At Work

A $15 Minimum Wage Bombshell in Los Angeles

As regular readers know, I frequently delight in calling liberals naïve in their view of the world and the anticipated results of their proposals. Reading the following opinion piece in the NYT may cause me to move from naïve to just stupid.

imageLook at what I have highlighted from this NYT editorial.  Do you seriously believe that raising the minimum wage over a period of several years will reduce turnover and improve productivity?  As far as turnover goes, if all minimum wage jobs are paying the same, what does it matter pay-wise where a person works? Other factors will still impact turnover.  To have any chance of lowering turnover, an employer would have to pay higher than competitors. The bigger joke is improved productivity.  Let’s think about the typical minimum wage job, how is productivity going to be enhanced by a higher wage? Will they clear more tables, wash dishes faster, file nails fast, cook fries faster? Give me a break.  Did your productivity increase the last time you received a wage? Did you say, oh wow, more money I think I will work 75 hours a week rather than just 60?

Then we have “minimum wage increases make somewhat higher prices manageable.”  So, we are saying that with a bit more money you will be able to pay a bit more for the things you buy that increased in price because you received a bit more money!  And you are better off, how?  For Pete’s sake, if a person stays in the minimum wage job, they are not going to be better off and if the overall minimum goes to $15.00 we will simply redefine the poverty level and these Americans will be eligible for the same benefits that are currently. Or, if we don’t raise the level at which they can receive assistance, these workers will be no better off because the increase in pay will not offset the loss of benefits.

Now let’s look at “the deplorable practice of subminimum wages for tipped workers.”  Below is what the Law requires. Do you see any tipped worker making less than the federal minimum wage that applies to all other workers? Many states apply an even higher minimum and several follow the federal rule, none can be lower.  The writer of the NYTs article talks about productivity, what better way to lower productivity and customer service than to downplay the value of tips in a personal service job?

I almost forgot my favorite nonsensical statement in the editorial: just “pay executives and shareholders less” to raise pay. You know what you moron, the vast majority of Americans, the very great majority of Americans earning the minimum wage don’t work for a company with “executives” or shareholders. They work for small entrepreneurs. And even if they did, do you not think there would be adverse consequences to the investments and retirement security of average Americans if you started messing with shareholder value and hence stock prices?

I have to stop, I’m getting apoplectic.

To make this all the more bizarre, we have states, the federal government and now cities and towns all doing their own thing distorting economies.  If you work in LA your higher pay may make you ineligible for a Obamacare subsidy, but your cousin in a neighboring town may get cheaper health insurance and an overall better economic outcome with a lower hourly wage.

Is anyone looking at the big picture? Is there any strategy or long-term plan for anything we do? You know the answer as well as I do, there are idiots and ideologues running things with no coordination, no understanding of the many consequences and no common sense.

Raise the minimum wage all you want, nobody is going anywhere unless they get the hell out of a minimum wage job.

 What is the minimum wage for workers who receive tips?

The Fair Labor Standards Act (FLSA) requires payment of at least the federal minimum wage to covered, nonexempt employees. An employer of a tipped employee is only required to pay $2.13 an hour in direct wages if that amount plus the tips received equals at least the federal minimum wage, the employee retains all tips and the employee customarily and regularly receives more than $30 a month in tips. If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference.

Some states have minimum wage laws specific to tipped employees. When an employee is subject to both the federal and state wage laws, the employee is entitled to the provisions which provides the greater benefits.

Opponents of higher wages — generally, business groups and their political allies — have raised the same objections in Los Angeles that have been raised since the dawn of the federal minimum wage in 1938: that higher pay will lead to layoffs and business closings or business migration. But experience and research involving actual minimum wage increases indicate otherwise: The added cost of higher wages is offset by savings from lower labor turnover and higher labor productivity.

