Living on minimum wage, 50s to present

[CivFan]

Median wage is a better metric. If entry level wages are too high, there's less incentive to improve skills. This effect lowers the productivity of the nation as a whole. Canada's wage structure is more "egalitarian". One result is that a good programmer usually doubles earnings moving from Montreal to Boston. That transplant also gets to keep more of the increased pay, realistically tripling disposable income.

Sure, and it has nothing to do with the lack of technology or the rural nature of most of Canada. Half the country makes Montana look urban.

How do you explain a huge wage jump from Montreal to Vermont about 100 miles away? Vermont is FAR more rural than Montreal.

 

[Quantum Windbag]

^not appropriate for a low skilled job. $10 an hour should be enough.

Why isn't $8/hr enough for a low skilled job?

This will be fun. You don't have the slightest idea why $8/hr is too little or 50/hr too much. It just sounds like a good number to you, so you throw it out there. This is why we say libs can't think or reason.

Let's add to the fun.
Do you think $10/hr is enough in Dubuque IA, with a low cost of living, as well as in Los Angeles, with a high cost of living?

Across the board, minimum wage should be set at the same amount. It can be up to the employer whether they pay more. But no one should be working full time and taking home three hundred bucks a week. That is fucking stupid.

You want to eliminate taxes?

 

[Wiseacre]

Recession Big Factor as Birthrate Falls - WSJ.com

But once you have those skills, what good does it do them when the job market is awash with people who have those skills and are willing to work for cheap too? this flavor of conventional thinking only works in boom times, where labor is scant and competition kicks in.

Working, but still poor - The Week

Workers wanting the dignity of making ends meet is not a "problem" that needs to be "solved".

News flash - significantly raising the minimum wage is not going to increase the number of jobs out there; in fact, employers will find ways to cut labor costs and jobs. Especially in bad times like now. And living within your means and not starting a family until you can afford to support one is the kind of thinking that works in any environemnt.

Sure, but not everyone has a choice. I have several friends who had decent jobs and were providing for their families. Then the place closed down and now they are working whatever they can find.

And I would also argue that most places index pay with the minimum wage. So part of our stagnant wage growth comes directly from the stagnant minimum wage.

Understood. But you gotta also understand that a higher minimum wage means fewer employees. Or the extra costs of labor gets passed on to the consumer and prices go up. Or as you say the business closes down. There aren't any good choices, it boils down to doing without a lot of stuff or doing things you used to do. IOW, our standard of living has to adjust downward until such time as the economy begins to strengthen.

 

[emptystep]

News flash - significantly raising the minimum wage is not going to increase the number of jobs out there; in fact, employers will find ways to cut labor costs and jobs. Especially in bad times like now. And living within your means and not starting a family until you can afford to support one is the kind of thinking that works in any environemnt.

Sure, but not everyone has a choice. I have several friends who had decent jobs and were providing for their families. Then the place closed down and now they are working whatever they can find.

And I would also argue that most places index pay with the minimum wage. So part of our stagnant wage growth comes directly from the stagnant minimum wage.

Understood. But you gotta also understand that a higher minimum wage means fewer employees. Or the extra costs of labor gets passed on to the consumer and prices go up. Or as you say the business closes down. There aren't any good choices, it boils down to doing without a lot of stuff or doing things you used to do. IOW, our standard of living has to adjust downward until such time as the economy begins to strengthen.

If the lowest pay can't get above $10/hr could the highest pay get below $480/hr?

 

[CivFan]

Sure, but not everyone has a choice. I have several friends who had decent jobs and were providing for their families. Then the place closed down and now they are working whatever they can find.

And I would also argue that most places index pay with the minimum wage. So part of our stagnant wage growth comes directly from the stagnant minimum wage.

Understood. But you gotta also understand that a higher minimum wage means fewer employees. Or the extra costs of labor gets passed on to the consumer and prices go up. Or as you say the business closes down. There aren't any good choices, it boils down to doing without a lot of stuff or doing things you used to do. IOW, our standard of living has to adjust downward until such time as the economy begins to strengthen.

