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562 Comments
- Stevanoski, on 07/14/2009, -33/+167When my son-in-law worked at a pizza parlor the day after they raised the minimum wage the owner raised the price of each pizza by one dollar. When the callers asked my son-in-law would answer, "we had to pay for the minimum wage hike somehow."
- gigi52, on 07/15/2009, -31/+127I have a small business, employing 27 people. Business is down, but I kept everyone employed, just did not fill 2 vacancies until July. I cannot raise prices - I am begging for business and giving discounts to keep us going. We have not given ourselves a raise for 5 years. But with minimum wage hike and having to raise others to keep the balance, I had to lay off 2 people. How does that help?
- alanocu, on 07/15/2009, -12/+96That's a good point. Who gets hurt and who benefits when the minimum wage rises has always been a hot topic. A recession is the worst time to raise the cost of low-skilled employment though. Bigger paychecks for some will mean unemployment for others. My feeling would be to keep as many people working as possible and ditch the increase for now.
- inactive, on 07/15/2009, -5/+85If congress was paid minimum wage maybe we would see some real change in this country.
- AbsurdParadox, on 07/15/2009, -27/+90Amazing how the government keeps doing the EXACT OPPOSITE of what will end a recession.
- pathouston22, on 07/15/2009, -24/+82Take your real world scenario somewhere else. This is Digg, we want taxes on the rich and higher wages for the poor. And that's that.
- PowderedToasty, on 07/15/2009, -7/+57We should lower the minimum wage so we can pay $1 less for pizza!!! Better yet is there some way to outsource our pizza making and delivering to India?
- Khast, on 07/15/2009, -31/+77Higher wages means higher cost of goods. Do you honestly think that by giving a $1.00 raise to the minimum is going to make your money go further?
I worked at Subway in 1997, when the minimum wage went up 25 cents, the prices across the board went up 50 cents.... so you were actually making less money when all was said and done.
Oh, and for the lazy jack-offs which think that having a raise in the minimum wage will be good for them....the last time, I got bumped into the next tax bracket as well. - MCBROCK, on 07/15/2009, -10/+52Wow!!! This will be great for the millions of Mexicans working here illegally for less than the minimum wage and are now an even better value. Think of it as a stimulus package for Mexico.
- bombula, on 07/15/2009, -17/+58It goes both ways. Ask an anti-minimum wage person why no minimum wage won't work.
Yeah, that's right. The US turns into India. Congratulations. I'd rather we emulate Sweden, thanks. - drmangrum, on 07/15/2009, -10/+50Which does nothing. The price of goods and services will go up 6 months later.
- MatthewDuke, on 07/15/2009, -9/+42@yeeaauuh - that's the most blue collar statement I've heard in a long time. Good luck with that mentality in life.
- chinaman1212, on 07/15/2009, -9/+39People that don't own business don't realize that a $8.00 an hour worker actually costs the employer about $12.00 and hour. @ $9.00 that puts most at about $13.25 an hour. Do the math. the more the price of employment goes up the hire costs of goods.
- alais, on 07/15/2009, -14/+43And millions more wont get hired because of it.
- Shwaavay, on 07/15/2009, -8/+37No, but when the competition lowers its' prices, the owner in question will have to do the same. It's the beauty of free market economics.
- AbsurdParadox, on 07/15/2009, -6/+35You'd just see minimum wage go up to about $60 / hour, followed by a hyper-inflation currency crash.
- chupavacas, on 07/15/2009, -32/+59Minimum wage is a government imposed price control. Price controls artificially set levels that the free market will do on its own. When artificial levels are set imbalances occur. Those imbalances take the form of higher unemployment, higher consumer prices and business failures. The answer is not for government to artificially set the floor for wages but for us to embrace the free market which is self-regulating and does not cause these adverse side effects.
- AbsurdParadox, on 07/15/2009, -13/+39"Those who are concerned that the minimum wage is getting too high should digest this statistic: in real, inflation-adjusted terms, the new minimum wage will still be below the $9 per hour minimum wage of the late 1960s."
This in no way justifies it. Only the market can properly set the value of labor -- government intervention has far reaching unintended consequences. - kasjogren, on 07/15/2009, -5/+30So the dude had 5 guys working at a time and needs to raise it a dollar a pizza? He ONLY SELLS FIVE PIZZAS AN HOUR? He is either doing very poorly as a business owner or full of *****.
