Ontario raising minimum wage to $15

[Jolly_Penguin]

Eddie,

I don't think anyone here is arguing against everyone having enough income to flourish. Well, unless you are opposed to increases in social programs (and UBI!) along with this minimum wage hike you are advocating for.

This is what I a was writing about in the OP. Our premier has given no thought or policy on what she is going to do to help those workers and unemployed adversely effected by the rapid increase in minimum wage.

A big question that then emerged from this thread is who is responsible to make sure that workers have enough income to survive and flourish. The unemployed aside, you appear to be arguing that employers should be mostly responsible for this in regard to their employees. And you seem to find it inherently unfair when they don't pay enough for this, regardless of their profit margins or what they consider the workers' labour to be worth. Am I reading this right?

If so, I find this to be an avoidance of responsibility on your part, for you as a tax payer and for all others in society, and especially the rich who do not hire employees.

I see the same in regard to health care coverage in the US, where you haven't moved to a universal single payer system like we have here, where we all collectively pay in, and instead hold employers responsible for the health care of employees (while the unemployed are left hanging). Hazard pay and damages from doing a job is one thing, but why should employer's be especially responsible for the health care of workers otherwise?

And again, this reminds me of the family courts holding men, who show "an intention to aid and support" because they helped out a single mother, responsible to fully and continuously pay child support, instead of putting that cost to all of society.

These are all examples forcing the all responsibility onto one so the rest can avoid paying their fair share.

Bomb's analogy to the grocery store.... Is that where you seek to take us next?

 

[DBT]

In other words, by increasing unemployment. Same thing unions do.

Not so, incomes have been stagnating for years, thus decreasing incomes through erosion of purchasing power, yet the unemployment rate was not higher before incomes eroded away. During the same period, executive salaries have been rising by leaps and bounds and the rich have been getting richer. The only losers have been those at the lower end, which has also been encroaching into the middle class. The aim should be address this growing disparity between incomes without raising unemployment levels in the process. It has been done in the past, so it is doable however much some employers love to wail and gnash their teeth over pay increases for employees but not management.

 

[barbos]

I read an article about French economy few months ago. Apparently French have extremely strong labor protection laws and not completely unexpected result of that is high unemployment. It's very hard to fire anyone in France so businesses are afraid of hiring low skilled workers, instead they try to rely on higher skilled engineers and high level automation. In the end they have one of the highest productivity and a lot of unemployed with stagnating economy, because lots of people permanently unemployed.

In Russia which is now a beacon of capitalism there is virtually no labor protection, unemployment is officially lower but productivity sucks because businesses can simply lower wages as needed to be profitable. Economy stagnates as well, albeit at lower level than in France.

 

[DBT]

An unreasonable difficulty in dismissing unproductive workers is not the same as paying productive workers a decent wage.

 

[barbos]

An unreasonable difficulty in dismissing unproductive workers is not the same as paying productive workers a decent wage.

Well, French have decent wages too, and short hours and huge vacations.
I just think if unskilled want high wages then they should be prepared to be replaced by skilled workers or even robots.

 

[Canard DuJour]

There's no rational reason to think subsidizing a low wage worker means we're subsidizing his employer. It's like claiming a jobless guy's welfare check is a subsidy to the grocery store and demanding that any grocer who sells him some food be required to supply him all the rest of the food he needs at her own expense.

That's a great analogy.

Nah. The welfare cheque isn't reducing the grocer's operating costs, and the grocer isn't claiming he'd go out of business without that reduction in operating costs. It's barely analogous.

Should the employer hire the worker to do a job that will increase the employer's revenue by $20000, pay him $30000, and take a $10000 loss on the trade? Or should she not hire the guy, and get $20000 less revenue and $30000 less expense? Are both of those options more moral than paying him $20000 for the $20000 revenue increase he'll deliver, or only one or the other?

She should hire a worker who will increase her revenue by as much she needs to at least break even. If she can't find one, she should go out of business in a market economy because she doesn't have a viable business plan. Bugger all to do with morality (as already noted).

 

[Bomb#20]

[youtube]https://www.youtube.com/watch?v=X7pnRgBan7c[/youtube]

 

[Crazy Eddie]

Eddie,

I don't think anyone here is arguing against everyone having enough income to flourish. Well, unless you are opposed to increases in social programs (and UBI!) along with this minimum wage hike you are advocating for.

The mathematics doesn't work out under current conditions, IMO. A universal basic income for all Americans would come at a cost high enough that you would have to strip the wealth from the entire investor class and smear it out over a broad, thin layer of abject poverty across the entire country. Between that and a minimum wage increase, the latter is a far less disruptive option.