If the lowest pay can't get above $10/hr could the highest pay get below $480/hr?

If you're a commissioned sales person that gets 1% of sales and you land a million dollar account in an hour, should some of your commission be distributed to other associates or should the agreed to compensation be honored? Should you be forced to sell for the rest of the month without compensation? Just asking.

 

[PaulS1950]

The businesses that employ people at the minimum wage do so because the businesses can't afford to pay more because the products and services that they sell are more or less fixed to the wages they pay. How much can you charge for a burger and fries? or a drink at a bar? or a meal in a truckstop?
If you increase the wages then you increase the price of what you are selling to make up for it and then you lose business and lay people off or close down completely. Businesses have to make a profit or the guy (person) who owns it can't feed his (or her) family or pay the bills at home .
Back when kids were getting $1.25 an hour you could get a burger, fries and a coke for less than a dollar. Now it costs over $10 at the same joint and everything is smaller to boot!

 

[Underhill]

Median wage is a better metric. If entry level wages are too high, there's less incentive to improve skills. This effect lowers the productivity of the nation as a whole. Canada's wage structure is more "egalitarian". One result is that a good programmer usually doubles earnings moving from Montreal to Boston. That transplant also gets to keep more of the increased pay, realistically tripling disposable income.

Sure, and it has nothing to do with the lack of technology or the rural nature of most of Canada. Half the country makes Montana look urban.

How do you explain a huge wage jump from Montreal to Vermont about 100 miles away? Vermont is FAR more rural than Montreal.

I don't know. But I do know that we have the same thing here in the states. There are huge discrepancies in income from state to state and company to company.

It's like asking why a house where I live cost 75k and a house in Florida cost 300k. There are too many factors that you aren't comparing.

But, I will say this. Your income numbers seemed a bit fishy to me. (I live near the Canadian border and actually own property in Canada.) So I looked them up. And I found an exhaustive study on the subject.

"GDI per capita in Canada relative to the US has undergone several long cycles. It was about 83% of the US level in the 1960s, increased to 98% in the early 1980s, before a long decline to near 80% by the late 1990s. It then rebounded to 92% of the US level by 2008."

http://www.statcan.gc.ca/pub/11-624-m/11-624-m2010025-eng.pdf

This paper is a comparison of US and Canadian incomes and compares their purchasing power.

And as of 2008 the difference is 8% overall. Certainly no where near the 50% difference you claimed. It may be possible for a specific job at a specific company. But it certainly isn't true in the overall picture.

 

[emptystep]

The businesses that employ people at the minimum wage do so because the businesses can't afford to pay more because the products and services that they sell are more or less fixed to the wages they pay. How much can you charge for a burger and fries? or a drink at a bar? or a meal in a truckstop?
If you increase the wages then you increase the price of what you are selling to make up for it and then you lose business and lay people off or close down completely. Businesses have to make a profit or the guy (person) who owns it can't feed his (or her) family or pay the bills at home .
Back when kids were getting $1.25 an hour you could get a burger, fries and a coke for less than a dollar. Now it costs over $10 at the same joint and everything is smaller to boot!

Accounting must have gotten a lot simpler in the last few years. Used to be there were all kinds of stuff on the balance sheet. Now there is only pay and price. Accountants should make minimum wage.

 

[emptystep]

Understood. But you gotta also understand that a higher minimum wage means fewer employees. Or the extra costs of labor gets passed on to the consumer and prices go up. Or as you say the business closes down. There aren't any good choices, it boils down to doing without a lot of stuff or doing things you used to do. IOW, our standard of living has to adjust downward until such time as the economy begins to strengthen.

If the lowest pay can't get above $10/hr could the highest pay get below $480/hr?

If you're a commissioned sales person that gets 1% of sales and you land a million dollar account in an hour, should some of your commission be distributed to other associates or should the agreed to compensation be honored? Should you be forced to sell for the rest of the month without compensation? Just asking.

