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Los Angeles Raises Minimum Wage To $15 an Hour
HughPickens.com writes: Jennifer Medina reports at the NY Times that the council of the nation's second-largest city voted by a 14-1 margin to increase its minimum wage to $15 an hour by 2020. Los Angeles and its almost 4 million residents represent one of the biggest victories yet for those pushing wage increases across the country. Proponents hope it will start to reverse the earning gap in the city, where the top 7% of households earn more than the bottom 67%.
Detractors point out the direct cost increase to businesses, which could total as much as a billion dollars per year. If a business can't handle the increased cost, the employees this measure was designed to help will lose their jobs when it folds. An editorial from the LA Times says it's vital for other cities nearby to increase their minimum wage, too, else businesses will gradually migrate to cheaper locations. They add, "While the minimum wage hike will certainly help the lowest-wage workers in the city, it should not be seen as the centerpiece of a meaningful jobs creation strategy. The fact is that far too many jobs in the city are low-wage jobs — some 37% of workers currently earn less than $13.25 an hour, according to the mayor's estimates — and even after the proposed increase, they would still be living on the edge of poverty."
Detractors point out the direct cost increase to businesses, which could total as much as a billion dollars per year. If a business can't handle the increased cost, the employees this measure was designed to help will lose their jobs when it folds. An editorial from the LA Times says it's vital for other cities nearby to increase their minimum wage, too, else businesses will gradually migrate to cheaper locations. They add, "While the minimum wage hike will certainly help the lowest-wage workers in the city, it should not be seen as the centerpiece of a meaningful jobs creation strategy. The fact is that far too many jobs in the city are low-wage jobs — some 37% of workers currently earn less than $13.25 an hour, according to the mayor's estimates — and even after the proposed increase, they would still be living on the edge of poverty."
Australia has a minimum wage of around $17USD/hour (around $20AUD) which increases 20% if you are a casual. Our poor people do well.
You know how everyone whines about big corporates making too much money; well this is the best way to redistribute that wealth.
Paying your poor people well, helps lift them out of poverty.
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(While you're at it, also explain why businesses would pay $15/h for a worker who doesn't increase revenue by significantly more than $15 for each hour he works.)
If your business requires paying wages that are so low that your workers can't make a living and to survive are still welfare and foodstamps (that my tax dollars pay for) despite working full time then your business plan is broken.
Or in many cases, the worker does increase the company's revenue by by more than $15 for each hour he/she works but they pay them less and pocket the difference (e.g. Walmart and other big box stores) and by paying lower wages and making other taxpayers make up the difference the owners of the company just get richer. That's why the Walton family has more wealth than 40% of Americans combined (that's 129 MILLION Americans). We're talking about a company whose executives take separate private jets to the same meeting just for fun to see who can get there faster. A company whose chairman (Sam Walton's oldest son) is only in the office a few times a month, and spends the rest of his time taking his private jet from his home in the Colorado mountains to go cycling in France, or hunting geese in Canada, or bio-safaris in South America, yet pays his workers so little that even though they work full time they can't afford rent and food. Are you still going to tell me that company can't afford to pay its workers a wage they can live off of?
In a sense, minimum wage is just a best effort to re-balance the market distortion introduced by the social safety net. Were there no net, people being paid less than it costs to live would be forced to quit either because their health would decline from the privation or because they would be too busy dealing drugs and robbing people to show up for work. Then wages would go up to bring people in who won't quit, go to jail, or die or the business would fold up and go away.
Since we find high crime, shanty towns, and riots undesirable, we introduced the social safety net. A side effect is that it becomes possible to capture people in a situation where they are paid less than it costs to live and the taxpayers get stuck for the rest. The minimum wage seeks to patch that up to the extent possible.
The sad reality is that people were forced to accept minimum wage jobs in the big crash and many are still stuck there because Wall Street recovered a hell of a lot faster than Main Street.