I’d have no issue with PA raising minimum wage or Federal raising minimum wage, if it followed inflation. Raising it from $7.25 to $15 is what I am talking about. You can’t raise something so drastically without expecting the cost of everything to follow suit (inflation). In suburban PGH a 15 year old with work papers from school can get at least two jobs that I am aware of that pay $10.50+. Most kids that I know that are 16 or over are making $12+. I would imagine anyone 18 and older in this market working full time are at $15 or pretty close. That is just what the local economy demands. What works for suburban Pgh doesn’t work for small town AL or wherever. It would put small businesses out of existence in those small towns. $15 min wage in NYC, LA or SF is about the same as $7.25 in many small towns.

It is just like noted before, the talk is to somehow have those at the top pay for it. For the past 47 years of my existence, I have heard this talk, but never action. Does anyone really think raising wages won’t raise the product/service cost of what a business is selling and will actually hit the CEO and other? They raise the costs and not just to cover costs, but gives a chance to raise and make more profit too. When inflation happens, they can’t just pay themselves $2M in untaxed stock, they would need to pay themselves $2.5M in untaxed stocks.

If PA Senate blocked a bill to raise it to $9.50, I can’t imagine $15 is even up for debate. Why not present legislation that has a chance of passing? $7.25 adjusted for inflation is $10.31. I’d think a bit more support for that and a lot less inflationary responses to pay for it.

Porktown
If PA Senate blocked a bill to raise it to $9.50, I can’t imagine $15 is even up for debate. Why not present legislation that has a chance of passing? $7.25 adjusted for inflation is $10.31. I’d think a bit more support for that and a lot less inflationary responses to pay for it.

Sounds reasonable.

DarDys
What happens to the person that was at $10-hour? Do the move up to the new minimum wage, do get a raise of the same dollar difference as the minimum wage person got, or do they get the the same percentage (based on the rate of inflation according to the above post) as the minimum wage person?

In option #1, they lose ground against the minimum wage person because they brought enough value to the employer to be $2.75 higher than minimum, but now are at minimum.

In option # 2, they still lose ground to the minimum wage person, albeit not as much, for their increased skills (why they were paid above minimum in the first place). If they were at $15/hour, they were slightly above 200% of minimum, but now would be at about 140% of minimum — a loss of 60 percentage points from where they were.

In option #3, the question has to be asked, where does it stop? Where is the demarcation where the person earning beyond minimum wage does not get the same increased percentage, perhaps a lesser percentage, perhaps nothing — both of which reduce their monetary stature when contrasted to the minimum wage earner?

Further, who gets to determine that threshold?

On second thought 💭 I reconsider my last post and am now going back to how I feel about a minimum wage. I don’t believe there should be one.

You must be from an urban or semi urban area. Rural or semi rural, where those types of wages are paid, the option of “get a new job” without relocating is often outside of the realm of possibility — there are only so many jobs around.

Too bad we can't get all the politicians to wear logos on their clothes so we know who is sponsoring them.
 

I’ll agree with Pork on what happens to slightly above minimum wage earners when minimum wage increases set, some would argue artificially, the market floor. But I’ll disagree with his time line, not in it’s entirety, but somewhat.

Studies, far too many to cite in an internet discussion forum (this isn’t a scholarly paper), show that once the wage floor moves in an upward direction, either artificially through legislation or organically through market forces, those closest to the floor now demand and/or require a rise in wages so as to not lose ground.

From a first-hand perspective, early on in my work life, I was a Branch Manager for a ManPower temp franchise. While we had a lot of workers at or near minimum wage, many were not. In fact many were in the $7/hour range when minimum was $4.35 (almost exactly the same numbers, percentage-wise, as the $7.25 vs. $15 being discussed today).

Those making $7 had higher skills — fork truck, assembly machine operation, clerical (computers were taking a foothold), etc. than those making less. Often these higher skilled works were hired by the company who placed the order, but if the company didn’t have a long term need and ended their assignment without hiring (a temp job was a good way for employee and employer to “test drive” each other without a commitment), because of their increased skills, we could quickly find them another assignment.

Then, minimum wage changed from $4.35 to $5.15 (I hope I’m getting the cents correct). Of course, the minimum wage people were thrilled. But the higher earners and the employers were not.

It took 6 months (that’s why I disagree with Pork’s timeline a bit) before the $7/hour workers changed their “willing to accept” pay parameters to a minimum of $8.50 from $7 in order to remain at the same percentage increase. Those above $7 followed suit in their minimum acceptable wage, also by percentage, hence my original question with the three options.

Employers were obviously not happy with the mandated increase. What they did was to do more with less. If they normally would have asked for 5 workers, they now ordered 4 (it was easy to see this trend because of seasonal personnel orders that had very good records). The employers had a total aggregate cost in mind before needing to raise prices, sometimes significantly if the cost of goods sold was heavily weighted toward labor costs, and they achieved that by reducing headcount in order to keep the labor cost component stable. In other words, workers got more work to do for their short lived wage gain (the market and inflation ate it up quickly).

I believe history will repeat itself if minimum wage is adjusted outside of market forces.

Another first-hand example is one of my former students who’s parents own 16 McDonalds. Obviously, they are well off financially, but that doesn’t mean they are benevolent. In my HR Management class, we discuss pay plans — how to set them, the ramifications of market forces, unemployment factors, etc. and since they had a prime example of wage forces at work (to be clear, none of their stores were at minimum wage, even in below areas with a cost of living index below 100, but rather we’re in the $9 to $11 range for the lowest lever workers, location dependent), they often chimed in.

