Los Angeles gives preliminary approval to $15 minimum wage

[COKid]

LOS ANGELES - The Los Angeles City Council gave preliminary approval on Tuesday to raise the hourly minimum wage to $15 an hour by 2020 for companies with more than 25 employees, while giving smaller businesses an extra year to meet that benchmark.

 

The council voted 14-1 to approve the measure, which must come back for a final vote.

 

The proposed wage increase in the second-largest U.S. city would raise the pay of an estimated 800,000 workers, officials said.

 

"We are embarking upon, I think, the most progressive minimum wage policy anywhere in the country," said City Councilman Curren Price Jr.

 

The federal minimum wage has remained at $7.25 since 2009. Opponents of minimum wage hikes say they place an undue burden on businesses and force some employers to lay off workers and pass on higher labor costs to consumers. 

 

Source: http://www.msn.com/en-us/news/us/los-angeles-gives-preliminary-approval-to-dollar15-minimum-wage/ar-BBjYjmI?ocid=ansnewsreu11

 

And people wonder why so many jobs have gone overseas. The US is pricing themselves right out of the global job market. I buy Made in the USA products whenever I can, but I can see why so many companies pursue cheaper labor. $10 an hour maybe, but $15? Inflating wages artificially like this is just dumb. And I lean left on most issues. Prices for goods and services will simply be raised accordingly and nothing will have been accomplished. Actually, I'm for abolishing the minimum wage altogether. Want a better paying job? Get more skills! Through experience and/or education. We really are becoming a nanny-state.

[astropheed Veteran]

Because that'll solve all your problems. Gah...

[spaceelf]

I don't know what cost of living is like in LA, but I'd be surprised if it was low.

 

And telling people who can barely afford food and/or a car to get an education is kinda pointless.

[trag3dy]

I don't know what cost of living is like in LA, but I'd be surprised if it was low.

 

And telling people who can barely afford food and/or a car to get an education is kinda pointless.

 

As pointed out above you gotta be pretty naive to think just raising min/wage is going to fix anything. The places this affects will just raise their prices accordingly to compensate. In the end nothing will change.

[+Warwagon MVC]

As pointed out above you gotta be pretty naive to think just raising min/wage is going to fix anything. The places this affects will just raise their prices accordingly to compensate. In the end nothing will change.

 

La la la la la "Its the ciiiiiiiircle of liiiife!! And it moooves us ALLLLLLlll"

[spaceelf]

As pointed out above you gotta be pretty naive to think just raising min/wage is going to fix anything. The places this affects will just raise their prices accordingly to compensate. In the end nothing will change.

Some might, but saying living expenses across the board will be raised equivalent to the change is also na

[Taliseian]

What people generally fail to understand, but a lot of economists do, is that raising the minimum wage is a good thing overall for several reasons.

 

Please note - while I personally agree with the wage hike, I feel that $15 is too high.  I would suggest $11-13.

 

1)  It will shift the burden of the social safety net off of state and local governments - by raising the wage to a living one, larger corporations like WalMart and McDonald's will pay their workers enough that it will mean they won't need to work and receive SNAP and other general assistance to make ends meet.  That alone will save the taxpayers millions annually.

 

2)  Worker will have more disposable income to spend in the community.  For most people who work at the current levels, anything other than the basic necessities is mostly out of the question.  That means more eating out, movies, and being able to replace worn out household items with new ones instead of used.  That will help both large and small businesses by having more people with income to afford the goods and services they produce.  With more people actively contributing to the economy, that will help to keep overall inflation in check and help to drive demand.

 

3)  The drive in demand for more goods and services will help both large and small businesses to not only absorb the cost of increased wages (one of the largest expenses for any business) but will encourage those businesses to expand in either size, employee base, or both.

 

4)  With more workers working and making more money, the tax rolls will increase which will send extra dollars that are sorely needed in the local, state, and federal tax systems.  More tax dollars (if spent right) will help with infrastructure spending, public services (fire, police, emergency), education, and other areas that have been sharply cut since the Great Recession. 

 

 

T

[astropheed Veteran]

Some might, but saying living expenses across the board will be raised equivalent to the change is also na

[astropheed Veteran]

Reasons

 

Because Magic. Why don't we just make the minimum wage $100/hr?

 

Also, I feel quite bad for those who worked just that much harder who are making $15 an hour right now, I don't suspect their wage is going to increase all that much, personally. Gee, that would suck.

[timster]

As pointed out above you gotta be pretty naive to think just raising min/wage is going to fix anything. The places this affects will just raise their prices accordingly to compensate. In the end nothing will change.

companies affected don't have to raise prices to compensate, they'll just cut employees hours or let a few people go

[astropheed Veteran]

companies affected don't have to raise prices to compensate, they'll just cut employees hours or let a few people go

 

They don't have to, but what a good excuse. "Hey, we all feel the pinch".

