News, Starbucks CEO: $15 min. wage may kill jobs (credit, bankruptcy, unemployment)

[Shirina]

Originally Posted by downtownBellevueDan

the average profit for a business is 5% Gross.

The weakness of using an average is that it does not take into consideration extreme values - which can substantially skew the results. The one-off "Mom and Pop" businesses would be the most affected, but those kinds of places usually don't have more than a dozen workers - if that. These little (rather than small) businesses, arguably the most numerous, drag down the average gross.

In addition, using a percentage rather than raw dollar amounts is misleading. If 5% of gross equals hundreds of millions of dollars - or even billions - then this argument can't be used as an excuse to be against a 15$/hour standard.

The easiest way around this issue is to have a system like Minnesota that allows for a lower minimum wage if a business's annual receipts total less than $625,000. Of course this specific number can be changed, but the point is that some states already have a tiered system. Why not put it to use nationally?

Because the abundance of small (tiny) businesses which cannot afford to pay its employees all that well acts like an anvil tied around the leg of wages. If the going rate for a graphic designer is $30,000 per year to start but 70% of businesses can only afford to pay $20,000, the other 30% which can afford to pay $30,000 ... won't.

This simply allows multi-billion dollar companies like McDonald's and Wal-Mart to skimp on wages.

Originally Posted by downtownBellevueDan

If the government forces expenses on any company-thru regulations, which this 15hr is, Small business will go broke and big business will be forced to cut jobs or shut down locations and sell the real Estate they own.

Uh ... no they won't. The problem, as stated before, is to introduce a two-tiered system. Big businesses, however, won't be going broke. They'll just have to give up some of that gold stashed in their vaults, probably allocated for golden parachutes and extravagant perks for the senior executives - oh and let's not forget lobbying congress. You need plenty of money to do that so a business's special interests can supercede the will of the people. We lost our right to call our nation a "democracy" the moment the Supreme Court ruled that money is a form of free speech in regards to election campaigns. But that's a whole other thread.

Originally Posted by downtownBellevueDan

Why do people with out any economics in their expertise think they can be smarter than the marketplace?

People often forget that economics is not a science. That's why the economics department in most every university is found in the same building(s) as the history, sociology, and psychology departments. There are NO immutable laws; economics is the study of human behavior, not mathematical equations and geometric theorems. Our economic system works the way it does because we have chosen to make it work that way. But the beauty of human behavior is ... wait for it, wait for it ... yeah, we can change it. Wow, what a novel concept.

You claim that $15/hour will kill businesses. Well, guess what will kill businesses even faster? How about when all but 10% of people can't afford much beyond basic living expenses? I would imagine that would be devastating for a consumer-driven economy, wouldn't you think? Remember that America was at its most prosperous when even a high school drop-out could walk down to the local factory and earn a modest yet comfortable living. Now you'd be hard-pressed to earn more than $25k per year without a masters degree.

Originally Posted by downtownBellevueDan

It is not the private sector that is responsible for helping workers get a living wage. It is the educators that have failed to create high levels of literacy.

Yeah, that's because the private sector is using the educational system to subsidize their training - because that frees up even more of their profits. Thus there really aren't any "entry level" positions any longer; you're expected to already know the job so that training only amounts to a week or two covering the specific policies of the company. Now, kids coming out of high school have to go tens of thousands into debt learning skills that ought to be taught on the job. It's just another scheme by the private sector to pass on all the expenses to the people - which is why things like apprenticeships and paid internships are a thing of the past.

Originally Posted by downtownBellevueDan

It is the educational system that could deliver college degrees online for 1/10th the current cost-because of the internet and innovation.

Online learning is overrated; it will never deliver the whollistic experience of a brick-and-mortar school. Online learning is fine for taking a few classes while still working to get a promotion or brush up on the latest goings on in your field. But I wouldn't put a lot of stock in it as a substitute for actually -going- to college.

Originally Posted by downtownBellevueDan

And yet they raise the tuition much faster than inflation-to build fiefdoms and tenureship and fat pensions. They talk a good game"we want everyone to have a good education" but they think only of their own profit.

Which is precisely what the private sector has been doing since the Reagan years. Who do you think taught it to the educational system? But ... at least a pension is benefiting the average worker and not just the elite positions. I don't have an issue with pensions - because, heh, yeah, the idea of scrapping pensions is yet -another- way in which businesses have foisted unaffordable costs onto the individual citizen (but the top dogs are never wanting for money, even when they fail and get kicked to the curb).

