Why is the minimum wage so low?

VictorVonDoom
If $15 / hr. is good, why not make the minimum wage $150 / hr.? I could pay off my mortgage in no time.

Likely because that's a little silly...

how can any business turn a profit if they have to pay $150 an hour to their workers

$15 is a fair wage... its livable at least

I have thought alot about this. If minimum wage were $15 per hour, that person would not qualify for medicaid and food stamps anymore, would be buying their groceries out of pocket and medical care/insurance would be as well. They would be paying higher prices to offset the higher minimum wage. Therefor, most people would not be better off making a higher wage.

I make $15 per hour and have done the math. I am no better off after food, insurance, and heat bills. It's the equivalent of making minimum wage and being on public assistance.

The only benefit would be that our tax dollars would go elsewhere.

(My figuring included children, not as a single adult with no children)

reply to post by tinker9917


Could you live as well as you do making $7 an hour doing the same work?

You pay wages based on one’s economic output. One’s pay MUST come with a higher rate of return. If someone is paid $8.50 an hour, they must produce and sale more then there pay hourly, plus cover overhead. If this is not achieved then the company goes under.

Simple economics, you raise the minimum wage, the cost of goods and services must be raised as well to cover the new wages.

Example, lets say minimum wage is $10. The government passes a law to raise it to $15 an hour. That’s a 50% increase right. That Mc double Mr and Miss minimum wage are flipping cost $1.29. simple economics dictates that the price point for the Mc Double must also increase to cover the new wages. Your Mc Double you enjoyed before the new law now cost you $1.93.

You say no big deal, ill pay the extra .64 cents so someone has a livable wage. This is where I laugh in your face. Mr and Miss Minimum wage increase 50%, the unintended consequence is the price of all goods and services increase by 50% as well to cover the new costs. This creates a 0% economic gain for those on minimum wage as all goods and services prices must rises to cover new wages.

The minimum wage argument is low hanging fruit for the economically uneducated. Once implemented it doesn’t establish any economic gain and only Provides an illusion that your getting paid better as inflation kicks in and settles the score.

Akragon
reply to post by tinker9917

 

Could you live as well as you do making $7 an hour doing the same work?

Minimum wage in my state is $7.75, I believe.

Since I pay $700 per month for group health insurance plus co-pays and deductibles, $400 minimum per month in groceries), heat bills (in the winter), so the answer is YES. I would consider it to be equivalent.

I may have a larger cash flow, but it gets spent on the things I would qualify for free if making minimum wage.

I CHOOSE to do better than that, because I can. I wouln't work for less and go on public assistance unless I absolutely had to. But, I really am no better off money-wise.

As a single adult with no children, quick math tells me would be better off with the higher wage. But not as a single adult with children at home.

reply to post by camaro68ss


In your example McD's is a company that makes millions of dollars every single day....

the top tier of companies like that pay their CEO's and underlings large wages...

The value of the goods they provide did not increase because of the new minimum wage, they could still afford to pay their employees said wage and turn a huge profit without increasing the cost of the product...

More over the product will be more in demand because the people of the community could afford to treat themselves to said poisonous crap...

The idea that the cost of the product needs to go up in the case of a company that makes millions ever day is just ludicris...

Its just greed on the top tiers part

tinker9917

Akragon
reply to post by tinker9917

 

Could you live as well as you do making $7 an hour doing the same work?

Minimum wage in my state is $7.75, I believe.

Since I pay $700 per month for group health insurance plus co-pays and deductibles, $400 minimum per month in groceries), heat bills (in the winter), so the answer is YES. I would consider it to be equivalent.

I may have a larger cash flow, but it gets spent on the things I would qualify for free if making minimum wage.

I CHOOSE to do better than that, because I can. I wouln't work for less and go on public assistance unless I absolutely had to. But, I really am no better off money-wise.

As a single adult with no children, quick math tells me would be better off with the higher wage. But not as a single adult with children at home.

I don't see how that makes sense... of course I live in a different country then you...

IF you make half of what you make now..... how would it be possible to have the same things you have?

Akragon
reply to post by tinker9917

 

Could you live as well as you do making $7 an hour doing the same work?

I also must add, that I still drive an older, paid for car because I cannot afford car payments (and higher insurance), I don't use credit cards (if I don't have the cash, I obviously can't afford it). We shop with coupons, second-hand stores whenever possible. We don't have cable/satellite tv because we can't afford it.

