Minimum Wage

virgil · Post by **virgil** » Tue Dec 04, 2012 8:45 pm

Didn't we have a massive recession in the middle of that time period?

erik · Post by **erik** » Tue Dec 04, 2012 10:15 pm

[quote="virgil"

]Didn't we have a massive recession in the middle of that time period?

[/quote]

Beginning at the last quarter of 2008, yes. And for a completely unrelated set of reasons. And I view your statement with disdain even if you didn't mean to imply any correlation. It smelled of it.

It is a damn good thing minimum wage did begin raising before September 2008 and onward. Imagine how proper fucked we'd have been if the only jobs people could get on the bottom end paid about 50% less. And fuck the people who would say that that means more people would be able to be employed. People would have to work multiple jobs and spend less.

Some employers were somewhat happy they could fire workers and renegotiate contracts thanks to the recession under cover of 'the economy made me do it', while still raking in hefty profits, bonuses and accumulating cash reserves. Many would have been all too happy to pay out shit wages despite increasing costs for necessities.

The current minimum wages are disgracefully low as they do not provide incomes above poverty level, especially as employers try to skirt paying for health care by only hiring part time on top of it all. Thus dumping more costs on the people who can least afford them.

virgil · Post by **virgil** » Wed Dec 05, 2012 1:25 am

erik wrote:[quote="virgil"]Didn't we have a massive recession in the middle of that time period?

Beginning at the last quarter of 2008, yes. And for a completely unrelated set of reasons. And I view your statement with disdain even if you didn't mean to imply any correlation. It smelled of it.[/quote]I did imply a correlation, and I meant it wholly sarcastically/ironically.

erik · Post by **erik** » Wed Dec 05, 2012 2:18 am

Well, then at least we profited from my search for a peeing smiley since we don't have one on our board (yet).

=-)

RadiantPhoenix · Post by **RadiantPhoenix** » Wed Dec 05, 2012 4:10 am

Based on my impressions of the cost of living where I grew up and some simple math, I would say that the minimum wage could do with rising to something like $20 an hour.

Desired minimum annual income: $40000
Desired maximum number of hours worked per day: 8 hrs/day
Desired maximum number of days worked per week: 5 days/week
Desired maximum number of weeks worked per year: 50 weeks/year
Multiply Items 2, 3, and 4 together: 2000 hrs/year
($40000/year)/(2000hrs/year) = $20/hr

I'm not an economist, though.

tussock · Post by **tussock** » Wed Dec 05, 2012 9:54 am

If you're in a borderline unproductive job like "greeter" at Wallmart, an increase in the minimum wage may take your job away. There are totally jobs which would go away like that, just not many of them.

But if you're in a borderline unproductive job like "fry cook" at McDonalds, an increase in the minimum wage may get you better skills training and improved working conditions to try and boost your production and help you reduce other costs. There are totally jobs which would become better and more productive, much more than would go away, but still not many.

So what minimum wages do is limit how unproductive a worker can be before the employer has to think about how to get more out of their employees. Ideally businesses would all do this already, but they totally don't, not when the wages are low enough to profit by throwing another warm body at every little problem.

The long-term benefit comes from the new higher-skilled workers having more cash to throw at the economy. Which gets more businesses with more skilled workers around, at least until you hit a solid resources limit, like peak oil or something. In, say, 2005.

shadzar · Post by **shadzar** » Wed Dec 05, 2012 1:16 pm

no, they just remove jobs on a whim to give the manager more money, especially in franchises where the manager only gets any profits made. this is why there is NEVER enough checkouts open at a store. they fired all the bag boys and cashiers.

tussock · Post by **tussock** » Thu Dec 06, 2012 5:51 am

You still have bag-fillers in your stores? Shit, your wages are low, only the posh places here pack anything for you, and most of the supermarkets are quickly replacing checkout chicks with self-checkout machines with about one chick per six tills to keep an eye on everyone and help the disabled.

