Citing the sky-high costs of living in Palo Alto, a group of City Council members is leading a push to adopt a local minimum-wage ordinance.
In a memo released Thursday, Councilmen Marc Berman, Pat Burt, Tom DuBois and Cory Wolbach are calling for staff and for the council’s Policy and Services Committee to consider a law that would “set a near term base wage, inflationary adjustments and long term goals.” It does not specify what the new minimum wage should be.
“Despite our general affluence, along with high costs of living and working in Palo Alto, we currently have the same minimum wage as low cost regions of California and lower minimum wages than some neighboring cities,” the memo states.
Though the council has yet to wade into the issue, the proposal is expected to move forward without much delay. At a forum before last November’s election, almost every candidate responded to a question about raising the minimum wage with an emphatic “yes.” This included both DuBois and Wolbach, with the latter responding to a potential $15-per-hour minimum wage proposal by saying, “I’d go for $20.”
Council members Eric Filseth, Greg Scharff and Karen Holman all said before election day that they would support raising the minimum wage, though they didn’t get into specifics of what it should be.
“This is a very progressive community and sometimes it’s a little surprising some of things we haven’t yet addressed,” said then-candidate (and now Mayor) Holman. “I think this is one of them.”
Filseth also said that while he would “absolutely” support a higher minimum wage, he was uncertain what the exact number should be.
Under the new proposal, staff would analyze recent minimum-wage ordinance in Sunnyvale and Mountain View and model Palo Alto’s new law after those. The Mountain View council last October voted to raise the city’s minimum wage to $10.30 an hour, with annual inflation adjustments, effective July 1, 2015. Sunnyvale’s ordinance, which does the same thing, took effect on Jan. 1.
California’s minimum wage is currently set at $9 an hour, which will increase to $10 on Jan. 1, 2016. In the memo, the four councilmen argue that if minimum wage was adjusted based on local cost of living, they would be “considerably higher in Palo Alto and the peninsula than most elsewhere in the state.”
“Our lowest wage workers perform valued services in Palo Alto and often have to work multiple jobs with long commutes to barely make ends meet,” the memo states. “A local minimum wage would be a modest step in supporting these workers who are vital to maintaining the services we value and that are essential to our local economy.
“In addition, the strength of our community and society relies on maintaining a level of economic fairness and opportunity for all. This measure will be a modest but constructive step toward providing adequate income for all.”
The full council is scheduled to discuss the memo on Feb. 9 and is expected to refer the subject to its Policy and Services Committee for further analysis and, ultimately, a recommendation. The memo also directs the committee to explore with staff “a strategy for outreach/education” and “investigation and enforcement of violations.”
Great news! The bulk of research is very clear that raising the minimum wage has net benefits. We can debate all day about the research, which tends toward the side of positive, but the moral of the story is that if someone is working hard, they deserve fair and equitable treatment.
Palo Alto now has the highest median rent in the country, and many hard working families that I have known for years are being displaced. With the amount of abundance flowing through the veins of Palo Alto, I’m happy to see these coucilmembers taking such leadership, joining our neighbors and taking action for a more fair and equitable society.
With the wealth we have in this area, we can afford more than slave wages. I look forward to hard working families getting just that little bit more that will help them pay for gas, shelter, and food for themselves and their children.
Hurray Palo Alto!
The minimum wage should go up to 12.00 to match the areas cost. It certainly wouldn’t hurt our economy in palo alto. People are paying 4000.00 a month to live in a 2 bedroom
Glad to see old and new Council Members joining together on this effort. So often candidates support policies during a campaign just to get elected, but then shy away from them when in office. Let’s see Eric Filseth, Greg Scharff and Karen Holman work with other Council Members to promote a unified from on this important issue. No one who works full time should have to live in poverty!
Makes sense to increase minimum pay above $10 however nobody can live in Palo Alto for $10 or even $20 an hour thus cost of living is not a valid argument. On the other hand there are lots of residing older people who need caregiving and the high price of minimum wage may make it non affordable. Round the clock caregiving might exceed $100,000 a year.
Raising the minimum wage is a wonderful idea.
But why stop at $15/hour? Let’s help these folks out and raise it to $150/hour to show how much we care.
Seriously, the “bulk” of the research shows that raising the minimum wage does not produce net benefits, and just leads to higher unemployment for those it is designed to help.
I’ve been surprised to learn how many of the people who ring up my groceries, slice my bread and generally help me out all day make less than $10.30 per hour. In this expensive area! How do they survive? We can do better. Palo Alto, please join SJ, Mountain View and Sunnyvale by raising the minimum wage.
I am part of a condo board and we already raised our minimum to $12/hour. Our fairy bubble for some of us does not make it easy for general working people in Palo Alto to manage. Get with it CPA.
This news is sickening. Why are bureaucrats who are out of touch with reality interfering with a free market? Do they know what its like to run a small business? Do they think money grows on trees?
Wages are based on the amount of skill required to perform tasks. This should operate very naturally, and people making 10 an hour should be motivated to save up, work hard, and expand their horizons so they can move up the ladder. This is such a basic concept and there’s no way around it.
