Predictable. Completely Predictable.
Like several other “workers’ paradise” libidiot-run cities, Washington DC recently raised its minimum wage substantially above the Federal minimum. In 2014, it was raised to $11.50 an hour – and there’s been talk about raising it further soon, to $15 an hour. They’ve also instituted other mandatory benefits.
So, things are rosy, right? This means the “little guy” minimum-wage workers in DC are all getting bigger average paychecks and living better?
Well, some might be. But I’m thinking this headline kinda gives us the “rest of the story”:
Workers, Reduced Hours Due to Minimum Wage Hikes
Looks more to me like employers are watching their bottom line – and as a result are paring hours to keep labor costs close to the same as before. If that’s the case, then that means that many entry-level workers are NOT are getting paid a whole lot more. Some may even be making less than they did before, albeit for less hours worked.
Oh, and yes: prices generally did rise, too. So it’s not just the little guys getting hours cut (or laid off) who are taking it in the shorts due to DC’s minimum wage hike.
Gee – who’d have thunk it?
Yes, that last was sarcasm. Anyone who has half a clue clue about economics could have predicted this.
Category: "Teh Stoopid", Economy
Those in power probably do know better, but it wins a lot more votes to pander to crybabies and kick the ball down the field for someone else to deal with later.
Bingo.
This in the nutshell is, and probably always has been, what has been the motivating factor in so many horrible decisions coming out of government.
Ignorant communist a.h.’s, all that is going to do is get a hell of a lot of burgerking workers fired! This country needs a house cleaning in its govt….BIGTIME,, heat up the tar, bring on the feathers….any rail will do!!
They just don’t get it. Raising wages will raise prices, which will drive buyers to other sources for the product, leaving workers without work, and companies without income.
True, but perhaps raising prices is something that needs to happen. If McDonald’s can’t offer a $1 burger without fully funding its workforce, i.e. without those employees needing govt assistance to survive, then perhaps the true cost of that burger should be closer to $1.50 or $2. I don’t think it’s right for those companies to effectively be subsidized by the tax payer and hope that the increase in wages will get some people off of govt assistance. However, I know that it probably won’t happen, as the wage increase will lead to inflated prices, which will devalue the extra money they will be getting, which means that they won’t be making enough to subsist again, which will lead to a demand for higher wages…
What a strawman. A McDonald’s job is not a job for a person who requires a so call “living wage”. It is an entry level job for low/no skilled workers to enter the work force. Entry level, you know teenagers, students. Not a head of household. As a younger critter I worked multiple jobs to pay for school. I also witnessed several of the people I worked with do the same. Instead of inflating wages people who are working the minimum wage jobs need to find the skills that will lead to better jobs/careers.
What about medical coding? I see commercials all of the time indicating that it is a career field that is exciting AND gives you “the skills to pay your bills!” Or, there is always setting up a business fraudulently listed as economically disadvantaged woman owned small business to sell software to the government. Low overhead, you don’t even need a door on your mailbox to get started.
Every. Effing. Time.
You forgot to add some of the additional policies that DC is trying to implement, to include 16 weeks of paid “family leave”. Three months of not showing up for work, and DC wants them to get full salary. Why not, it’s not as if these companies are in business to make money. You would have to be an idiot to open a business in DC.
https://www.washingtonpost.com/local/dc-politics/dc-could-become-best-place-in-us-to-have-a-baby-get-sick-or-have-parents/2015/10/05/0277c3ae-6b30-11e5-aa5b-f78a98956699_story.html
The libs aren’t pushing the $15 a hour minimum wage to help out the “little guy.” They are doing it to pay back the union goons. Whenever the minimum wage goes up the union members get a boost in their wages because the contracts specify that they receive x% or $x above the minimum. When the individual union member gets more money, the union then gets more money to bribe the libs. Shampoo. Runs. Repeat. And remember, DC is full of unionized government workers. One more reason to ban government employee unions.
