here.

 

[bleubird]

http://www.usnews.com/opinion/econo...mall-business-owners-back-a-minimum-wage-hike
Just hate when facts do not agree with my ideology.

Why did they use $10.10 for the survey? Most pundits on the left consider anything under $15, plus full health care and retirement benefits, to be an unlivable wage.

Please back that up.

 

[SimpleDon]

If you "get" my point about the differences between capital investment and the use of capital services in the modern industrial and even post industrial economies it puts you ahead of about 90% of the economists working today.

This is one of the points involved in what is called the Cambridge Capital Controversy of the 1950's and 1960's. It was between the economists of Cambridge University in the UK and of the economists of MIT in Cambridge, Massachusetts, hence the term Cambridge Controversy. The economists of MIT finally conceded that the economists of Cambridge University were right and they spent the next sixty years ignoring the concession that the UK's economists were right. It is one of the major reasons that neoclassical economics is so nearly useless today, especially for predicting the course of the economy.

I am assuming that you can google the terms to see more about this.

I'm trying to understand how you are trying to apply it here. If people do think that increasing the minimum wage doesn't cause other problems, then why can't we raise the minimum wage to a million dollars an hour?

The main argument against raising the minimum wage is that it will cause unemployment. This argument is not based on examples from past history, none exist showing widespread unemployment from raising the minimum wage or any other wage for that matter.

The argument that raising wages will cause unemployment is based on theory alone. That a rise in wages will under certain conditions will cause the production costs to rise above the wages of the lowest paid workers and they will be laid off. The key phrase is "under certain conditions." Those conditions are that the economy is in equilibrium, it is at full employment and at full utilization of production capabilities. This is almost never the case, it only has occurred in all out wartime, like World War II.

Short form, the miracle of the self-regulating free market requires that the prices of goods or services be driven down to the marginal costs of production of the last product produced. Employment is based on the costs of the wages of the employee who produces the last product produced being lower than this price, if the wages are higher then he will be laid off. Ridiculous you say. I couldn't agree more, it is. But it is the only way that there can be a self-regulating free market.

However, it does allow economists to say that raising wages could result in unemployment "under certain conditions." They don't tell you that the certain conditions hardly every apply and that it is based on a completely bullsh*t theory. After a short time they drop the qualifier "under certain conditions." It is dishonest.

The reference to the capital controversy was perhaps a step too far. But it is a similar dishonesty of neoclassical economics, the free market economics. Neoclassical economists are desperate to establish that capital investment earns income. That capital investment is a scarce resource that is limited and that must be rewarded for its part in production. That capital in the form say of machinery used in production is the same to industrial production as land is to farming. But it is not the same. One example of why is the difference between the capital machine as a single resource to produce and that the increased frequency of the use of the machine can produce more. For example by running a night shift to operate the machine 16 hours a day instead of only eight hours a day, you have doubled the capacity of the machine and halved the "wage," profits, due to it in the terms of per unit produced. Industrial capital is not the same as land is to farming where you can't run a night shift to grow something else at night.

The theory that an increase in wages can cause unemployment is based on this idea of a fixed capital machine that we can't get anymore production out of. The whole theory is based on the work of the classical economists of the early 19th century. And they were concerned with agriculture, the industrial revolution hadn't happened yet.

Okay, I am sure that that is too much information. But to your challenge of why not raise the minimum wage to a million dollars?

Once again, I caution you that we are not just talking about the minimum wage. The neoclassical economic theory that increases in wages will cause unemployment "under certain conditions" applies to any increase in wages, including the CEOs. It is a part of the dishonesty that it is only trotted out when we talk about raising the minimum wage.

So your question should be why don't we raise all wages to a million dollars? Actually we could, if it was done slowly over time. But there is no reason to do it. Everything would have to adjust, prices, land values, profits, you would create massive amounts of inflation for no net gain. Finally we must establish a balance that keeps the economy growing at a reasonable rate and that keeps employment high. In case you hadn't noticed we are not doing that now.

It is because we have lowered effective demand. We have an imbalance between the total supply in the economy and the total demand in the economy. There is more than enough financial capital, that is money, sitting on the side lines to boost the economy back to the potential GDP but they won't invest until there is an increase in demand. (There has been a small increase in business investment recently. I hope that it continues.) We need to raise demand and to do that we need to raise wages and to lower profits. The whole secret is balance.

Since we are asking ridiculous questions I have some for you. Why don't we drive all of the wages down towards zero? If increasing wages causes unemployment wouldn't we eliminate it by pushing down everyone's wages? Wouldn't you gladly see your own wages lowered to keep everyone employed?

Are there any downsides to lowering everyone's wages?