Social programs like free education and universal healthcare are good ideas in principle. Implementation for either would be difficult, but I see healthcare as a basic human right and I also see education as a public resource that should be available to anyone who needs it without obstacles.

A big question that then emerged from this thread is who is responsible to make sure that workers have enough income to survive and flourish. The unemployed aside, you appear to be arguing that employers should be mostly responsible for this in regard to their employees. And you seem to find it inherently unfair when they don't pay enough for this, regardless of their profit margins or what they consider the workers' labour to be worth. Am I reading this right?

Yes and no. I consider it to be "cheating" in the sense that some employers are paying their workers as low as they possibly can. In doing so, they are artificially suppressing wages across the entire labor market. This is bad for workers, which is bad for consumers, which is bad for sales, and then it comes full circle and winds up being bad for the economy in general.

IOW, there are some irresponsible choices being made by employers that cause bigger problems elsewhere. Again, the example of industrial pollution or hazardous products comes to mind, or the lending behavior that lead to the subprime mortage crisis or the Savings and Loan crisis. Hell, even the Great Depression is a highly dramatic example of this: those choices might not be bad for the person who makes them, but the aggregate sum of irresponsible choices leads to negative consequences that eventually impact everyone.

The difference between you and me is, I don't see the minimum wage -- or the need to have it keep up with inflation -- as a social program or an anti-poverty measure, even though it does have that effect. The minimum wage is one of the ways we protect our economy from reckless behavior that might cause problems for everyone. If you want to talk about the social imperative of social programs, as I keep saying, that is an entirely different avenue of discussion.

These are all examples forcing the all responsibility onto one so the rest can avoid paying their fair share.

Employers and businessmen aren't responsible for the problems of all of society, at least not just by virtue of being employers and businessmen. But they ARE responsible for the conduct of their own business, which means they have to conduct business in a responsible way.

This means they cannot lie to their customers, cannot avoid paying their taxes, cannot falsify their financial records to their investors, cannot give potential investors inside information to help with investment information. They cannot knowingly sell products that are dangerous and they cannot force their workers to endure hazardous conditions. They cannot deny a woman leave for pregnancy, nor can they fire her just for having a baby (technically, at least; in some states they find ways to do this even though it's illegal). As far as the minimum wage, this also means they cannot pay their employees too little money for them to be able to live on.

All of that is just corporate responsibility. If you run a business, there are rules in place that determine what you can and cannot do. severely under-paying workers is ALREADY one of those "can't do" regulations. Increasing the minimum wage is something that needs to happen, though, in order to keep up with inflation.

 

[Jolly_Penguin]

The mathematics doesn't work out under current conditions, IMO. A universal basic income for all Americans would come at a cost high enough that you would have to strip the wealth from the entire investor class and smear it out over a broad, thin layer of abject poverty across the entire country. Between that and a minimum wage increase, the latter is a far less disruptive option.

Minimum wage increase does nothing to help the unemployed (including those who become or remain unemployed due to the increase) or those otherwise most effected by the higher cost of living that can be caused by the wage hike where it is passed onto consumers in the form of higher prices. That makes me wonder if your primary concern is actually poverty.

As far as the minimum wage, this also means they cannot pay their employees too little money for them to be able to live on.

This our fundamental disagreement.

This makes the employer responsible for the cost of living of the employee (no matter what it is). I don't see why they should be

 

[laughing dog]

This our fundamental disagreement.

This makes the employer responsible for the cost of living of the employee (no matter what it is). I don't see why they should be

Your view would be more convincing if UBI were implemented. Until it is, your view is simply pie in the sky wishful thinking.

 

[Jolly_Penguin]

This our fundamental disagreement.

This makes the employer responsible for the cost of living of the employee (no matter what it is). I don't see why they should be

Your view would be more convincing if UBI were implemented. Until it is, your view is simply pie in the sky wishful thinking.

No, that doesn't change what I am saying at all. That just points to the employer as payer of last resort, ultimately responsible for 100% of the cost of living of the employee that isn't coming from somewhere else.

Why should that be the employer's responsibility? Why shouldn't it be society's?

 

[laughing dog]

Your view would be more convincing if UBI were implemented. Until it is, your view is simply pie in the sky wishful thinking.

No, that doesn't change what I am saying at all.

Of course it does not change the meaning of your position. No one said it did. It simply means your position has no real point in current practice. If and when UBI is adopted, then your position makes practical sense. Until that time, it is simply wishful thinking.

 

[Bomb#20]

That's a great analogy.