I must say, I am no better off...

tinker9917

Akragon
reply to post by tinker9917

 

Could you live as well as you do making $7 an hour doing the same work?

I also must add, that I still drive an older, paid for car because I cannot afford car payments (and higher insurance), I don't use credit cards (if I don't have the cash, I obviously can't afford it). We shop with coupons, second-hand stores whenever possible. We don't have cable/satellite tv because we can't afford it.

I must say, I am no better off...

Well that's fair, but again how could you afford what you have on half of your current income?

Akragon

tinker9917

Akragon
reply to post by tinker9917

 

Could you live as well as you do making $7 an hour doing the same work?

Minimum wage in my state is $7.75, I believe.

Since I pay $700 per month for group health insurance plus co-pays and deductibles, $400 minimum per month in groceries), heat bills (in the winter), so the answer is YES. I would consider it to be equivalent.

I may have a larger cash flow, but it gets spent on the things I would qualify for free if making minimum wage.

I CHOOSE to do better than that, because I can. I wouln't work for less and go on public assistance unless I absolutely had to. But, I really am no better off money-wise.

As a single adult with no children, quick math tells me would be better off with the higher wage. But not as a single adult with children at home.

I don't see how that makes sense... of course I live in a different country then you...

IF you make half of what you make now..... how would it be possible to have the same things you have?

The difference is, the government would then pay for our food, all medical costs (free medicaid instead of paying for insurance), and heat bills in the winter. I would also qualify for housing coupons to pay part of my rent.

Let's look at America where basically people want to double the salary of minimum wage workers..All for it but does everyone also get a substantial increase?

reply to post by tinker9917

I may have a larger cash flow, but it gets spent on the things I would qualify for free if making minimum wage.

There's the judge difference between the two countries.
In Canada it's not likely any family is paying $700 a month for healthcare, unless they have a huge family, and we don't pay co-pays or deductibles.

We have less things that we qualify for if not making enough money.
I don't think we even have a food stamp program (?). Not sure on that one.

Akragon
reply to post by camaro68ss

 

In your example McD's is a company that makes millions of dollars every single day....

the top tier of companies like that pay their CEO's and underlings large wages...

The value of the goods they provide did not increase because of the new minimum wage, they could still afford to pay their employees said wage and turn a huge profit without increasing the cost of the product...

More over the product will be more in demand because the people of the community could afford to treat themselves to said poisonous crap...

The idea that the cost of the product needs to go up in the case of a company that makes millions ever day is just ludicris...

Its just greed on the top tiers part

You are not in the liberty to determine what Mc Donald’s can or can’t afford. We don’t know there overhead, we don’t have their financials nor do we know there margins. The average companies “Evil Profits” are on average 2-5% of their total revenue. That’s not a lot. A 50% increase in wages will wash that out. Simple economics dictates prices MUST go up.
You obviously don’t understand business or economics so there is no use in arguing with you.

and you did not read what i wrote above otherwise you would understand an increase in wages without an increase in Productivity must increase cost making your new wages wash with the new increase price in goods

camaro68ss

Akragon
reply to post by camaro68ss

 

In your example McD's is a company that makes millions of dollars every single day....

the top tier of companies like that pay their CEO's and underlings large wages...

The value of the goods they provide did not increase because of the new minimum wage, they could still afford to pay their employees said wage and turn a huge profit without increasing the cost of the product...

More over the product will be more in demand because the people of the community could afford to treat themselves to said poisonous crap...

The idea that the cost of the product needs to go up in the case of a company that makes millions ever day is just ludicris...

Its just greed on the top tiers part

You are not in the liberty to determine what Mc Donald’s can or can’t afford. We don’t know there overhead, we don’t have their financials nor do we know there margins. The average companies “Evil Profits” are on average 2-5% of their total revenue. That’s not a lot. A 50% increase in wages will wash that out. Simple economics dictates prices MUST go up.
You obviously don’t understand business or economics so there is no use in arguing with you.

Nope I don't know a damn thing about business or economics...

but..

A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated restaurants. In 2012, McDonald's Corporation had annual revenues of $27.5 billion, and profits of $5.5 billion

en.wikipedia.org...'s

So ya... they can afford it

reply to post by camaro68ss


Mc Donalds has a reported profit margin in the BILLIONS.search

IMO minimum wage should adjust with honest inflation calculations, on a yearly basis. If this is not done then minimum wages becomes less and less each year as inflation makes the currency worth less.