Wrong, Wrong, and Wrong.
Facts are appreciated around here.
Fed Wages are negotiated based on like kind work in that specific area. So McD’s employees wages have no impact on Fed employees, unless they are flipping burgers for them
Last time I checked, that not liking something is not grounds for violating someone else’ rights
Ummm… Where in my comment did I say FEDERAL government workers? The District of Columbia government is full of unionized workers.
Also, look at this excerpt from this article (http://freebeacon.com/issues/d-c-passes-15-minimum-wage/ )
“The Democrat-controlled council unanimously voted to hike the district’s hourly minimum wage from $10.50 to $15 an hour, a 43 percent increase. The council took up the matter as union-backed groups campaigned to put a $15 wage on the November ballot.”
Now, why would union-backed groups be concerned with the minimum wage?
Is that a test question?
Union-backed groups are concerned with the minimum wage because the union pension coffers supposedly get plumper that way.
Unfortunately, these things do not always work out the way the unions think they will. Inland Steel, for instance, went belly-up because of union demands and took the union-pension plans with it. The state of Illinois has the highest-paid teachers in the country and all of them pay into the teachers’ state pension fund, all backed by the teachers’ union. And guess what is always B-R-O-K-E??? Unless these state employees (teachers) also have SocSec-related jobs, they may not have ANY retirement money.
Let’s not forget that in Los Angeles the unions backed the $15 minimum wage and once it was passed promptly asked to be exempt from it.
So, the unions can pay less than $15 an hour. Gee, makes unionizing look more and more attractive for the employer, doesn’t it?
Oops, hit report by mistake.
The previous comment tieing union wages to the min wage is correct which is why unions are the primary driver behind it
Negotiated based on “the prevailing wage”, which is how one can say “not based on the minimum wage’ witha straight face.
The “prevailing wage” of course, is estimated based on minimum wage.
The price inflation that occurs after the raise in minimum wage goes to adjusting those “cost of living” kickers, too.
Just announced on one of the local DC talk radio stations that there will be AUTOMATIC raises to keep up with inflation. The DC “leaders” won’t have to dirty their hands voting on this again.
Oh, okay. Where’s my COLA?
+1000
At McDonald’s. And in DC, a medium cola at McDonald’s will soon cost $4.73 plus tax.
The CPI for May will be released on June 16. So far, it’s ahead of the last CPI that offered an COLA.
That ‘welfare to work’ requirement, a minimum of 20 hours a week to get subsidies, has been reinstated in at least 20 states. So if the minimum wage becomes an inflated rate, more part-time jobs will be available than full-time and you can bet your bippy that prices will rise accordingly until more automation and robots are installed.
What does that mean? Your Rx goes to the drug store, it’s scanned by an OCR reader which activates a pill dispenser which reads a bar code on the related Rx storage jar, boxed, bagged and tagged and handed to you by a robot, that blinks and says ‘Have a very nice day, sir.’
Count on it.
***you can bet your sweet bippy***??
Hold the phone, Ernestine, I think I just had a Sock It To Me flashback!!
Yeah, Blow in my ear and I’ll follow you anywhere.
Say Goodnite, Dick.
Goodnite, you dick!
Uh-Oh, did I do something wrong?
No, not you. I waited and waited for Dan Rowan to say that to Dick Martin and he never did.
Ah, OK, Got it. That would have been a good comeback.
Side Note: Thank You for the Re-Up Bird/FU Lizard audio. We never did listen to it, but talked about it.
We decided to save it for the next go-around.
<3 <3 <3
There’s more stuff, but you guys should follow that blog.
Verrrrrry interesting
… und provocative.
The minimum wage hike is a rallying cry for meat heads across the nation.
The reality is that the actual problem lies behind the traitors in both parties who’ve been bought by large corporate concerns. These traitors proceed to pass legislation that allows US companies to relocate to foreign nations where the labor rates area tenth of US rates and sell product in the US without penalty.
