On price increases re. minimum wage increase

[boomtube-mk2]

My hot take is that there isn't one single "Main reason" for this and I'd wager that the reasons are broken down with regards to the age of the people looking for, or not as the case may be, employment opportunities.
Other demographics might include; political views, city, suburban, or rural residency, degree of economic security and I'm sure there are many others.

Much like Homelessness there is no single reason "Why" and thus no single answer.

 

[jderimig]

I think

I don’t think the hiring problem is “free money to stay home”, because that has already ended. Some states ended it early. Having that money end hasn’t changed the hiring problem, and there’s no difference between the states that ended it early and those that ended it later.

Whenever a new jobs report comes out with surprising or unusual data, there are a lot of hot takes that are filtered through the biases of people making them. We don’t really know what is going on here, but it will be important to find out, and it’s going to take more data and research.

My own hot take is this is pandemic related. I think people have gone through a pretty traumatic time. There’s a lot of anxiety and depression, so maybe it’s a mental health crisis, and people are leaving their jobs over it. Maybe it has to do with people reevaluating their job in the context of how their employers and the public treated them during the pandemic. Maybe it has to do with lingering problems with things like school closures and childcare that pulled a lot of women out of the workforce. Maybe it has to do with people getting a taste of a BETTER life during the pandemic, with no commute, remote work, more time with family, and they decided to find a way to make it permanent. I don’t really know, but it will be important to find out.

I think the latter. I wish I could find a way to stop working and pursue other things that don't compensate as well.

 

[boomtube-mk2]

[NM]

 

[Back_at_it]

If you look up the unemployment numbers in states that ended the addition $300 payout you can see that unemployment has been dropping steadily in the months following the end of those programs.

If you look at states like Illinois where I'm from that kept the additional payout you will see that the unemployment numbers are steady. I'm predicting that Illinois and other states where the payout recently ended will finally start to see some reduction in unemployment. You're also going to see a reduction in the inflated wages for entry level jobs.

At it's peak I saw a Burger King listing $19 to start in my area. In the last few weeks we've seen that number drop to $16 and it's currently at $14. I don't think it was a coincidence that the wages started dropping the week after the program ended.

 

[ThirstyBarbarian]

If you look up the unemployment numbers in states that ended the addition $300 payout you can see that unemployment has been dropping steadily in the months following the end of those programs.

If you look at states like Illinois where I'm from that kept the additional payout you will see that the unemployment numbers are steady. I'm predicting that Illinois and other states where the payout recently ended will finally start to see some reduction in unemployment. You're also going to see a reduction in the inflated wages for entry level jobs.

At it's peak I saw a Burger King listing $19 to start in my area. In the last few weeks we've seen that number drop to $16 and it's currently at $14. I don't think it was a coincidence that the wages started dropping the week after the program ended.

Unemployment numbers are the number of people looking for work. That’s different from the number of unfilled jobs looking for workers.

Unemployment is not a significant problem right now. The rate is 5.2 percent, and that’s not really all that bad. The problem is jobs going unfilled.

You are saying unemployment went down. I don’t know if that’s true or not. But if unemployment went down, it means people have either found jobs or they have decided to drop out of the workforce. That’s not solving the problem of unfilled jobs, which has remained high.

Everything I’ve read has said the end of the supplemental $300 has not encouraged people back into the workforce.

 

[rharshberger]

One thing we are seeing in my area is early retirements due to Bidens Vaccine mandate 6 people in my craft alone have chosen early retirement rather than get the shot in the last two weeks, those 6 are only a drop in the bucket to the number retiring of the 10k plus people on my work site. About 10% are expected to quite outright on Dec 8th.

 

[H_Rocket]

<snip>
There are 10.4 million job openings in the country.

I'd like to know where the hell they are. Yeah there are truckloads of minimum wage (and sub minimum + tip) jobs out there. I've been looking since just before the pandemic hit and I'd be happy to get a response from folks that read "Having reviewed your resume, are you kidding us?"

The majority of IT jobs are in software development as opposed to my specialty.

