Minimum wage: $15 NOW!; or 15... eventually

[Undertoad]

https://www.washingtonpost.com/news/...=.946a7b8a0328

https://fivethirtyeight.com/features...-gone-too-far/

[classicman]

The city is gradually increasing the hourly minimum to $15 over several years. Already, though, some employers have not been able to afford the increased minimums. They've cut their payrolls, putting off new hiring, reducing hours or letting their workers go, the study found.

[Happy Monkey]

Interesting; two studies came out with opposing results; one concentrated on restaurants, including fast food chains, and the other covered all sectors, but excluded multi-location businesses, like fast-food chains. One had excellent access to lots of data, but only in Washington State, while the other used more general data, but made comparisons across the country.

Neither study included multi-location businesses across all sectors, which I would expect to be a fairly significant block. On the one hand, it's a valid point if raising the minimum wage hurts mom & pop shops more than chains, but on the other hand, chains have been knocking out the mom & pop shops already, under historically low minimum wages. A study that purports to talk about the average impact to workers while omitting workers who work for businesses with widespread locations seems suspect. As does one that only includes restaurants, though that seems to be the standard, if these articles are correct.

[tw]

Well proven repeatedly in economics and history - if machines replace humans, then more human jobs are created, that economy is healthier, people's living standards increase, wealth of the common man increases, and it is all contrary to classic sound byte reasoning.

We also know that an economy is healthier and a Gini coefficient decreases when the minimum wage moves up to an affordable income level. Also known as a living wage.

A minimum wage that is too high may also have adverse affects. But anyone citing 'use of more machines' to lower peoples incomes and job opportunities is using wild speculation and junk science reasoning. History has repeatedly demonstrated otherwise.

[Undertoad]

Update, new study on this came by.

Seattle Times: A tale of two Seattle job markets for low-wage workers in new minimum-wage study

More-experienced workers in Seattle’s low-wage labor market saw their paychecks rise with the city’s minimum-wage increases and stayed in jobs longer, while less-experienced workers, on average, saw little or no change.

That’s the latest finding from a team of University of Washington researchers, whose first study on Seattle’s minimum wage increases in 2017 concluded paychecks for low-wage workers on average were shrinking slightly because they were working fewer hours even as the pay floor rose from $11 to $13 an hour in 2016. That finding provided ammunition to opponents of the wage increases.

Researchers followed more than 14,000 people employed in Seattle at a wage of $11 an hour or less at the beginning of 2015, before the wage increases. Looking at the same group about 18 months later, the researchers found that workers who started out working more hours — defined in the study as more-experienced workers — ended up earning on average $251 more per quarter. The less-experienced half of the group, which logged less than a third as many hours on the job each week at the beginning of the study period, averaged little or no change in income. That includes earnings anywhere in Washington, not just in Seattle.

So far, the bottom line sounds like this. At first, employers reacted to the increase by giving their employees fewer hours. Over time, employers found that if they were offering higher wages, they could now expect more out of their employees. The "good" employees still got fewer hours (if you the math), but they were paid more via the law, and so did better per quarter. The lower half continued to get even fewer hours, and as a result saw no improvement in take-home pay. And then there are the people not getting hired at all:

For low-wage workers with less experience — a high-school student looking for a summer job, say — the wage increases have led to fewer job opportunities, the researchers found.

All this is happening during an economic boom. If it was during a bust the picture would be much more bleak. But it's not the broader unemployment I thought it might be - in a record low time for unemployment in general. It's just stagnant income and fewer opportunities to get started.

Can't vote yourself prosperity.

[Clodfobble]

The less-experienced half of the group, which logged less than a third as many hours on the job each week at the beginning of the study period, averaged little or no change in income...

The "good" employees still got fewer hours (if you the math), but they were paid more via the law, and so did better per quarter.

So, I interpret these two things a little differently. First, someone working 10-15 hours a week ("less than a third" of the close-to-full-time workers) is not someone who is supporting a family. In my recent experience (via my stepdaughter's ongoing part-time efforts,) employers prefer the magic number of 30-34 hours per week--few enough that they don't have to provide health benefits, but just barely, because coordinating the schedules and paychecks of three people at 10 hours each instead of one at 30 is just more headache for the manager and requires more time wasted on training, etc. I posit that anyone working just 10 hours a week wants to be working that little, i.e. the job is intentionally supplemental. So relatively speaking, I'm the least concerned about their wages stagnating compared to others'.