[ironsight2000]

Here in Canada (Ontario) the minimum wage has gone from $7.45 in 2005 to 11 dollers at present.

[timster]

Here in Canada (Ontario) the minimum wage has gone from $7.45 in 2005 to 11 dollers at present.

it's going to $11.25 on October 1

[spaceelf]

What people generally fail to understand, but a lot of economists do, is that raising the minimum wage is a good thing overall for several reasons.

 

Please note - while I personally agree with the wage hike, I feel that $15 is too high.  I would suggest $11-13.

 

1)  It will shift the burden of the social safety net off of state and local governments - by raising the wage to a living one, larger corporations like WalMart and McDonald's will pay their workers enough that it will mean they won't need to work and receive SNAP and other general assistance to make ends meet.  That alone will save the taxpayers millions annually.

 

2)  Worker will have more disposable income to spend in the community.  For most people who work at the current levels, anything other than the basic necessities is mostly out of the question.  That means more eating out, movies, and being able to replace worn out household items with new ones instead of used.  That will help both large and small businesses by having more people with income to afford the goods and services they produce.  With more people actively contributing to the economy, that will help to keep overall inflation in check and help to drive demand.

 

3)  The drive in demand for more goods and services will help both large and small businesses to not only absorb the cost of increased wages (one of the largest expenses for any business) but will encourage those businesses to expand in either size, employee base, or both.

 

4)  With more workers working and making more money, the tax rolls will increase which will send extra dollars that are sorely needed in the local, state, and federal tax systems.  More tax dollars (if spent right) will help with infrastructure spending, public services (fire, police, emergency), education, and other areas that have been sharply cut since the Great Recession. 

 

 

T

I'm not really convinced of #2/3s assumptions in a worldwide economy.  Some of it will certainly return to local businesses, but a lot of it ends up elsewhere.  Though that's hardly different from before.  Now that online sales seem to be being taxed properly though, that's less of an issue.

 

I'm not surprised at the rest of this thread, heh.  I'm no learned scholar obviously but logic seems to be in short supply sometimes.

[astropheed Veteran]

I'm not surprised at the rest of this thread, heh.  I'm no learned scholar obviously but logic seems to be in short supply sometimes.

 

I'm not an expert, and I legitimately would like to know how what I've said does not apply logic if you're at all referring to me. I'm not "calling you out", I really want to know. Perhaps you can change my mind.

 

These threads always end up being a "everyone is a finance expert and no one is right" type of deal so over the years I've formed my own opinions on these low level economic increases and the outcome almost always seems to coincide with what I thought would happen.

 

I'm willing to be wrong, it'd actually be useful to be wrong.

[spaceelf]

I'm not an expert, and I legitimately would like to know how what I've said does not apply logic if you're at all referring to me. I'm not "calling you out", I really want to know. Perhaps you can change my mind.

 

These threads always end up being a "everyone is a finance expert and no one is right" type of deal so over the years I've formed my own opinions on these low level economic increases and the outcome almost always seems to coincide with what I thought would happen.

 

I'm willing to be wrong, it'd actually be useful to be wrong.

Your argument assumed that everyone in the city was making minimum wage.  If that were true then yes, the cost of everything would go up equivalently except for the many services people rely on are not purchased from a local vendor (most non food or lodging goods and services I'd think.  Vehicle services are not likely paying their employees minimum wage, and parts can be ordered from elsewhere.)

 

The other issue I have is I have no idea what the cost of living is like in LA, but it varies greatly by city/region in the US...as does the amount of citizens earning below the poverty line.

 

I don't have a lot of data to share there without a lot of searching.  There are suggestions that a raise to $9 or $10 would not lose that many jobs - http://www.cbo.gov/publication/44995 and suggestions that much of LA is living below the poverty line, but not being an economics major it'd be hard for me to find the best info to share.

 

I could share a lot of links, but picking out which are legitimate and which are special interest funded pieces is beyond my abilities at the moment.

[astropheed Veteran]

Your argument assumed that everyone in the city was making minimum wage.  If that were true then yes, the cost of everything would go up equivalently except for the many services people rely on are not purchased from a local vendor (most non food or lodging goods and services I'd think.  Vehicle services are not likely paying their employees minimum wage, and parts can be ordered from elsewhere.)

 

Not true, my argument was based solely on those who currently make $15 or less, which I'm to understand is quite a lot of people.

[TrueMonolith]

What people generally fail to understand, but a lot of economists do, is that raising the minimum wage is a good thing overall for several reasons.