Nah. The welfare cheque isn't reducing the grocer's operating costs

I take it you mean to imply that the welfare check is reducing the employer's operating costs. What's your evidence for that hypothesis?

, and the grocer isn't claiming he'd go out of business without that reduction in operating costs. It's barely analogous.

I expect if there were a mass political movement trying to order grocers to supply poor people's food needs at grocers' expense, a typical grocer would start claiming he'd go out of business if that burden were assigned to him.

Should the employer hire the worker to do a job that will increase the employer's revenue by $20000, pay him $30000, and take a $10000 loss on the trade? Or should she not hire the guy, and get $20000 less revenue and $30000 less expense? Are both of those options more moral than paying him $20000 for the $20000 revenue increase he'll deliver, or only one or the other?

She should hire a worker who will increase her revenue by as much she needs to at least break even. If she can't find one, she should go out of business in a market economy because she doesn't have a viable business plan.

I.e., she should hire a different worker. I.e., you choose option two. I.e., the first worker should be stuck with a $30000 problem instead of a $10000 problem. I.e. you grabs his duds and his picks as well, and you hurls 'em down the pit of hell.

Bugger all to do with morality (as already noted).

She should X. If Y, she should Z. Bugger all to do with morality. What is it you mean by "morality", if not answers to "should" questions?

 

[Jolly_Penguin]

No, that doesn't change what I am saying at all.

Of course it does not change the meaning of your position. No one said it did. It simply means your position has no real point in current practice. If and when UBI is adopted, then your position makes practical sense. Until that time, it is simply wishful thinking.

Again, you are not making sense. My point was first to ask what measures are being and what measures should be put in place to offset the negative impacts of the minimum wage on the vulnerable. My only other point was to ask why employers should take ultimate responsibility for employees meeting their cost of living. You are not addressing either with your statement that UBI isn't likely to happen soon.

 

[Loren Pechtel]

We have been over this again and again.

The problem is that as technology becomes more pervasive in the workplace more skilled workers spend less of their time on low skill tasks. This increases the value difference between skilled and unskilled workers.

Wages reflect this. High skill workers do better in this climate, low skill workers do worse. However, the median is below the mean so it's moving farther away from the mean.

Cool story, bro...

Except a minute ago you said "The problem is people having children before they have built their careers up." That has nothing to do with the median income failing to keep up with inflation, LP. Not least of which because Americans are having children later and later in life while long term careers for most workers are actually paying them less and less whether they have children or not. It isn't child care that's causing the stagnant wages, and even if it is, it wasn't a factor BEFORE the 1960s and it shouldn't be one now unless we're doing something very wrong.

It's much harder to better yourself once you have children that you need to take care of.

Employers used to value brawn. Now they much more value brains and skills.

And yet even employees with brains and skills aren't earning a living wage in many cases. Strictly speaking, it's not even SKILLS that employers are coming to value, it's experience and access.

I'm including experience using those skills as part of skills. Book learning isn't enough, you need to actually do it a fair amount before you're good at it.

 

[Loren Pechtel]

Thank you for illustrating my point: if your business has been run so incompetently that a %2 loss in a single year is going to drive you into bankruptcy, it's because you are a shit businessman who deserves to fail.

Who said anything about a single year? The wages stay up, unless they raise prices to compensate the loss would be permanent. And if they raise prices to compensate you simply end up with 30% of inflation and back where you started.

Also, I dare say your numbers are shit. I do the books for MY company too; $565,000 annual payroll for $1.3 million in revenue. A 30% increase would be a jump in payroll to $734,000. Fixed cost would eat up a lot of the difference and we'd still have a 2 to 5% profit. Assuming, of course, that ANY of our employees were earning only 70% of the minimum wage when in fact all of them make singificantly more already and a wage hike wouldn't affect our payroll even a little bit for at least another two years.

This for a small business with only 21 employees.

Different businesses will have different numbers, you can't rebut the numbers from one business with the numbers from another. And you're saying that your current profit margin is over 15%. That's not usual in the business world.

And 21 employees, $565k payroll means an average income of $27k.

And they were in a better position to take such a price hike than most businesses.

If that's true, they would have survived just fine.

Even with numbers in front of you you persist in thinking you can take anything you want from business and they'll survive just fine.

 

[Loren Pechtel]

In other words, by increasing unemployment. Same thing unions do.

Not so, incomes have been stagnating for years, thus decreasing incomes through erosion of purchasing power, yet the unemployment rate was not higher before incomes eroded away. During the same period, executive salaries have been rising by leaps and bounds and the rich have been getting richer. The only losers have been those at the lower end, which has also been encroaching into the middle class. The aim should be address this growing disparity between incomes without raising unemployment levels in the process. It has been done in the past, so it is doable however much some employers love to wail and gnash their teeth over pay increases for employees but not management.

