HuffPo.com: Elizabeth Warren: Minimum Wage Would Be $22 An Hour If It Had Kept Up With Productivity

[Son of Gadsden]

No, it doesn't. But thank you for playing.

Let's turn your claim around.

If, as you say "nothing changes at all", then why oppose it?

Because, more legislation happens, more free market violation, price list changes and everything else. All because a few in washington/the media have no idea how businesses operate and want to create the illusion that everything is better now. It's the same as printing money to fix the economy. We don't have enough money? Print more, duh. If you don't own/run a business, you shouldn't be writing about it. It's your right, but it's like giving parenting advice without having children.

---------- Post added March-26th-2013 at 02:20 PM ----------

As far as I know, there are many very smart people in the field of economics who spend their time arguing about possible effects of changes to the minimum wage. Some of them probably advocate something similar to what you are describing, while others disagree. All of them probably have good, plausible arguments. I have not done enough research to emphatically back either side of this argument.

I do, however, see trends of income disparity over the last few decades as problematic... and, generally, would welcome policies that reduce income disparity, provided they are free from highly undesirable side effects.

Why welcome politics? All they do is make things worse. When have politics fixed anything at all? They may murk up the water and make the problems harder to see, but never seen an actual solution.

As for the "other side of the argument", I'm the first one to change my opinion when I'm proven wrong, or even persuaded to view a different side. I've changed my views on the 2nd Amendment, abortions, gay marriage, etc. Seen great arguments from both sides. In a large amount of business arguments such as this, though, I've just yet to hear it. Maybe it's out there, but everything I read from the media and politicians about regulating business even more looks great on paper. But in reality, it's far from applyable in the actual field. If minimum wage was increased, from my company, I would expect layoffs, hourly wage decreases, removal of benefits, and cutting down on every imaginable aspect of the business including quality of materials. I would expect price increases on everything, added fees such as gas mileage and truck usage. I would expect much stricter requirements for employment. Anyone with any kind of criminal record whatsoever would be denied on the spot, lack of high school diplomas, and maybe college degrees would be instant denial. Mandatory drug tests, etc would all happen. Because if we are paying $22 an hour, we won't accept anything less than the very best money can buy.

You may say, well you should be doing that in the first place. Everyone gives people chances. You'll see people like teenagers not being offered jobs. It would be great if everyone in the world made $22 and hour, I just don't see any possible way it could ever happen. Hell, a whole lot of folks I've seen employed weren't worth $7 an hour. Rather than raise the minimum wage, I normally push for getting rid of it altogether. The unemployment problem would certainly diminish almost instantly.

[Larry]

I don't think the $22 an hour is the point. The point is exactly what Pho alluded to in his post....regardless what the proposed minimum wage is. Can business owners eat the costs of raising minimum wage? Everyone makes it sound like it's as simple as cutting profit.

Not me. I say it's as simple as raising prices.

You know? Pass the costs along to the consumer?

Unfortunately for the folks opposed to the idea, I

also

point out why it seems blatantly obvious to me that raising min wage by X% will

not

cause prices to rise by an identical x%. (Or, as some folks in this thread have tried to claim, by an even larger percentage.)

(My reasoning is pretty simple: The only way raising wages by X% causes prices to raise by X%, is if labor constitutes 100% of the item's price. And that seems a bit hard to swallow, to me.)

[Son of Gadsden]

Not me. I say it's as simple as raising prices.

You know? Pass the costs along to the consumer?

Unfortunately for the folks opposed to the idea, I

also

point out why it seems blatantly obvious to me that raising min wage by X% will

not

cause prices to rise by an identical x%. (Or, as some folks in this thread have tried to claim, by an even larger percentage.)

(My reasoning is pretty simple: The only way raising wages by X% causes prices to raise by X%, is if labor constitutes 100% of the item's price. And that seems a bit hard to swallow, to me.)

Of course raising by X% doesn't increase by X%. However labor *does* Constitute for a very LARGE percentage of a lot of businesses. Such as construction for example, you want tile put down? The tiles can cost as low as 80 cents or so a piece for 12x12. That's almost as cheap as carpet. However, you could carpet a room 15 times and not touch the cost of ceramic tile once. Because it costs over $10 per foot for the labor, and that's not even at cost for most companies. Go up to $22 an hour, I guarantee you that same tile is now $20 per foot.

