I am hoping the situation for employers to get so dire that they have to start offering minimum salaries for hourly workers if the number of hours are not sufficient, steady schedules, and redundant employees for shift type work where the work cannot be done at another time.
That's a ridiculous strawman... nobody is blaming the workers. Workers respond to incentives like any normal person does.
People are blaming federal stimulus spending and the Fed.
OK, but shouldn't that leave more qualified employees on the market for employers that do want to hire? The stories we're seeing are the opposite, with employees putting out unfilled want ads for weeks / months.
That's not what is being claimed though - the claim is that companies can't find employees to fill empty positions - it's not that they are not hiring.
There are plenty of people blaming workers- I’ve heard many iterations of “we’ve got lazy people on unemployment who won’t work” or the signs at restaurants or stores saying “closed on X because no one wants to work any more”
Is lessened with the end of unemployment benefits, but saying no one partly blames workers is not true.
My unemployment benefits when covid hit (In Illinois) were absolutely better than the 20$ an hour some of these companies were offering. Yes, it was much lower than my software industry salary, but I did make the state maximum in benefits. For me it was a lot lower than my salary, but if the state maximum for some people was just under what they made, I can absolutely see people favoring unemployment benefits over working a crappy job.
There is an idea of morality in living on unemployment when you're otherwise capable of working a job, but during lockdowns, a changing society, etc., can you really blame anyone for choosing the easy option? Some people call it lazy, but I think it's more that many people in society are starting to see the old way just sucks for them. Living in lockdown has forced many to reevaluate what's important to them, and flipping burgers to pay bills isn't high up there.
> There is an idea of morality in living on unemployment when you're otherwise capable of working a job,
A bullshit idea since conveniently there is no accompanying idea of morality in living on your parents’ money when you are capable of working a near minimum wage job.
There absolutely is an idea of morality of living off your parents income, at least after a certain age. While I know plenty of parents who will assist their adult kids who are working or provide short term help in between jobs, I know very few who will unconditionally sponsor otherwise capable idle children, and I am perfectly fine saying those parents are making a mistake at many levels, including moral.
Those jobs will fill up quickly. Low wage workers are still living off those added federal unemployment money. (Unemployment benefits should be at that level. I never understood how people survive off prepandemic unemployment checks.)
The powers at be (Big bloated alcoholic wealthy boy Senators) will start their low wage worker corporate chant about, "The value of a hard days work is blah blah, and how proud Americans will take any job just to feel like a Man."
All those lousy back breaking smelly no future jobs will be filled. Nothing will change. Companies will get away with having people lease transportation in order to work for non-livable existences, while being called hustlers, or Independant Employees.
Homelessness will just get worse. Multiple families living under one roof will be the norm.
Corporate will make their wad though, and act like everything is rosy.
What bothers me is CEO's, like that tool from Dominos, is all for bringing in more low wage workers from other countries, in order to deliver his pizzas. He claims they go from delivery drivers to millionaire. (Jim Cramer interview him, and Cramer said, "The problem is those low wage employees don't go on to own a franchise anymore. The tool bag acted like he didn't hear that tid bit of info, and kept chanting his mythical road to poverty to success stories. Cramer dummied up, and said nothing.
My last company was a big, successful HR and recruiting firm. But in our large IT department, there was significant turnover. The colleages were great, but wages were not high enough and upper career options were limited due to some particular executive decisions... so good skilled people often had a lot to offer the company would leave after 1-2 years.
In other words, even the companies you would expect to be the smartest about this topic often are not. There is still a huge blind spot for companies when it comes to recognizing the value of retaining skilled workers.
As for your McDs, do you happen to live in a relatively wealthy area? Kids of upper middle families don't need to do crappy jobs, so they won't. And the ones who do need those jobs may find the high traffic commute (especially without a decent public transport system) not worth it.
There’s also the reality that a job paying $15/hr doesn’t provide benefits or a full-time schedule. There’s no shortage of jobs offering both right now. Free markets work both ways.
I live in suburban Pennsylvania, we have lots and lots of warehouses and we've been seeing billboards announcing unusually high hourly wages, the highest I've seen is up to $27 per hour, here's a local news story: https://www.lehighvalleylive.com/business/2021/10/uline-luri...
$27 in 2021 is still over $25 in 2019 [0]. That's a lot better than the minimum of $14 or the standard $20 for skilled wood workers that another comment mentioned.
Inflation may be high today in the USA (as much as 5.8% this year) but it'll take a while until these numbers become as drastic as many news outlets make them appear.
That's... almost exactly the inflation adjustment for what they've always paid. I made $15/hr entry level at one in central PA as a summer job between semesters in college 20 years ago.
Minimum wage was $5.15 at the time. It was better pay than my first tech job (QA testing, $11/hr) and I seriously considered going back for a while. But I wouldn't call it "fantastic".
Nice article. Hopefully more companies will realize that their operations are more stable when employees are paid well enough to have a comfortable home life.
How is the market still soaring with a supposed nationwide labor shortage? Is this just a low wage phenomenon? Is this another indicator that we're in a giant bubble?
There exists volumes of research about the negative and positive employment effects of having a minimum wage. I am glad to see that finally a market mechanism (supply and demand) is the catalyst that is driving wages in general higher - including the minimum wage.
Inflation will potentially reduce the US to a third world country. I'm not saying it's bad that they are getting raises at this sawmill, but this article is brushing aside much broader implications and paints nothing but rosy pictures of what's going on at a higher level. When you have to pay employees more, costs go up. When costs go up, prices go up. When prices go up, people get poorer. This lesson has played out in history innumerable times.
>> Everything is cyclical, so I don’t know how long it will last.
Right up until the bread runs out, boo.
>> The demand is for middle income and upscale housing, Hill said.
Because people with a bit of money stashed away that can are fleeing the highly populated areas due to pricing insanity.
