Why is that an issue for McDonalds or Walmart in running its business? Welfare is not a program that they put in place, and are not part of the ROI of the job positions.
Making this argument is like someone coming onto my property and doing work I did not ask for and would not do and then demanding payment because they said the work is my responsibility to pay for. No, did not ask for it, so they eat the costs.
Following from #1 above, it is definitely the taxpayers' responsibility because it is the taxpayers who put the welfare programs of such high expenditures in place. The taxpayers voted for the stupid pols that created these programs, thus, the stupid taxers, i.e, voters, should pay for what they voted for, not businesses which did not vote of such a program. You vote / ask for it, then it is your responsibility to eat the costs, not pass it to someone else.
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Mcdonalds (one of the most profitable restaurant chains) made a 5.5 billion dollar profit last year… That’s also assuming Mcdonalds used 100% of their profit to pay employees more, which is also highly unrealistic…
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I am always intrigued by this sort of statement.
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I get what you are saying, but this statement acts like the $5.5B belongs to some inanimate object that can do with the $$ what it pleases. The flaw in this argument is the money does not belong to an inanimate object. Where in the world do you think McDonalds gets its money from to open stores and operate?
More specifically, that $5.5B is other people’s money (lots of other people), i.e., the people who took a risk and invested in McDonalds. So, it does beg the question, how would you like someone to be able to come and tell you what you must do with your after-tax discretionary income? They could say no vacation for you and that new car, forget about it. I am thinking you would not like that very much and would tell them that your after-tax discretionary income, after your hard work, is your business (no pun intended) to decide what to do with.
Have you ever thought that is is exactly what the investors in McDonalds are thinking as well, as they are no different than any other workers in terms of expecting return on their money (their money is their work), and that they, like you, also expect the requisite freedom to spend their after-tax income how they choose?
We are doing a poor job in teaching economics if people do not understand / know the basic fact that a company’s money is just another term for other people’s (the risk-takers’) money.
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What? Do you mean Ms. McDonald isn’t lounging somewhere with $5.5B coming in each year?
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The argument is that low minimum wages (profit to the investors) is subsidized by welfare (food stamps for the working poor) which is a cost to all taxpayers. Why should the taxpayers be helping owners of McDonalds (or Walmart)?
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That is one way of looking at it.
Another way to look at it is this:
many/most of the McD workers are not low income. They’re young folks being supported by parents, single people with no dependents (often sharing a home with another similar person), spouses with another income, retired people looking to supplement their income, people on disability who allowed to earn about $1000 a month w/o it hurting their benefits (which taxpayers are covering ANYWAY).
the truly low income single-parent working at McD’s is in a subset of McD’s minimum wage employees.
the truly low income parent is going to receive tax-payer benefits anyway. Raising the minimum wage likely still qualifies their kids for free breakfast and free lunch. They’re probably still going to qualify for the tax credit for low income folks.
It’s better to leave the minimum wage about what it is, with periodic reasonable increases, and allow that small group where their minimum wage job is their entire family’s only income to still get their bennies.
Why should tax payers have to pay more for products just so the rest of the minimum wage earners can earn more money?
It’s better to help subsidize a working low income person then to create an atmosphere where her employer does a cost-analysis and determines that a capital investment into some sort of automation will eliminate her job completely.
Companies like McD’s may want to look into whether it’s cheaper to provide some sort of child-care supplement for those who have bio or adopted children under a certain age (say $5 an hour for worked hours). That would target the ones who actually have children to support w/o raising the wages for all.
Should it be permissible for convict labor performed in public, to be paid less than the min wage? I’m thinking of the Shawshank Redemption & Brubaker, where prison labor is in competition w private businesses for contracts.
Maybe convict labor should be paid mini wage, but a portion should go for their upkeep, a portion to any child dependents they have, and then some remaining amount for themselves.
When will the $15/hour minimum wage increases go into effect in Los Angeles, San Francisco, and Seattle? It is my understanding the increase will apply to all workers in those three cities and not just for fast food workers.
Every single parent I know shares that goal. We act like they’re all never married women who have multiple kids and survive on welfare. However, most single parents I know were married and many of the divorces were instigated by the husbands. Some of the women had college degrees but had been SAHM’s for several years to save on childcare costs. The number who don’t get timely child support (of the ones who get it at all) is an embarrassment to our system, so they don’t have money for childcare and there’s not always another low income person available to trade childcare. Jobs have to be taken when and where available.
In our area, the economy has taken many hits. A large company with multiple branches has had wave after wave of layoffs. Those formerly well paid professional people, who had mortgages and college tuition to pay, took jobs the next tier down. The people who previously would have had a shot at those 2nd tier jobs were now losing out to the professional people, so they settled for 3rd tier jobs, which pushed the people who normally held them out. The effect is that jobs like those in the fast food industry are now being taken by people trying to support families. There aren’t always jobs available that offer the opportunity for advancement.