So Starbucks baristas should now make $20/hr just because they happen to be in Palo Alto? We do not exist in some exclusionary bubble. We are part of a greater region. Let’s stop denying the reality of how the economy functions.
Embrace challenges, take risks and break thineselves from this spoiled-rotten sense of entitlement.
Of course we want to see people earn as high a wage as they can and that people who work in Palo Alto should be able to afford to live locally, not necessarily Palo Alto, but certainly within a 20 mile commute.
But, the reality is that a lot of businesses will be severely hurt by this. Of course the big chain stores and high tech companies can afford to pay even the lowliest member of staff a decent wage, but some of the smaller businesses who are struggling in Palo Alto are not. Their only alternative is to let some of their workers go or put up prices so high that they will not be able to compete with the chains and other businesses.
So next time you are in your favorite mom and pop business, eatery, etc. and you find the service is poor with a few harassed staff working as hard as they can, or else that the prices have suddenly gone up, remember the reason why.
I suspect that even Safeway and Walgreens will end up employing less of these lower paid staff. I can’t see that this is really going to help someone who ends up losing their job or getting less hours as a result.
According to “Minimum Wages and the Distribution of Family Incomes” by Arindrajit Dube, minimum wage increases increase the take-home earnings of low-income families (including adjustment for employment levels effects). We should support the aspirations of lower-class workers in Palo Alto. That may mean reducing the low-wage subsidies that a handful of businesses claim to require to stay in business. If a business in the labor market can only prop itself up by imposing austerity wages on its workers, then it should be replaced by one that is worker-friendly. The homelessness status of thousands of full-time workers in our region is an indictment upon our society! It is their experiences that fuel the fire of Karl Marx’s zealous rhetoric- let us not tempt a leveler’s revolution here!
Minimum wage laws make it illegal to hire someone whose labor isn’t worth a minimum level: if they don’t have language skills or experience that make them worth the minimum, it’s illegal to hire them for less. (A bad job is much better than no job!) If people who supported these laws really believe that these workers are worth more, they’d hire them for the minimum wage and sell their valuable work product for a higher price – but that arbitrage opportunity doesn’t exist. Minimum wage laws are cynically supported by unions and incumbent businesses to cruelly block low-wage competition which typically comes from minorities and new immigrants. Minimum wage laws hurt most exactly the people they supposedly help. Minimum wage laws are immoral.
And to Sabrina and other posters above – the evidence is overwhelming that making anything more expensive (including labor) reduces consumption and invites substitution. A recent NBER paper from Meer and West concludes that “the minimum wage reduces job growth over a period of several years. These effects are most pronounced for younger workers and in industries with a higher proportion of low-wage workers.” McDonald’s (for one real-world example) is replacing order-takers at the counter with touchpad ordering systems.
The unemployment rate among African-American teens is over 30%. Increasing the minimum wage will increase that rate. End the minimum wage!
Actually, a high minimum wage makes it harder for teens or unemployed to find marginally valuable roles, and start to (re)build good work habits and work history.
There will always be plenty of volunteer work that pays zero.
Build good work habits, learn skills, add to résumé, gain references.
Dare the city to make that illegal.
>> But why stop at $15/hour? Let’s help these folks out and raise it to $150/hour to show how much we care.
When you were writing that, why did you stop at $150/hour, why not say $1500, probably because you know already your argument was ridiculous and used that absurd suggestion to shoehorn in the incorrect remark about raising minimum wage not having benefits.
It’s a complicated subject, so I have to ask myself what I think of the sincerity of someone who makes an absurd argument such as that … seriously?
When the wage gets up to a point where people can actually benefit from working … then you get more employment, less crime, more taxes, more consumption, more production, just about everything goes up, except safety net costs which can then go down. A whole bunch of good things happen … except a few business owners lose some money – and I don’t take that lightly either.
But when I say “actually benefit from working” I mean “actually benefit from working” … not the braindead thinking that we have to threaten people that they starve if they do not take the lowest possible wage. Hopefully we all realize that it is better to live in a compassionate society than one that enslaves people or lets them die. We still have yet to really understand the transfer from a stick society to a carrot society. We actually think that sticks work, and we don’t know yet how to work with carrots as well as we do with sticks at this point.
One can ask just as well, why not lower the minimum wage to 0? I am sure we could find people who would work for must less than $10 or $5 if they are threatened or desperate enough.
The idea is to make the world a better place for people so as a society and economy we can create a tide that raises all ships as the saying goes.
By the way … isolating on the minimum wage is just another dodge and evasion to what is really going on.
The fact is that while wages are not always rising, prices are. Number are massaged so that we pretend inflation is low, but look at rents and transportation costs … not to mention health care.
When you look at that what you see is lots of know it alls talking economics of raising people’s salaries and complaining about prices rising … but you never hear them talking about how ubiquitously penny by penny the lowest people on the pole are getting virtual pay cuts … which really has been going on for 30 years according to the numbers.
I find it so amazing that so many of the same people who talk about markets and prices from the elementary school mentality also want to push a school tax on everyone. When it is for a marginal benefit for their own kids, they are willing to pay the money and force others to pay for their kids, but when it is for people who are falling off the pole that a little money could really benefit the hate comes out … along with the phony economics.