Under that system there can only be an increase in lower income jobs which is exactly what’s been seen under Obama’s much vaunted recovery (in spite of the concept that most jobs are low paying service sector jobs) all the fucking idiots who run around yammering about “free” trade who don’t even understand there’s nothing free about it don’t help. Capitalism is great when it’s properly regulated, unregulated capitalism is what breeds minimum wage sweat shop slave workers. In some industries deregulation helps, but zero regulation does nothing for a nation.
This nation was strongest when the middle class was a production based economy, no nation with a service sector only economy has a comfortable middle class. Pushing the minimum wage does nothing to address the basic issue with free trade agreements that are anything but free.
Okay, VOV, how do we reverse this trend of everything in the way of work going overseas?
The best I can come up with is be your own boss, but that requires a willingness to put up with long hours, a slow start and no guarantee of success.
Unfortunately I think we need to look at restructuring trade deals or we can just accept the fact that the middle class will continue to slide backwards into the upper working poor economic class.
Free trade with Mexico hasn’t helped our economy and has done little to increase border security, one might argue that agreement hasn’t done anything to benefit the US, unless you own a business that you moved there to take advantage of cheap labor.
There can be no free trade with a nation where wages are so low it’s cheaper to have hundreds of people fulfilling product that it is to create a machine to do it in an automated fashion.
I could shit can my entire workforce and move my business to Mexico and the benefit would be making more money for me, and more money for some Mexicans and fuck the people who are working for me now…that’s a really big problem EX.
When American companies benefit substantially from firing American workers and relocating to China or Mexico one must wonder what kind of people are making these trade deals.
There’s a reason the wealth gap is growing, it’s staring us all in the face but we can just keep electing the same people and pretending it’s of no concern and see how that works out in another 40 or 50 years.
Unions bear a large portion of the blame for what you describe, VOV. Prior to the GM/Ford/Chrysler bailout in 2009 – which ended up costing the US taxpayer billions – union labor cost in excess of $70/hour at all 3 major US automakers. In contrast, the cost of labor at Japan’s “big 3” (Toyota/Honda/Nissan) was less than $50/hour, with 2 of the 3 at less than $45 – and the overall manufacturing average in 2006 was less than $30/hour.
http://www.heritage.org/research/reports/2012/06/auto-bailout-or-uaw-bailout-taxpayer-losses-came-from-subsidizing-union-compensation
Indeed there is some truth to that, however it was also Japan’s policy to inflict massive import taxes on US products and subsidize their industries that they wished to gain market share in the US.
Labor costs whatever it costs, but free trade with countries that impose tariffs or have 3rd world wages make discussion about current labor rates rather pointless. There is no wage cost in the US that could compete with a Mexican or Chinese hourly rate of less than $5/hr…productivity can’t make up for that difference.
Labor costs whatever it costs, . . . .
Not really. Labor costs can rise, but only up to some maximum value. Exceed that value, and it becomes cheaper for the business to either move or automate. Exceed that value by enough, and businesses will move or automate – or they’ll go out of business due to competition from those who did.
Businesses are not public services. They exist to make money for their owners, not to provide jobs for the public. When they can no longer do the former, they – and their jobs – go away.
Labor does indeed cost what it costs in a competitive market for talented workers….you are correct when you state automation plays a role. Reducing labor costs is the easiest way to increase direct bottom line numbers. However there’s another reality at play when we are discussing free trade agreements Hondo and put simply it doesn’t make a single bit of difference what US labor costs if the free trade partner has an average wage one third of our minimum wage.
Unregulated free trade across international borders with 3rd world nations has directly contributed to the current job situation. Pretending otherwise is disingenuous at best and downright dishonest at worst. Republicans and Democrats have constructed free trade agreements designed to benefit their corporate masters and do nothing for American society. There is no long term benefit to US workers when their purchasing power decreases due to industry wide loss of manufacturing to a 3rd world economy.