[johnbent]

If you don't own/run a business, you shouldn't be writing about it. It's your right, but it's like giving parenting advice without having children.

Woah; this is crazy talk! Should only politicians write about politics? It's not possible to understand something without experiencing it? I'm sorry but I'll trust PhD economists about businesses more than I'll trust the owner of a corner grocery.

A business owner speaks from anecdotal evidence only. Statistics and data analytics trump anecdotes. Where does this idea stem from that knowledge comes from experience only? It's just silly. I saw someone else say that non-gun owners shouldn't comment on gun control. Uh, yeah, except I'm affected by flying bullets. And I'm affected by businesses in the same way. And I can reason about the workings of an economy without owning/running a business.

[No_Pressure]

Working part time while going to school I was a cashier at a local grocery store. It was a great store (Wegmans) which was union free and paid most employees a little bit above minimum wage. Now I'm the type of person who can't stop himself from working hard and doing the absolute best. It is part of my nature for some reason to be highly competitive and attempt to be the absolute best at everything, even if that thing is a part time job in the crappy service industry where I didn't have incentives to bag faster, slower, properly, or be friendly and courteous.

As a side note, my grocery store tracked an average number comprised of a number of things called "IPM" or items per minute. It gave a value to an individual's speed as a worker. The store goal was 14, the store average was 13, and my average was 17.5-18.5. What I learned was this:

1. I made over 8 something per hour, which sucked because I really did work quite hard and I did so prior to or after classes, on 9 hour weekend shifts, and in one of the busiest stores in the entire company. I felt that personally, my wage deserved to be higher, but they didn't have an incentive program.

2. The vast majority of people working a minimum wage job aren't actually working all that hard. I know we have these ideas about the working class, and how hard they have it. If you worked 8 hours you got a 30 minute lunch break and two 10 minute breaks during the day. The most mentally and physically demanding job was as a cashier, stocking shelves, doing inventory, selling prepared food- they were all way easier and less demanding. There were very simple things that fellow cashiers could have been doing, which they were well aware of, which would have easily sped up the process of checking out groceries. I understood that the 50 and older crowd of cashiers wouldn't move as quickly, but I saw a lot of high school and college kids averaging 12 IPM and just being lazy as ****. I saw people who disregarded certain rules or procedures, I saw people who were not friendly and helpful to customers, and to be honest a lot of the people working there were not working nearly as hard as they should be.

3. Sure things are expensive and they have changed in proportion to wages. My dad was making $4.00 per hour working at a grocery store in the early 70's. A new Corvette cost about $5,500. When I was working at a grocery store I was making twice what my dad was making, but a new corvette was something like 17 times more expensive. If wages kept up with prices that new vette would be 11k, but it isn't. This is the reality of inflation, an extremely uneven distribution of wealth, an ineffective government, and a populace in general which is terrified of change. At the grocery store if we moved one item to make way for renovations the customers would let us hear about how horribly upset they were about an item moving 10 feet over to a new aisle for the next few months. I never knew the extent to which people are terrified of change until I was exposed to a large volume of them. Here's the other good thing: most of them were old, and all of them vote. They vote like ****ing crazy. They say "$8.00 per hour is way too high for a minimum wage! Why when I was 18 I was making 20 cents an hour!" without taking into account that 20 cents would buy them their lunch and a subway ride with a little extra left over.

The thing is, what are we to do about it? Well, if you don't like your job and your wage, go to school. The only thing that kept me going strong in that job was saying to myself "this is why I'm getting a ****ing college degree".

