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If you can't afford to pay your workers at a level that approximates a living wage, there is something flawed about your business plan.
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I have a problem with the whole concept of a "living wage". Everyone's idea of that is different. Some people seem to think you should be able to support a family of 4 a minimum wage job. I do not.
All jacking wages up does is raise prices or eliminate employment as a result of the higher prices. If it doesn't raise prices, it's because jobs have been eliminated due to automation or other efficiencies. Most of the businesses that pay low wages have 3-4% profit margins at most. That is why they don't pay much. Retail, restaurants, and hotels are all high overhead, low profit margin businesses, which is why they don't pay much.
The core problem is we have too many people competing for jobs at the bottom of the wage scale. Raising the minimum wage doesn't solve that core problem.
However, increasing the housing supply generally keeps the cost of living lower for everyone and I think that's a much better policy.
I live outside of Seattle where some of this "nonsense" regarding $15 minimum wages started (as far as I know).
The issue is that it's becoming ever increasingly expensive just to afford housing here. I don't even own a home, I own a 1860 sq ft condo and it's valued at around $600k. 1500 sq ft "starter" homes go for about the same price. Unless you live in SF, LA, Boston, DC or NYC spending $600k for a ho-hum condo is crazy. Single individuals making the $9-12/hour simply couldn't afford real estate where I live and most couples with the same wages couldn't either. So people advocating $15 minimum wages aren't looking to simply spend more on just anything. In many cases they're looking to just remain solvent in our ever increasing COL.
That's the rationale where I live and it's certainly a valid concern. However like what previous posters have said, I'm not sure how it would work out on the employer's side of things or the ramifications on the whole. Going to $15 is a huge jump. I feel like it sorta came out of nowhere. I can only imagine doing anything different would be better if it was done gradually.
But what I am tired of is vilifying and politicizing the issue.. that somehow wanting to make our greatest cities more affordable and housing fairer is somehow just a "leftist" issue. It's not... in fact, in many ways what's happening in Seattle is the kinda issue that Trump would love to talk about. One of the YUGE (that's "huge" Trump style!) issues Seattle is facing is that it's literally being bought up by a ton of cash-heavy Chinese investors trying to hide their wealth from their Communist government. Up until recently the Chinese were mostly focused on Vancouver, CA (although there had been growing interest in Seattle from the get go). Then they implemented a hefty foreign investor tax and it's forcing the Chinese to look at Vancouver's American neighbor just a few hours south of the border: Seattle. So what's happening is that the competition for housing, any housing, isn't even necessarily local competition. In a way it makes a more solid argument for Trumps position: our jobs are leaving the country, but our land is foreign owned.
Complicated issue.
Seattle has limited space.
Therefore limited housing.
Give everyone more dollars to spend on housing and they'all spend more on housing until once again $15/HR makes it impossible to afford a place to live.
I think if you reread you'll note that I'm not entirely convinced it would.
Building more housing is easier said than done here. Unlike places like Texas where development can just keep spreading far and wide, we're constrained by Puget Sound to the west and the Cascade range to the east. Total distance between the two is about 40-50 miles, but in those 50 miles you still have topographic challenges like smaller mountains and lakes.
The economy and construction is exploding, but developers are focusing on the coin-laden high tech workers, not wage earners. Adding in the cost of transportation even the outskirts become expensive.
On the note of a foreign investor tax... YES. If these people want to come in, live here and contribute to our society that's great, but the issue is that a lot of them are just parking their cash, with an idea that maybe they or their children will come... eventually. I'm not in favor of empty houses so I would support the tax.
You are considering the amount of space for housing by looking at two dimensions only, while ignoring the third dimension.
Give everyone more dollars to spend on housing and they'all spend more on housing until once again $15/HR makes it impossible to afford a place to live.
Supply and demand doesn't change.
So you are saying that change the scale doesn't mean changing the problem.
Yes I agree with this.. to some extent...
Supply and demand doesn't live in a vacuum though. Government and policy is a big, big force in economics.
I live outside of Seattle where some of this "nonsense" regarding $15 minimum wages started (as far as I know).