Only if you want people in the sales pipeline? Asking someone to sell for the rest of the month with no salary and no commission is going just a little overboard. Just saying.

 

[Underhill]

The businesses that employ people at the minimum wage do so because the businesses can't afford to pay more because the products and services that they sell are more or less fixed to the wages they pay. How much can you charge for a burger and fries? or a drink at a bar? or a meal in a truckstop?
If you increase the wages then you increase the price of what you are selling to make up for it and then you lose business and lay people off or close down completely. Businesses have to make a profit or the guy (person) who owns it can't feed his (or her) family or pay the bills at home .
Back when kids were getting $1.25 an hour you could get a burger, fries and a coke for less than a dollar. Now it costs over $10 at the same joint and everything is smaller to boot!

Yeah but you make it sound much worse than it is.

Here are some real numbers. The average McDonald's brings in 2.7 million a year. And employee cost is roughly 20% of that (see link). An increase in labor cost of 1.00 an hour would mean a difference of 2% annually to their bottom line.

This means the average cost of a burger that is $2 today, would have to go up to an average of $2.04. Staggering I know, but I think we can handle it.

http://www.burgerbusiness.com/wp-content/uploads/Janney_McD.jpg

And the numbers are similar for every major chain.

You also ignore the fact that more money in the pockets of employees means more people buying their products so even that 2% could be easily offset by increased sales.

 

[emptystep]

The businesses that employ people at the minimum wage do so because the businesses can't afford to pay more because the products and services that they sell are more or less fixed to the wages they pay. How much can you charge for a burger and fries? or a drink at a bar? or a meal in a truckstop?
If you increase the wages then you increase the price of what you are selling to make up for it and then you lose business and lay people off or close down completely. Businesses have to make a profit or the guy (person) who owns it can't feed his (or her) family or pay the bills at home .
Back when kids were getting $1.25 an hour you could get a burger, fries and a coke for less than a dollar. Now it costs over $10 at the same joint and everything is smaller to boot!

Yeah but you make it sound much worse than it is.

Here are some real numbers. The average McDonald's brings in 2.7 million a year. And employee cost is roughly 20% of that (see link). An increase in labor cost of 1.00 an hour would mean a difference of 2% annually to their bottom line.

This means the average cost of a burger that is $2 today, would have to go up to an average of $2.04. Staggering I know, but I think we can handle it.

http://www.burgerbusiness.com/wp-content/uploads/Janney_McD.jpg

And the numbers are similar for every major chain.

You also ignore the fact that more money in the pockets of employees means more people buying their products so even that 2% could be easily offset by increased sales.

Turn over rate is so fast they barely learn each other's name. (OK, that's a little overboard.) Manager are sometimes cruel. Course that happens everywhere.

 

[PaulS1950]

Crew payroll is listed at $540,000 with gross profits at $1,782,000 makes the crew labor costs just over 30% of gross profits. If you divide 540000 by days in the year and hours in the day (8760) you get $61.64 per hour for the average store in labor costs. If the average employee gets somewhere beteen $7 and $8 per hour then roughly six employees. so an additional $6 ($1 per employee) is an increase of just over 9.7% in labor cost so now your labor cost goes from 30% of gross profit to 40% of gross profit. The store level operating income drops to -$18,900.
That store is closed and you have lost those 18 jobs. (6 per 8 hour shift average)

 

[emptystep]

Crew payroll is listed at $540,000 with gross profits at $1,782,000 makes the crew labor costs just over 30% of gross profits. If you divide 540000 by days in the year and hours in the day (8760) you get $61.64 per hour for the average store in labor costs. If the average employee gets somewhere beteen $7 and $8 per hour then roughly six employees. so an additional $6 ($1 per employee) is an increase of just over 9.7% in labor cost so now your labor cost goes from 30% of gross profit to 40% of gross profit. The store level operating income drops to -$18,900.
That store is closed and you have lost those 18 jobs. (6 per 8 hour shift average)

So much great logic except one small fact. There is a HUGE difference between what a company brings in and gross profits. Unless you are Exxon that is.