>> Perhaps just as important is that those hard-working sawmill workers may find life a little easier and the stresses that lead to poverty and crime and all other sorts of societal ills may be relieved a bit.
This... is not generally how gaining more and more external population works.
This whole article is contrived euphoric delusion.
I am genuinely curious: you seem unhappy with the economic circumstances presented in the article (and in the country in general), so what is your preferred alternative in terms of policy and outcomes?
Complain until hungry people kill him and take his stuff, I'd wager.
Conservatives have thousands of years of history to look to and see that pattern play out over and over again, and yet they think it'll be different this time if only they implement this one weird trick.
Unfortunately it really is that simple. Wealth concentrates and people revolt. So if you don't want the revolt either give away your wealth or let the wealth erode slowly over time (higher wages eat away at relative wealth).
It's funny how inflation is blamed on increases in the salaries of the lowest-earning folk. This in an age of record high corporate profits, stock market highs, and massive concentrations of wealth.
There are plenty of countries that have higher minimum wages than the US and don't experience greater inflation. One reason is that the money for these higher wages comes not from higher prices, but from executive and investor compensation. If workers have more leverage and companies compete in a competitive market then prices can stay low by cutting fat from above to feed those below.
That higher wages == inflation is a self serving argument that only gets rolled out when those wages are blue collar wages. You don't see it applied to the ridiculous amounts of money the managerial and investor classes earn.
The 50's and 60's saw modest inflation and rapid wage increases. Workers had more leverage and the US wasn't nearly as unequal.
> Inflation will potentially reduce the US to a third world country.
While the US may well get there, is there a reason to believe inflation will drive it, rather than any number of other idiotic foot-guns your leaders seem determined to apply?
You can't just say somewhere is a first world country. You have to look at it and see what life is like there. America is only a nice place for the rich. For everyone else it sucks. That is not true for most other first world developed countries. Practically every metric demonstrates that very clearly.
The term "first world" comes from the separation of countries aligned with the USA (first world), the communist countries (second world) and whatever remained (third world). Its origins have little to do with wealth or social development.
South Africa and Morocco aren't exactly the wealthiest countries in the world, but they're still decidedly first world. Ireland and Sweden are third world countries, despite their relative wealth.
Now that the second world has mostly fallen or become capitalist, the term "third world" is often used to refer to developing nations (which is silly, as if not aligning with the USA inherently makes you poor) but its origins explicitly make it impossible for the USA to be part of anything other than the first world.
And let's be honest, even with its terrible labour laws, unmaintainable healthcare system, two-party political system and income inequality inequality, the USA is still far ahead of the developing nations people call "third world". Compare the poor American states to the poor European countries and the USA still comes out ahead on average. America is a country of extremes, where the rich are extremely rich and the poor are extremely poor, especially given the wealth that surrounds them. I'd much rather be homeless in Europe than be homeless in the USA, but being middle class in most of Europe leaves you more budget constrained than being middle class in much of the USA.
If you pay spherical cows in a vacuum really high wages, then sure, you're completely right.
But a lot of models have funny behavior when you get closer to the edges.
I think you can intuit that if you pay people some amount they actually work more efficiently because they're happier and healthier and better fed and better educated. Of course if you pay them a very large amount, the efficiency gains per dollar will likely drop off again because there's only so much a person can improve themselves (as per your intuition before) .
So it turns out you're really dealing with an optimization problem.
I think a lot of people just assume the model behavior is linear and end up picking a point far too low down on the curve.
(People have had some clue for a long time though: consider the saying "Penny wise, pound foolish")
>I think you can intuit that if you pay people some amount they actually work more efficiently because they're happier and healthier and better fed and better educated. Of course if you pay them a very large amount, the efficiency gains per dollar will likely drop off again because there's only so much a person can improve themselves (as per your intuition before) .
Those two are the income and substitution effect. Unsurprisingly better compensated individuals tend to work more not less.
>When prices go up, people get poorer. This lesson has played out in history innumerable times.
Your hypothesis doesn't make any sense when looking at the entire history of the dollar. Most of the economic growth happened during years of moderate 3-5% inflation and people have gotten richer over the last two centuries.
what goes up first the wages or the cost of living? in the end I think they chase each others tail. someone has to pay the bill for that person getting $18hr for flipping burgers or pulling green chain. it’s an upward spiral probably hurting those on a fixed income the worst. the paycheck will of course look and feel nice but now the trip to the grocery store will be $135 instead of $85.
Well, in this case it's cost of living. I can only speak for some of Europe. Shit is going up in price (and it doesn't seem to be slowing down). Wages are going up, too.
Ultimately a bit useless, the poorest are still more fucked by CoL than they're helped by higher wages.
Only because there is insufficient wealth transfer from the top deciles and quintiles to the bottom ones. Obviously, if society retains the same conditions that allow increasing income/wealth gaps, then higher wages will not help the poorest.
It's funny if investors demand 10% ROI nobody blinks an eyelid, but if if wages are go up suddenly everyone talks about inflation. Do investors returns not increase prices?
If investors decided to demand 1,000,000% ROI we wouldn't suddenly have hyperinflation. Investors can 'demand' whatever they like; there's no guarantee they're going to get it, and most of the time they won't. It's just their way of exerting control over a company.
When wages go up they actually go up, which, at least according to conservative economic theory, leads to inflation. In practice though it often doesn't.
> . Investors can 'demand' whatever they like; there's no guarantee they're going to get it, and most of the time they won't.
And yet it is all hands on deck with both political parties when the stock market does not deliver 10% annual growth. It is pretty clear that the weight of the federal government and the federal reserve is behind making sure VOO keeps consistently going up over the timescale of decades if not a few years.
But when wages for the bottom 80% stagnated for decades, there is debate on whether or not anything needs to be done.
When minimum wage goes up, only people making between the former minimum wage and the new minimum wage get more money. Everyone else makes the same. This means increasing minimum wage by 10% might only see an overall increase in the cost of goods and services of 3%.