Every single trade deal ever made that was a “free” trade deal with a 3rd world economy has resulted in an instant trade deficit for the US and subsequent loss of jobs. That was true under Bush and true now under Obama. Clinton will support the TPP which is another debacle. All of those free trade agreement simply create a larger wealth gap in the US.
I’m a fervent capitalist, it’s why I operate my own business. But first and foremost I’m a nationalist Hondo. If my fellow Americans have no access to middle class jobs and middle class purchasing power my standard of living will eventually be affected. Maybe after I’m dead which means it only impacts my children and grandchildren….but a country with no middle class isn’t much of a country anymore.
Sounds to me like you’re a proponent of high protectionist tariffs and/or juche. The former merely raise prices artificially – until they become unsupportable and the economy severely degrades or collapses (see Depression, Great – the Smoot-Hawley Act tariffs and similar retaliatory measures overseas were a primary reason for the extreme depth and length of that worldwide downturn). The latter hasn’t worked out so well for the North Korean people.
So what’s your plan then? Hope that someday the Chinese and Mexicans actually make enough money that the US can sell them some product and in the meanwhile just watch manufacturing jobs continue to decline and the gap widen between the rich and the poor? Watch China take over as the largest economy? Because rich guys deserve it? When the corporations that make billions off the US taxpayer’s infrastructure and income but bear no responsibility to the nation the nation’s fucked. Maybe not today, but it’s an inescapable reality that free trade isn’t free when one side has no citizens with actual disposable income. Capitalism unregulated is a dangerous parasite because it eventually kills its host. Capitalism is not capable of a symbiotic relationship with the host unless it’s regulated to do so. I’m not proposing high tariffs, I’m proposing no free trade with economies that are incapable of actual free exchange of trade. I apologize if I’m mistaken but you seem to be advocating that corporations do everything they can to maximize income by taking away US production in favor of an unbalanced free trade system without regard to the impact to the US. if I’m mistaken I apologize and would love to hear how free trade with a foreign weakened economy ever benefits the US long term. Sure you can buy a $10 shirt at Walmart…for now..when you no longer have a job as what 94 million Americans do now as you’ve reported on this very site in the past when you post labor non-participation…what’s the cure? More shitty jobs at Walmart or some dream that a US factory worker making $30-$40 an hour should be happy making $12-$20 because that’s as good as it gets? Poking fun at union labor is easy, they are the elephant in the room. The republicans have offered nothing of substance to fix this, and neither have the democrats simply because both parties are not beholden to you and I they are beholden to their corporate sponsors. Those at the top are globalists, they don’t much care what happens to the US… Read more »
Riddle me this, amigo: if you could move your operations to a location in a neighboring state and save 40% on your total operating costs, would you do so if the location was within a reasonable commute of your current home?
Doing that would benefit the nation – lower costs to consumers, more efficient economic production, yada yada yada. But wouldn’t doing that screw your current workforce and community – even if it benefited both you and the nation as a whole?
My point is that there is ALWAYS disparity, even between locations within the same nation. That disparity creates local advantages and disadvantages.
International trade works on the same principle. We just have larger disparities and less control over them.
If you’re happy where you are and can make it work, great. But don’t blame those who seek to take advantage of the advantages offered by the self-imposed disparity imposed by places with excessive regulation and laws vis-a-vis other places (sometimes within the same nation) that have more business-friendly policies and practices.
OK, there are some industries that don’t require that. Industry is a loose word for self-employed as an artist, photographer, writer – basically, anything that only requires a smattering of equipment, a bright idea, and a subset of skills. It used to be much more difficult to get published as an author but now we have numerous outlets such as Amazon and Smashwords for indie authors and don’t have to go the standard route of the Big Five traditional publishing houses.