Originally Posted by downtownBellevueDan

Cut off all Government subsidy for College tuition and lets see how fast the cost of tuition drops. Educators are self-serving Hippocrates.

Nope, won't happen. Cutting off government subsidies for tuition would only ensure that most colleges would close, leaving a higher education to the wealthiest Americans. And hey, why not? That's the way the private sector is heading - especially our obsolete and, I dare say, barbaric health industry.

Originally Posted by downtownBellevueDan

Help everyone get an education and get a good job and grow the economy. Build FREE online colleges that compete with state and private colleges. Let the employers decide if these graduates will make good workers! Soon the low-wage jobs will be hard to fill at 15ph!

The problem here is that not everyone is college material. I would argue most are not. Even before tuition began skyrocketing, only 23% of Americans had a BA, 6% had a masters, and less than 1% had a doctorate. Not everyone can be a scientist, mathematician, businessman, engineer, doctor, or other higher end jobs. Without people working on the factory floor and doing other low/unskilled jobs, society would break down and there would be no goods to sell; those are the folks making a pittance.

The problem today is NOT a labor shortage. That's why even educated people are still delivering pizzas five years after graduation. Even before the Great Recession hit, I was told by a headhunter business that recent college grads like myself are finding themselves in similar circumstances as myself - plenty of education but no experience. Thus we end up working low-paying, irrelevant jobs that do absolutely nothing to gain any of the experience we need. The classic trap of "needing experience to get experience" is particularly potent these days.

Bottom line is that there are not millions of job vacancies due to Americans being too stupid and uneducated to fill them. It's not as though affordable tuition will suddenly put America back to work making a decent living.

And the bottom line to my earlier bottom line is really quite simple - if complex to solve. Prices keep going up because someone decides to raise them. Someone somewhere makes that decision based on a convoluted formula we call "economics" to justify ever-increasing amounts of greed and corruption.

What needs to happen will never happen - not even if it means the death of civilization as we know it. What we need is a completely (and I do mean completely) different economic model. One that is stable and sustainable rather than this chaotic and volatile system we have now. It has to go because eventually it will be the death of us all. Hyperbolic you say? No ... actually it isn't.

Because the human race, more than any other time in history, is finding itself bound not by what we're capable of, but rather by what we can afford. That will lead to our ultimate demise.

[go-getta-J]

^^^^^Shrina....well thought out analysis. This articulates my viewpoint as well.

The problem is you are not going to convince these free market fundamentalists otherwise:

Remember, they see the world in black and white:
The free market is their God. Economics is their Bible.
Poor people = evil, unworthy and deserving of their fate.
Rich People = Blessed & Holy, do not offend them.

A shame that an advanced country such as the U.S. still has to deal with these ignoramuses and as a result suffer from a worse quality of life than most comparable western democracies.

[chickenfriedbananas]

Originally Posted by go-getta-J

^^^^^Shrina....well thought out analysis. This articulates my viewpoint as well.

The problem is you are not going to convince these free market fundamentalists otherwise:

Remember, they see the world in black and white:
The free market is their God. Economics is their Bible.
Poor people = evil, unworthy and deserving of their fate.
Rich People = Blessed & Holy, do not offend them.

A shame that an advanced country such as the U.S. still has to deal with these ignoramuses and as a result suffer from a worse quality of life than most comparable western democracies.

I don't really disagree with the spirit of your argument, and there's no question that there's a growing disconnect between executive salaries and the salaries of wage earners on the front lines. But I think the minimum wage ought to be a last resort. We'd be better off giving earned income credits at tax time and closing tax loopholes for big business. We'd be even better off if we could impose modest sanctions on countries that serve as offshore tax havens.

[oldtrader]

What so many on this thread keep ignoring, is that businesses only have so much money they can dedicate to salary. Many cannot raise their prices to cover a $ 15 minimum wage, due to competition. A $15 minimum wage would drive many businesses into bankruptcy.

What will happen with a $15 minimum wage, is a lot of people will lose their jobs, and nothing else will be available.

Today, many jobs can be automated away. Example of McDonald's, Burger King, Wendy's, etc. They will just automate and lay off nearly all of the staff. The machinery that can replace most help, is getting ready for sale right now. They are hoping that the government is stupid enough to make $15 an hour the minimum wage, which will make them the standard in the hamburger world.