An increase in minimum wage means those getting the 10% increase have a 7% better quality of life. Those who already made more than the new minimum wage now have a 3% quality of life decrease.
The economy is not a zero sum game. Many higher wages will also go up.
Furthermore, there are plenty of things that money can't buy. Most of us do much better in life when the people around us are also doing better.
You don't live in the cheapest slum you can find, do you?
This has me asking so many questions. They claimed Louisville grew in population. Did they come from the surrounding areas? If so, which ones? Mississippi as a whole lost population according to the 2020 census. The bigger places around Louisville would be Meridian, casinos, and maybe Jackson. I doubt folks are moving from those spots but I don’t know. I suspect it’s people coming in from the surrounding county/rural areas?
Are the companies able to pay more because of the lumber market this year? What about other sawmills in Mississippi?
What about timberland owners? They haven’t reaped the benefits of sawmills, because there’s like 50 years worth of timber inventory in the American South (though it appears Q3 is picking up! https://www.forest2market.com/blog/southern-timber-prices-hi...)
And does this just raise the wages or is there some profit sharing going on?
> the company announced the rollout of a new wage structure, including a minimum wage of $15.25 per hour
> What Winston Plywood is doing defies almost everything we have been told about wages in Mississippi — that raising the minimum wage would cripple profits, throw company pay structures into chaos, create inflation and ultimately wreck the economy.
Uh, no ... they didn't raise the minimum wage, they raised the wage that they pay. That's not the same thing at all. That's a market force, not a government intervention, in this particular case.
Yes, they did raise the minimum wage at that company. The expression "minimum wage" gets applied to different contexts. National minimum wage is the minimum wage specified by (presumably) a national law. Likewise some states have higher state minimum wages.
But every company has a minimum wage - that is the lowest wage paid to an employee of the company. Or it can be more broadly used to describe the minimum hourly wage paid to anyone who does work for the company (temp worker, contractor, etc.).
It seems you're really missing the point of the article. Some political forces have been pushing the argument that raising the minimum wage will have many negative side effects, especially for the businesses themselves. This one example seems to show the opposite. But it's not a market force; it's a (contrarian) business decision which was made with a long term goal in mind. It seems the company decided that retaining skilled talent was worth paying more for and would result in better long term profits.
> "On Monday, the company announced the rollout of a new wage structure, including a minimum wage of $15.25 per hour and increases for its skilled workers, bringing the average salary to $20 per hour."
It seems obvious to me that it is referring it the minimum wage within the company's wage structure, and not a national minimum wage. I don't understand your point, "the company announced the rollout of a new wage structure, including a minimum wage of $15.25 per hour", means exactly that.
That's not the part being taken issue with, this is:
> What Winston Plywood is doing defies almost everything we have been told about wages in Mississippi — that raising the minimum wage would cripple profits, throw company pay structures into chaos, create inflation and ultimately wreck the economy.
The minimum wage of that debate is a government legislated minimum wage, obviously.
They took a story of interest and lied about it to mislead people to put a favorable spin on a political issue. I.e., modern journalism.
It’s not a lie though - the sawmill did indeed raise its minimum wage. The author posits that the experience of this sawmill defies what “we” have been told about wages across the state, because this company raised their wages and didn’t experience the negative effects that were asserted.
The lie is in the conclusion: "because a single company raised its minimum wage and was successful, this implies all companies can raise their minimum wage and be successful".
If you accept the premise that some work is more valuable than others, then you must also accept that having a minimum wage will rule out certain types of work as being not sufficiently valuable to actually be worth paying for. Thus, having a minimum wage law means that some jobs will disappear (or become much more expensive). Whether this trade-off is worth it or not is a political choice with arguments to be made on both sides.
You can’t call a conclusion a lie because you don’t agree with it. A lie implies falsehood, where you’re just saying, “I don’t agree that this situation where raising the minimum wage of a small towns core business didn’t have negative impacts can translate to a larger scope of a whole state, because I don’t believe that’s how it works”. It’s on you to show the opposite.
So a conclusion that uses a false generalisation must be accepted at face value despite its faulty logic? This has nothing to do with opinion, mine or otherwise; the article is pushing a policy on the basis of broken logic. And yes, I can damn well call that a lie.
It is a lie. The company does not "defy" anything about the opposing side of the minimum-wage debate. It is a deliberate and calculated lie about the characterization of the minimum wage debate.
Unless there happens to be a major group I've never heard of in that state which opposes legal minimum wages and also wants legislation to outlaw companies giving pay rises to their lowest paid workers.
They are just words. It's the minimum wage at that company. There is no law "Thou shalt only use [Minimum Wage](TM) and forget about that those are just regular words".
>But every company has a minimum wage - that is the lowest wage paid to an employee of the company. Or it can be more broadly used to describe the minimum hourly wage paid to anyone who does work for the company (temp worker, contractor, etc.).
You're just playing with words. The point of a government mandated minimum wage is that work that pays less than this wage is banned. A company can decide to set the lowest wage to $15/h and when economic conditions worsen it can set them even lower to $10/h. With a minimum wage of $15 the company would just fire the employees. Right now businesses are doing well so raising wages won't hurt the economy.
>...Minimum wage increase do not increase unemployment. We have almost a century of data. It's always trumpeted by the wealthy, but never happens.
Small changes in the minimum wage will have minimal changes in short term total unemployment - less productive workers will have a harder time competing as more desirable workers will now compete with them and longer term there will be a bigger incentive to switch to automation to remove workers.
Larger increases in the minimum wage though will obviously effect total unemployment as the law of supply of demand still holds. As one example, the non-partisan Congressional Budget Office estimated a national $15 minimum would cause employment to be reduced by 1.4 million workers.
You misunderstood what I wrote. I wrote "Small changes in the minimum wage will have minimal changes in short term total unemployment"
If any given minimum wage rate would have no effect on employment levels, than we would simply increase the minimum wage to 100 dollars an hour and end all poverty.