I worked for about eight years as a freelancer in prepress graphics production, and my hourly rate was from $10/hr to 12/hr, depending on the project, until I took a permanent job at a law firm. But I was working for myself, I had regular customers, and I set the number of hours per week that I would work, based on the project offered to me.
I don’t know how things are in the work world (the advantage of being retired) 😉 but it almost seems to me that if this inflated rate for low-level wages becomes law, then business owners are going to cut starting jobs to part-time only.
The national economy doesn’t run on those jobs, those jobs are actually byproducts of an economy where the middle class has purchasing power.
Print industry (which I know very well because my current business is print where I am involved in color science) is a classic example of a manufacturing industry largely dependent on more traditional manufacturing firms needing printed matter like packaging and instructional materials along with promo pieces etc…the print industry has been decimated by the move of large manufacturing firms overseas, mostly because the production of good in Mexico or China provides print opportunity for Mexican firms and Chinese firms to supply packaging.
The print industry has been hit so bad it’s a defined retraining industry for the unlucky workers who’ve been displaced by “free” trade.
The simple reality is this, when the middle class workers lose purchasing power service sector jobs go down the tubes as well regardless of any artificial attempt to pump them up and generate larger wage bases. A strong middle class with strong purchasing powers makes a minimum wage mandated hike almost unnecessary largely due to competition for service sector workers.
When the middle class suffers so does the lower economic strata which is what we see now. There’s a reason why in a recovery nothing is really changing with respect to new purchases and why certain markets remain relatively stagnant.
A nation without a strong manufacturing base employing a strong middle class is a nation that will eventually succumb to third world status.
Yep.
My concern over manufacturing losses is simple – you can talk all you want about military might and technology, but in a war the country that can keep manufacturing weapons and replacements longest wins. In many respects WWII technology was dominated by the Germans…but we outlasted them. They had Me-262s and V1/V2s…we had P51s and B-bombers. But when they were running out of fuel, bullets, and troops, we kept throwing more into the mix (as did the Russians.) We don’t have much manufacturing any more – regardless of the size of today’s military, if another major long war comes along – we’re screwed.
DC had a drug bust yesterday. 80+ pounds. No, not marijuana but heroin! It’s a good thing wages are up there. The price of H is tripling as we speak.
Maybe we’re looking at this from the wrong angle. The low-end wage workers are belly-aching for a higher minimum wage, right? Most of those companies hit by this demand are large franchises like McD’s or Target or WalMart. WalMart recently raised its hourly wage to $10/hr. WalMart has thousands of employees, and facilities everywhere, but they don’t MAKE anything. On the other hand, manufacturing jobs like automobiles and electronics seem to have mostly gone overseas, except that my Escape was built in the US, and GM is still sitting tight in Detroit. It was union demands that made Detroit implode, not the Japanese or Koreans. No one is under any obligation to buy a Toyota or a Kia or a Subaru, but people do. And my Chevy Citation was built in a plant in Oklahoma, not in Seoul. If you take a look around, plenty of smaller independent businesses that are not chains or franchises are thriving. There is plenty of entrepreneurial effort underway that is succeeding because there are avenues now that allow a broader market to find these people. If you recall, it used to be that your city neighborhood had small mom & pop shops like bakeries and butcher shops that supported an entire family. They were replaced by chains of supermarkets, like A&P, Safeway, Food Lion, and now Walmart. Even getting a cup of coffee involves going to a chain like Starbucks or 7-11. The smaller shops seem to be returning, for various reasons. Craft breweries and vintners have picked up where the Big Beer Boys have failed. Amazon’s distribution system allows anyone who has a product to reach a wider market. QVC, the telemarketing company, has facilities in many, many countries, but most of their stuff comes from entrepreneurs, not large manufacturers. And last but certainly not least, the good ol’ internet gives anyone who has a product exposure to sell it. None of this involves unions in any way at all. So what’s wrong with that? Unions had a purpose at one time, to stop employers from exploiting wage earners. They served their purpose,… Read more »
Service sector only economies never provide the stability and long term employment of manufacturing economies EX…
All those small shops are great, but as the wealth gap continues to widen they won’t succeed for long either.