We face a world of abundance, with even Fourth World peoples having the basics. Why? Because of technology and the increasing rate of technological productivity. The one major principle that can keep poor people in their place is to surrender to the idea of scarcity (e.g. global warming, income redistribution).
Let a hundred ideas of abundance bloom! Reactionary ideas like Marxism and scarcity are a complete loser…as well as enslavers.
$150/hour is not out of the question. I fully expect to see it in my lifetime.
I remember when minimum wage was $1.00/hour.
Isn’t artificially raising the value of labor the same as devaluing the dollar?
@Cynics — Oscar Wilde’s definition of cynic,
“a man who knows the price of everything, and the value of nothing.”
The minimum wage should be zero. It’s not moral to force an arbitrary level.
Let our teenagers have a chance at a job.
> Isn’t artificially raising the value of labor the same as devaluing the dollar?
No. If you listen to some of the stuff people are saying here you might thing so, but the net profitability of placing a minimum wage in a reasonable spot that allow work to pay is productive and efficient for the whole economy.
> It’s not moral to force an arbitrary level.
But it must be more moral to take advantage of starving people and pay them at a level that keeps them starving?
I never would have figured that Palo Alto would be so full of economic neanderthals.
I mis-spoke. A “wage” could be less than zero–paying to learn a skill.
@ CrescentParkAnon – the problem is you can’t force employment, so you will end up with some winners who get a higher wage, and losers who lose their job, lose hours, lose benefits, and many who never get access to jobs in the place. Unemployment is a bigger problem than low wages – it is what causes real suffering, so a minimum wage may make you feel good, but it is cruel to the real people on the bottom.
Mr Recycle, you need to read about the virtuous cycle for a start.
When you raise the minimum wage in most cases it is an incentive
for people to work … and yes, you get more competent workers
as a start, but when you get more money into these areas of the
economy you also stimulate spending and buying which increases
employment.
The trick is to get people working for money that goes and stays
into the local economy, not funneled into some rich guys hedge
fund or overseas. Then you get a stimulatory effect … but only
if you inject enough to make it pay for people to work.
Most people just seem to end their thinking with – people have
to eat to live so let them starve enough and they will work for
anything and be happy. That ain’t true, and not only that but
those jettisoned people become angry, criminal, or social
problems that we have to pay for one way or the other, which
is one big (wrong) reason why some want to just end all
social programs.
The whole picture must be looked at, and over a period of
time. The stats I looked at said that there has been no place
where minimum wage has been increased that has not had
employment growth very quickly.
But the other thing is that the labor market at these levels
is not exactly free, fair or efficient.
Another thing to consider is that what kind of people do you
want working jobs like these. I call it the fast food syndrdome,
where sure you can hire people who can work in fast food
places and not pay them much, but what you get is incompetence
and anger, then the fast food places, many of them around here
and you can see a difference. Excluding the price and taste of
food when In & Out paid people more than competing restaurants
( and I use that term loosely ) you could see a better cleaner
more polite product from it.
There is a lot to this, but over time when people can make a
better wage that makes working and being a diligent worker pay
off for them, the economy grows … all of the things being
equal.
@ CrescentParkAnon – “jettisoned people become angry, criminal, or social problems that we have to pay for one way or the other, which is one big (wrong) reason why some want to just end all social programs.”
Exactly. But it is people who are unemployed are the ones who are jettisoned in society, not people who are working minimum wage. Minimum wage jobs are entry points for people. Raising the minimum wage reduces the number of opportunities for the very bottom, who need jobs most. It is not the McDonalds cashier who becomes an “angry criminal” it is the kid who might have a high school diploma, who has been unemployed for 3 years.
@ CrescentParkAnon: The fallacy of thinking that raising the minimum wage is encouraging economic independence is in forgetting that: A.) Inflation ALWAYS follows such raises; B.) Those who earn slightly above the minimum wage usually don’t see a proportional increase; and, C.) Minimum wage jobs are NOT — and never should be thought to be — career jobs.
No one is forced to work minimum wage jobs. Minimum wage jobs are for minimally trained and non-skilled work — usually for students, retirees seeking supplemental income or part-time supplemental income workers.
NO PERSON should earn enough from minimum wage to live off of. Why? These aren’t skilled or career jobs. They are supposed to be short-term jobs. Yet, many people are neglecting their education because it is becoming increasingly possible to live off of a minimum wage when all entitlement benefits are also considered.
While it may be difficult to live off of minimum wage in Palo Alto, it isn’t impossible (via “affordable housing,” multiple income households and additional entitlement benefits). Of course, most of Palo Alto’s minimum wage workers don’t live in Palo Alto anyway. They come from surrounding towns with more affordable housing.
Minimum wage increases ALWAYS result in a loss of jobs. Alway. Even during the booming 1990’s, there were cuts in minimum wage jobs in the months and years following such increases. The consequential inflation affects minimum wage earners more than anyone else because they tend to shop at stores and restaurants where prices are adjusted due to minimum wage. Their $5 footlong becomes a $6 footlong. Their $1 McDouble becomes a $1.49 McDouble. Their 50 cent spiral notebook from Wal-Mart becomes a 79 cent spiral notebook.