The big problem there is someone like Trump (or now Biden) should slap a vicious tariff on offshoring tech jobs. Lets face it, steel, coal, and other heavy manufacturing jobs are a decade out if we decided to pull it all back today (just to get past the environmental problems would likely be insurmountable). Knowledge work requires little or no infrastructure. It just requires the government to make it less financially attractive to move the work to countries where the cost of living is a fraction of the U.S. Of course, products and services will cost more.


.

 

[Marc_G]

One thing we are seeing in my area is early retirements due to Bidens Vaccine mandate 6 people in my craft alone have chosen early retirement rather than get the shot in the last two weeks, those 6 are only a drop in the bucket to the number retiring of the 10k plus people on my work site. About 10% are expected to quite outright on Dec 8th.

It's scary that anyone old enough to retire early would refuse the shot.

 

[rharshberger]

It's scary that anyone old enough to retire early would refuse the shot.

Not really Marc, the government has done a fantastic job pushing the skeptical even further away. Most of it was their erratic moving goal posts in 2020 and now the "GET IT OR ELSE"..... I work for a government contractor, their response to religious and medical exemptions is, you can have one but we wont accommodate you, so its unpaid leave, pretty sure that IMO is a form of extortion, no one should ever tell someone that they should put something in their body that they dont want there.

 

[boatgeek]

Not really Marc, the government has done a fantastic job pushing the skeptical even further away. Most of it was their erratic moving goal posts in 2020 and now the "GET IT OR ELSE"..... I work for a government contractor, their response to religious and medical exemptions is, you can have one but we wont accommodate you, so its unpaid leave, pretty sure that IMO is a form of extortion, no one should ever tell someone that they should put something in their body that they dont want there.

The power of states and local governments to require vaccines is well-established, all the way to the Supreme Court. I'm not sure if the feds have been given that power, but if the federal mandate gets struck down, expect a special session of the WA legislature to get called and put a mandate in place in less than a month.

 

[jderimig]

The power of states and local governments to require vaccines is well-established, all the way to the Supreme Court. I'm not sure if the feds have been given that power, but if the federal mandate gets struck down, expect a special session of the WA legislature to get called and put a mandate in place in less than a month.

Why would WA wait? If its that critical have WA pass it now rather than wait for an arcane rule making process and inevitable court stays on implementation. They better hurry before the pandemic ends.

 

[ThirstyBarbarian]

I watched a news segment tonight about the supply chain problem, and the labor shortage is a part of that. One fact I was not aware of is that part of what is causing the bottlenecks is a strong increase in demand. I had assumed these ships were backing up in ports and causing an overall decrease in supply BELOW a baseline from before the pandemic. But in a lot of cases, it’s actually that the global supply chain can’t accommodate demand ABOVE the prepandemic baseline.

People have been shifting their demand for what they want to buy from one thing prepandemic to other things during the pandemic. Examples might be, if a person can’t go to a gym or doesn’t want to, they might decide to buy exercise equipment instead. If they can’t go to restaurants, they might upgrade their kitchen or their BBQ grill. Can’t go to movies, upgrade home electronics. Stuck at home, upgrade yard and remodel house. Kids learning remotely, buy laptops or other electronics.

A lot of shipments of durable goods have gone UP, not down during the pandemic, and some of the supply chain bottlenecks are due to increased demand. That’s not great, but not as bad as not keeping up with the baseline. It’s a brake on growth and slowing down the rebound from the pandemic, but it’s probably not dragging us into recession.

 

[BABAR]

What is not always considered is that with full time jobs, employers are on the hook not just for wages but for health insurance. I am sure it varies, but for those calculating the price of a burger just by the wage given the cook (as well as the cost of the meat, the building the heat, the advertising) you also have to add in the individual benefits plans including health insurance. so for a business to stay profitable (meaning “to stay in business”) the average employee has to generate more than the cost of his/her employment, which particularly in low wage earner may a Pretty good percentage above the wage itself, EVEN if you raise it to some arbitrary number.

as for overpaid executives, I agree it is crazy, but if their paychecks were a significant portion of the business margin, I would expect other companies would pay their execs less and undercut them.

with the exception of the federal government, businesses that pay their average employees more in total compensation (wages, health benefits, etc) than they generate fail. Agriculture is an exception, they can pay more than the employees generate but only because they get bailed out by, you guessed it, the federal government when crops fail. (please don’t think I am dissing agricultural workers, God bless them and I am thankful they do what they do!)