- pathouston22, on 07/15/2009, -6/+30And you think pizza is the only thing that will go up in price? Durrrrr.
- Jektal, on 07/15/2009, -0/+24"Large pizza with pepperoni."
"You want pineapple on small pizza?"
"No, pepperoni on large."
"I'm sorry sir, that is not an available topping. Please choose one of our many delicious toppings."
"You don't have pepperoni?!"
"Pepperoni? Of course we have pepperoni! Do you want that on your pizza instead?"
"..." - norman619, on 07/15/2009, -7/+30yeeaauh:
wow that is a prime example of an ignorant statement. - Bloodwine, on 07/15/2009, -9/+31"Millions of U.S. workers get a pay cut", could be an alternative headline.
Two reasons:
1) prices of goods and services increase to cover the wage increases
2) most people making above minimum wage will not get a comparable raise, so in effect they take a pay cut - JigoroKano, on 07/15/2009, -1/+23Or it's a completely made up anecdote.
- rolf, on 07/15/2009, -4/+25When people order less, the business will be doing worse. Workers earn their wages regardless how many orders pour in, but they may lose their jobs.
- drmangrum, on 07/15/2009, -5/+25I guess you missed the part where he said "I am begging for business." That usually means he doesn't have any work to do.
- drmangrum, on 07/15/2009, -18/+38Bad analogy is bad.
1) those weren't unskilled jobs. They were machinists.
2) The only people who could afford cars were the well-to-do. He could charge what he needed to to turn a profit.
3) People aren't meant to live off of minimum wage.
Minimum wages jobs are minimum for a reason. They have minimal training and minimal skill. You can pull any idiot off the street to do the job. The only thing raising the minimum wage does is increase the price of goods and services to compensate. It all balances out. Making 10% more doesn't mean a whole lot when 6 months to a year down the road costs of goods and services also increases by 10%. - deema1, on 07/15/2009, -2/+21In a monopoly, your point is correct. However, in a free market, a reduction in costs creates higher margins, which gives businesses more pricing power, which entices more competition, who then sacrifice a portion of these margins in the form of lower prices in order to drive more business. Pricing becomes a race to the bottom rather than a peg to a price.
It may not work perfectly with something like pizza, but it's absolutely the case when it comes to most consumer goods and services. - EndouOuto, on 07/15/2009, -0/+19Employer pays 7.5% to social security you pay the other half.
Unemployment ins to the state, medical ins for some jobs.
ect - smashblu, on 07/15/2009, -4/+23Or how about "I'll lower my price to make my product more appealing".
- ChristmasPoo, on 07/15/2009, -15/+33I get it... So if the cost to produce a pizza suddenly decreases, i.e. the flour, cheese, meat becomes cheap the store owner will say, "Oh - I am making too much money for my pizza, I better decrease the cost of my pizza"
- inactive, on 07/15/2009, -13/+30You do understand how tax brackets work, right? Only the amount of money you make above the bracket level gets taxed at the higher rate.
- chinaman1212, on 07/15/2009, -8/+25Rotzooi! You ducked just in time! the point Stevonoski made just flew right over your head!!!!!
- inactive, on 07/15/2009, -2/+19I think we can take that as "No, and furthermore I didn't even understand the question"
- apackofmonkeys, on 07/15/2009, -3/+19Yes, if it brings in customers. That's what several restaurants in my area have done since the recession-- lower prices. Steak 'n Shake's $4 meals, Subway's $5 footlongs, the seafood restaurant I ate at last night has halved their wine prices indefinitely... oh, you were trying to be sarcastic and deride the greedy businesses to support your agenda, so don't even bother reading.
- BotchaMcCoola, on 07/15/2009, -7/+22True, but I doubt it was because of this minimum wage nonsense. Real income increases when productivity increases. That is an economic law that no one has been able to break.
- deema1, on 07/15/2009, -7/+21Nice...another uptick to unemployment, on its way.
- ohplease, on 07/15/2009, -4/+18CEOs making hundreds of millions a year and Congress giving itself 30 percent pay raises while the minimum wage stays stagnant makes a lot of sense to you, doesn't it?
- Annihilia, on 07/15/2009, -2/+16Your tone is disgusting. It makes me sick that there are people who think like you do.