Higher wages can also be offset by modestly higher prices, which haven’t proved measurably disruptive, in part because minimum wage increases make somewhat higher prices manageable. Wages can also be raised by paying executives and shareholders less. Whatever changes employers may have to make in Los Angeles, the long phase-in of the increase gives them time to adjust.

A challenge will be to ensure that all employers are held to the new higher wage. California is already one of eight states that prohibit the deplorable practice of subminimum wages for tipped workers. So waitresses and waiters in Los Angeles will be eligible for the higher $15 minimum wage along with everyone else. Policy makers at all levels of government should follow California’s lead in outlawing subminimum tipped wages.

via A $15 Minimum Wage Bombshell in Los Angeles – NYTimes.com.

Categories: At Work

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7 replies »

  1. Mr. Quinn: There are a great many states, a great many cities and many very successful large corporations that disagree with your reich wing point of view. If your “logic” had any basis in fact, they would not be raising wages as they are. I think I’ll go with the knowledgeablee majority on this one, but thanks for your predictable comments anyway.

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    • You never fail to prove my point about naive liberals Mr Wilson. I was a VP of Compensation and Benefits and performance management for a major corporation. I know a bit about what money can and cannot do and how you can motivate people.

      Why not explain exactly which one of my observations are wrong and why? Am I wrong about the poverty level and the impact of a $15.00 minimum wage? Do you seriously believe a raise as proposed will motivate unskilled workers to higher productivity?

      Why say I’m wrong unless you can tell me why?

      If a couple both had minimum wage jobs at $15 an hour they would be earning $62,400, well above the average household income today. Don’t you think that will have an impact on other wages and on prices?

      Do you not agree that staying in a minimum wage job is a road to nowhere regardless of the hourly rate?

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      • I don’t care that you were once VP of anything anywhere which only proves you are out of touch with todays world. I was, too. And, I don’t have to refute your flawed statements point by point that have no basis in fact. I’m just telling you that 29 states and 10 cities are paying wages above the federal minimum wage level and are experiencing faster job growth as a result of their actions. And, I’m telling you that the following corporations are paying wages above the federal minimum level: McDonald’s, Aetna, Wal-mart, T.J. Maxx, Target, Starbucks, Ikea, Gap Inc., Costco, In-N-Out Burger, Shake Shack, Ben & Jerry’s and Whole Foods. Furthermore, I am telling you that I have more faith and confidence In the business acumen of the executives of these corporations than I have in your aging philosophies, flawed and factually unsupported rants and reich wing bias.

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      • Most large organization pay and have always paid above the minimum wage and pay all employees accordingly. That is not the point at all if you read what I wrote. You remind me of the people on Facebook who post those stupid attack ads and then refuse to comment when the errors and lies in the ads are pointed out and substantiated. Besides, as I have repeatedly said, raise the minimum already and be done with it.

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      • So please answer this: 1) If you support raising the federal minimum wage, why did you write this posting?2) Do you really believe that you are more locally economically intelligent than the legislators and governors of 29 states? 3) Do you really believe that you are more locally economically intelligent than the council members, mayors  and city managers of 10 large American cities?4) Do you really believe that you are more economically intelligent than the chief executives of 13 large and successful American corporations?I read what you wrote and you said that raising the minimum wage would do no good at all and you detailed support of your arguments with point by point denial of reality and reich wing bias – it seems that you tuned out of the real world around you when you retired and that is very sadWilson

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      • I wrote it to challenge the assumptions and comments in the NYT article.

        The state’s that raised the minimum wage experienced faster job growth and as you may note, in a previous post I said I didn’t buy into the idea that jobs would be lost as a result of raising the minimum. Also, there were several state with higher job growth that did not raise the minimum so the causal relationship is open for further investigation.

        You act like the consequences of raising the minimum I discuss are not relevant or real. Do you believe that? Do you believe there will be no impact if the minimum goes to $15? Impacts that affect income related benefits or impacts that go up the ladder as a result of compression?

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