Thus the extra tech jobs and less "oh god, I'm so bored, why didn't I study harder" jobs.

fectin · Post by **fectin** » Tue Dec 11, 2012 5:05 am

Actually, all the adjustments are weird. Employment is likely to go UP, but each employee makes less money (on the average). Because the cost of overtime goes up. So you hire more people, give them less overtime each, and save money.
Say you have one employee, Edgar, with overhead cost O, and hourly wage W. you need to get 60 hours/week of work done. You can do that in two ways: have Edgar do it all, or hire Dave to help as well (at the same costs).

If Edgar does it all, it costs 70W + O
If Dave does half the work, it costs 60W + 2O (though, you get efficiencies there, so it really costs 60W + 1.8O or whatever)

Obviously, if O > 10W each week, Dave is jobless, and if O < 10W, Dave is hired. As W increases, it's more likely that Dave gets hired and Edgar loses hours. Because O(Dave) is less than O(Edgar), that very quickly escalates.

Once that ratio trips, Edgar, who is nominally getting paid more than before, suddenly has to work 10 more hours than he did before to make the same amount of money. (Edit: because he has to find another job that will give him 40 regular hours to match the 10 regular + 20 OT hours he had before)

For bonus fun, you also have fewer full time employees, and thus fewer benefits, less opportunity for advancement, and increased fungibility of labor.

tussock · Post by **tussock** » Tue Dec 11, 2012 9:59 am

That assumes a lot about labour laws. Which is probably true in the US. Perverse incentives abound when you can legally treat your employees like shit. In NZ if you took half of Edgar's job off him and gave it to Dave they could both sue you for about 6 months wages once they find out, and the court would order you give Edgar his job back or start getting serious about the fines.

fectin · Post by **fectin** » Tue Dec 11, 2012 5:13 pm

Under what cause of action, exactly?

tussock · Post by **tussock** » Wed Dec 12, 2012 12:32 pm

The employment relations act, formerly the employment contracts act, formerly whatever they called it in the 80's, which replaced what they had in the post-war period. Hardly changed in principle since the waterfront strike in 1953, other than employees being allowed to sign away those rights for a few years, and various industry exemptions.

The people I've known who were sacked without just cause and replaced ("just" as defined in law, which they are required by law to give you beforehand, so you can defend yourself to them and save everyone's time, etc) simply hired a lawyer. I have no idea what bits of what are involved, just that you tend to get a year's wages and any court costs if the employer has fucked up the process and refuses to rehire (interim wages and costs if they do).

And if they fight really hard, appeal and shit, it costs them way more and the lawyers take it all. Same as in town.

fectin · Post by **fectin** » Wed Dec 12, 2012 1:33 pm

No-one got sacked, or let go. A part time employee was previously overworked, so burger world hired someone else too.

fectin · Post by **fectin** » Wed Dec 12, 2012 1:39 pm

Though, you are partially right. If its hard to fire someone, that's essentially the same as increasing O. In that case you compensate b cutting back operating hours, so you have less work to be done overall. Similar long-term effects on everyone working, but you also get lower employment.

Your way is significantly worse though, because it kills your nightlife.

Ted the Flayer · Post by **Ted the Flayer** » Wed Dec 12, 2012 4:15 pm

shadzar wrote:no, they just remove jobs on a whim to give the manager more money, especially in franchises where the manager only gets any profits made. this is why there is NEVER enough checkouts open at a store. they fired all the bag boys and cashiers.

I really hate saying this, but Shadzar is right. Unemployment has nothing to do with wages, and everything to do with the fact that companies work on a skeleton crew so the shareholders can continue to embezzle their millions.

