Increase in Min Wage

[lvstephanie]

What do you think of the proposal to increase the minimum wage that the President announced in his State of the Union?

I personally think this is a very wrong move to make, esp. in the current economic climate that we are in. Looking at it from the PoV of a business, a company isn't going to just roll over and fork out the additional cost to pay their workers. Either a company will shift those costs to the consumer thereby increasing prices which in turn raises inflation which hurts people on lower wages and / or fixed incomes. Or a company will not be able to afford as many workers which will lead to unemployment. In either case, the people that this wage increase is supposed to help are actually the ones hurt in the process.

And for small businesses, this could be this kiss of death for them. If one of these companies cannot afford the increase and cannot lose customers by increasing prices, their only recourse would be to hire less staff. And if they don't have enough employees to cover all of their obligations, they may just have to close up completely.

I just think that this is one of those policies that looks good at first, but when you examine all of the ramifications, it is actually more harmful to the already fragile economy.

[sigmapi1501]

It's an artificial raise.  If you are working 35 hours a week and they raise your rate an hour, the company will just cut 5 hours a week. THEN the same company will use this rate increase to raise prices of goods even though they are actually unaffected due to cutting hours.

[lrharting]

I agree.  It sounds like a great idea until you really think about it.  Businesses will find a way to absorb the costs.  I think instead of hours, benefits would be the first thing to go.  After all if you have more money you can afford to pay more for healthcare...  Everyone want's to throw money at the economy problem, but I don't think they can print enough to solve it.  It would help some if everyone (gov't included) would live within their means.

[gwendolynconrad]

This is great who really need this.

[Phx0808]

It doesn't work. Look at companies like Walmart who always find a way around stuff. The gov't says you have to give benefits to full time people, so instead of hiring 10 full time people, they will hire 20 part timers.  I think there would be better competition for jobs, if we didn't have the min wage. I know some people may get taken advantage of but, they have to take some responsiblity for allowing it.

Min Wages are also so different from State to State

7.80 in Arizona    (2013)
9.19 in Wa. State (2013)  

[BMaston12]

What do you think of the proposal to increase the minimum wage that the President announced in his State of the Union?

I personally think this is a very wrong move to make, esp. in the current economic climate that we are in. Looking at it from the PoV of a business, a company isn't going to just roll over and fork out the additional cost to pay their workers. Either a company will shift those costs to the consumer thereby increasing prices which in turn raises inflation which hurts people on lower wages and / or fixed incomes. Or a company will not be able to afford as many workers which will lead to unemployment. In either case, the people that this wage increase is supposed to help are actually the ones hurt in the process.

And for small businesses, this could be this kiss of death for them. If one of these companies cannot afford the increase and cannot lose customers by increasing prices, their only recourse would be to hire less staff. And if they don't have enough employees to cover all of their obligations, they may just have to close up completely.

I just think that this is one of those policies that looks good at first, but when you examine all of the ramifications, it is actually more harmful to the already fragile economy.

Lets face it, we all need more money to keep  up with rising prices. Unfortunately, it will only help the little guy for a short time. Prices wil begin to rise to compensate for the increasse in minimum wages. If we could stop everything from continuing to rise in cost, we would stand a chance to actually get ahead of the race. But it is not likely that prices will fall at the grocery store, restuarants, cars, or other good we purchase. The trend is to pay more and get less.
BMaston12

[ssliva67]

Prices will continue to rise to cover the cost of the pay increase.

[Flackle]

It's an artificial raise.  If you are working 35 hours a week and they raise your rate an hour, the company will just cut 5 hours a week. THEN the same company will use this rate increase to raise prices of goods even though they are actually unaffected due to cutting hours.

Although I agree that raising the minimum wage affects the availability of jobs, it doesn't necessarily mean less hours. If a worker is being productive enough to produce 10 dollars per hour for the company and is being paid 2 dollars an hour, then the company will profit whether that person is working 35 hours a week or 40 (Its only when you get into extremes ,like the difference of 10 to 40 hours or 40 to 60 hours, does the number of hours affect productivity.) The problem occurs when the minimum wage becomes, say, 11 dollars an hour and the company loses a dollar per hour regardless of the number of hours that person works.