Please don't misrepresent what I wrote - that is arguing in bad faith.
You simply wrote "Minimum wage increase do not increase unemployment."
I pointed out "Small changes in the minimum wage will have minimal changes in short term total unemployment - less productive workers will have a harder time competing as more desirable workers will now compete with them and longer term there will be a bigger incentive to switch to automation to remove workers.
Economists think larger increases in the minimum wage though will effect total unemployment as the law of supply of demand still holds. As one example, the non-partisan Congressional Budget Office estimated a national $15 minimum would cause employment to be reduced by 1.4 million workers."
You then respond with an insult and a link to the Nobel prize about the research showing that small increases in the minimum wage don't have an effect on employment levels and that sometimes higher pay would also attract more applicants, boosting labor supply. I pointed our that this was exactly what I said. Those 'more applicants' they refer to are why I said in the longer term less productive workers will have a harder time competing as more desirable workers will now compete with them - that won't be reflected in overall employment but it will hurt the most vulnerable workers. I also pointed out that "the non-partisan Congressional Budget Office estimated a national $15 minimum would cause employment to be reduced by 1.4 million workers." While small increases of the minimum age won't have a major effect on employment you are acting as if you think that it would not be possible that increasing the minimum wage by over 100% could have no effect on employment. If everyone is already earning over $15 an hour it wouldn't have an effect, but for example, the wage rates in San Francisco are much higher than rural Mississippi. If you don't think a >100% increase could have an effect, please explain why you are right and economists at the CBO are wrong.
You then falsely claim I am making a straw man argument. No, I am not - I pointed out that while small increases won't have a noticeable effect on employment level, economists think a large increase can have a direct effect on employment or otherwise economists would simply propose making a $100 minimum wage. If you don't think that a minimum wage can ever affect employment levels then say so, if you think there is some level where it would affect employment levels, then what is that level and how did you decide what that level is?
I see you're really dedicated. Try this, click my link, press ctrl+f and type "small", hmm.... 0 hits. Strange if you search "increase", you get 7 hits.
Let's further break down your post.
economists think... (conjecture)
...a large increase can have a direct effect on employment... - ( 72% used to, now only 46% do. per my link)
...or otherwise economists would simply propose making a $100 minimum wage... (the most classic case of Straw Man ever. Who is proposing this huge increase?)
They are referring to the typical small increase in minimum wage that has been done for the last few decades. You seem to hold very very strong views for someone who found a press release.
>......or otherwise economists would simply propose making a $100 minimum wage... (the most classic case of Straw Man ever. Who is proposing this huge increase?)
This is exactly my point. If economists believed that a large increase could have no effect on employment levels, they would propose raising the minimum wage to say $100 an hour. Since they haven't proposed that, that means that they do believe that a large increase would directly impact employment levels. This really shouldn't be that hard for you to understand. If you don't think that a minimum wage can ever affect employment levels then say so, if you think there is some level where it would affect employment levels, then what is that level and how did you decide what that level is?
$100 would not cause the problems your positing, it would cause other problems. It would create a massive disruption in pricing and pay rates. That argument is dead stupid. I'm not sure why you're doubling down on it.
Economists are not proposing massive changes, because economics is mostly about justifying current systems and getting paid by the wealthy.
Back in college (undergrad not grad school). Even if you aren't currently attending college, these days there are plenty of universities who put courses on-line (MIT Open Courseware, etc.)
No, its kind of obvious they are trying to make the compairson:
"What Winston Plywood is doing defies almost everything we have been told about wages in Mississippi — that raising the minimum wage would cripple profits, throw company pay structures into chaos, create inflation and ultimately wreck the economy. Besides, we are told, Mississippi’s low cost of living makes a raise in the minimum wage unnecessary.
Yet a recent study provided to Congress on hearing about raising the federal minimum wage showed half of Mississippians are ALICE (Asset Limited, Income Constrained, Employed) and that a minimum wage that would cover essential costs of living would need to be $10.94 per hour for a single person and $14 per hour for two-income families with two children.
That a sawmill in a rural Mississippi town would go far beyond that is startling — and definitely something to keep an eye on."
I know what you mean by contrarian but shouldn't this way of operating a business be normal? Isn't it disruptive to any business to have to continually train and acclimatise new workers?
I believe it should be normal, and that the proper balance of pay and perks is much different from what is common now and what certain “business friendly” folks believe.
These days, paying more than required is contrarian unless you’re a big tech company.
Governments also increase minimum wages due to market forces. The government wants increased tax revenue and growth in their domestic product. It’s macro economics.
“Starting wage for unskilled labor” is what they changed. Because we’re lazy, the reporter called it minimum wage.
In the small Arkansas town I grew up in, when the Tyson plant changed what we called the “starting wage” it was a big deal. Back in 97-98 it went up to $6.05, which got me to apply there and get a job. That was almost a dollar more than the US minimum wage.
I didn’t last very long. That wasn’t for me. I instead went to a mcse boot camp and got a job offered to me by the place that ran the camp. They had a service side that hired me at $11.25/hr. I was billed out to clients at $125/hr. The rest is history.
When I returned to see some high school friends around 2000, the starting rate at the Tyson plant was up to $7/hr.
> That's not the same thing at all. That's a market force, not a government intervention, in this particular case.
That's also exactly what's written in the article, what are you complaining against?
> “The one thing that doesn’t change is that they want to make profits,” Hill noted. “Not to get too far into theory, but what’s happening here, I think, is basic economics. For a lot of years, there were more workers than jobs. Now, I think that’s changed. These are smart people. They realize there’s a competitive market for workers. They want to hire and retain the best workers they can find. I think that’s what they’re doing here. I think what we’re seeing is that it’s the workers who have the leverage now. It’s been the other way for a long time, and now we’re seeing a shift. Everything is cyclical, so I don’t know how long it will last. But I think what (Winston Plywood) is doing is significant.”