Minimum wage increases should be slow increases rather than sudden jumps. There must always be an incentive so that 30 year old men are not working the drive-thru at Jack-in-the-Box and women aren’t spending a decade building burritos at a Chipotle. Low wages should always motivate people to better themselves and strive to gain knowledge, skills and education so that they can leave those jobs as part-time jobs for high school and college students.
This may sound mean, but years of migrant farm work caused my nine siblings and me to work our way though school and achieve college degrees so that we wouldn’t be caught up in a cycle of poverty. Yet, I know a girl from high school who began working at a fried chicken restaurant when I started college and she is still working there today. She is not married, has a couple of kids and combines her low-paying job with taxpayer assistance. She isn’t motivated enough to leave the job. At Christmas last year, she told me that she is “comfortable” and “doesn’t need anything.” I couldn’t help but feel sad for her and her children.
It still looks like a zero-sum game. The carrot and stick metaphor that I learned from cartoons always showed a carrot dangling from the end of a long stick attached to the donkey cart. That donkey keeps pulling, but never catches up to the carrot.
Seems to me that if $10/hour workers start getting $15, then the current $15/hour workers will be justified to ask for $20, otherwise their premium tenure or skill has just been devalued to nothing. And on up the line. CalPERS will need more pension contributions and everyone’s 401K will begin to look inadequate. Retirees will come out of the woodwork to soak up the less-physically-demanding low-end job opportunities.
Addendum: I see Nayeli made some of my points while I was writing this. (+1 for you)
Also, while there may be a floor on the number of certain types of minimum wage jobs in areas like food service, there are many more that can be sent out of state, or out of country. Comcast recently moved 600 bay area call center jobs to Colorado, Oregon, and Washington. Those are jobs that California will never get back. That’s less opportunity for people to get started in life with a stupid, but valuable job.
>> The fallacy of thinking that raising the minimum wage is encouraging economic independence is in forgetting that: A.) Inflation ALWAYS follows such raises;
This is simply not true. Inflation has been steady for decades, and minimum wages have actually lost ground to inflation, that is what stated the whole discussion that for 30 years, not just minimum wages but all working wages have gone down relative to inflation … and do we see more employment … no, we see the opposite because our economy is demand driven and when the people at the bottom that actually spend their money do not, demand goes down and employment goes down.
There’s an elephant in the room that is being ignored. You mentioned Jack in the Box, Chipotle.
Last time you were at Chipotle, did the woman rolling your burrito speak much English? Did she strike you as someone who’s merely saving up money so she can go study Engineering?
No, she probably has kids to support and is just getting by, just trying to make ends meet.
When was the last time you saw a high schooler working at Chipotle?
We live in a socially stratified society, whether we like it or not. Moral preening that drives economic regulation is the true culprit, in my opinion. Life is simply unfair. That’s just how it is.
I think that politicians who micromanage the economy and spend all their time campaigning and legislating while getting paid off of taxes (rather than honest productive work), whether their intentions are pure or not, should lay off and let the free market operate naturally.
Most arbitrary, “progressive” regulations are fundamentally inaccurate because they apply a one-size-fits-all solution. This basically lowers the bar and paralyzes small businesses in particular. I work for a small business, and the new health care law, for example, is having a devastating effect on us.
Free market solutions are the only honest way to drive a prosperous economy. This takes innovation and entrepreneurship, which can’t be taught in colleges.
Let’s work to encourage creative minds, rather than intimidate them with a labyrinthine, overregulated economy.
Economics 101: The law of supply and demand. If the price of something rises its demand will decrease. This applies to labor just as anything else. An employer paying 8 $/hr will have less jobs if he is forced to pay 10 $/hr. Anyone who says jobs will increase is spinning.
I’m not certain what the minimum wage should currently be, but I do not believe the City of Palo Alto should be setting it. I think it should only be set on the state level. The reason is we already have too many confusing bureaucratic rules and laws.
The current city coucil is especially power hungry. They want control. They have to justify their large salary increase.
@ CrescentParkAnon.:
I think that you misunderstand. You’re claiming that inflation is “steady?” That is absolutely incorrect. Inflation always goes up and down — which is why the government works tirelessly to try and control it. However, I am speaking of the specific inflation that results from minimum wage increases.
There is an undeniable impact from inflation on goods and services in the sectors affected by minimum wage increases. In addition to the loss of jobs, the businesses affected by increases in the minimum wage MUST raise their prices to compensate for the additional wages that must be paid. While upper income and upper middle income families rarely notices those things, it certainly affects low and lower middle incomes that depend upon such things.
Nayeli is making things up again.
>> I think that you misunderstand. You’re claiming that inflation is “steady?”
Where do you get that?
Nayeli, I was not going to post on this again, but someone always says something ridiculous like that.
Over the last 30 years inflation may have gone up and and down … monotonically, i.e. in one direction – upward. 30 years ago movies were $5, gas was about $1, I could get out of Safeway with a weeks worth of groceries for $100 – I can barely do that in a day now. Yet, minimum was is that so different, and most other wages are stagnant as well as “financial espertise” funnels profits up to the top.