When I worked at Wal-Mart, by my last week I had to cover Hardware, Sporting Goods, Housewares, Homelines, Toys, Lawn and Garden, and Seasonal by myself after 5pm because they didn't want to pay to have someone in those departments. And it was a super-center, I had to cover a lot of ground, and the whole time my supervisor was getting yelled at because I wasn't helping all the customers and doing all the work (My supervisor was a 68 year old Marine with a master's in engineering, and was not scared to tell management they were full of shit. Good guy, I worked extra hard for him.)

violence in the media · Wed Dec 12, 2012 4:28 pm

fectin wrote:Actually, all the adjustments are weird. Employment is likely to go UP, but each employee makes less money (on the average). Because the cost of overtime goes up. So you hire more people, give them less overtime each, and save money.

How prevalent is it for businesses to require/encourage overtime and have employees plan their finances around getting it? Why wouldn't you as an employer seek to hire more people rather than continue to pay your crew overtime for months? Why would you, as an employee, just assume that you were going to be getting 10, 20, or 30 hours of overtime every week?

I can understand the outcry at getting your hours cut from 35/week to 20/week, or being converted from a full-time employee with benefits to a part-time employee with limited/no benefits. But I don't have any understanding for the people that whine about not getting their 15 hours/week of overtime. That really seems like time you shouldn't sensibly be counting on, and that your employer should reasonably be trying to eliminate. (Unless your employer is actually a whip-wielding orc and demands endless 60+ hour weeks because fuck you, prole.)

Beyond that, I don't think that 10 hour days for 6 or 7 days a week is a work paradigm we should really be encouraging.

shadzar · Post by **shadzar** » Wed Dec 12, 2012 4:59 pm

Ted the Flayer wrote:
shadzar wrote:no, they just remove jobs on a whim to give the manager more money, especially in franchises where the manager only gets any profits made. this is why there is NEVER enough checkouts open at a store. they fired all the bag boys and cashiers.
I really hate saying this, but Shadzar is right. Unemployment has nothing to do with wages, and everything to do with the fact that companies work on a skeleton crew so the shareholders can continue to embezzle their millions.

When I worked at Wal-Mart, by my last week I had to cover Hardware, Sporting Goods, Housewares, Homelines, Toys, Lawn and Garden, and Seasonal by myself after 5pm because they didn't want to pay to have someone in those departments. And it was a super-center, I had to cover a lot of ground, and the whole time my supervisor was getting yelled at because I wasn't helping all the customers and doing all the work (My supervisor was a 68 year old Marine with a master's in engineering, and was not scared to tell management they were full of shit. Good guy, I worked extra hard for him.)

yup. and if they tripled your pay to cover those 3 departments it doesnt mean you can physically do the work of 3 people, but the business expects 1 manhour/$X. you cant do the job of 3, and the probably would never pay you the amount of 2 to do it.

another eason why businesses see the new helthcare plan and cutting workers hours so the worker isnt cutting into profits again (see papa john's) by being a "full time" employee under the plan.

which MIGHT mean it would be better if MORE places followed this 30 hours per week idea he had, because that would mean they would need to hire some more people to cover those other hours they need to operate.

and no matter what the news says, unemployment is WORSE than they report. the number discussed on new is ALWAYS and ONLY those people that qualify for unemployment to draw money from the government. it is not the difference between all person 18+ of age and those employed. so real unemployment is about double what it cited in the news.

no matter what the minimum wage is, if jobs dont exist, or positions dont exist for people to fill, then wage means nothing. the entire country suffers so long as there is ANY unemployment. untapped resources that are renewable that are taking things out, but not allowed to put things back in.

codeGlaze · Post by **codeGlaze** » Wed Dec 12, 2012 5:49 pm

"ANY unemployment" is a bit harsh. Realistically you'll probably always have somewhere between 3 and 5 % unemployment.

But you are right about current unemployment being higher than reported in the headlines.

name_here · Post by **name_here** » Wed Dec 12, 2012 6:03 pm

There's always going to be some unemployment. People will be fired or quit or the company they work for will collapse, and then they will be looking for another job.

On overtime, I think the average is something like 1.5 times base salary per hour, so for a forty-hour contract even just straight wages are cheaper until 60 hours and then there would be overhead to worry about, assuming a full time employee with benefits. I imagine most people who are pissed about losing overtime want to make more money than one non-overtime job provides but do not want to spend eighty hours a week holding down two jobs. And the sorts of places that pay overtime generally can predict how many man-hours they'll need, so the total overtime washing around the group is steady.