As a Canadian in the wood products sector it’s a bit shocking wages in US sawmills are so low…in Canada production workers make 1/2 to 2/3 of trades wages and have excellent safety standards and worker protection. There is a fair amount of retention of young people in rural communities thanks to that. Automation displaces some amount of jobs, but is more geared towards increasing productivity and grade outturn
It is Mississippi, the poorest state in the nation. Contrast with WA, where the minimum wage is $14.49, but I doubt a sawmill would find a worker for less than $20 if not $25.
They were able to raise wages due to the increased market price of their goods. Government imposed minimum wages increase regardless of the market price of a company's goods or services.
Mandatory minimum wages are most detrimental to those who the proponents are claiming to help. Low skilled workers are less likely to be hired because they have to be paid at a rate above what the market value of their labor is. This is not the case right now because the market rate of low skill labor has increased beyond the federal and state minimums.
During periods of high labor availability and low job availability, minimum wages can establish a significant barrier to employment for low skilled workers.
During times like the present when labor supply is short, minimum wage mandates are not keeping up with the market and have very little effect on hiring.
What you’re saying totally makes sense from an intuitive sense.
But how do we reconcile that with the ability for someone to be able to live on a certain wage, given there are only so many hours they can work? Yes the market value might be lower but their bills don’t get lower.
Squaring those things mostly involves deciding if there's moral value in work. If there is, you effectively create a subsidy for low-paid work by supplementing it via welfare or tax credits. If you don't believe that there's moral value in work, you accept that those jobs will of necessity be moved to lower-waged places on the planet, replaced by automation, or deemed to be not be viable (and probably end up providing living costs via the social safety net).
In one word: move. The living wage for a single adult in SF with no kids is $28/hour(1). That's not a realistic wage for someone in most unskilled jobs (which is why there's basically no manufacturing there and only the bare minimum of service jobs!).
We should subsidize moving.
The other point to make here is that labor constraints are largely a good thing right now. We went 50 years where the power balance was on the corporate side. Now that it's shifting, labor is finally seeing the benefits of increased productivity over that time. All it took was a global pandemic to push a few million boomers into finally retiring...
Assuming it means plenty of food, shelter, healthcare, affordable children, and care for them. There is no reconciliation when it comes to minimum wage. Additionally, how do we define the expectations of a minimum wage salary when establishing it? What should the person be able to afford with the earnings? Everyone has a different answer to this question. Minimum wage will never be set high enough because human nature has us desire more. "Give a mouse a cookie..."
Unskilled labor is typically for people who are first entering the market in their teenage years and have subsidized expenses by their parents.
Everyone I've met in my life aside from some disabled people are capable of developing skills. Once The skill is developed and marketed they no longer need to depend on "minimum wage" earnings. For the sake of this conversation let us ignore disabilities.
For a healthy person, working 80 hours in a week is completely feasible. 80x7.25=$2,320 a month(decent where I live). Many people choose to work this many hours and more for financial gain.
Once they have done this for a short period of time, they can use their savings to pay for education that will give them skills.
Savings is the key to success. Wages x hours worked - expenses = savings.
Too much energy is focused on one part of that equation, considering the importantance of choices made by individuals regarding how many hours to work and what to spend savings on.
This is mostly correct, but not the whole picture. They experimented with minimum wage levels in East Germany after re-unification, and found that they have barely any effect on unemployment levels if they are not too high. Turns out lot of demand is not that elastic.
But agree its a very dangerous tool in the hands of politicians, and better not to have it than have it be abused.
I was interested in reading more about this, but the articles I found on the topic suggested the minimum wage in Germany was only instituted in 2015. Is this the natural experiment you're talking about?
Some other commenters have pointed out: huge difference between artificially mandating this sort of wage through legislation and a company deciding on their own to do so because of economics, generosity (such do exist, not all), etc.
It also ignores whether it is sustainable long term, and economic impact should it continue. For all we know, this could put the company out of business financially. I hope not, but it could. And, should it become a trend or government mandate, the impact on inflation and other economic factors is a question.
"The one thing that doesn’t change is that they want to make profits," [Will Hall] noted. "Not to get too far into theory, but what’s happening here, I think, is basic economics. For a lot of years, there were more workers than jobs. Now, I think that’s changed."
Yup. It's pretty basic. Labor gets a better deal in one of two ways.
1. Reduction in workforce. Historically, Black Death and wars.
2. Collective action. Guilds, unions, trades, and the like.
I honestly didn't think I'd live to see Labor doing better. I'm glad there's finally some movement. I'm sorry it took a pandemic.
[Yes, there's multiple forces. Things are never simple, there's always more to the story. Aging workforce, (mostly men) opting out, (mostly woman) stuck with child and elder care, wave of early retirement, reduction in immigration, increased disability and mortality, and probably more.]
--
Also interesting in this story:
"This week, Winston Plywood, through its investors, a Connecticut-based equity firm, announced a new wage structure."
Access to capital.
If policy makers want employers to increase wages, we need to consider how to make it happen.
I'm totally onboard with using pandemic crisis cheddar (governmental largess) to provide capital to distressed businesses. Especially locally owned. Loans, grants, debt forgiveness, whatever.
Corporations and trusts receive billions. That'll never stop. I just want some of that torrent of cash to go directly to where it will help the most. Versus waiting for it to "trickle down".
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[ 3.2 ms ] story [ 159 ms ] threadTurns out if there are fewer jobs than people wages go down. Reverse it and they go up.
Smart companies will move to preserve the employees they have instead of having to train new ones after having to raise wages anyway.
Don’t Blame Workers for Inflation https://nyti.ms/2Xhxul7
Is lessened with the end of unemployment benefits, but saying no one partly blames workers is not true.
There is an idea of morality in living on unemployment when you're otherwise capable of working a job, but during lockdowns, a changing society, etc., can you really blame anyone for choosing the easy option? Some people call it lazy, but I think it's more that many people in society are starting to see the old way just sucks for them. Living in lockdown has forced many to reevaluate what's important to them, and flipping burgers to pay bills isn't high up there.