The issue is that it's becoming ever increasingly expensive just to afford housing here. I don't even own a home, I own a 1860 sq ft condo and it's valued at around $600k. 1500 sq ft "starter" homes go for about the same price. Unless you live in SF, LA, Boston, DC or NYC spending $600k for a ho-hum condo is crazy. Single individuals making the $9-12/hour simply couldn't afford real estate where I live and most couples with the same wages couldn't either. So people advocating $15 minimum wages aren't looking to simply spend more on just anything. In many cases they're looking to just remain solvent in our ever increasing COL.
That's the rationale where I live and it's certainly a valid concern. However like what previous posters have said, I'm not sure how it would work out on the employer's side of things or the ramifications on the whole. Going to $15 is a huge jump. I feel like it sorta came out of nowhere. I can only imagine doing anything different would be better if it was done gradually.
But what I am tired of is vilifying and politicizing the issue.. that somehow wanting to make our greatest cities more affordable and housing fairer is somehow just a "leftist" issue. It's not... in fact, in many ways what's happening in Seattle is the kinda issue that Trump would love to talk about. One of the YUGE (that's "huge" Trump style!) issues Seattle is facing is that it's literally being bought up by a ton of cash-heavy Chinese investors trying to hide their wealth from their Communist government. Up until recently the Chinese were mostly focused on Vancouver, CA (although there had been growing interest in Seattle from the get go). Then they implemented a hefty foreign investor tax and it's forcing the Chinese to look at Vancouver's American neighbor just a few hours south of the border: Seattle. So what's happening is that the competition for housing, any housing, isn't even necessarily local competition. In a way it makes a more solid argument for Trumps position: our jobs are leaving the country, but our land is foreign owned.
Complicated issue.
Structural changes to the economy have created a critical mass of ADULTS trying to live on minimum wage. In 2012, 48.5 percent of minimum wage earners were at least 25 years of age; that number is certainly higher today.
This is why people are protesting for a higher minimum wage - it's not teens who are protesting.
America has to be the only country in the world whose people argue for LOWER wages. We could make the minimum wage $0.01 an hour and it wouldn't make you people happy.
They'll say "minimum wage workers need to get better jobs.". But how do they get them? They have to get education. A minimum wage job will not even pay for community college. Plus, tuition rises 10% per year, including at community colleges, while minimum wage has not increased since 2007.
So they ask for free tuition, and you say "they should get a job."
They go into debt, then ask for debt relief, and you say "they're moochers."
They were not properly prepared so they don't finish college but you say your taxes are already too high so the schools go under funded, leaving students unprepared. Colleges offer remediation but now it's even more classes students have to pay for.
States decrease their appropriations so they can cut taxes to get your vote. Tuition rises again.
Do you see the vicious cycle here?
We will either raise wages or lower people's costs.
For years I have proposed reducing housing regulations as a way to reduce housing costs, which are by far the elephants in the budgets of most minimum wage workers.
But Americans are sore losers and unwilling to adapt to downward economic mobility, so government is unwilling to allow lower housing costs.
In this context, raising minimum wage is politically the easier thing to do.
I have a problem with the whole concept of a "living wage". Everyone's idea of that is different. Some people seem to think you should be able to support a family of 4 a minimum wage job. I do not.
All jacking wages up does is raise prices or eliminate employment as a result of the higher prices. If it doesn't raise prices, it's because jobs have been eliminated due to automation or other efficiencies. Most of the businesses that pay low wages have 3-4% profit margins at most. That is why they don't pay much. Retail, restaurants, and hotels are all high overhead, low profit margin businesses, which is why they don't pay much.
The core problem is we have too many people competing for jobs at the bottom of the wage scale. Raising the minimum wage doesn't solve that core problem.
However, increasing the housing supply generally keeps the cost of living lower for everyone and I think that's a much better policy.
I was predicting that 20 years ago when people were screaming for welfare reform.
For years I have proposed reducing housing regulations as a way to reduce housing costs, which are by far the elephants in the budgets of most minimum wage workers.
But Americans are sore losers and unwilling to adapt to downward economic mobility, so government is unwilling to allow lower housing costs.
In this context, raising minimum wage is politically the easier thing to do.
Well by doing that you would decrease home values, and homeowners are much more politically powerful that those who are not. They own valuable real estate after all.
Another way, but similarly not politically feasible, is to do something like encourage building WAY out from expensive areas and at the same time create some massive and efficient public transportation infrastructure. Japan has this, London has this to an extent. Of course, it is very, very expensive.
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