It's her business, her private property, and she is entitled to do whatever she needs to do to keep it afloat in the face of all of these moronic mandates enacted by DC opportunists in hopes that the guilt-ridden, intellectually lazy will support them (YOU). - bombula, on 07/15/2009, -1/+15@khast
A little math will help clarify things:
Say minimum wage rises by $10. Expenses for businesses go up. Prices go up.
Now, who is paying for those higher prices? Not _just_ the people on minimum wage, but everybody. Say 20% of the population works for minimum wage. How much of society's stuff does that 10% buy? Well, maybe 20% - probably less. The other 80+% gets paid for by wealthier folks.
Know what that means? It means there is a whole lot of extra money in the pockets of people working on minimum wage, since the wealthier people are covering the other 80% of the price hike.
It's a mechanism for redistributing wealth across society. Hope that example makes it clear how it works.
Whether or not wealth redistribution is a good thing is another debate. But most educated folks tend to agree that it is better for society and the economy to have people working than unemployed, to have a lower poverty rate especially among children (Sweden child poverty = 2.6%, USA = 22.4%) if you want your country to have any kind of future, and that people in poverty end up costing the middle class and rich more anyway in taxes to pay for social services. - inactive, on 07/15/2009, -11/+25You can't say that here. Diggers think everything should be free.
That's because their parents pay for all their stuff. - covertbadger, on 07/15/2009, -5/+18"if the job is miserable enough (either physically or psychologically) then it should be worth a pay rate equivalent to it's difficulty or mental/physical impact."
Rubbish. Pay rate is determined by supply and demand. A job that can be done by any idiot is never going to command a decent wage, no matter how difficult or unpleasant it is. - minoss, on 07/15/2009, -6/+19Ah yes, raising minimum wage. Something that is most damaging to small businesses (large businesses rarely pay minimum wage) and the poor (who get laid off). Keep up the great work congress.
- jschubart, on 07/15/2009, -19/+32With a slack labor supply, forcing a wage raise on those with already high unemployment (younger workers) may not be the best idea. Granted it won't harm much but it definitely isn't helping.
- ramiro, on 07/15/2009, -6/+19So she should close business, obviously firing everyone of her employees...
Now tell us:
HOW BEING UNEMPLOYED HELPS THEM?
CAN YOU BE ANY LESS STUPID? PLEASE??? - inactive, on 07/15/2009, -8/+20In Seattle, we have a very popular burger joint called Dicks Drive-In. They charge 2.50$ for a double cheeseburger (dicks deluxe). Its a pricey burger compared to the items Jack in the Box used to crank out across the street. They pay their employees like 11$ an hour, people sure as hell dont mind paying extra for the food because it good food and they employees are super fast and earn that wage well. People will come from out of the country to buy burgers. I used to live right behind it and not only do you see Sir Mix A-Lot (Dicks is on Broadway, where his posse rides) every now and then, but tons of high school prom limo caravans getting food before or after they lose their virginity. Its an insane mix of people who service this place.
Companies that have a great product, wont have to worry about raising prices to pay for the wage hike. - bombula, on 07/15/2009, -9/+21Wow have you sucked down a lot of neo-classical econ koolaid.
You want totally unregulated labor markets? Think that's the way to help society? I suggest you visit any of, oh, 150 or so developing countries and try working there. See how far you get.
This thread is full of ideology, and short on data.
Look at where labor markets are most heavily regulated: Sweden, Norway, Denmark, Finland, France.
Look at where labor markets are least regulated: India, Phillipines, Vietnam, China, Mexico, almost every country in Africa, etc, etc, etc.
Hmmm. Which system is working out better for society...? - steinjake, on 07/15/2009, -0/+11adjusted for inflation
- DavidNiven, on 07/15/2009, -39/+50Liberals in power tend not to have a clue about what makes small businesses work and work well. So, it's not surprising that price controls, mandatory wage increases, and tax hikes all seem like great ideas to them. When was the last time any of them paid their taxes on time (Charles Rangel, talking to you hypocrite!) much less owned their own small business?
- wolfing, on 07/15/2009, -0/+11so, the owner has to pay his 3 employees an extra $1/hour and he raises the prices of pizza $1... since he most probably sell more than 3 pizzas/hour, he actually made money out of the hike! except obviously, that people would now buy pizzas from the other pizza place that didn't raise the prices.
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