A bullshit idea since conveniently there is no accompanying idea of morality in living on your parents’ money when you are capable of working a near minimum wage job.
The powers at be (Big bloated alcoholic wealthy boy Senators) will start their low wage worker corporate chant about, "The value of a hard days work is blah blah, and how proud Americans will take any job just to feel like a Man."
All those lousy back breaking smelly no future jobs will be filled. Nothing will change. Companies will get away with having people lease transportation in order to work for non-livable existences, while being called hustlers, or Independant Employees.
Homelessness will just get worse. Multiple families living under one roof will be the norm.
Corporate will make their wad though, and act like everything is rosy.
What bothers me is CEO's, like that tool from Dominos, is all for bringing in more low wage workers from other countries, in order to deliver his pizzas. He claims they go from delivery drivers to millionaire. (Jim Cramer interview him, and Cramer said, "The problem is those low wage employees don't go on to own a franchise anymore. The tool bag acted like he didn't hear that tid bit of info, and kept chanting his mythical road to poverty to success stories. Cramer dummied up, and said nothing.
In other words, even the companies you would expect to be the smartest about this topic often are not. There is still a huge blind spot for companies when it comes to recognizing the value of retaining skilled workers.
As for your McDs, do you happen to live in a relatively wealthy area? Kids of upper middle families don't need to do crappy jobs, so they won't. And the ones who do need those jobs may find the high traffic commute (especially without a decent public transport system) not worth it.
I think this is fantastic and I hope it lasts.
Inflation may be high today in the USA (as much as 5.8% this year) but it'll take a while until these numbers become as drastic as many news outlets make them appear.
[0] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=27&year1=20210...
Minimum wage was $5.15 at the time. It was better pay than my first tech job (QA testing, $11/hr) and I seriously considered going back for a while. But I wouldn't call it "fantastic".
>> Everything is cyclical, so I don’t know how long it will last.
Right up until the bread runs out, boo.
>> The demand is for middle income and upscale housing, Hill said.
Because people with a bit of money stashed away that can are fleeing the highly populated areas due to pricing insanity.
>> Perhaps just as important is that those hard-working sawmill workers may find life a little easier and the stresses that lead to poverty and crime and all other sorts of societal ills may be relieved a bit.
This... is not generally how gaining more and more external population works.
This whole article is contrived euphoric delusion.
Conservatives have thousands of years of history to look to and see that pattern play out over and over again, and yet they think it'll be different this time if only they implement this one weird trick.
That higher wages == inflation is a self serving argument that only gets rolled out when those wages are blue collar wages. You don't see it applied to the ridiculous amounts of money the managerial and investor classes earn.
The 50's and 60's saw modest inflation and rapid wage increases. Workers had more leverage and the US wasn't nearly as unequal.
While the US may well get there, is there a reason to believe inflation will drive it, rather than any number of other idiotic foot-guns your leaders seem determined to apply?
America is already a third world country. https://www.rollingstone.com/politics/politics-news/six-ways...
The first/second/third world distinction is pretty irrelevant these days, but the US is unalterably a first-world country in it.
South Africa and Morocco aren't exactly the wealthiest countries in the world, but they're still decidedly first world. Ireland and Sweden are third world countries, despite their relative wealth.
Now that the second world has mostly fallen or become capitalist, the term "third world" is often used to refer to developing nations (which is silly, as if not aligning with the USA inherently makes you poor) but its origins explicitly make it impossible for the USA to be part of anything other than the first world.
And let's be honest, even with its terrible labour laws, unmaintainable healthcare system, two-party political system and income inequality inequality, the USA is still far ahead of the developing nations people call "third world". Compare the poor American states to the poor European countries and the USA still comes out ahead on average. America is a country of extremes, where the rich are extremely rich and the poor are extremely poor, especially given the wealth that surrounds them. I'd much rather be homeless in Europe than be homeless in the USA, but being middle class in most of Europe leaves you more budget constrained than being middle class in much of the USA.
But a lot of models have funny behavior when you get closer to the edges.
I think you can intuit that if you pay people some amount they actually work more efficiently because they're happier and healthier and better fed and better educated. Of course if you pay them a very large amount, the efficiency gains per dollar will likely drop off again because there's only so much a person can improve themselves (as per your intuition before) .
So it turns out you're really dealing with an optimization problem.
I think a lot of people just assume the model behavior is linear and end up picking a point far too low down on the curve.
(People have had some clue for a long time though: consider the saying "Penny wise, pound foolish")
Those two are the income and substitution effect. Unsurprisingly better compensated individuals tend to work more not less.
https://youtu.be/8Pk654J8-5c
Your hypothesis doesn't make any sense when looking at the entire history of the dollar. Most of the economic growth happened during years of moderate 3-5% inflation and people have gotten richer over the last two centuries.
Ultimately a bit useless, the poorest are still more fucked by CoL than they're helped by higher wages.
When wages go up they actually go up, which, at least according to conservative economic theory, leads to inflation. In practice though it often doesn't.
And yet it is all hands on deck with both political parties when the stock market does not deliver 10% annual growth. It is pretty clear that the weight of the federal government and the federal reserve is behind making sure VOO keeps consistently going up over the timescale of decades if not a few years.
But when wages for the bottom 80% stagnated for decades, there is debate on whether or not anything needs to be done.
You're confusing ROI with interest. When lenders demand 10% interest you can bet that the interest payments are being passed onto consumers.
An increase in minimum wage means those getting the 10% increase have a 7% better quality of life. Those who already made more than the new minimum wage now have a 3% quality of life decrease.
You don't live in the cheapest slum you can find, do you?
Are the companies able to pay more because of the lumber market this year? What about other sawmills in Mississippi?
What about timberland owners? They haven’t reaped the benefits of sawmills, because there’s like 50 years worth of timber inventory in the American South (though it appears Q3 is picking up! https://www.forest2market.com/blog/southern-timber-prices-hi...)