anyway, people that WORK for businesses that fail promptly become unemployed.

what I really find disheartening and amazing is that this has not percolated down to the high school and junior high school levels. There are a number of high paying jobs that are going to immigrants because they BOTHERED tp learn to read and write English well and to be good at math and are polite and well spoken. I have absolutely nothing against immigrants, they compete fairly for these jobs and often outshine the typical American students which is why they get hired. Absolutely nothing wrong with flipping burgers or pushing brooms, but capitalism Is set up to give every job to the lowest qualified bidder. We should be starting probably at the junior high level to start kids thinking about what kind of job they want and what is a realistic pathway to get there.

one of my grandsons wanted to be either a DJ or a computer graphics designer. I told him, “Great. The competition to make a good living as a DJ is tough, go for it, but meanwhile work on your math, writing skills, science, and speaking skills which will serve you as a DJ but also help you with computer graphics as a backup.”

 

[jderimig]

I watched a news segment tonight about the supply chain problem, and the labor shortage is a part of that. One fact I was not aware of is that part of what is causing the bottlenecks is a strong increase in demand. I had assumed these ships were backing up in ports and causing an overall decrease in supply BELOW a baseline from before the pandemic. But in a lot of cases, it’s actually that the global supply chain can’t accommodate demand ABOVE the prepandemic baseline.

People have been shifting their demand for what they want to buy from one thing prepandemic to other things during the pandemic. Examples might be, if a person can’t go to a gym or doesn’t want to, they might decide to buy exercise equipment instead. If they can’t go to restaurants, they might upgrade their kitchen or their BBQ grill. Can’t go to movies, upgrade home electronics. Stuck at home, upgrade yard and remodel house. Kids learning remotely, buy laptops or other electronics.

A lot of shipments of durable goods have gone UP, not down during the pandemic, and some of the supply chain bottlenecks are due to increased demand. That’s not great, but not as bad as not keeping up with the baseline. It’s a brake on growth and slowing down the rebound from the pandemic, but it’s probably not dragging us into recession.

The free market has a solution for that. Raise prices to put supply and demand in balance. In process.

Now the Fed and Gov need to do their part and stop interfering with the laws of economics before it destroys everything.

 

[PeterK]

Need to get a few Haitians up there. Connect the dots.

No affordable housing any more. Lowest cost houses start at $300,000. Majority of homes are being purchased by companies for cash to flip or rent. This is a fairly rural area but must live 30 miles or so away from work to find anything affordable. Crazy. No way people can come here and work service sector jobs as no where to live. Building lots of housing in town. It is called affordable housing. Starting price is $1,000,000 for a condo. Sheesh!

 

[jderimig]

Thank you Federal Reserve.

No affordable housing any more. Lowest cost houses start at $300,000. Majority of homes are being purchased by companies for cash to flip or rent. This is a fairly rural area but must live 30 miles or so away from work to find anything affordable. Crazy. No way people can come here and work service sector jobs as no where to live. Building lots of housing in town. It is called affordable housing. Starting price is $1,000,000 for a condo. Sheesh!

 

[Great Hobbies]

Our current minimum wage in Ontario is $14.35. Gas is about $1.35 (per litre) for low-grade. It cost me over $70 to fill my Civic last week. Food is even more ridiculous right now. More than half a day has to be worked for a minimum wage worker to just fill the tank for the week. Oh, and that's before tax is taken off, so...

 

[jderimig]

When will we begin discussing a maximum wage? Why isn't there a proportional wage tied to how well or poorly the business does that applies to every employee? Or would it be considered a form of communism/socialism if everyone working to generate capitalist profits were to actually share in those profits rather than be exploited to squeeze as much work as possible out of someone for the least compensation possible? Why are we blaming those who are just trying to pay basic bills for wanting a wage increase? No individual really needs a billion dollars, let alone a hundred billion, especially if their full time employees need food stamps to survive. Balance is called for.

The value of an individual to an Enterprise is unrelated to the performance of the Enterprise.