For context, they stated that while there were some high performing stores in their portfolio, there were also some break even locations and even a few which consistently posted losses. The business rationale for keeping the break even and losing stores open was economy of scale — the more stores one has, the greater the discount on supplies, particularly those supplied via McDonald’s. In other words, the losers were somewhat helpful in getting lower costs for the stores which performed.

However, they war gamed the scenario where minimum wage was raised to $15 and the result was that the extra discount did not cover the diminishing returns of the losing stores and, obviously, made the break even stores losers. The course of action would be to close all of the losing stores, close some of the break even stores, and go to more automation in other break even stores first, then spread that technology to the higher performing stores which were now making less money due to not only higher wages, but the loss of reduced material costs.

Of course, the losing and break even stores were in lower socioeconomic areas, so two things would happen — less available jobs for starter/low skill/no skill workers and the beginning of a food desert (think Detroit after the riots, which had never recovered) requiring people in that area to travel to get a Big Mac — which doesn’t sound bad until one realizes that other types of businesses will follow suit and either close or reduce their workforce in order to keep costs in check.

Where does this happen — inner city and rural — and in the food industry as was mentioned.

How is it that the government can have the power, (or the right), to determine the price of work in any given business environment? America is supposed to be a free market society. That being said, I am not a proponent of a minimum wage. I'll agree with Dardys and Pork somewhat. If you increase the minimum wage for low or lesser skilled workers, including new hires, you have effectively cut the pay of all long time or more skilled workers by the same amount regardless of hourly pay. There have most likely been more than a few businesses that were priced out of business by the cost of labor. Businesses that can afford wage increases but don't, make themselves a target for the unions. Those that can't afford labor increases because they have not yet hit upon the product or service that could become their cash cow, and still become the target of the labor unions, either go out of business or move their business to a right to work state. Social security was just increased last year to slightly less than the 9.1% peak inflation. It was either 8.1 or 8.5%, which, if applied to the minimum wage, workers would get about an $0.88 cent raise, but at the same time, all workers should get the same percentage. Even as inflation soared last year, average wage increases, (excluding minimum wage), only increased 5.5%, so everybody is still money behind. It is a conundrum wrapped in an enigma to complete the mystery.
 
BTW, in my area, MickeyD's is payin' $12 to $13 an hour, flexible schedule, full or PT, and that's why 2 bacon, egg, & cheese biscuits and a large roast coffee costs $10. Still don't have enough workers. In the drive thru, you now pay at the service window instead of the order payment window due to lack of employees.
Didja know that before the pandemic, out in the Dakota's during the oil and gas boom, MickeyD's was payin' $20 an hour. Why? Market forces. Too many high paying jobs in the area and they needed to pay that wage to attract workers to survive. Just my $0.02.

https://www.dol.gov/agenc...mum-wage/history/chart

EMitch
BTW, in my area, MickeyD's is payin' $12 to $13 an hour, flexible schedule, full or PT, and that's why 2 bacon, egg, & cheese biscuits and a large roast coffee costs $10. Still don't have enough workers. In the drive thru, you now pay at the service window instead of the order payment window due to lack of employees.

To quote (I believe "D-Nymph") from about 10 years ago.
 
"Your first mistake was to go to McDonalds for anything more than a bathroom emergency".
 
Ha, ha.  Nothing at all to do with the substance of this topic.  I think about that every time I am on a road trip with my kids and they are asking to stop at Mickey D's.  Now I am just amazed that it costs me $50 for a family of 4...  If this $15 minimum across the entire country were to happen, then $100 for the same.  As long as they keep Sam's Club rotisserie chicken the same price, I'll be okay!  If I can avoid dropping $300 on other stuff while there!

I am also no proponent of the earned income credit. The government bases the rate off the US median income, (which I think I read recently is $54K per year). I only know two people who make that or more. If a family of 4 makes less than, say, $40K, it gives tax filers a return because the gov. thinks a family of 4 couldn't possibly survive on such meager earnings. Somehow I made my mortgage payment, bought two new vehicles 2 years apart, and supported a family of six, one of which attended Penn State for a year before he opted out, and I was averaging $28K per year. Apparently the wife and I did not know how to access the system, because some of these returns are quite large, on taxes that were never paid. It's another name for public assistance.

Mitch,
Was this $28K in 1970??? Does your wife make $200K???
The average cost of living for a family of 4 right now is somewhere around $80K.
You are like a financial magician!

state ryder
On their 2020 income tax returns, Trump and his wife Melania paid no federal income taxes and claimed a refund of $5.47 million, according to the report by the staff of the Joint Committee on Taxation.
 
 

 I hear you on "if can't pay cash for it don't need it" I live off the minimum on SS. Always had crap paying jobs when moved up near Lake Arthur in 1985 (Nobodies fault but mine)  Would  make way more money Deejaying weekends doing weeding's, parties and clubs than working at the mill or other jobs.
 
 Lucky our 3 houses have reasonable taxes and payed cash for them. Could go out tomorrow and buy 7 new vehicles cash but I am fine driving jalopies and eating road kill. How you manage money is the most important, not keeping up with the Jones. Seemed I was always lending out money to my friends that made 3 times as much as me and their places were crap. Don't gamble, hang out at the bar, no fast food, no gym membership and so on. What a boring life hunting and fishing I tell ya.   Could rent a couple houses out but don't want to be a landlord.

Seeing these numbers you guys are talking about, and having a pretty good idea of how ya vote. Real dome scratcher. 
It's a shame what the societal and culture wars have done to people.