Note that not everywhere pays overtime. A programmer might be contracted to receive a certain amount of money at specified times in return for accomplishing specific tasks, which would be why major game developers have their programmers work eighty-hour weeks for extended periods of time instead of hiring more people.

shadzar · Post by **shadzar** » Wed Dec 12, 2012 7:04 pm

codeGlaze wrote:"ANY unemployment" is a bit harsh. Realistically you'll probably always have somewhere between 3 and 5 % unemployment.

But you are right about current unemployment being higher than reported in the headlines.

well best case scenario you wouldnt have ANY, but utopia is unattainable. i agree about 5% is a good number for REAL unemployed, not the gov program called unemployment. but until unemployment problems are solved, minimum wage means nothing because it doesnt include those without jobs to even SHARE in paying cost of living for a group. a raise in minimum wage means a business will raise prices to cover the new wage range, to make sure the shareholders dont lose profits, which reduces the effect of raising the minimum wage....and still people are unemployed, or more people are because cutting jobs is a good way to "raise profit margins".

tussock · Post by **tussock** » Thu Dec 13, 2012 6:35 am

fectin wrote:No-one got sacked, or let go. A part time employee was previously overworked, so burger world hired someone else too.

There the law gets a bit more tricky, but I've seen the unions take people on for cutting union hours and giving them to someone non-union, and win (though it was a seriously dirty fight through the media, the company dumping people's medical records to the tabloids and so on, and basically shot themselves in foot over and over again out of spite).

The funniest one I saw was the cleaner's union took on a big office that changed cleaning contractor, and made the new contractor take on the old cleaning staff with their previous wages and conditions and back-pay.

Basically, the big unions formed the Labour party and beat our version of the Democrats and Republicans in the 30's, and made jobs a "right" of the employee, and we weren't far off a civil war in the 50's when the combined party of plutocrats tried (and largely failed) to remove that right.

violence in the media wrote:or being converted from a full-time employee with benefits to a part-time employee with limited/no benefits

That can't happen here either. Government stuff is all levied per equivalent-full-time employee. It's hours of total workforce divided by 40 times tax structure. I struggle to believe your government was stupid enough to do it otherwise.

But then, they made it compulsory private insurance rather than public insurance, despite that being around 50% more expensive for the same outcomes, so I guess I can believe it after all. Crazy Americans.

fectin · Post by **fectin** » Thu Dec 13, 2012 1:10 pm

Unless your union workers make minimum wage, unions don't enter into it.

LargePrime · Post by **LargePrime** » Thu Dec 13, 2012 1:23 pm

violence in the media wrote:How prevalent is it for businesses to require/encourage overtime and have employees plan their finances around getting it? Why wouldn't you as an employer seek to hire more people rather than continue to pay your crew overtime for months? Why would you, as an employee, just assume that you were going to be getting 10, 20, or 30 hours of overtime every week?

Simply this is due to Americas Crazy Healthcare costs.
If you have to spend 20K USD to give someone healthcare, then giving them a few extra dollars in overtime is nothing, especially after looking at adding another head with burden costs for all the other benefits. Also cutting overtime has no/small legal protections or ramifications.

But the history here is the automotive industry. Guys are paid around the clock to keep the line running and service the line when it is stopped so it does not stop when it is time to make things. There is a whole culture in Michigan of skilled trade guys giving up weekends to make double/triple time for most of their career.

tussock · Post by **tussock** » Fri Dec 14, 2012 8:56 am

@fectin, there's a newish union in NZ was set up for minimum-wage (or close to it) workers in all professions and industries. "Unite", based on one out of Britain, by the looks of it. Seems busy and quite popular, very feisty. Works mostly on getting collective employment agreements across the whole country, stop the low end undercutting itself on conditions.