Biden seeking a $15 an hour minimum wage in his Covid relief proposal (1 Viewer)

[Incumbent]

If there’s already a Biden economy thread, I can add this there. It could have gone in the Covid thread, but the impact of this would extend well beyond that topic.

Well past time to raise the minimum wage, which hasn’t been increased since 2009.

Biden to seek $15 minimum wage in COVID-19 proposal

President-elect Joe Biden will include a proposal to raise the federal minimum wage to $15 as part of a COVID-19 relief package, the first major legislation of his presidency.Biden is expected to a…

thehill.com

 

[SaulGoodmanEsq]

It's a fair point I suppose. We upped the minimum wage in the UK back in the late 1990's. Despite the harbingers of doom, it has NOT had a depressing effect on job growth or company profitability. Having said that, the minimum UK wage is about the equivalent of about $12, not $15.

Quite a few allegedly 'socialist' policies that the UK has adopted over the years that hasn't resulted in the parade of horribles most Republicans (and conservative Democrats) bemoan in the US. Re: the difference in $12 and $15 -- wouldn't the UK's expansive government healthcare system more than make up for that gap?

 

[SystemShock]

There are other things, but do note I said 'it seems like' there are assumptions; they may not actually be assumptions, but on the basis of what you've said here, it's not clear that they aren't. I've got a minute, so I'll expand on it a bit.

The first part of your post was not solely about the pre-WW2 American economy. You were replying to @cuddlemonkey's quote of FDR, and stated, "in general he wasn’t referring to minorities who did the overwhelming majority of menial labor jobs." That's not merely a 'factual statement about the WW2 American economy', that's a statement that FDR wasn't referring to minorities doing menial labour jobs in his speech about changing the economy from what it was to what he thought it should be.

Given that, as @cuddlemonkey quoted, FDR explicitly stated, "I mean the whole of commerce as well as the whole of industry" and "I mean all workers," without something to support the notion that FDR actually meant the principles he was describing should apply to, "all workers, except those guys, you know the ones I mean", it would seem that there may be some assumptions in there.

An argument could be made that FDR's intent must have been in line with the times, in which (for example) ostensibly neutral support of unions and higher wages was used to effectively exclude African Americans from work in a time when racist employers would only hire them if they could pay them less, particularly in the South. But that would still be an assumption, and a counter-argument would point to things like the existence and influence of the so-called Black Cabinet and FDR's subsequent executive orders against discriminatory hiring to be taken into account.


Right, but FDR never succeeded in introducing the principles he described in that 1933 speech. The National Industry Recovery Act he made that statement in connection with didn't achieve that. It aimed to make the 'change from starvation wages and starvation employment to living wages and sustained employment' through 'an industrial covenant to which all employers shall subscribe', but that didn't actually happen. All employers did not subscribe, even where they did it wasn't well enforced particularly in some regions, and the NIRA itself was dead two years later, both politically, and due to being struck down by the Supreme Court.

The federal minimum wage wasn't introduced until 1938 with the heavily compromised Fair Labor Standards Act, and that wasn't FDR's living wage either. FDR described it as a start (specifically, he said it "starts us toward a better standard of living and increases purchasing power to buy the products of farm and factory.").

So while I would agree that there hasn't been a time where an entry-level low wage job had a livable wage, it doesn't follow that there shouldn't be, or that FDR wasn't calling for that.


So it's definitely an assumption that there are enough higher level jobs. It's interesting you think there are, because my assumption would have been that there aren't. Stats-wise, it's quite hard to get a good picture, particularly given how the stats are framed can give a very different picture. For example, only 1.9% of all hourly paid workers earned at or below the federal minimum in 2019. But that's still 1.6 million hourly paid workers, it doesn't take into account just how low that federal minimum is, and it doesn't account for workers earning fractionally over the minimum.

Then there's studies like the one described here - https://www.brookings.edu/blog/the-...nd-there-arent-enough-good-jobs-to-go-around/ - which take a broader view of low wages and paint a very different picture, arguing that 'that there simply are not enough jobs paying decent wages for people without college degrees (who make up the majority of the labor force) to escape low-wage work.'


I certainly agree that $15 is still a low wage not a living wage. But I would have taken that as all the more reason people working such jobs should be earning at least $15 an hour.