Second, you could look at it as the good employees "got" fewer hours, but you could also say they "had to work less" while taking home a bigger paycheck. They may be using that time to go to school to get a better job--the effects of which won't be seen for several more years--or voluntarily spending more time with their kids because now they can afford to, or (not great, but still) able to apply the extra hours toward a second part-time job since their first employer won't give them the full 40 hours with benefits. Ideally everyone wants to work 40 hours, but if your employer is keeping you at a max of 35.5 anyway, then it seems better to work less for more money.

For low-wage workers with less experience — a high-school student looking for a summer job, say — the wage increases have led to fewer job opportunities, the researchers found.

This, I'll grant you, isn't good. But it is a continuation of a trend that has been going on for a long time now. To me, it goes hand-in-hand with the fact that older workers in manufacturing are also having a hard time finding jobs--we have to figure out what the shit jobs of the New Economy are going to be, for all ages, and that takes some time. Possibly in a few more decades it will be a given that all teens work for, say, Instacart, but that will require them and/or their parents to familiarize them with the life skill of shopping on their own, and consider it as a logical option instead of mentally defaulting to, say, food service, which is where all the teens of my generation worked but isn't a viable option for most teens now.

[Undertoad]

The 35 hour workers are also getting fewer hours now.

35 hours x $15 x 4 weeks x 3 months = $6300/qtr (gross)

35 hours x $11 x 4 weeks x 3 months = $4620/qtr

They should be making $1632 more per qtr -- but they are only making $251 more per qtr.

But wait, we all made a little more money more during this time. There was inflation. Does the study adjust for inflation? The answer seems to be no; I can't find any evidence that all this is in real dollars. $4,620 in June 2014 is equivalent in purchasing power to $4,902 in October 2018. That's $282 difference.

So the math says the top half people are now working 2 fewer hours per week, and netting a little less money out of their job due to inflation.

[Gravdigr]

But did the hamburgers get more expensive?

[tw]

Originally Posted by Gravdigr

But did the hamburgers get more expensive?

In the early days of MacDonalds, one could get a hamburger and coke for less than $1. Today, that is about $8. Replacing humans with more machines has significantly reduced the cost of hamburgers.

[Gravdigr]

Originally Posted by Gravdigr

But did the hamburgers get more expensive?

I don't mean since 1940, I mean since the $15 minimum wage went into effect.

[Gravdigr]

I hope that was sarcasm.

I have only seen prices increase for 50 yrs.

Where are the burgers getting cheaper?

I might move for cheap hamburgers.

[tw]

Originally Posted by Gravdigr

I hope that was sarcasm.

Obviously not sarcasm. The coke I once bought for a dime now cost over a dollar. That dime then is now called 90 cents. So the price of coke has increased (but not its cost).

That 63 cent Egg McMuffin is now called $3.10. So automation explains why Egg McMuffin prices have decreased.

When I was working for minimum wage in the early 1960s, that is about $13/hr today.

[Happy Monkey]

With the $1 -> $8 comment, I suspect he was being sarcastic about robots decreasing prices.


But a cheeseburger and a drink are each on the dollar menu, so you can get both for $2. That's more than the less than $1 from the early days of McDonalds, but there's probably some point in the intervening years where a cheeseburger and coke cost more than $2.

[xoxoxoBruce]

1948
But the best thing about this menu has to be the prices. The most expensive item was the “Triple-Thick Shake,” which cost a whopping 20 cents. You could get a shake in Chocolate, Vanilla, or Strawberry (hence the “Triple” part of the name). If you wanted the milk without the shake, you could order a “Refreshing Cold Milk” for only 12 cents.

1960
In 1960 where I lived, it was also possible to get a large(r) soft drink for 15 cents in addition to the smaller one for 10 cents. Other than that, these prices are just as I remember them. The "All-American" meal was a burger, fries, and a shake for 45 cents (plus tax).

1963
35 cents for McDonalds hamburger, fries, and Coke in 1963.

1968
The Big Mac was added to the menu in 1968. You could buy it for about 49 cents.

1975
The Egg McMuffin was added to the national menu in 1975. It sold for about 63 cents.

[tw]

Originally Posted by Happy Monkey

But a cheeseburger and a drink are each on the dollar menu, so you can get both for $2.

That is not the cheeseburger that was served back then. We are discussing retail prices - not the price of discounted loss leaders.