The minimum wage on Jan 1, 1978 was $2.65 for all covered, noexempt workers. Raise that to match inflation and you end up with $9.47.

$9.47 is not $15, but its much more than the current federal minimum wage. In all fairness the federal minimum wage should be $9.47, with individual states adjusting as they see fit, but never going below $9.47.

To have the minimum wage below the inflation adjusted wage that was earned in 1978 just goes to show how little they care about low wage workers. It was hard to live off of minimum wage in 1978, but impossible to do so in 2014.

Minimum wage Source
Inflation calculator

Akragon

camaro68ss

Akragon
reply to post by camaro68ss

 

In your example McD's is a company that makes millions of dollars every single day....

the top tier of companies like that pay their CEO's and underlings large wages...

The value of the goods they provide did not increase because of the new minimum wage, they could still afford to pay their employees said wage and turn a huge profit without increasing the cost of the product...

More over the product will be more in demand because the people of the community could afford to treat themselves to said poisonous crap...

The idea that the cost of the product needs to go up in the case of a company that makes millions ever day is just ludicris...

Its just greed on the top tiers part

You are not in the liberty to determine what Mc Donald’s can or can’t afford. We don’t know there overhead, we don’t have their financials nor do we know there margins. The average companies “Evil Profits” are on average 2-5% of their total revenue. That’s not a lot. A 50% increase in wages will wash that out. Simple economics dictates prices MUST go up.
You obviously don’t understand business or economics so there is no use in arguing with you.

Nope I don't know a damn thing about business or economics...

but..

A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated restaurants. In 2012, McDonald's Corporation had annual revenues of $27.5 billion, and profits of $5.5 billion

en.wikipedia.org...'s

So ya... they can afford it

Mc donalds has over 400,000 employees, at $10 an hour that’s 32 million a day times 365 days a year equals 11.6 billion in wages. Raise minimum wage 50% and now that’s 17.4 billion in wages. The delta being 5.2 billion. This now wipes out all profits, do the math buddy. Prices MUST RISE

Akragon

VictorVonDoom
If $15 / hr. is good, why not make the minimum wage $150 / hr.? I could pay off my mortgage in no time.

Likely because that's a little silly...

how can any business turn a profit if they have to pay $150 an hour to their workers

Well, they would turn a profit by raising their prices; the same way they would continue to make a profit if the minimum wage was raised to $15 / hr.

If you give this a little thought, you may realize that the problem isn't a low minimum wage. A minimum wage is an artificial lower limit.

The real problem is fiat currency. Imagine how things would be different if people were paid in silver, for instance, instead of paper that loses value every day. Imagine if your money had the same purchasing power today as it did when you earned it 20 years ago.

If people were paid in real money for their labor instead of fiat currency, the wealth gap we see all over the world would begin to disappear.

Lets's not forget here in America we have about 25 million illegal immigrants who will work for whatever they can get. I have seen it lower the wages in allmost every aspect of the construction industry. In 2007 I quit a damn good paying job as an electrical construction superintendant. At the time I was making $27.75 an hour, working up to 60 hours a week. Card carrying electricains were making around $16 to 18 an hour. Problem being I had 22 men under my leadership amd could only communicate with 4 of them, all the rest...no hablo english. When I found out that the non-hablos were making the same as guys I knew who had been in the industry as long as I had been, that was the straw that broke OYM1262's back.

I stared my own business and never looked back. Lean times laid ahead, but my damn happiness is more important than money. I'm not saying they are the only reason our minimum is so low, but it's part of the problem. All trades here is this way. Other poster was correct in his lawn mowing reference, If one man will do a $15.00 an hour job for $9.00 and hour, who do you think the companies hire. Obama Care aint helping it either, America will become a part time work force because of it. To be able to live on $7.25 an hour is to work two maybe three jobs. One way to up it is solidarity amongst all who work those jobs, that aint gonna happen in America. We be a greddy nation full of greed and deceit. the rich want more, the poor want more, every damn body wants more, problem being we created the handout generation and it's getting way worse. Hard work & determination is the key to success, no matter the wage. You have to want to do better.

I may never get back to the money I was making, but that's OK . Because I am happy, happy, happy. As simple answer is this, the poor and down trodden are way easier to controll in every aspect. Sorry for the long winded reply. This subject just cranks my damn tractor!!!

reply to post by Akragon


And isn't raising the minimum wage greed? you want more for doing nothing more.