High level corporate executives already have most of their compensation based on the market value of their companies. So what you suggest for people at the tippy top already exists

 

[ep29030]

On the topic of automation, one of the best options I've seen put forward is a federal tax on automation so companies are forced to pay for the retaining or long term unemployment costs of displaced workers.

It seems obvious to a lot of people that anyone working full time (whether at one job or several combined) should make enough money to live above the local poverty line without government assistance. A federal minimum wage is one way to accomplish this, but there are other ways. Federal mandates ensuring housing for low income folks should also be considered IMHO. Single payer/universal healthcare fully funded by employer side payroll taxes is another part of the solution.

Yes, this kind of tax is a bad idea, because it punishes productivity (income per employee). Less automation just means foreign competitors (who have no such tax) will displace more American companies, which is already bad enough. People act like automation is a zero sum game, that there is no ability to create new companies or products, when digital systems and automation are enabling new things. We complain about automation on a device that has more capability at less cost than our devices of 30 years ago. I still remember using a $5000 Mac II in the late 1980's

 

[Wally Ferrer]

The value of an individual to an Enterprise is unrelated to the performance of the Enterprise.

High level corporate executives already have most of their compensation based on the market value of their companies. So what you suggest for people at the tippy top already exists

Not true- minimum wage means it doesn't matter where I work, everyone pays the same for that entry level job. A maximum wage would do the same, in that a CEO would make the same amount of money no matter which company they work for. If you want to tie their compensation to the company's market value, then you should do the same for ALL jobs at that company. Wages outside of executive compensation have been stagnant for decades, which is why I used the term exploiting. Pay and compensation are out of balance.

 

[jderimig]

Not true- minimum wage means it doesn't matter where I work, everyone pays the same for that entry level job. A maximum wage would do the same, in that a CEO would make the same amount of money no matter which company they work for. If you want to tie their compensation to the company's market value, then you should do the same for ALL jobs at that company. Wages outside of executive compensation have been stagnant for decades, which is why I used the term exploiting. Pay and compensation are out of balance.

To each according to need and from each according to ability?

 

[MJW]

To each according to need and from each according to ability?

Sounds like socialism...

 

[jderimig]

Sounds like socialism...

Not really but it is totalitarianism. Telling me I don't have the freedom to pay or imposing a limit on what I can pay for a product or service.

I can sympthasize with moderate min wage arguments but limiting the ability to overpay for a product or service is un-American.

 

[BABAR]

Not really but it is totalitarianism. Telling me I don't have the freedom to pay or imposing a limit on what I can pay for a product or service.

I can sympthasize with moderate min wage arguments but limiting the ability to overpay for a product or service is un-American.

Aside from government intervention and monopolies, in free capitalism a company simply can’t over the medium to long run overcharge for a product. Unless their quality or customer service is significantly better, if they are truly “overcharging” competition will always come in and undercut them.

In fact, even IF quality and customer service is significantly better, it is hard to convince customers to pay more. Which is why, however much we whine about Walmart, Amazon, and big box hardware stores, they often put mom and pop small grocery stores and hardware stores and hobby stores out of business.

as much as we SAY we want local neighborhood businesses to thrive, our wallets often dictate otherwise, and our wallets usually win the argument.

 

[Banzai88]

Aside from government intervention and monopolies, in free capitalism a company simply can’t over the medium to long run overcharge for a product. Unless their quality or customer service is significantly better, if they are truly “overcharging” competition will always come in and undercut them.

In fact, even IF quality and customer service is significantly better, it is hard to convince customers to pay more. Which is why, however much we whine about Walmart, Amazon, and big box hardware stores, they often put mom and pop small grocery stores and hardware stores and hobby stores out of business.

as much as we SAY we want local neighborhood businesses to thrive, our wallets often dictate otherwise, and our wallets usually win the argument.

Precisely. People, in general, want cheap crap from China delivered INSTANTLY a whole lot more than they want Mom&Pops right next door.

 

[jderimig]

Aside from government intervention and monopolies, in free capitalism a company simply can’t over the medium to long run overcharge for a product. Unless their quality or customer service is significantly better, if they are truly “overcharging” competition will always come in and undercut them.

I was taught that in capitalism it is immoral not to charge what the market will bear. Otherwise creative destruction and innovation will be subdued. Not good for society.