Now I could see a company cutting hours and then expecting their workers to do more work or be more productive, but they could do the same if they still retain the same number of hours. They could simply ask for people to produce more or fire them, because their business cannot be sustained by losing a dollar every hour for that employee even if they only work 35 hours. If the employee works harder to become more productive, and is able to produce 12 dollars an hour, then they can keep their job but they have to work harder than they probably want too. Workers also have to work harder because those who can't get cut and the rest of the workers have to try and pick up the slack. Although that employee may be producing 1 dollar per hour profit, after the cost of overhead and other expenses, the employee may not be profitable unless they produce 2 extra dollars an hour (and thus has to produce a total of more than 13). The number of hours the person works some bearing on this, but I don't see how cutting 5 hours out of the employees work week will suddenly cause them to be more profitable and is the best solution to increased forced wages. Cutting hours is a temporary solution (since less hours does mean overall less cost) to a permanent problem, and most companies will know this and probably just flat-out layoff someone rather than fiddle with their hours.

[bobes915]

I agree with what others have said on this thread.  While it seems like a good idea, the economic realities actually make it a really dumb idea.  Instead of helping the little guy, this will hurt the little guy.

[levettepough]

I agree with what others have said on this thread.  While it seems like a good idea, the economic realities actually make it a really dumb idea.  Instead of helping the little guy, this will hurt the little guy.

If they increase the minium wages maybe people will feel like they are making some money

[Flackle]

I agree with what others have said on this thread.  While it seems like a good idea, the economic realities actually make it a really dumb idea.  Instead of helping the little guy, this will hurt the little guy.

If they increase the minium wages maybe people will feel like they are making some money

You mean after they get laid off because they are no longer profitable to keep as an employee?

[lgemini]

Yes, min. wage need to increase, who can live off of $7.25 an hour.

[msmoneybags48]

Raising the minimum wage to $9 per hour?  You are complaining that it's a bad idea.  I worked in the 1980's and, at that time, minimum wage was $3.35 per hour.  I was barely able to eke by.  I was hired as a Clerk when I was in Chicago in 1991; minimum wage was $4.25 per hour and I was paid $4.95 per hour (70 cents over minimum wage).  By the end of the year, I was making $5.15 per hour until I was promoted to being a Full Time worker.  The fact is, on minimum wage, you are still one of the working poor and making less than you would if you were salaried.  But if you let the Republicans tell it, the Government is broke because they can afford the luxuries that we wish we could afford.  They don't want to sacrifice their luxurious lifestyle, but they are not looking out for the Americans that are poor; they are looking out for the millionaires.

[Flackle]

Yes, min. wage need to increase, who can live off of $7.25 an hour.

Its pretty easy, actually, if you do the following things:

-Stop eating out every week.
-Get a beater for a car and stay away from having to make car payments.
-Live with roommates and share rent (it helps if you also withhold having children until you can afford it but a lot of people already jumped the gun and so unfortunately this isn't really an option. There is still fairly cheap houses out there depending on where you decide to live.)
-When you do buy food be smart about it. Don't buy expensive pre-made frozen foods. Go for basics like pasta, rice, beans, in-season vegetables (things like potatoes and cabbage go a long way for your buck).
-Buy from thrift stores and yard sales. Avoid buying brand new clothing unless you have to for your job. Even then, there is plenty of good clothes if you look around and you get them 90% off what they cost retail. No to mention things like books, home decor, and furniture.
-Save your money for emergencies. Don't rely on credit cards since debt is the most useless thing to waste your money for. It really does pay to actually have money saved if you can avoid paying that 18% interest.
-Be wary with electricity use. If it's warm outside then open a window to save on heat during the winter. Always turn off lights when you're not using them (Its worth saving the electricity for the extra second it takes to flip a switch). Don't take 3 showers a day. 2 At most is enough but I find 1 in the morning to be plenty (Its not the number of showers, its how well you clean yourself that matters). Try drying clothes on a clothes line if possible.
-Be wary with gas use. Use gas only when you have too, and don't feel ashamed to ask for gas money if you do someone a favor. Also remember that when you drive, gas isn't the only expense. There's the wear and tear on your car, and also the time spent driving.
-Avoid impulse buying. Unless you work there, don't go the mall.

Just some general hints to make living on 7.25 easier. Obviously having a large family to support does make this difficult, so I recommend anyone thinking of having a family to get your finances in order first.

[vickysue]

Yeah and an increase may just put you into the next tax bracket too. I had that happen to me. I got a dollar raise and taxes went up and i actully lost money.