You're totally off target here, this isn't a rebuttal at all. You're not addressing the point.

 

[Crazy Eddie]

Minimum wage increase does nothing to help the unemployed

I don't recall ever suggesting that it DID.

or those otherwise most effected by the higher cost of living that can be caused by the wage hike where it is passed onto consumers in the form of higher prices.

As I've already pointed out more than once, MOST businesses would not be affected by a minimum wage increase since they are already paying their employees significantly higher than minimum. Those CLOSE to the old minimum or even new minimum might suddenly find it easier to request a pay raise or transfer to another employer at a higher rate, but that wouldn't be an immediate effect, and the increase in consumer buying power is likely to offset it.

That makes me wonder if your primary concern is actually poverty.

I do not recall ever suggesting that my primary concern is poverty. Lack of economic mobility and an anemic labor market is my primary concern, and increased poverty is a symptom of those two things, among other factors.

As far as the minimum wage, this also means they cannot pay their employees too little money for them to be able to live on.

This our fundamental disagreement.

What is there to disagree with? The minimum wage exists.

Perhaps you mean that you think the minimum wage SHOULD NOT exist? I just finished explaining to you that this would make things worse and not better. Nor is Universal basic income an ALTERNATIVE to the minimum wage, since it won't actually work in its absence.

It's as simple as acknowledging the fact that removing the minimum wage would have a very negative effect on the labor market whether Basic Income is implemented or not; since Basic Income has not been implemented, isn't going to be implemented, and even if it IS implemented won't be fully funded to levels high enough to make it work, "should" isn't worth a damn thing.

I don't see why they should be

For the same reason a business has to act responsibly in ANY OTHER aspect of its business. You're arguing against over a hundred years of well documented history if you're trying to claim that businesses shouldn't be compelled to act responsibly, because the historical record shows they can cause ALOT of damage if those rules aren't in place.

 

[Jolly_Penguin]

The problem, btw, is called "poverty."

I do not recall ever suggesting that my primary concern is poverty.

I must have misread you then. My primary concern here is poverty, and making sure that everyone has what they need (including money, food, shelter healthcare, etc), and not just those who can find jobs and keep jobs at the increased rate.

For the same reason a business has to act responsibly in ANY OTHER aspect of its business. You're arguing against over a hundred years of well documented history if you're trying to claim that businesses shouldn't be compelled to act responsibly, because the historical record shows they can cause ALOT of damage if those rules aren't in place.

But why are you equating the employer paying enough to meet the employee's cost of living with the employer acting responsibly? Why is this ultimately the employer's responsibility rather than all of society's? You are still arguing to absolve others from their share by painting the employer as being irresponsible if she doesn't take 100% of the burden.

 

[Crazy Eddie]

I.e., she should hire a different worker. I.e., you choose option two. I.e., the first worker should be stuck with a $30000 problem instead of a $10000 problem. I.e. you grabs his duds and his picks as well, and you hurls 'em down the pit of hell.

Unless you're working in outside sales or independent contracting, there are very few industries in America where the actions of a specific worker are directly associated with a specific amount of revenue. As far as I know, though, commissioned-based salespeople don't work for minimum wage anyway. It is difficult if not impossible to pin down a specific revenue trend to the actions of a specific worker. There are other means to measure performance and productivity, but you can't really monetize employees hour by hour in most cases.

What generally happens instead is, a business that suddenly has to pay its workers $20,000 more has to come up with a way to make $20,000 of additional revenue to cover the shortfall. If they've been padding their profit margins by suppressing wages, this is easy: they either raise their prices and take it off the consumers, or they accept a smaller profit margin, or they do some combination of both. Another more popular alternative is to fire their three least productive workers and then combine those workers' responsibilities onto the remaining one; this is closer to what YOU were suggesting, i.e. "the first worker is stuck with a $30,000 problem." I don't really see why anyone would object to that, since that's the equivalent of a promotion anyway and would probably be pretty good for his career. Meanwhile, the three fired workers are all stuck looking for new jobs, and the lowest offer they can make is $30,000, which means they ALSO end up with a promotion at whatever company ends up hiring them.

What is it you mean by "morality", if not answers to "should" questions?

"If I want X, I should Y."
"If I want A, I should B."

X is a business question, Y is a business solution.
A is a moral question, B is a moral solution.

The minimum wage isn't about morality, it's about the capacity of a huge number of irresponsible business practices to completely sink a country's economy.