 

[Ez2cDave]

Where I get hacked off is when you have restaurants and/or retail paying managers with several years of experience a few bucks above minimum wage and then not paying them overtime because they're management.

Many restaurants get around that by putting Managers on salary ( unlimited hours, with fixed pay, and no overtime ) , while workers receive hourly wages ( no one actually gets 40 hours/week, so no overtime ) . . . OR the managers are on salary, while workers are ALL part-time ( no "benefits" or overtime ). They get away with it because there is always a "stack of applications" in the Manager's office ( high turnover ).

Dave F.

 

[BABAR]

can’t vouch for the accuracy of the source, but it is a completely theoretical discussion anyway, and seems ballpark.

in any case, the Soviet Union proved pure communism doesn’t work. If a better work ethic, more schooling, more entrepreneurship (risk taking) doesn’t pay off, I might decide to skip the 15 years of extra school and push a broom rather than read brain and spine MRI scans If both paid the same.

the Chinese have managed an effective mix of communism and capitalism. I don’t like China, and I don’t want us to BE like China (maybe @K’tesh can jump in, except I can never get the right punctuation to get his name to work). Their system seems to work well for them, not sure if they are really happy about it or just not allowed to complain.

anyway, here is an internet report on what would happen if we divided the wealth equally. Again, may not be accurate, but it is thought provoking.

your “average American” may like the first part, what happens if we just divided the wealth equally among AMERICANS? But the same people would HATE the second part, what happens if we equally divided the wealth among the people of the WOLRD.

What would happen if wealth was evenly distributed?
American households held over $98 trillion of wealth in 2018. If that amount were divided evenly across the U.S. population of 329 million, it would result in over $343,000 for each person. For a family of three, that’s over a million dollars in assets.

How much money would everyone have if it was divided equally?

According to research by Credit Suisse in 2016, the world’s total wealth is $256 trillion. If every person in the world were given an equal share, you’d have $34,133

from May 26, 2021

https://www.mvorganizing.org/what-would-happen-if-wealth-was-evenly-distributed/

 

[Wally Ferrer]

Well, that's more than someone with a minimum wage job earns, even if it is increased to $15 per hour. I'm not advocating for everyone makes the same money, only it should be better balanced.Something is causing jobs to remain unfilled, and compensation is certainly related somewhat.

 

[dr wogz]

another thing I think needs to be said, is:

when I grew up, your 'entry level job' or part time work while in school was a job to help make ends meet. Not be the start to independent living. I had room mates thru most of my 20's and even in my early 30's (The 'room-mate' soon switch to 'girlfriend' then 'wife'..)

Many here in N. American want a wage to live on their own, in a nice place, yet only manage a menial task. No room mates, no living on 'skid row' etc.. Nice pay for a car, a condo, some hockey tickets, etc.. all for barely 40hrs pushing a mop or flipping burgers.

Theses 'low wage' / menial jobs are also suppose dot teach you some life lessons: flipping burgers at Burger Hut is supposed to teach you math (counting change) and working in a team. also 'responsibility' (Show up on time, clean your uniform, follow procedures, etc..)

Some unions are also to blame: pushing for a 12% pay increase over 4 years, despite a recession / down-turn in the markets, etc.. the employees get their 12% while the company start to loose money. And, some employees are guaranteed a comfy job after a set number of years, and at a set pay increase, and soon realize they don't need to do very much, as they are somewhat protected / are then hard to get rid of..

Pensions (Again unions) when the work force today live longer & some are asked to retire earlier. (Dad worked till he was 70, then retired, and dies at 81. My cousin worked till 60, then retired, then lived to 94.. both did the same job & got the same benefits) Didn't this happen to the Big 3 auto makers? Where 20 cents of every dollar made goes to finance pensions (and are indexed to inflation).. so, their pension fund is a massive part of their 'books'. (and again, is set regardless of how the economy / market trends are doing)


I always thought it funny. that a bus driver makes more than I do.
I hold an engineering position in a private company. And I feel I'm doing quite well.

Local Montreal bus drivers make as much as I do, after I believe 5-7 years of continuous work. Their pay scale is guaranteed, and their seniority is kept, thanks to Unions. Yet to ride a bus is not cheap..

They make more than local school teachers..