Where would you even get the idea that you are some kind of expert on inflation, but then express it like that. It is basically the “I know more than you” comment or claiming someone “doesn’t know what they are talking about” … without facts or evidence … always inadequate for a discussion. Why bother, really?
It doesn’t matter what inflation does in the short term, in the long term it has eaten away at the earnings of those at the very bottom, and especially in this area where gas, rent and anything else are disproportionately high.
Why not just come out and say you would be against the idea of indexing minimum wage with a COLA, or indeed the whole idea?
Any in-depth study of minimum wage, that does not include right-wing ideologies shows that raising the minimum wage grows jobs in the long run – other variables constant.
If you want a though experiment imagine if there were enough jobs that people would work and it would take care of their shelter, transportation, food, health care, retirement, education, etc … i.e. provide for a real life. That is why people do not work – it doesn’t pay, especially if they have home responsiblities. Then what ends up happening is that society ends up picking up these costs one way or the other, and the populations in question grow over time enlarging the problem.
Like so many of the right-wing arguments, this one is not even just false it is toxic. Like the arguments that paying farmworkers even minimum wage would make food unaffordable, when we know that very little of food prices is farm labor. Same with GMO labels. Lots of absurd arguments like this.
Serious, right wing propaganda is very effective, you can see that by how many people naturally want to believe it, since it is designed with a lack of facts and to appeal to emotions.
And no, I am also not talking about raising the minimum wage above the average wage either as was another of the right-wing arguments proffered here.
@ CrescentParkAnon. – “Right wing propaganda?” Do you know how silly that sounds? Would you like it if I accused you of spreading “Left Wing propaganda?” Is it possible to refrain from taking cheap shots?
This is about economics. You’re repeating things that are simply false. Increases in the minimum wage have consequences. Those consequences include a loss of jobs and increases in prices at the places where minimum wage workers are employed.
In addition, the claims about minimum wage work is true. Minimum wage work should NEVER be considered long-term work. It should never be comfortable for workers to the point that it becomes a career job.
This is the sort of thing that happens with minimum wage raises. http://abc7news.com/business/beloved-sf-bookstore-becomes-casualty-of-minimum-wage-hike-/502008/
If Palo Alto raises the minimum wage, we can wave goodbye to many independent businesses.
@CrescentParkAnon – if you look at after tax income, the bottom 20% is beating inflation. Since ~2001 they have had a negative tax rate, so they aren’t doing as poorly as you suggest. There was obviously a huge setback in the last recession, but the main issue is unemployment, not wages.
“Those consequences include a loss of jobs…”
Whose job gets lost? Do you really believe that businesses keep surplus employees on the payroll until the minimum wage goes up and makes them too expensive to keep around? Do you really believe that? Seriously now.
Naturally a business has to raise prices when labor expenses go up. The net effect is to circulate more money, which stimulates the economy, raises the rising tide that lifts all boats, which is good for all of us.
We have seen this over and over in Palo Alto, small businesses such as University Arts or Restaurants closing or moving because of rent increases.
Just for example, someone who worked 30 days a month 8 hours a day at $10 an hour costs $2,400.
Anyone can tell us what rents for average business are in Palo Alto, and what the average rental increase is per year?
I would not be a bit surprised if all our economic experts here are commercial landlords who know that there will be less money that they can scoop up for doing nothing if low wage earners are paid a little bit more.
@curmudgeon – here is an example of job loss due to minimum wage happening right now. Borderlands books in SF is closing because the increase in the minimum wage will put them in the red.
“In November, San Francisco voters overwhelmingly passed a measure that will increase the minimum wage within the city to $15 per hour by 2018. Although all of us at Borderlands support the concept of a living wage in [principle] and we believe that it’s possible that the new law will be good for San Francisco – Borderlands Books as it exists is not a financially viable business if subject to that minimum wage. Consequently we will be closing our doors no later than March 31st. The cafe will continue to operate until at least the end of this year.”
“The change in minimum wage will mean our payroll will increase roughly 39%. That increase will in turn bring up our total operating expenses by 18%. To make up for that expense, we would need to increase our sales by a minimum of 20%. We do not believe that is a realistic possibility for a bookstore in San Francisco at this time.”
http://borderlands-books.blogspot.com/2015/02/borderlands-books-to-close-in-march.html
Do businesses keep surplus employees? Obviously. By definition a layoff is getting rid of surplus employees. Also, can businesses outsource expensive employees? yes, Can they move to cheaper cities and states. yes. Can jobs be automated? yes! By your logic, why not $50/hr minimum wage, it would circulate a ton of money? It’s like you’ve discovered a perpetual motion machine to drive the economy, the higher the minimum wage, the more money circulates, and everyone gets rich. $1000/hr minimum wage!
Here it comes; CPAnon is going to propose rent control. But he claims the facts are on the collectivist-statist controlled economy side rather than the freedom-capitalist side.
Republican Senators say that higher minimum wages should apply to adults only. Teenagers have easier jobs and should have a lower minimum wage. Would this work in Palo Alto? ABC News: http://abc7news.com/finance/should-high-schoolers-make-a-lower-minimum-wage/503775/
Well that’s a recipe for age-discrimination lawsuits.