 

Please note - while I personally agree with the wage hike, I feel that $15 is too high.  I would suggest $11-13.

 

1)  It will shift the burden of the social safety net off of state and local governments - by raising the wage to a living one, larger corporations like WalMart and McDonald's will pay their workers enough that it will mean they won't need to work and receive SNAP and other general assistance to make ends meet.  That alone will save the taxpayers millions annually.

 

2)  Worker will have more disposable income to spend in the community.  For most people who work at the current levels, anything other than the basic necessities is mostly out of the question.  That means more eating out, movies, and being able to replace worn out household items with new ones instead of used.  That will help both large and small businesses by having more people with income to afford the goods and services they produce.  With more people actively contributing to the economy, that will help to keep overall inflation in check and help to drive demand.

 

3)  The drive in demand for more goods and services will help both large and small businesses to not only absorb the cost of increased wages (one of the largest expenses for any business) but will encourage those businesses to expand in either size, employee base, or both.

 

4)  With more workers working and making more money, the tax rolls will increase which will send extra dollars that are sorely needed in the local, state, and federal tax systems.  More tax dollars (if spent right) will help with infrastructure spending, public services (fire, police, emergency), education, and other areas that have been sharply cut since the Great Recession. 

 

 

T

Uh no. My undergraduate degree was in economics and this is literally....Wow, not economics at all.

Like what you're talking about is often spouted by left wing "economists" in popular media but its not the prevailing view at all, and wasnt when i was doing my degree. If its going this way, then the new-keynesians have truely taken over and math in economics must be considered heresy.

The econometric modelling has shown for a while now (and its covered in Greg mankiw's introduction to economics book) that the dead weight cost of regulation and price floors far exceeds any gains made from an increase in aggregate demand.

[spaceelf]

Not true, my argument was based solely on those who currently make $15 or less, which I'm to understand is quite a lot of people.

I can't really speak towards who will earn what in 2020.  I can say that LA is not the first to raise minimum wage and certainly won't be the last.

 

http://murray.seattle.gov/minimumwage/#sthash.m5Gq8XNN.dpbs has a few interesting studies attached.

The econometric modelling has shown for a while now (and its covered in Greg mankiw's introduction to economics book) that the dead weight cost of regulation and price floors far exceeds any gains made from an increase in aggregate demand.

 

From what I've read there's little agreement among economists about the right thing to do (though they're all pretty much universally agreeing that we're not doing it.)

[tompkin]

Uh no. My undergraduate degree was in economics and this is literally....Wow, not economics at all.

Like what you're talking about is often spouted by left wing "economists" in popular media but its not the prevailing view at all, and wasnt when i was doing my degree. If its going this way, then the new-keynesians have truely taken over and math in economics must be considered heresy.

The econometric modelling has shown for a while now (and its covered in Greg mankiw's introduction to economics book) that the dead weight cost of regulation and price floors far exceeds any gains made from an increase in aggregate demand.

I got a Business Degree many years ago. Let me tell you what I've found. On paper, liberal and conservative economic theory should both work. In practice, neither does. 

 

I'm speaking of the U.S. only here because that's where I live. There are the very wealthy (Bill Gates types) and there those in hard-core poverty. The way our system is run, inertia will pretty much keep both of them in these positions.

 

Then there is everyone in between. 

 

There used to be an old saying, "Just pull yourself up by your bootstraps". This saying  originated in a day when the U.S. economy was primarily agricultural. People used to wear work boots that had straps on the side of the boot that was used to pull the boots on with. The implication was that to "better yourself" all you had to do was to put your boots on, go out in the field and work. That is the mentality of many still today. The problem is that there is a big difference between working in a farm field and getting an engineering degree. Today, if all you have is a high school degree all your likely to get is a minimum wage job unless you have friends or something where you can get a better job.

 

Today, a masters degree is roughly equivalent in "job seeking" that a bachelor's degree was when I graduated. Now you could say that some in the STEM fields (Science, Technology, Engineering, and Math) could get along with just a bachelor's degree (or maybe GitHub). The problem is that not everyone can work in the STEM fields and we still need people to sell cars, not just design cars.

 

Where does this leave the minimum wage issue? Some might use this as an excuse to raise prices but in reality there is no justification because the buying power of these people has been steadily eroding since their last wage increase. By giving them a wage raise, it is (hoped) that they are catching up with the buying power they lost since their last one.  

[TrueMonolith]

I got a Business Degree many years ago. Let me tell you what I've found. On paper, liberal and conservative economic theory should both work. In practice, neither does. 

I suppose this is where economics and business diverged. Economists arent trying to find a theory to manage society, they're looking at society and trying to explain the interactions.