 

[emptystep]

Crew payroll is listed at $540,000 with gross profits at $1,782,000 makes the crew labor costs just over 30% of gross profits. If you divide 540000 by days in the year and hours in the day (8760) you get $61.64 per hour for the average store in labor costs. If the average employee gets somewhere beteen $7 and $8 per hour then roughly six employees. so an additional $6 ($1 per employee) is an increase of just over 9.7% in labor cost so now your labor cost goes from 30% of gross profit to 40% of gross profit. The store level operating income drops to -$18,900.
That store is closed and you have lost those 18 jobs. (6 per 8 hour shift average)

Your numbers show that that labor cost is 1/3 gross profit. Holy shit.

 

[Wiseacre]

Sure, but not everyone has a choice. I have several friends who had decent jobs and were providing for their families. Then the place closed down and now they are working whatever they can find.

And I would also argue that most places index pay with the minimum wage. So part of our stagnant wage growth comes directly from the stagnant minimum wage.

Understood. But you gotta also understand that a higher minimum wage means fewer employees. Or the extra costs of labor gets passed on to the consumer and prices go up. Or as you say the business closes down. There aren't any good choices, it boils down to doing without a lot of stuff or doing things you used to do. IOW, our standard of living has to adjust downward until such time as the economy begins to strengthen.

If the lowest pay can't get above $10/hr could the highest pay get below $480/hr?

2 separate issues, whatever the top CEOs get isn't going to change what the minimum wage people get. Focusing on the top ain't going to help everybody else, and the sooner the left realizes that the better.

 

[emptystep]

Understood. But you gotta also understand that a higher minimum wage means fewer employees. Or the extra costs of labor gets passed on to the consumer and prices go up. Or as you say the business closes down. There aren't any good choices, it boils down to doing without a lot of stuff or doing things you used to do. IOW, our standard of living has to adjust downward until such time as the economy begins to strengthen.

If the lowest pay can't get above $10/hr could the highest pay get below $480/hr?

2 separate issues, whatever the top CEOs get isn't going to change what the minimum wage people get. Focusing on the top ain't going to help everybody else, and the sooner the left realizes that the better.

It just seems a little unfair when they say everyone has to take a pay cut they don't really mean 'everyone'.

 

[PaulS1950]

Labor costs for any business are typically 30% of gross profit - if the company is healthy.
The gross sales is the amount of money that comes through the business before subtracting the costs of the sales. Sell a burger for $2 and you have $2 in gross sales but you have to subtract the cost of the meat, bun, condiments, napkin, and wrapper to get net sales income. Then you take the costs of running the business out of whats left. According to the figures presented the average MacDonalds has a net operating income of 5.7% of "net sales" which is high for the food industry. One would expect to see close to 3%.

 

[CivFan]

If the lowest pay can't get above $10/hr could the highest pay get below $480/hr?

2 separate issues, whatever the top CEOs get isn't going to change what the minimum wage people get. Focusing on the top ain't going to help everybody else, and the sooner the left realizes that the better.

It just seems a little unfair when they say everyone has to take a pay cut they don't really mean 'everyone'.

I'm surprised most people are even tempered enough to get work done with a pay cut. When pay cuts get talked about in a company, I usually wind up on the layoff list. Crankiness sometimes pays off. Not only does the pay get cut, so does morale and company culture. It's better to be out the door no more than three months after a pay cut.

 

[theHawk]

$7.25 an hour is something a teenager in school should be earning, not an adult!

If someone is being paid $7.25 an hour then that is what their skill level dictates it to be.

Any unskilled worker can educate themselves for free at a local library.

Until then, I don't feel sorry for them in the least bit.

 

[PaulS1950]

And what working skill can you pick up at the library that would get you a job as a skilled worker without a certified education?