CPAnon tried to shift the discussion from labor control to rent. Does that mean he/she is also in favor of rent control?
R Wray seems to be trying to shift the discussion to me. No, I am not and
in general am not in favor of rent control. But I think there are cases when
people need some kind of help with shelter and when it is to all our benefits
to give it to them. But many of the messes locally that end up with rent
control are not fair to landlords. I don’t know a good solution to this offhand,
so I would not strike down rent controls in place in certain locations.
But R Wray, how do you see my trying to shift the topic to rents … rents if
a cost of living and rents are skyrocketing. How does that not affect a
conversation about minimum wage?
I saw the report on the news about Borderlands Books having to go out of
business because of the rise in the minimum wage.
The comment from the workers there was that they were unhappy to lose
their jobs, but that they would not vote against a rise in the minimum wage.
This is sad, I put a high value on book stores, especially ones that contribute
to the community, but if an increase of this nature forces the business to close
it sounds like they were eventually going to go under sometimes soon anyway.
The report also said they owned a small cafe next door that is not closing.
@CrescentParkAnon – Given the number of small local businesses that Palo Alto has already lost, I hope the Borderlands example shows that there are real consequences to raising the minimum wage. Obviously a $15, $20, or $25 minimum wage isn’t going to drive Palantir or Ideo out of business, or out of Palo Alto, and it will be windfall for the cleaning crews there. But all you’ll have left on University and California is office space, and big corporate restaurants that can absorb higher wages.
>> I hope the Borderlands example shows that there are real consequences to raising the minimum wage.
That’s just it, it doesn’t. if you look at Borderlands … that is, if you actually saw the report you might have a clue what you are talking about. That business is on the edge of folding anyway, and would not even make it Palo Alto at all
What has happened in Palo Alto is that landlords suck up every spare penny that businesses can generate.
You seem to be saying that the only way Palo Alto can support businesses is to have a class of slave laborers.
@ CrescentParkAnon – Only someone deeply privileged and removed from real work would insult minimum wage workers by calling them slaves. It’s a typically elitists attitude to deny people the dignity of their work. Let them eat welfare!
You acknowledge, but still don’t recognize the consequences of raising the minimum wage. Minimum wage kills marginal businesses, and forces business to layoff employees on the margin.
What exactly is the effective difference between a “greedy landlord” raising your rent and an ignorant government forcing wages up? Nothing. How can you decry high rent as a problem, but deny high wages causes the exact same issue? That rents are high puts even more businesses into that marginal area where higher wages will kill them.
The only honest position you can take in support of minimum wage is to say that you don’t care if it drives businesses under, you don’t care if kills jobs, and you don’t care if there is less opportunity for young workers to enter the job market, just as long as some of the remaining workers benefit (and you feel good about yourself for helping them).
A fundamental issue with minimum wage is initiating government force. An employer and employee agree on a wage . The government initates force if it doesn’t like the rate. If it’s not complied with out come the guns–fines and/or prison.
To imply that this is okay because free market factors, such as rent, also affect business is off point.
That is, unless you think rent and other factors should also be forcibly controlled.
>> @ CrescentParkAnon – Only someone deeply privileged and removed from real work would insult minimum wage workers by calling them slaves.
Mr. Recycle, thanks for RECYCLING — that old comic argument – that is what you guys stoop to, twisted emotional name-calling argument that has nothing to do with the issues.
It’s more of an insult to working people who work for a living starve or die because of lack of health care. When someone does not make enough money to avoid slowly dying, yeah, I’d call that slavery. I’m sure you’d be in favor of child labor too you love the poor so much.
@CrescentParkAnon – You can drop the health care canard now that we are two years into free health care. And if you’d like to point to an article about minimum wages workers “starving” I’d love to see it. The reality is obesity is a bigger problem at the lowest income levels in the US than starvation.
Bottom line is, you make unsupported claims that employment goes up when wages go up when evidence shows the opposite. At this point belief has passed way into the realm of faith on your part. I know you want to help, your heart is in the right place, but we need to use our brains too.
Okay, let me be honest here. I work for a small business. I make a paltry $15/hr. With lots of overtime work and supplemental weekend jobs, I get by. I love my job.
When I started working at age 16 I made $7 an hour, $9 at my next job, then $10.50…
I realize that my income is generally proportional to my ambition and how I use my free time. I am rather young, and currently use all my free time to build for the future and minimize leisurely activities; which I haven’t done in the past.
I’m actually proud of making more than I used to. Now that the floor is suddenly being raised to $15/hr, my employer would not be required to raise me to $20/hr! So I would suddenly be making minimum wage, and that is kind of insulting!
Even if he did, it would definitely limit our business in other ways because once again, money doesn’t grow on trees!
See how imbalancing an effect such a drastic regulation can have? Seriously, to hell with Big Government.
http://www.raisetheminimumwage.com/pages/job-loss The Most Rigorous Research Shows Minimum Wage Increases Do Not Reduce Employment
The opinion of the economics profession on the impact of the minimum wage has shifted significantly over the past fifteen years. Today, the most rigorous research shows little evidence of job reductions from a higher minimum wage. Indicative is a 2013 survey by the University of Chicago’s Booth School of Business in which leading economists agreed by a nearly 4 to 1 margin that the benefits of raising and indexing the minimum wage outweigh the costs.
