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  #121  
Old 31 August 2013, 12:03 AM
Singing in the Drizzle Singing in the Drizzle is offline
 
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Originally Posted by Wintermute View Post
But it wouldn't increase cost by 50%. I wish Pinqy was here because he explained this in great detail before.
As I said it was just a number to make the math easy. There is no data I could find after searching for two day on the relationship between a minimum wage in crease the cost of living. I will admit it would not be the first time there is data on something and my google-fu was not up to the challenge.


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So each burger might have to be raised 10% to cover the cost or maybe even 20%, but not 50%. Not even close.
And most everything else. A 8%-9% increase in the cost of basic good and other necessities would be all that is need for the 50% cost of living increase I used.
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  #122  
Old 31 August 2013, 12:07 AM
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Esprise Me Esprise Me is offline
 
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You can't prove your point by picking numbers that make the math easy and then showing that the calculations based on those numbers is just what you said it would be. There's a term for that, and it doesn't mean "raising a question"--though your logic raises plenty of questions, too.
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  #123  
Old 31 August 2013, 12:07 AM
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Lainie Lainie is offline
 
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SITD said:

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A 8%-9% increase in the cost of basic good and other necessities would be all that is need for the 50% cost of living increase I used.
No. An 8-9% increase in each category would result in a total increase of 8-9%.
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  #124  
Old 31 August 2013, 01:03 AM
jimmy101_again jimmy101_again is offline
 
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Originally Posted by Lainie View Post
No. An 8-9% increase in each category would result in a total increase of 8-9%.
Not quite. That is true only when the cost of producing, delivering, advertising and selling the product is a significant part of the end price. That is not always the case. Some products are priced purely on demand and the cost of production is only a minor factor. An example is gasoline. When the cost jumps 10% ($0.35 increase on a $3.50/gallon base) overnight it is rarely due to increases in production costs. The price rises because of demand, not costs.

Patent drugs and many forms of entertainment are often priced on what the market will bear and the price has relatively little to do with the production costs. A movie that cost $300M to produce has the same ticket price as one that cost $50M. If everyone in the production company got a 100% raise the ticket price would not necessarily go up.

Gold and diamonds are other examples of products whose end price has relatively little to do with production costs.
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  #125  
Old 31 August 2013, 02:06 AM
Singing in the Drizzle Singing in the Drizzle is offline
 
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Originally Posted by Esprise Me View Post
You can't prove your point by picking numbers that make the math easy and then showing that the calculations based on those numbers is just what you said it would be. There's a term for that, and it doesn't mean "raising a question"--though your logic raises plenty of questions, too.
The point was more people would be living in poverty if there is any increase in minimum wages. It does not matter how much the cost of living increases only that is does. The smaller the increase the smaller the effect, but it is never zero.

I also said that the people getting a minimum wage increase would be better off though still living in poverty.

You are welcome to find some real numbers since I could not. I admit this may be my fault for not looking for the right things, but I spent two days trying.
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  #126  
Old 31 August 2013, 02:17 AM
Singing in the Drizzle Singing in the Drizzle is offline
 
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Originally Posted by Lainie View Post
SITD said:



No. An 8-9% increase in each category would result in a total increase of 8-9%.
Bad math. If you used the number I gave increasing the minimum living wage by $1.00 per hour or $2K per years would take a 8-9% increase of prices of the items used to calculate cost of living. Remember the 50% is not a 50% increase in the cost of living, but rather 50% of the minimum wage increase.
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  #127  
Old 31 August 2013, 02:27 AM
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Mickey Blue Mickey Blue is offline
 
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Re: Jimmy & production costs: I'm no economist and won't pretend to be one, but a raise on minimum wage would, I would assume, impact every industry that used minimum wage workers (or in this case workers who got paid less than $15/hour) so while yes the price for a movie isn't based on the cost to make a movie it's possible that all movies would start to charge more and that, coupled with their own increased costs, could cause a movie theater would have to charge more for food (if that's even possible) and tickets.


I have two questions on this issue, I've followed the thread but I guess I'm more curious for the summary. Basically as to the two common 'problems' raised by people opposed to such things:

1) Is there any data to back up the argument that raising minimum wage will raise costs for many key industries (basically any industry that uses a lot of low-ish paid employees, in this case $14 or less)? I know that's what is being batted back and forth for the last few pages but is there any evidence in it happening in the past with other raises to the wage?

2) What happens, when they raise minimum wage, to people who were previously making that much? There are a lot of jobs that require training and such that pay between 10 and 15/hr; is there any evidence that people will choose not to do those jobs (instead picking a job that is easier such as one of the previously minimum wage jobs) forcing the other employers to pay more, causing a ripple effect raising lots of wages and thus making the issue in question 1 worse?

I only ask because I worked a number of paramedic jobs (to be fair not in Seattle) that paid less than 15/hr, in fact when I left the last placed I worked (after being there for a few years) I was only making 18/hr. Now I wouldn't 'not be a paramedic' over that, however I suspect other jobs may have similar issues, where all of a sudden a job you worked hard to get is paying the same as a person flipping burgers and that may convince some people to choose not to bother.

Another example would be 'wheelchair van drivers' who make a dollar or two above minimum wage right now, if they became tied with minimum wage many may not bother with that job (as not only does it suck but it requires training and such).