These programs are intended as temporary help, not permanent subsidies for those living in perpetual poverty. The working poor – those who work full-time jobs but still can’t afford to support their families – can only take advantage of those programs for so long. Free breakfasts and lunches (when there’s enough money to cover all the students who qualify) are only available during the school year. Those kids may or may not have dinner during the school year, and in the summer many go without lunch. Our district does it’s best to put together backpacks to help them, but there’s never enough.
Interesting article about NY’s minimum wage increase for fast food workers and how it will affect Upstate NY and Long Island. I didn’t realize how high the cost of living is in Ithaca.
Not as bad, but rent has been going up. This morning I’ve heard on the public radio that landlords turn apartment into condos and try to sell it. They evict people.
But for kids who are making a living as an artist LA, it’s not easy to get more money vs the high tech kids in SF.
Not only that for seniors living on SS which will not get a raise, some other site mentioned this, that’s how I know, rent will go up and SS doesn’t. How are they going to survive? Where is the compassion for older people? In fact I’ve seen some really old people working at shops, I can’t remember which shops but I’m sure they don’t pay that much.
I still dont get how they decided that only fast food workers are worthy of such a large pay increase. This will be interesting. The average salary of a bank teller in NYC is 26,000, the average salary of a CNA is 30k. How can they justify fast food workers making 31,200 per year? I will assume that many restaurants will keep the hours low and only have a bunch of part timers.
^^ They can’t justify it from a free enterprise supply/demand model, nor based on the bottom line: revenue must increase to offset the increase in cost, or investors get nervy. Now, you can do two things to offset an increase in cost:
Increase prices, hoping that demand will not fall in reaction to the price hike.
Cut cost elsewhere to make up for the increase in marginal labor cost
I see some businesses trying to cope by raising prices; but if not all of them do, those that do might not see more revenue because demand will decline while customers flock to competitors who keep prices lower. But even if they all raised prices, customers still might not go along with the price hike – even if there was not a lower-price alternative. They’ll simply buy more groceries and do more cooking at home, or hit up finer-dining establishments. Which means if they are raising one type of cost, they need to cut cost elsewhere: likely the hours of employment. this might require more or better automation, however, or redesigned business processes – not necessarily easy.
It’s not easy when you force businesses to arbitrarily raise the rate of pay, when there is no consideration coming back their way to offset that increase in pay. Are workers going to produce 50% more product or at 50% higher quality, to justify the increase in pay? And regardless of that answer, will the market respond to the higher production or quality in such a way as to offset the pricing fears? But in this case, there is no increase in production or quality to offset the arbitrary pay/cost increase. It introduces a massive amount of inefficiency.
This whole thing is about the lack of good jobs for working adults. The presidential candidate with a plan for enticing the private sector into both bringing jobs back from overseas and creating new opportunities here… is, Dem or Rep, going to get my vote. With working adults in good jobs with benefits, we’ll see fewer people on welfare, more tax revenue, fewer people on ACA and medicaid, and a better market for existing and prospective entrepreneurs and investors. It really will improve so many areas of our economy to bring jobs home and add more here. So who is on the side of the entrepreneurs and investors?
According to 538.com’s research the average wage in the NYC area is $21.73. But the increase will hit hardest in Upstate NY where AVERAGE wages in Binghamton are only $16.05 and in the Buffalo area they are only $16.71.
One interesting fact is if you factor in the Cost of Living adjustment to the $8.75 minimum wage in NYC, the net wage is reduced to between $5.00 to $7.00 per hour depending on which study you believe.
Someone asked if every fast food worker in NY State only earns the minimum of $8.75. According to the NYS Dept. of Labor, the average fast food worker in NY State is making $9.03. They must have been given a 25 cent raise since the minimum was raised.
@prezbucky great post! Fast food is pretty expensive as it is, especially in NYC. My daughter who is interning there talks about how much more Chipotle is, than it is here in the Midwest. I think this will backfire. I believe you will have a lot of employees losing hours. A business cannot asborb such a large increase. As Ive stated, I do believe nationally, it is time to increase the minimum wage. But to increase it over 70% makes no sense.
To try to increase the supply of good jobs in the US, we could try an across-the-board reduction of the corporate tax rate to, say, 20% (from 35% now), but that would do nothing to bring home outsourced jobs.
How do we bring outsourced jobs home… fine companies thousands of dollars ($10,000? $20,000?) per non-US citizen on the payroll? Offer a nice tax write-off once 100% of their employees are US citizens?
I don’t like coercion generally, but those are jobs (in most cases, I’m presuming) that American people could do. And there are plenty who need good jobs…
Raising the minimum wage for just one class of workers makes no sense to me. Why would Cuomo think that would fly? But then I read that “New York once set specific minimum wages for particular industries but began unifying them in 1962. Now, only certain industries — tipped restaurant servers, hotel housekeepers — have separate wage rules.”