And does this just raise the wages or is there some profit sharing going on?
> What Winston Plywood is doing defies almost everything we have been told about wages in Mississippi — that raising the minimum wage would cripple profits, throw company pay structures into chaos, create inflation and ultimately wreck the economy.
Uh, no ... they didn't raise the minimum wage, they raised the wage that they pay. That's not the same thing at all. That's a market force, not a government intervention, in this particular case.
But every company has a minimum wage - that is the lowest wage paid to an employee of the company. Or it can be more broadly used to describe the minimum hourly wage paid to anyone who does work for the company (temp worker, contractor, etc.).
It seems you're really missing the point of the article. Some political forces have been pushing the argument that raising the minimum wage will have many negative side effects, especially for the businesses themselves. This one example seems to show the opposite. But it's not a market force; it's a (contrarian) business decision which was made with a long term goal in mind. It seems the company decided that retaining skilled talent was worth paying more for and would result in better long term profits.
The key factor of the minimum wage is that, if they wanted the employer could reduce their wages back down to the actual minimum wage.
It seems obvious to me that it is referring it the minimum wage within the company's wage structure, and not a national minimum wage. I don't understand your point, "the company announced the rollout of a new wage structure, including a minimum wage of $15.25 per hour", means exactly that.
> What Winston Plywood is doing defies almost everything we have been told about wages in Mississippi — that raising the minimum wage would cripple profits, throw company pay structures into chaos, create inflation and ultimately wreck the economy.
The minimum wage of that debate is a government legislated minimum wage, obviously.
They took a story of interest and lied about it to mislead people to put a favorable spin on a political issue. I.e., modern journalism.
If you accept the premise that some work is more valuable than others, then you must also accept that having a minimum wage will rule out certain types of work as being not sufficiently valuable to actually be worth paying for. Thus, having a minimum wage law means that some jobs will disappear (or become much more expensive). Whether this trade-off is worth it or not is a political choice with arguments to be made on both sides.
Unless there happens to be a major group I've never heard of in that state which opposes legal minimum wages and also wants legislation to outlaw companies giving pay rises to their lowest paid workers.
Case studies? Economists?
Or
Vested interests? Politicians? Talk radio hosts?
Journalism should be calling out the specifics here and the ?lack? of grounding it has had, and how such ?misinformation? Is spread.
You're just playing with words. The point of a government mandated minimum wage is that work that pays less than this wage is banned. A company can decide to set the lowest wage to $15/h and when economic conditions worsen it can set them even lower to $10/h. With a minimum wage of $15 the company would just fire the employees. Right now businesses are doing well so raising wages won't hurt the economy.
Minimum wage increase do not increase unemployment. We have almost a century of data. It's always trumpeted by the wealthy, but never happens.
Small changes in the minimum wage will have minimal changes in short term total unemployment - less productive workers will have a harder time competing as more desirable workers will now compete with them and longer term there will be a bigger incentive to switch to automation to remove workers.
Larger increases in the minimum wage though will obviously effect total unemployment as the law of supply of demand still holds. As one example, the non-partisan Congressional Budget Office estimated a national $15 minimum would cause employment to be reduced by 1.4 million workers.
https://www.cbo.gov/system/files/2021-02/56975-Minimum-Wage....
If any given minimum wage rate would have no effect on employment levels, than we would simply increase the minimum wage to 100 dollars an hour and end all poverty.
You simply wrote "Minimum wage increase do not increase unemployment."
I pointed out "Small changes in the minimum wage will have minimal changes in short term total unemployment - less productive workers will have a harder time competing as more desirable workers will now compete with them and longer term there will be a bigger incentive to switch to automation to remove workers.
Economists think larger increases in the minimum wage though will effect total unemployment as the law of supply of demand still holds. As one example, the non-partisan Congressional Budget Office estimated a national $15 minimum would cause employment to be reduced by 1.4 million workers."
You then respond with an insult and a link to the Nobel prize about the research showing that small increases in the minimum wage don't have an effect on employment levels and that sometimes higher pay would also attract more applicants, boosting labor supply. I pointed our that this was exactly what I said. Those 'more applicants' they refer to are why I said in the longer term less productive workers will have a harder time competing as more desirable workers will now compete with them - that won't be reflected in overall employment but it will hurt the most vulnerable workers. I also pointed out that "the non-partisan Congressional Budget Office estimated a national $15 minimum would cause employment to be reduced by 1.4 million workers." While small increases of the minimum age won't have a major effect on employment you are acting as if you think that it would not be possible that increasing the minimum wage by over 100% could have no effect on employment. If everyone is already earning over $15 an hour it wouldn't have an effect, but for example, the wage rates in San Francisco are much higher than rural Mississippi. If you don't think a >100% increase could have an effect, please explain why you are right and economists at the CBO are wrong.
You then falsely claim I am making a straw man argument. No, I am not - I pointed out that while small increases won't have a noticeable effect on employment level, economists think a large increase can have a direct effect on employment or otherwise economists would simply propose making a $100 minimum wage. If you don't think that a minimum wage can ever affect employment levels then say so, if you think there is some level where it would affect employment levels, then what is that level and how did you decide what that level is?
Let's further break down your post.
economists think... (conjecture) ...a large increase can have a direct effect on employment... - ( 72% used to, now only 46% do. per my link)
...or otherwise economists would simply propose making a $100 minimum wage... (the most classic case of Straw Man ever. Who is proposing this huge increase?)
They are referring to the typical small increase in minimum wage that has been done for the last few decades. You seem to hold very very strong views for someone who found a press release.
>......or otherwise economists would simply propose making a $100 minimum wage... (the most classic case of Straw Man ever. Who is proposing this huge increase?)