And what's the long term thinking here? If we could ensure that there are both enough skilled jobs for everyone and enough support for everyone potentially capable of doing them (leaving aside that there may well be substantial numbers of people not necessarily capable by virtue of health or circumstance and they shouldn't be denied a living wage either) to be enabled to do so, who's then doing all the McDonalds type jobs? If there aren't enough people for them, wages will have to go up to attract people back to them, or there'll be increased automation, or both... but if those are arguably consequences to be avoided when discussing the impact of increasing wages now, why would they not apply here?

To put it more simply, barring an insane amount of automation including in areas where it's highly challenging (e.g. social care), I don't see a future any time soon in which we don't continue to have very large numbers of what could be considered low-skilled work that we will still need filled.

So let me put it this way. Here's the key reasons why I think those jobs should earn a living wage:

1) They're real work, providing services to other people, that we generally want provided, and should be paid accordingly.
2) They're often part of a profitable businesses that can absolutely afford to pay those wages.
3) Economically, they put more money into the local community, stimulating the local economy.
4) People earning a minimum living wage doing menial work would still clearly have incentives to seek higher paid, better skilled work where available. They don't need to be forced to work for a subsistence wage to have that incentive.
5) Earning a living wage in itself helps enable people to invest in themselves, through further training, access to education, etc. People earning a minimum wage often can't; even if the education or training is free, the time and the travel aren't.

There are certainly things to debate there; for example, someone criticising the second point would no doubt point out that while there are profitable businesses that can afford it, there are also unprofitable businesses that can't. But I'd argue that improving wages increases the chances of more businesses being able to turn a profit, since it drives more purchasing power in the community, and if business do need support, arguably that should be provided directly, rather than allowing businesses that don't need support to be able to opt into it by simply paying minimum wages (or the flip side to that is arguing that they should be allowed to opt into it, but if they do, they should be paying higher taxes).

So I'm just not seeing the case against here. You mentioned that 'this is really driven by the value of the position from a skills standpoint', but that raises the question of how that value is being determined, and whether it's being determined in a way we would consider fair, accurate, and desirable (and I'd argue that it is not). Providing education and training opportunities to address the relevant issues is certainly a worthwhile argument, but that can be an 'and', not an 'instead of'. Plus, as I mentioned above, higher minimum wages can better enable the uptake of those opportunities.

So what really is the basic case against paying people doing these jobs a living wage, or just a better minimum one?

FDR said a lot of things, but the actual social and economic environment of the time didn't reflect the all-inclusive implication of his speech.

No one is arguing against a living wage, even if there really isn't a practical definition of what a "living wage" is. Certainly, $15/hr is hardly a "living wage" in large urban areas, like NYC, L.A., SF, etc.

Profitable businesses that can absolutely afford to pay those wages are usually large corporations that pay much more than minimum wage to begin with.

Higher hourly wages for non/low-skilled workers lead to automation, and the disappearance of those jobs, or to work-hours reductions, which make the raise a wash.

 

[wardorican]

Yes. Increases.

Whether these would be regenerative, or just trending to a value, depends on the weighting of the increase in minimum wage as an input to inflation. They would, nevertheless, create an increase.

But a meaningful increase? Would it be enough to even push it a hundredth of a percent beyond the norm?

Increase v decrease are technicalities that can be true, but devoid of meaning. The amount of increase is what matters.

 

[Dragon]

FDR said a lot of things, but the actual social and economic environment of the time didn't reflect the all-inclusive implication of his speech.

No one is arguing against a living wage, even if there really isn't a practical definition of what a "living wage" is. Certainly, $15/hr is hardly a "living wage" in large urban areas, like NYC, L.A., SF, etc.

Profitable businesses that can absolutely afford to pay those wages are usually large corporations that pay much more than minimum wage to begin with.

Higher hourly wages for non/low-skilled workers lead to automation, and the disappearance of those jobs, or to work-hours reductions, which make the raise a wash.

Well yes those jobs exist due to the low hourly wages, but it also holds the US back from competing in many instances.

We have been through this process during the last 20 years. We have almost no factory jobs left which could be more profitable done by automation. What we have done however is used a lot of ressources on upgrading the qualifications of those who were made redundant. Everyone who works pays a small tax (appr 5$) a month in Educational tax used mainly to aid those who for some reason wants to upgrade their qualifications or change line of work completely. Some now work with maintenance of those machines and others have moved on to other types of jobs

But bottom line - the factories are far more competitive due to lower production costs which helps keep them (and the remaining jobs) in country rather than in Asia or eastern Europe.