This page reviews the most widely-cited and influential studies on the impact of minimum wage increases on employment, and examines the primary reasons why low-wage employers can afford higher wages today.
Opposition to raising the minimum wage is from hysterics who make up arguments like “what if you raise it to $150/hr” or people who discount government and economics theory assuming that their common sense is more intelligent, because in their simplified first order thought-economics it is counter-intuitive because they only consider one dimensio, supply and demand and think that is all there is..
http://www.dol.gov/minwage/mythbuster.htm U.S. Department of Labor Minimum Wage Mythbusters
Myth: Raising the minimum wage will only benefit teens.
Not true: The typical minimum wage worker is not a high-school student earning weekend pocket money. In fact, 88 percent of those who would benefit from a federal minimum wage increase are age 20 or older, and 55 percent are women.
Myth: Increasing the minimum wage will cause people to lose their jobs.
Not true: A review of 64 studies on minimum wage increases found no discernable effect on employment. Additionally, more than 600 economists, seven of them Nobel Prize winners in economics, have signed onto a letter in support of raising the minimum wage to $10.10 by 2016.
Myth: Small business owners can’t afford to pay their workers more, and therefore don’t support an increase in the minimum wage.
Not true: A June 2014 survey found that more than 3 out of 5 small business owners support increasing the minimum wage to $10.10. Small business owners believe that a higher minimum wage would benefit business in important ways: 58% say raising the minimum wage would increase consumer purchasing power. 56% say raising the minimum wage would help the economy. In addition, 53% agree that with a higher minimum wage, businesses would benefit from lower employee turnover, increased productivity and customer satisfaction.
Myth: Raising the federal tipped minimum wage ($2.13 per hour since 1991) would hurt restaurants.
Not true: In California, employers are required to pay servers the full minimum wage of $9 per hour – before tips. Even with a recent increase in the minimum wage, the National Restaurant Association projects California restaurant sales will outpace the U.S. average in 2014.
Myth: Raising the federal tipped minimum wage ($2.13 per hour since 1991) would lead to restaurant job losses.
Not true: Employers in San Francisco must pay tipped workers the full minimum wage of $10.74 per hour – before tips. Yet, the San Francisco restaurant industry has experienced positive job growth over the past few years according to the Bureau of Labor Statistics.
Myth: Raising the federal minimum wage won’t benefit workers in states where the hourly minimum rate is already higher than the federal minimum.
Not true: Only 23 states and the District of Columbia currently have a minimum wage higher than the federal minimum, meaning a majority of states have an hourly minimum rate at or below the federal minimum. Increasing the federal minimum wage will boost the earnings for some 28 million low-wage workers nationwide. That includes workers in those states already earning above the current federal minimum. Raising the federal minimum wage is an important part of strengthening the economy. A raise for minimum wage earners will put more money in more families’ pockets, which will be spent on goods and services, stimulating economic growth locally and nationally.
Myth: Younger workers don’t have to be paid the minimum wage.
Not true: While there are some exceptions, employers are generally required to pay at least the federal minimum wage. Exceptions allowed include a minimum wage of $4.25 per hour for young workers under the age of 20, but only during their first 90 consecutive calendar days of employment with an employer, and as long as their work does not displace other workers. After 90 consecutive days of employment or the employee reaches 20 years of age, whichever comes first, the employee must receive the current federal minimum wage or the state minimum wage, whichever is higher. There are programs requiring federal certification that allow for payment of less than the full federal minimum wage, but those programs are not limited to the employment of young workers.
Myth: Restaurant servers don’t need to be paid the minimum wage since they receive tips.
Not true: An employer can pay a tipped employee as little as $2.13 per hour in direct wages, but only if that amount plus tips equal at least the federal minimum wage and the worker retains all tips and customarily and regularly receives more than $30 a month in tips. Often, 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. When that occurs, 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, he or she is entitled to the provisions of each law which provides the greater benefits.
Myth: Only part-time workers are paid the minimum wage.
Not true: About 53 percent of all minimum wage earners are full-time workers, and minimum wage workers contributed almost half (46 percent) of their household’s wage and salary income in 2011. Moreover, more than 88 percent of those who would benefit from raising the federal minimum wage from $7.25 to $10.10 are working adults, and 55 percent are working women.
Myth: Increasing the minimum wage is bad for businesses.
Not true: Academic research has shown that higher wages sharply reduce employee turnover which can reduce employment and training costs.
Myth: Increasing the minimum wage is bad for the economy.
Not true: Since 1938, the federal minimum wage has been increased 22 times. For more than 75 years, real GDP per capita has steadily increased, even when the minimum wage has been raised.
Myth: The federal minimum wage goes up automatically as prices increase.