An economy built on purchasing goods and services needs customers with money, not minimum wage subsistence workers and a top tier wealthy class. That economy needs middle income earners with disposable capital income. Without that a purchase based capitalist economy is dead, not right away certainly but ultimately it declines and becomes irrelevant. Look at former world powers and see which ones lost manufacturing to their “foreign free trade” partners and you’ll start to see what happens to economies that outsource manufacturing and replace it with service sector economies.
And in each of those countries which were non-communist, VOV, look at the history of their organized labor. When wage demands rose too high, the industry went elsewhere – just as it damn near did in the US auto industry in 2009, and just like it did in much of the US steel industry in the 1970s.
Like it or not, we are not self-sufficient; we are dependent on participation in the world economy. As a nation, we can complain about the fact, do nothing, and go down the tubes. Or we can figure out how to use it to our advantage. Removing a metric crap-ton of taxes and over-regulation would IMO be a good start.
What we can’t do is maintain the status quo as it exists today (or that of 40 years ago). The American public may want that, but it’s simply not going to happen.
And what candidate(s) have actually proposed this? Trump makes great deals, really, really great deals and we’re going to have wonderful deals…
He negotiates really great terms, and we’re gonna have really, really great terms…except for the Mexicans they’re paying for the wall a really, really, big wall…
He suck and Hillary sucks he might suck less than her, but damn that’s a knife edge of difference.
Status quo is all we’ve got with the current crop of assclowns.
VOV, I was referring to shops that were started in the 1920s and 1930s during the Depression and are still going. This is 80-some years later. The shops support entire generations. Gonnella Bakeries started in Chicago during the Depression. It’s still going. That was my point.
You’re both making good arguments, but I’ll add this bit of history about a couple of industries. The furniture manufacturing business in the US started in North Carolina. From there, it went to Michigan, and later on, to Japan. Now, it’s in China. My kitchen table, chairs, and china hutch are all solid fruitwood and all came from a manufacturer in China. I wasn’t happy with that, but that’s where it’s being built. The other side of that coin is the photography industry. Eastman Kodak was the king of the heap in production of photolab chemistry and film. The management of that company did not take digital photography seriously. The company well belly up, managed to recover a little, and still produces a few kinds of film and chemistry products but it has mostly gone south for good. Kodak and Agfa were major producers of X-ray film. When digital X-ray equipment was developed, it not only cut the cost to the customer (the patient) to a fourth of its original price, but eliminated huge amounts of toxic chemical waste. The sensors and microchips in your phone camera, pocket camera and whatever came out of the Pioneer and Voyager probes. The sensors used to send images of the outer solar system are the genesis of your digital imaging stuff. they were developed in the USA but all of that stuff comes out of Japan and China now. Japanese teenage girls demanded cameras in their phones 3 years ahead of the production, and the phones with cameras were released in Japan 18 months ahead of the US release. So, in view of the toxic byproducts and the huge landfill waste piling up in China from discarded electronics, do you really want that stuff coming back here? The garment industry went overseas. It keeps moving around – a lot. But if I want clothes made in America, I can buy fabric and patterns at a US store and make my own. No, we don’t have much big industrial production now, but we still can do it when we have to. I think the… Read more »
“And my Chevy Citation was built in a plant in Oklahoma, not in Seoul.”
If you ever owned an 80’s Pontiac LeMans, it would have been built in Seoul by Daewoo, just sayin’…
That nay be, but the plant of origin for my Citation on the sales slip was Oklahoma. It was a crappy car, too: constant recalls.
About a month ago I read an article about how many restaurants and cafes are packing up shop and leaving Seattle because of their minimum wage fiasco. Once someone gets a $15 an hour minimum wage job, won’t they be making too much money to qualify for Government bennies to include Public Housing?