Sometimes this involves making suggestions about "fixing problems".

The argument that Pareto Optimality can be achieved by paying off people who are left worse off from a price floor is a political justification, not an economic one.

[tompkin]

I suppose this is where economics and business diverged. Economists arent trying to find a theory to manage society, they're looking at society and trying to explain the interactions.

Sometimes this involves making suggestions about "fixing problems".

The argument that Pareto Optimality can be achieved by paying off people who are left worse off from a price floor is a political justification, not an economic one.

So once you've explained the interactions, what good is it? Ultimately, we have to have solutions that help people in the real world. 

 

There is more to the reality of the world than economics. That is one "view" of the world. There are other views. It's sort of like the story of the blind men feeling an elephant. Each one believes that what he is feeling is the complete picture when in reality that is far from the truth. There are conservative and liberal economic "think tanks" and they have been suggesting things for 45 years (my adult iifetime)

 

. You might argue that the latest economic theories are superior to those in the past. Perhaps, but I would argue that the U.S. is in worse shape (over all) economically than it was post-WWII and we don't have any real obvious way to turn the ship around. If i'm right, and the economists have a solution, then the rest of us are "all ears".

[TrueMonolith]

So once you've explained the interactions, what good is it? Ultimately, we have to have solutions that help people in the real world. 

 

There is more to the reality of the world than economics. That is one "view" of the world. There are other views. It's sort of like the story of the blind men feeling an elephant. Each one believes that what he is feeling is the complete picture when in reality that is far from the truth. There are conservative and liberal economic "think tanks" and they have been suggesting things for 45 years (my adult iifetime)

 

. You might argue that the latest economic theories are superior to those in the past. Perhaps, but I would argue that the U.S. is in worse shape (over all) economically than it was post-WWII and we don't have any real obvious way to turn the ship around. If i'm right, and the economists have a solution, then the rest of us are "all ears".

Theroetical mathematics and physics have few real world applications too, but that doesnt make them any less accurate as general solutions.

[Arachno 1D]

If you compare the US with the UK where we also have a minimum wage across the country I would consider it a good idea in that it helps prevent employers taking advantage of Government handouts to supplement the meager income.paid to their employees.Without minimum payment its much like a minimum hours contract I personally abhor the zero hours contract culture as it again ties employees to an employer for no cost and with no guaranteed income.to survive week by week.

 

Without minimum hourly wage and minimum weekly hours its akin to taking us back to the 1800 workhouse of employees being some sort of subservient level of human totally dependent on the employers goodwill to survive

[tompkin]

I am glad you responded because I just wanted to say that, while I don't know the current views of economic theories, I know that they have their place. No argument. But there has always been a "tension" between theory and application (in a lot of fields). 

 

A solution is usually the result of a previously recognized problem. So my question, (truly, not being facetious), if economics is somehow an accurate general solution, what is the problem (or problems) that the economist is trying solve?

 

Apart from our little debate here, I read an article a few months back that is extremely interesting about a 150 year old math problem that was solved by pretty much a "regular guy". Here is the link: http://www.newyorker.com/magazine/2015/02/02/pursuit-beauty

 

His solution to this math problem will probably be in mathematics books for decades, but he himself said that it has no practical value. It's a mathematics solution, to be sure, but the problem it solved has no practical meaning. I know there are people in the world (not saying you) that deal with theory almost exclusively but no one really cares about what they study except them.

 

One thing I would suggest, perhaps you would disagree with me, is that "business" may be seen as the practical application of economics. If you believe in a particular economic theory, there has to be a path to get from where we are now to where that theory is. We can't just suddenly jump to a theoretical state, from the state that we are currently in.

 

An example may show what I mean. If one believe's that the private sector is the best answer to overall economic prosperity, the current condition of how our economy operates cannot be ignored. If we decide to suddenly severely cut back on government spending the economy would tank.

 

The government is the largest employer in the country. A lot of government spending is figured into the budgets of the vast majority of major corporations in the country. So by suddenly reducing government spending in such a short amount of time, the government would be laying off people at the same time that corporations would be cutting back on their budgets (because of the reduced revenue from the government) and the private sector could not hope to absorb all those people with the same type of jobs in such a short amount of time.

 

So if one believes in the private sector as the best means of economic prosperity, how do we get there from where we are now in anywhere near a time frame that anyone but the youngest among us would even care about. Also, this completely ignores the "world economy" that is so intertwined. The EU, China, etc. What happens in other countries has rippling effects in our own country.

 

At least with physics they are attempting to make it applicable with quantum computing. Google and Microsoft, I know, are actively pursuing this. Whether they are successful I don't know but at least they are attempting to do so.