01-16-2017, 12:31 PM
"Perhaps Russel should take the initiative 1st and start paying his entire staff a minimum living wage of $22.00 an hour to set the example for all employee's ,both part time and full time."
First and foremost, he wants his competitors to struggle with paying these wages.
From the punaweb archives:
"The minimum wage law requires employers to discriminate against persons with low skills. No one describes it that way, but that is in fact what it is. Take a poorly educated teenager with little skill whose services are worth, say, only $2.00 an hour. He or she might be eager to work for that wage in order to acquire greater skills that would permit a better job. The law says that such a person may be hired only if the employer is willing to pay him or her (in 1979) $2.90 an hour. Unless an employer is willing to add 90 cents in charity to the $2.00 that the person’s services are worth, the teenager will not be employed. It has always been a mystery to us why a young person is better off unemployed from a job that would pay $2.90 an hour than employed at a job that does pay $2.00 an hour."
-Milton Friedman, (1976 Nobel Prize recipient)
Fast forward out of the 1970's and the essence of the argument is the same. Except now instead of teenagers, it's older adults, sometimes heads-of-households demanding $15/hour "living wage" for the same McDonald's job that used to only employ teenagers living with their parents who were only looking for a little spending money to buy vinyl records and weed or whatever. Many people seeking $15/hour don't realize that the services they are providing aren't worth $15.00. I knew a pilot for Mesa airlines who made less than that. If one is a low-skilled worker demanding the same wage as a reliable airline pilot, you can bet that if a corporation is forced to pay $15/hour, they are going to hire people who are worth $15/hour. Then what happens to the folks that are "only worth" $8.00/hour ? Now picture the same scenario but we're in a bad recession and the unemployment rate is near 10% and former airline pilots are actually applying for those $15/hour jobs at McDonalds. Then the discriminatory nature of the minimum wage is more apparent. Imagine you are the manager at McDonalds and you have to choose between a single mother who has never operated a fry machine and a guy who used to fly machines. You're not SUPPOSED to think, gee, the single mom is going to call in sick all the time because of her kid... but you know it. And the airline pilot has a solid work history and never missed a day of work. Now do you see the discrimination effect of having a minimum wage that is set too high? Maybe having the ability to offer $8.00 to a new worker isn't such a bad thing. Maybe the opportunity to learn new skills has a value.
Replacing human workers with automation probably has a threshold far below $15/hour. Think about that next time you're at a fast food place and you see all the advertisements about discounts for ordering via the app. They may have paid somebody in India $5/hour so that they could eliminate 1000 employees making $8/hour. Start talking about $15/hour, and it won't be an app, it will be a robot operating the fry machine (hint, they are already 50% automated... the additional 50% isn't a heavy lift).
First and foremost, he wants his competitors to struggle with paying these wages.
From the punaweb archives:
"The minimum wage law requires employers to discriminate against persons with low skills. No one describes it that way, but that is in fact what it is. Take a poorly educated teenager with little skill whose services are worth, say, only $2.00 an hour. He or she might be eager to work for that wage in order to acquire greater skills that would permit a better job. The law says that such a person may be hired only if the employer is willing to pay him or her (in 1979) $2.90 an hour. Unless an employer is willing to add 90 cents in charity to the $2.00 that the person’s services are worth, the teenager will not be employed. It has always been a mystery to us why a young person is better off unemployed from a job that would pay $2.90 an hour than employed at a job that does pay $2.00 an hour."
-Milton Friedman, (1976 Nobel Prize recipient)
Fast forward out of the 1970's and the essence of the argument is the same. Except now instead of teenagers, it's older adults, sometimes heads-of-households demanding $15/hour "living wage" for the same McDonald's job that used to only employ teenagers living with their parents who were only looking for a little spending money to buy vinyl records and weed or whatever. Many people seeking $15/hour don't realize that the services they are providing aren't worth $15.00. I knew a pilot for Mesa airlines who made less than that. If one is a low-skilled worker demanding the same wage as a reliable airline pilot, you can bet that if a corporation is forced to pay $15/hour, they are going to hire people who are worth $15/hour. Then what happens to the folks that are "only worth" $8.00/hour ? Now picture the same scenario but we're in a bad recession and the unemployment rate is near 10% and former airline pilots are actually applying for those $15/hour jobs at McDonalds. Then the discriminatory nature of the minimum wage is more apparent. Imagine you are the manager at McDonalds and you have to choose between a single mother who has never operated a fry machine and a guy who used to fly machines. You're not SUPPOSED to think, gee, the single mom is going to call in sick all the time because of her kid... but you know it. And the airline pilot has a solid work history and never missed a day of work. Now do you see the discrimination effect of having a minimum wage that is set too high? Maybe having the ability to offer $8.00 to a new worker isn't such a bad thing. Maybe the opportunity to learn new skills has a value.
Replacing human workers with automation probably has a threshold far below $15/hour. Think about that next time you're at a fast food place and you see all the advertisements about discounts for ordering via the app. They may have paid somebody in India $5/hour so that they could eliminate 1000 employees making $8/hour. Start talking about $15/hour, and it won't be an app, it will be a robot operating the fry machine (hint, they are already 50% automated... the additional 50% isn't a heavy lift).