 

[DaveXA]

That is a crock of shirt brother.

So you maga spewing soul that you are now want more FREE education for the working poor in the trades. I call that socialist bullshirt not maga thinking.

The sob story was great yet has not one thing to do with fixing the amount of people that do work and live below the poverty level. When you were dirt poor being above the poverty level was not as high a hill to climb as it is now by a long forking shot.

The other problem is the way american companies have been allowed to employ people part time is the biggest problem for the working poor. When the nations largest employers only offer part time for the vast majority of their workers keeps them poor and keeps us paying the difference in government subsidies.

So yep let's teach people to fix air conditioning or code in between the two part time jobs they have that don't pay the bills now.

The fix is simple pay a living wage.

Your points were all lost after the maga crap. There's having a spirited debate, and then there's being an butt crevasse about it.

Fwiw, the guy you're directing your ire at is about as anti-maga as it gets.

 

[SaulGoodmanEsq]

Higher hourly wages for non/low-skilled workers lead to automation, and the disappearance of those jobs, or to work-hours reductions, which make the raise a wash.

In a non/low regulated market, yes. Trump supporters were all over the 'bring jobs back to America' shtick but that can't be done without significant regulation. The irony is most Trump supporters like Bernie Sanders-type policies but they don't like 'socialism.'

 

[SystemShock]

Well yes those jobs exist due to the low hourly wages, but it also holds the US back from competing in many instances.

We have been through this process during the last 20 years. We have almost no factory jobs left which could be more profitable done by automation. What we have done however is used a lot of ressources on upgrading the qualifications of those who were made redundant. Everyone who works pays a small tax (appr 5$) a month in Educational tax used mainly to aid those who for some reason wants to upgrade their qualifications or change line of work completely. Some now work with maintenance of those machines and others have moved on to other types of jobs

But bottom line - the factories are far more competitive due to lower production costs which helps keep them (and the remaining jobs) in country rather than in Asia or eastern Europe.

I can't say I know anything about Denmark markets and economics, but keeping factories in the US is a hard proposition cost wise. Everything about a manufacturing plant is more expensive in the U.S. than in most other places: the land, the machinery, the labor, the utilities...

 

[wardorican]

I can't say I know anything about Denmark markets and economics, but keeping factories in the US is a hard proposition cost wise. Everything about a manufacturing plant is more expensive in the U.S. than in most other places: the land, the machinery, the labor, the utilities...

Not if you need good engineering, quality, inspection...

 

[SystemShock]

Not if you need good engineering, quality, inspection...

You really think the U.S. is the only place you can get good engineering, quality, and inspection?

 

[wardorican]

You really think the U.S. is the only place you can get good engineering, quality, and inspection?

No, but generally, the good competition is Japan, the UK, Germany, and a few other European countries. I'm thinking about it more from the Aerospace side.

China is a lot better, but they're still pretty darn loose with quality. India engineering leaves a lot to be desired. They're almost too much of perfectionists that they can't get anything done without help.

 

[V Chip]

For everyone pushing for $15/hr minimum wage, I invite you to visit the McDonalds on St Charles....if they get your order 75% correct, that is considered a win.

Wouldn't that be an argument in *favor* of a minimum wage increase? Basically the only people willing to work for the paltry minimum now are workers who don't do much more than the minimum, obviously. If the wage is increased, the higher quality worker that would apply for the job, no?

That's 21.37/hr for police. 14.38 for EMT/Paramedic. 17.73 for firefighters.

It's not hard to see why there is push back. They feel like their cost of living bump will go away. Of course, the point is that those jobs would have to pay more, but those towns don't have city income tax.. they rely on property tax. So, unless that goes up, or they increase millage, would EMT's want to do a less stress job?

I find the argument that "these other workers are underpaid, too, so we shouldn't raise the wage of these even worse underpaid workers" to be a really lazy one (no offense intended -- it's just a weird point to make in a discussion about wages).

An entry level job that requires low skill isn't supposed to be a life long job. It's the kind of job a teenager gets until they get enough skills or education to move on to a better paying job.

Raising the minimum wage would just push places like McDonald's further towards automation.