Not true: While some states have enacted rules in recent years triggering automatic increases in their minimum wages to help them keep up with inflation, the federal minimum wage does not operate in the same manner. An increase in the federal minimum wage requires approval by Congress and the president. However, in his call to gradually increase the current federal minimum wage to $10.10 per hour, President Obama has also called for it to adjust automatically with inflation. Eliminating the requirement of formal congressional action would likely reduce the amount of time between increases, and better help low-income families keep up with rising prices.
Myth: The federal minimum wage is higher today than it was when President Reagan took office.
Not true: While the federal minimum wage was only $3.35 per hour in 1981 and is currently $7.25 per hour in real dollars, when adjusted for inflation, the current federal minimum wage would need to be more than $8 per hour to equal its buying power of the early 1980s and more nearly $11 per hour to equal its buying power of the late 1960s. That’s why President Obama is urging Congress to increase the federal minimum wage and give low-wage workers a much-needed boost.
Myth: Increasing the minimum wage lacks public support.
Not true: Raising the federal minimum wage is an issue with broad popular support. Polls conducted since February 2013 when President Obama first called on Congress to increase the minimum wage have consistently shown that an overwhelming majority of Americans support an increase.
Myth: Increasing the minimum wage will result in job losses for newly hired and unskilled workers in what some call a “last-one-hired-equals-first-one-fired” scenario.
Not true: Minimum wage increases have little to no negative effect on employment as shown in independent studies from economists across the country. Academic research also has shown that higher wages sharply reduce employee turnover which can reduce employment and training costs.
Myth: The minimum wage stays the same if Congress doesn’t change it.
Not true: Congress sets the minimum wage, but it doesn’t keep pace with inflation. Because the cost of living is always rising, the value of a new minimum wage begins to fall from the moment it is set.
Could I still volunteer to work for less than minimum wage?
CrescentPark: I’d appreciate it if you summarized your points originally instead of copy&pasted a selection of something you found on Google to support your arguments. Anyone can find the exact “research” that they like. The internet is like that. As it is, I don’t have time to read your bountiful wall of text because *gasp* I have WORK to do.
@Johnny
I hear you about your work experience. Intrusive government in economics mucks up a lot of things. As Ayn Rand said, the solution is “the separation of State and Economics, in the same way and for the same reasons as the separation of Church and State.”
I think, however, that there is still enough freedom for you to succeed. You have a good attitude and the fact that you love your work is a huge plus. An employer can not pay you more than you produce. Your part is to produce as much value as you can for the employer. If an employer doesn’t reward value produced, he will soon go out of business.
CPAnon, I’m not going to go over all the misrepresentations in the DOL web page, but I find one that is particularly curious. It claims that 3 out of 5 small business owners support an increase in the minimum wage. Why?
If the businesses want to raise the wages they pay to “benefit from lower employee turnover, increased productivity and customer satisfaction” like they say, they are free to do it without the government forcing them. Also, they wouldn’t want their competitors to be forced to do it because they would lose their competitive advantage of acting to gain these benefits if the others also did it.
The real reason they want the minimum wage is that it provides a barrier to entry for new businesses. Also, since they are established businesses, some of their competitors may be in a weaker position and be forced out of business by the higher wages.
This is not good for the workers this is supposed to help. I find it bazaar that the DOL would represent this as a positive for minimum wage.
> I’m not going to go over all the misrepresentations in the DOL web page,
Oh, you mean the US Government Department of Labor website, that 75% of the CONSERVATIVE University of Chicago economists agree with … surely you and your off the cuff arguments know better … it’s just a big Obama conspiracy … except they were saying this from quite a while ago.
>> I don’t have time to read your bountiful wall of text because *gasp* I have WORK to do.
Hey Johnny, glad you don’t work for me … I don’t think I could afford the
time it must take you to scroll down three screenfulls. HINT – try using 3
presses of the PAGEDOWN key – that ought to boost your efficiency.
You take care of your posts and I’ll take care of mine.
>> R Wray a resident of Palo Verde
>> … As Ayn Rand said ….
Now that explains a lot.
CPAnon
< Opposition to raising the minimum wage is from hysterics…
You seem to like to quote Univ. of Chicago economists. For instance, google “Milton Friedman minimum wage” and watch a 3-minute video. He very calmly states that “no positive objective is achieved by a minimum wage”.
A classic book is “Economics in One Lesson” by Henry Hazlitt. (Should be required reading for anyone interested in economics.) Hazlitt, I’m sure very calmly, starts his chapter on minimum wage laws with, “We have already seen some of the harmful results of arbitrary governmental efforts to raise the price of favored commodities. The same sort of harmful results follows efforts to raise wages through minimum wage laws.”
>> Economics in One Lesson
Both guys and you are ideologies …. but I imagine that it takes more than one easy lesson to understand anything in depth that is important?
CPAnon, re your ideologue charge,
If you mean by “ideologue” one who has an integrated philosophy, I agree and welcome that characterization.
It beats your pragmatic, anti-conceptual, disintegrated approach which leads to collectivism and nihilism.
>> It beats your pragmatic, anti-conceptual, disintegrated approach which leads to collectivism and nihilism.
Egads, that’s a mouthful …. collectivism and nihilism, eh?
In other words, damn the facts, full speed ahead with the scare tactics.