Robot Serves Up 360 Hamburgers Per Hour | Singularity Hub

[MaseMan]

Again, no one seriously thinks a 15 dollar minimum wage is around the corner. It will rise to 10 bucks an hour at most. A lot of people are fine with that, including Subway CEO Fred DeLuca (you know, one of those job creator guys) .

[go-getta-J]

Originally Posted by MaseMan

Again, no one seriously thinks a 15 dollar minimum wage is around the corner. It will rise to 10 bucks an hour at most. A lot of people are fine with that, including Subway CEO Fred DeLuca (you know, one of those job creator guys) .

I would also be happy with a $10 an hour minimum wage and then indexing future increases to inflation OR an expansion of the earned income tax credit. Anything to help boost the purchasing power of the lower and middle classes.

But I have a feeling no matter what.......the right-wingers will oppose ANYTHING that helps those not in the top 10%. Like you said earlier, they just can't stand the concept of government helping average Americans. Supposedly that's evil socialism or whatever....

Remember the right-wing policy platform........nothing will work *******s (or insert other tired liberal cliche), we don't have any better ideas so go starve.

[const_iterator]

Originally Posted by Shirina

Yeah, that's because the private sector is using the educational system to subsidize their training - because that frees up even more of their profits. Thus there really aren't any "entry level" positions any longer; you're expected to already know the job so that training only amounts to a week or two covering the specific policies of the company. Now, kids coming out of high school have to go tens of thousands into debt learning skills that ought to be taught on the job. It's just another scheme by the private sector to pass on all the expenses to the people - which is why things like apprenticeships and paid internships are a thing of the past.

I agree 100%.

The educational system basically serves companies ready-made workers at no expense. The years 18-22 for people these days is spent going into debt and doing all sorts of gymnastics to stand out and try to compete for those coveted white collar jobs when a company goes to do its university recruiting once a year. Those who have good jobs lined up for when they graduate are the "winners" of the working world these days, and those who don't get the good jobs are stuck on a track to be the "losers", because all the good jobs don't really have a bottom-rung-of-the-ladder by which a college grad without a stellar pedigree can prove himself.

The overall trend in the working world is that the good companies are figuring out how to do more with a fewer number of workers and so the number of good jobs is shrinking and becoming occupied by a sort of "elite" workforce; everyone else is left with service sector jobs where they'll be serving the elite when it buys its toys online or uses the company credit card to go out for lunch for the 5th day in a row. Social scientists like David Brooks and Charles Murray predicted that the working world is heading in that direction, and their predictions seem to be coming true.

[MJ7]

I feel sorry for the guy that started out making minimum wage 10 years ago and finally has made it to 15$/hr. Some companies will not be able to afford to match the increase and will probably give employees ultimatums - either you stay at 15/hr or you can leave?

[go-getta-J]

Originally Posted by const_iterator

I agree 100%.

The educational system basically serves companies ready-made workers at no expense. The years 18-22 for people these days is spent going into debt and doing all sorts of gymnastics to stand out and try to compete for those coveted white collar jobs when a company goes to do its university recruiting once a year. Those who have good jobs lined up for when they graduate are the "winners" of the working world these days, and those who don't get the good jobs are stuck on a track to be the "losers", because all the good jobs don't really have a bottom-rung-of-the-ladder by which a college grad without a stellar pedigree can prove himself.

The overall trend in the working world is that the good companies are figuring out how to do more with a fewer number of workers and so the number of good jobs is shrinking and becoming occupied by a sort of "elite" workforce; everyone else is left with service sector jobs where they'll be serving the elite when it buys its toys online or uses the company credit card to go out for lunch for the 5th day in a row. Social scientists like David Brooks and Charles Murray predicted that the working world is heading in that direction, and their predictions seem to be coming true.

The ultimate irony......private sector companies griping about big bad evil government but demanding government-funded and subsidized colleges supply them with an abundant supply of turnkey workers.

[MaseMan]

Originally Posted by MJ7

I feel sorry for the guy that started out making minimum wage 10 years ago and finally has made it to 15$/hr. Some companies will not be able to afford to match the increase and will probably give employees ultimatums - either you stay at 15/hr or you can leave?

Probably not a very good employer to work for, really