------------------------------------------------------

I will say this: the costs of things don't need to go up, they simply inevitably will in order to maintain the extreme and ridiculous pay at top levels of an organization. Let's say that the top 4 executives of a fictional grocery store chain pay the CEO 4 million per year and the other 3 get 2 million per year. If you took their salaries and cut them in half, then put that money into a pool to supplement the salaries of regular employees. That's 5 million free dollars. If you say minimum wage was made 20 dollars per hour and the average yearly salary was something like 38-40k, then 5,000,000 would provide for that type of wage for 125 employees without raising prices and generating more revenue than they currently are. The top people are still making millions of dollars, only the workers are not getting a more reasonable share. Let's say minimum wage was raised to something more realistic like 12 per hour. The extra 5 million from those executives would provide for the increased salaries of 23k for about 220 employees. There are more than 4 CEOs per company, and they're likely making a lot more than 2-4 million dollars depending on the size and profit margin of the organization. There could probably be pay cuts which were much more drastic for themselves and other upper management employees. Everyone would still be well off and making a decent amount of money, the pay scales are simply redistributed.

I have first hand experience with the upper echelons of a company which shall go unnamed. Most of the partners/senior VPs are paid between 500k and 1.2 million and they work their asses off with a ****load of stress. The executives who haven't met with a client in 30 years and spend their days hopping on private jets to go down to sarasota and play golf, and the same people who come up with failed initiatives and then blame it on the partners below them and cut 100 of them to save their salaries in a year in which they did not reach their target growth, are all making over 4 million for doing basically nothing.

Oh well.

[JimboDaMan]

If you don't own/run a business, you shouldn't be writing about it. It's your right, but it's like giving parenting advice without having children.

Sounds to me like you shouldn't be writing in this thread, right? :pfft:

[alexey]

Why welcome politics? All they do is make things worse. When have politics fixed anything at all? They may murk up the water and make the problems harder to see, but never seen an actual solution.

Politics do suck and imho that's why we are not seeing good policies in place.

As for the "other side of the argument", I'm the first one to change my opinion when I'm proven wrong, or even persuaded to view a different side.

...

These are complex issues that deal with interactions of numerous forces and variables. As I wrote, many really smart people study these things for a living. These people hold conflicting opinions, advance conflicting positions, offer different proofs, and so on.

When you take and hold an emphatic opinion on these complex matters, you either really get it or your really don't. I am somewhere in between, so there isn't much for us to talk about.

[Son of Gadsden]

Woah; this is crazy talk! Should only politicians write about politics? It's not possible to understand something without experiencing it? I'm sorry but I'll trust PhD economists about businesses more than I'll trust the owner of a corner grocery.

Sorry if that hurts your feelings, but folks on the sidelines making business decisions that effect my company based on theories that look good on paper but don't work in the real world is not something I'm just going to accept as an "okay" thing. If you think it works, start a business and try paying your workers "fair". Politicians that have never run a business, making business decisions is why we are in this mess in the first place.

A business owner speaks from anecdotal evidence only.

Really? And what draws you to this conclusion? A blanket statement based on no statistics or data at all? Irony at it's best. I've got a double major in business administration as well as building trades. So I guess I can't possibly run a business, because I don't run on anecdotes. For someone who bases his beliefs on data and statistics, you sure do love using anecdotes.

Statistics and data analytics trump anecdotes.

My statistics professor disagrees with you, as does most anyone who understands statistics. Statistics can be manipulated to say whatever you want them to say. They should never be solely used to make decisions. Any business, or mathematical professor will tell you that.

Where does this idea stem from that knowledge comes from experience only? It's just silly.

You said it, not me. Any businessman's decisions should be based on knowledge of their field, statistics/data, as well as experience. As anyone will tell you that has completed a course in any field and then went out into that field, many times your experiences lead you to much better ways to do things than by the book.

I saw someone else say that non-gun owners shouldn't comment on gun control. Uh, yeah, except I'm affected by flying bullets.

That's one of the most idiotic things I've ever heard of, and I have no idea how you can compare that to the statements I have made. If you don't like being shot at by businesses, stop paying for the guy's rounds that he is shooting at you. That's how it works. In a free market, business owners are free to make their own decisions. It is not your place.

And I'm affected by businesses in the same way. And I can reason about the workings of an economy without owning/running a business.

You have that right. Hey, what's even better is if you are so knowledgeable about it, go try it with your own business instead of someone else's. Not trying to be a dick about it, but seems that everyone has this idea that they are entitled to make someone else's business decisions better than the one running the business. If it's so easy, go do it yourself. This is a free market system, it's time we treated it that way.

[JimboDaMan]

Whelp, based on the post above, I guess you've got all the answers.