This is exactly my point. If economists believed that a large increase could have no effect on employment levels, they would propose raising the minimum wage to say $100 an hour. Since they haven't proposed that, that means that they do believe that a large increase would directly impact employment levels. This really shouldn't be that hard for you to understand. If you don't think that a minimum wage can ever affect employment levels then say so, if you think there is some level where it would affect employment levels, then what is that level and how did you decide what that level is?
Economists are not proposing massive changes, because economics is mostly about justifying current systems and getting paid by the wealthy.
My advice would be to take an economics class.
"What Winston Plywood is doing defies almost everything we have been told about wages in Mississippi — that raising the minimum wage would cripple profits, throw company pay structures into chaos, create inflation and ultimately wreck the economy. Besides, we are told, Mississippi’s low cost of living makes a raise in the minimum wage unnecessary.
Yet a recent study provided to Congress on hearing about raising the federal minimum wage showed half of Mississippians are ALICE (Asset Limited, Income Constrained, Employed) and that a minimum wage that would cover essential costs of living would need to be $10.94 per hour for a single person and $14 per hour for two-income families with two children.
That a sawmill in a rural Mississippi town would go far beyond that is startling — and definitely something to keep an eye on."
These days, paying more than required is contrarian unless you’re a big tech company.
In the small Arkansas town I grew up in, when the Tyson plant changed what we called the “starting wage” it was a big deal. Back in 97-98 it went up to $6.05, which got me to apply there and get a job. That was almost a dollar more than the US minimum wage.
I didn’t last very long. That wasn’t for me. I instead went to a mcse boot camp and got a job offered to me by the place that ran the camp. They had a service side that hired me at $11.25/hr. I was billed out to clients at $125/hr. The rest is history.
When I returned to see some high school friends around 2000, the starting rate at the Tyson plant was up to $7/hr.
That's also exactly what's written in the article, what are you complaining against?
> “The one thing that doesn’t change is that they want to make profits,” Hill noted. “Not to get too far into theory, but what’s happening here, I think, is basic economics. For a lot of years, there were more workers than jobs. Now, I think that’s changed. These are smart people. They realize there’s a competitive market for workers. They want to hire and retain the best workers they can find. I think that’s what they’re doing here. I think what we’re seeing is that it’s the workers who have the leverage now. It’s been the other way for a long time, and now we’re seeing a shift. Everything is cyclical, so I don’t know how long it will last. But I think what (Winston Plywood) is doing is significant.”
Mandatory minimum wages are most detrimental to those who the proponents are claiming to help. Low skilled workers are less likely to be hired because they have to be paid at a rate above what the market value of their labor is. This is not the case right now because the market rate of low skill labor has increased beyond the federal and state minimums.
During periods of high labor availability and low job availability, minimum wages can establish a significant barrier to employment for low skilled workers.
During times like the present when labor supply is short, minimum wage mandates are not keeping up with the market and have very little effect on hiring.
But how do we reconcile that with the ability for someone to be able to live on a certain wage, given there are only so many hours they can work? Yes the market value might be lower but their bills don’t get lower.
I’m genuinely asking how we square those two.
We should subsidize moving.
The other point to make here is that labor constraints are largely a good thing right now. We went 50 years where the power balance was on the corporate side. Now that it's shifting, labor is finally seeing the benefits of increased productivity over that time. All it took was a global pandemic to push a few million boomers into finally retiring...
(1) https://livingwage.mit.edu/counties/06075
Assuming it means plenty of food, shelter, healthcare, affordable children, and care for them. There is no reconciliation when it comes to minimum wage. Additionally, how do we define the expectations of a minimum wage salary when establishing it? What should the person be able to afford with the earnings? Everyone has a different answer to this question. Minimum wage will never be set high enough because human nature has us desire more. "Give a mouse a cookie..."
Unskilled labor is typically for people who are first entering the market in their teenage years and have subsidized expenses by their parents.
Everyone I've met in my life aside from some disabled people are capable of developing skills. Once The skill is developed and marketed they no longer need to depend on "minimum wage" earnings. For the sake of this conversation let us ignore disabilities.
For a healthy person, working 80 hours in a week is completely feasible. 80x7.25=$2,320 a month(decent where I live). Many people choose to work this many hours and more for financial gain.
Once they have done this for a short period of time, they can use their savings to pay for education that will give them skills.
Savings is the key to success. Wages x hours worked - expenses = savings.
Too much energy is focused on one part of that equation, considering the importantance of choices made by individuals regarding how many hours to work and what to spend savings on.
But agree its a very dangerous tool in the hands of politicians, and better not to have it than have it be abused.
https://socialeurope.eu/the-minimum-wage-in-germany-five-yea...
It also ignores whether it is sustainable long term, and economic impact should it continue. For all we know, this could put the company out of business financially. I hope not, but it could. And, should it become a trend or government mandate, the impact on inflation and other economic factors is a question.
In the end, likely pros and cons, and hard to balance: https://www.cbo.gov/publication/55681
Yup. It's pretty basic. Labor gets a better deal in one of two ways.
1. Reduction in workforce. Historically, Black Death and wars.
2. Collective action. Guilds, unions, trades, and the like.
I honestly didn't think I'd live to see Labor doing better. I'm glad there's finally some movement. I'm sorry it took a pandemic.
[Yes, there's multiple forces. Things are never simple, there's always more to the story. Aging workforce, (mostly men) opting out, (mostly woman) stuck with child and elder care, wave of early retirement, reduction in immigration, increased disability and mortality, and probably more.]
--
Also interesting in this story:
"This week, Winston Plywood, through its investors, a Connecticut-based equity firm, announced a new wage structure."
Access to capital.
If policy makers want employers to increase wages, we need to consider how to make it happen.
I'm totally onboard with using pandemic crisis cheddar (governmental largess) to provide capital to distressed businesses. Especially locally owned. Loans, grants, debt forgiveness, whatever.
Corporations and trusts receive billions. That'll never stop. I just want some of that torrent of cash to go directly to where it will help the most. Versus waiting for it to "trickle down".