Also, an aside, I wonder how this would impact waitstaff.. Right now the average after tips is around 12/hr (though I suspect the true average is higher than that) and a raise in minimum wage is likely (I would think) to result in worse not better tipping. So they'd end up with, on average, more money but no longer because of tips (I don't remember liking being a waiter).
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  #128  
Old 31 August 2013, 03:22 AM
jimmy101_again jimmy101_again is offline
 
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Originally Posted by Mickey Blue View Post
Re: Jimmy & production costs: I'm no economist and won't pretend to be one, but a raise on minimum wage would, I would assume, impact every industry that used minimum wage workers ...
That is true. But again it depends on how the final price is determined and what fraction of the selling price is due to wages. l'm also not a economist, or more importantly an MBA, but I do know a few things about pricing having had to do it.

The way people think it is done:
1. Sum all the costs to produce the product (including raw materials, shipping, labor, advertising, ...)
2. Pick a profit (many companies target a 20% profit).
3. Add 1 and 2 to get the price.
That is called, I believe, "cost plus" pricing. Most people probably think that is how prices are set (though many might not realize the targeted profit is that high.)

Businesses generally try not to price things that way. In some cases a company may be forced to do it that way but they generally try to avoid it. Companies prefer a second method. Basically, what is the product worth to the consumer? If it cost $1 to make and someone will pay $5 for it you charge $5. That is basically how gas, gold and a lot of other things are priced. One of the goals of advertising is to push up the demand for a product, which then shifts the pricing paradigm from "cost plus" to what a customer is willing to pay.

Fast food may well be in the "cost plus" domain because of the number of competitors. Many other things are not. If a gold mine boosted the salaries they paid their workers the price of gold would not be affected much since labor isn't that big of a cost, indeed "costs" aren't all that big a part of the pricing equation. What would be affected is the profit margin for the company and the amount of money available for salaries for the non-minimum wage workers and for the owners (stockholders).

A CEO of a company with many thousands of minimum wage workers that can shave a nickel off their hourly wage might save the company many millions of dollars, and get a couple million dollars as a performance award, bonus, raise or increase in the value of their stock options. There is a very real tension between the wages of the lowest paid and the highest paid workers in a company. The highest paid make the decisions and every penny they pay the lowest earners often directly lowers the top tier's compensation.

There will always be businesses that are just barely staying solvent. For them a raise in minimum wage might push them into insolvency. They depend on their always being enough people that are dependent on the lowest paying jobs, indeed that is a key part of their business model. Some think that is a problem, particularly if the economy changes such that all there is is the top 1% and everyone else is at or near the minimum wage.

I don't know what a "living wage" really is. I do know that McD pays the restaurant workers, the workers at the food prep plants, the workers at the butchers and chicken farms, the farmers and ranchers, and many other people in their supply chain a wage that is pretty near minimum wage. It isn't just the high school kid working 20 hours a week, it is the layer after layer of workers all the way back to the farm and ranches. At some point I would hope there is a layer consisting of a large number of workers that is making a "living wage".
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  #129  
Old 31 August 2013, 03:51 AM
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Avril Avril is offline
 
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Originally Posted by Lainie View Post
I've never lived in one, and I've spent most of my life in Ohio, which is not an expensive place to live.
It was possible in the apartment I lived in when I was 21 in Oklahoma, although by "reasonably well" I am excluding a lot that I don't know is fully "reasonable," actually, like health insurance. You could, however, have enough to eat and pay the rent and buy secondhand clothing and cheap shoes, etc. Mostly you would find this to be possible in small college towns.
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  #130  
Old 31 August 2013, 07:00 PM
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Originally Posted by Singing in the Drizzle View Post
The point was more people would be living in poverty if there is any increase in minimum wages. It does not matter how much the cost of living increases only that is does.
Of course it matters. If the increase in cost of living is less than the increase in wages, fewer people will be living in poverty.

Quote:
You are welcome to find some real numbers since I could not. I admit this may be my fault for not looking for the right things, but I spent two days trying.
You're the one arguing that an increase in minimum wage would definitely hurt workers. You find the numbers to back that up.

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Originally Posted by Singing in the Drizzle View Post
Remember the 50% is not a 50% increase in the cost of living, but rather 50% of the minimum wage increase.
Are you even reading what you write anymore?

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Originally Posted by Singing in the Drizzle View Post
The problem with raising minimum wage and cost of live is that it creates more people with less than a living wage while help the poor some.
Lets say the current living wage is $24,000 per year or $11.87 per hour. The Federal Minimum wage is $7.25 per hour or $14,600 per year. Now we raise the minimum wage to $9.25 per hour or $18,700 per year with a 50% cost of living increase (just a easy to use number since I cannot find any statics other than it increases) generated by this change.
Quote:
Originally Posted by Singing in the Drizzle View Post
A 8%-9% increase in the cost of basic good and other necessities would be all that is need for the 50% cost of living increase I used.
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  #131  
Old 01 September 2013, 02:10 PM
Bill Bill is offline
 
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A piece this morning from AP on fast-food workers' pay and how that's part of the industry business model:

http://finance.yahoo.com/news/worker...130129184.html

Thanks.

Bill
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