[Son of Gadsden]

Politics do suck and imho that's why we are not seeing good policies in place.

These are complex issues that deal with interactions of numerous forces and variables. As I wrote, many really smart people study these things for a living. These people hold conflicting opinions, advance conflicting positions, offer different proofs, and so on.

When you take and hold an emphatic opinion on these complex matters, you either really get it or your really don't. I am somewhere in between, so there isn't much for us to talk about.

I agree. Which, makes my job easy because everything you just said can be related easily without making 50 million separate quotes. Government can not make business decisions. There are too many different situations and variables for one central Leviathon to make one decision and expect everyone to be able to follow that arbitrary policy. For example, construction, as I stated before, is very much based on labor. If you increase labor by that much, our prices will triple, easily. In the shape the industry is in right now, it would be catastrophic. A retailer isn't going to be affected nearly as much. You might run a radioshack in the local mall. You need what, one person on staff? Your smart phones aren't going to double in price. But, then again, I also recognize the fact that I know NOTHING about the retail industry, therefore, if I haven't seen their books, I have no idea what their expenses and revenues are and can't begin to make a real decision regarding them. All of what I said is an assumption about them, and assumption that could cost a lot of people their jobs.

---------- Post added March-26th-2013 at 03:45 PM ----------

Whelp, based on the post above, I guess you've got all the answers.

If that's what you got from that, I don't know what to tell you. The whole point was that I don't know the answers. Which is why I believe in this crazy idea that business owners should make the decisions for their businesses instead of people who have no idea what the answers to their problems are. Hell, you and I can't even see their questions, much less answer them.

[JimboDaMan]

If that's what you got from that, I don't know what to tell you. The whole point was that I don't know the answers. Which is why I believe in this crazy idea that business owners should make the decisions for their businesses instead of people who have no idea what the answers to their problems are. Hell, you and I can't even see their questions, much less answer them.

Of course that's what I got from that. Go back and re-read. A guy who really thinks he doesn't have the answers, and a guy who isn't trying to be a dick, does not tell someone with a different viewpoint that their thoughts are "idiotic".

BTW, I am a small business owner.

edit: I do not wish to sound too harsh. It sounds like you have worked hard and at a young age managed to achieve a position of some trust and responsibility at your company. I applaud you for that.

[PeterMP]

I've got a double major in business administration as well as building trades. So I guess I can't possibly run a business, because I don't run on anecdotes. For someone who bases his beliefs on data and statistics, you sure do love using anecdotes.

So do you think that raising the minimum wage $1 over the next two years would be good or bad for the economy given the economy? Please use real data from real sources to support your answer.

My statistics professor disagrees with you, as does most anyone who understands statistics. Statistics can be manipulated to say whatever you want them to say. They should never be solely used to make decisions. Any business, or mathematical professor will tell you that

Who was your statistics professor? I'd like to contact them and know why they don't think that statistics and analysis don't trump ancedotal evidence.

You can give me the contact information for any math professor that you think would disagree with the statement you quoted too.

Now that isn't saying that ONLY those things can be used to make decisions (and that's the posted didn't say we only should use those things to make decisions) because there are value judgements that have to be made (e.g. what is good and what is bad, what is desireable, etc.(is a widening wealth gap good or bad? That might depend on your POV)). But I'd really like to have a conversation with a statistician that says statistics and analysis don't trump ancedotal evidence.

[ncr2h]

Why do we need a statistics professor?

Isn't it a fundamental axiom of economics that price floors and price ceilings create rationing and shortages, respectively? A price floor on wages will lead to a rationing (i.e. unemployment) of labor. Raising the price floor is just a dumb idea. We don't need a statistical analysis to tell us this - it is literally as simple as drawing a supply & demand graph for the labor market, drawing a horizontal line at the proposed price floor, and looking at the quantities of labor demanded and supplied.

I know Republicans are supposed to be the anti-science party, but what's the deal with this issue? Wasn't this problem solved several hundred years ago? Any statistical evidence to the contrary can easily be dismissed as not ceteris paribus.

[PeterMP]

Why do we need a statistics professor?

Isn't it a fundamental axiom of economics that price floors and price ceilings create rationing and shortages, respectively? A price floor on wages will lead to a rationing (i.e. unemployment) of labor. Raising the price floor is just a dumb idea. We don't need a statistical analysis to tell us this - it is literally as simple as drawing a supply & demand graph for the labor market, drawing a horizontal line at the proposed price floor, and looking at the quantities of labor demanded and supplied.

I know Republicans are supposed to be the anti-science party, but what's the deal with this issue? Wasn't this problem solved several hundred years ago? Any statistical evidence to the contrary can easily be dismissed as not ceteris paribus.

Because, it isn't that simple. There is a relationship between local supply and demand for goods and supply and demand for labor.

If boosting minimum wage causes more money to be spent in the country that boosts demand for labor, which means more people get hired.

If I can take money from people that are going to spend their money on an expensive sports car made in Italy (where most of the money goes to people working in Italy and company in Italy and Italian taxes) and give it to people that'll spend it at their local bar, meaning those local business owners make more money and potentially hire more people, then in terms of things like lowering unemployment in the US (not globally or Italy) giving the money who are spending their money at the local bar makes more sense.

**EDIT**

I'm not of the belief that minmum wage changes ONLY have one affect net good or bad (depending on how you want to define good or bad), but there are studies out there that show the "bad" effects are minimal at most.

http://www.economist.com/news/united-states/21571894-president-proposes-hefty-increase-minimum-wage-trickle-up-economics

I suspect the effect of changing the minimum wage are context and conditional dependent.

[JimboDaMan]

Why do we need a statistics professor?

Isn't it a fundamental axiom of economics that price floors and price ceilings create rationing and shortages, respectively? A price floor on wages will lead to a rationing (i.e. unemployment) of labor. Raising the price floor is just a dumb idea. We don't need a statistical analysis to tell us this - it is literally as simple as drawing a supply & demand graph for the labor market, drawing a horizontal line at the proposed price floor, and looking at the quantities of labor demanded and supplied.

I know Republicans are supposed to be the anti-science party, but what's the deal with this issue? Wasn't this problem solved several hundred years ago? Any statistical evidence to the contrary can easily be dismissed as not ceteris paribus.

No, that is not a fundamental axiom, and it is not literally that simple. Perhaps in a perfectly elastic environment, devoid of any social, political, cultural, or other human influences, that might be the case. Does that describe any reality you are aware of?

[Larry]

It seems to me to be pretty obvious that almost everything dealing with economics produces both good and bad results, and the trick lies in deciding whether the good results will outweigh the bad.

[Popeman38]

I personally believe the minimum wage should be determined by location. Unskilled workers in Ansted, WV o not need to be making what unskilled workers in San Francisco or New York City need to be making.placing a wage floor the allows unskilled workers to survive in WV place people well belw the poverty line in NYC.

[Larry]

I personally believe the minimum wage should be determined by location. Unskilled workers in Ansted, WV o not need to be making what unskilled workers in San Francisco or New York City need to be making.placing a wage floor the allows unskilled workers to survive in WV place people well belw the poverty line in NYC.

And several states agree with you, and have set their own minimum wages. (I don't know if any smaller jurisdictions have done so, but it wouldn't surprise me.)

The question is, should there be a single, national, floor, which other, high-cost locations, are free to raise?

(And, if so, should it be higher?)

[yank]

And several states agree with you, and have set their own minimum wages. (I don't know if any smaller jurisdictions have done so, but it wouldn't surprise me.)

The question is, should there be a single, national, floor, which other, high-cost locations, are free to raise?

(And, if so, should it be higher?)

Let's review. A high cost of living area such as New York, San Fransisco or Chicago has an (to be gentle) elevated tax structure which handcuffs businesses with no extra benefit to the business compared with lower tax areas (such as Dallas). Now you want to be able to mandate a higher minimum wage for these areas (because its so damn expensive to live there ya know?) which of course is an additional burden to businesses in the high cost/high tax area.

So the local governments overtax businesses in high cost areas and unskilled minimum wage workers in high cost areas will now mean that business have artificially high labor costs.

This kind of ivory tower lack of understanding of basic economics is why businesses are fleeing California, New York and Illinois to name three.

Last one out of there please turn the lights out.