Both of those points are mostly false. Entry level, low-skilled jobs are required in our society. I know many like to make the classist argument about "burger flippers" but there's a lot more workers at the MW who are in low-skilled jobs. Some people take those jobs to make some money, some because it's a job and they need some income, some because they are desperate to have *any* income and that's a job that will hire them on short notice. I think reducing that group of people to "burger flippers" shows a distinct lack of empathy and disdain for those workers.

Regardless, those low-skilled labor jobs are still very important -- imagine of during the pandemic the people stocking shelves refused to or could not work (which happened in some cases). Kroger and Ingles were hiring here at a good deal above their normal minimum wage (or floor wage) during the pandemic and couldn't find people willing to work at the increased wage. Now people want to reduce to calling them unskilled or "burger flippers" saying they don't even deserve a minimum wage? Sure they'll very very likely move on to something better -- when they find the better job, develop different skills, complete higher education/training -- because people in general want a better life with better pay. It doesn't mean they they should be shafted because they're still at the bottom of the ladder.

And the point about automation? Hogwash. Automation has come for people far higher than minimum wage. Any time a business can reliably replace a worker with a lower long-term alternative, they will. shirt, the cotton gin was invented when we had SLAVES for goodness sake because it was faster and cheaper than the alternative. ATMs, factory robots on assembly lines, help desk/phone answering systems, film projectionists, bowling pin setters, grocery clerks, pharmacy techs... the list goes on an on, and most of those jobs were not due to minimum wage increases or even involved minimum wage jobs. Many more higher paying jobs will be replaced by automation in the future that are a good deal above minimum wage.

 

[Roofgardener]

FDR said a lot of things, but the actual social and economic environment of the time didn't reflect the all-inclusive implication of his speech.

No one is arguing against a living wage, even if there really isn't a practical definition of what a "living wage" is. Certainly, $15/hr is hardly a "living wage" in large urban areas, like NYC, L.A., SF, etc.
....

Then perhaps people should leave such areas, and move to more affordable ones ? Why should employers across America fund the lifestyes of people in NYC, L.A. etc ?

The people of NYC would have to live without burgers. Or... the burger joints would have to increase their wages to attract staff. (and increase their prices, or course)

 

[V Chip]

For those who keep making this about teenagers and "burger flippers."

 

[Roofgardener]

Well,, there are some cogent points here about the benefits - both economic and social - of increasing the minimum wage. And I would probably applaud Biden for putting it on the table. If it wasn't for one thing....

Why is it part of a Covid Relief bill ? (but we've argued this already in another thread). It smacks of a lack of confidence to me. Does he think it might not get support if it was presented as a separate bill ?

 

[Dragon]

I can't say I know anything about Denmark markets and economics, but keeping factories in the US is a hard proposition cost wise. Everything about a manufacturing plant is more expensive in the U.S. than in most other places: the land, the machinery, the labor, the utilities...

One of the reasons we do this is precisely because labor is so expensive here Denmark is NOT a cheap place to run a business. But we do have a very high tech infrastructure and a fairly well educated labor force. And despite our manageable 37 hour work week we still have people who burn out. The working hours are very concentrated and organized with focus on high productivity and high quality. That does take its toll on people. Nothing is perfect in any way. Everything comes with a price.

 

[UncleTrvlingJim]

I'm going to go contrarian on this. I'd consider getting rid of minimum wage completely, and then do an earned income tax credit that's funded with higher corporate taxes.

 

[wardorican]

I find the argument that "these other workers are underpaid, too, so we shouldn't raise the wage of these even worse underpaid workers" to be a really lazy one (no offense intended -- it's just a weird point to make in a discussion about wages).

I'm simply explaining rural America push back with an example. And before I get into that, let me reiterate a point I often make... Everyone deserves higher pay (maybe outside of upper management). I'm all for all workers making more.

If you're the mayor of a small town, but large enough to hire police, EMT's, fire fighters. Your options for raising their pay is limited, due to budget and income streams. Higher wages in the town don't exactly raise the city budget. Property taxes do (depending on how the charter is set up), and that may not show up for a while. And even higher wages locally may not make them increase, it may lead to a further exodus of younger folks.

Increasing the min wage to $15/hr when you have skilled public worker labor making less than that is going to be a hard budgetary burden on those towns to get those folks not only up to $15/hr, but perhaps up to $18-20/hr. Perhaps they have to increase the water bill rate, and take that money from public works to cover police/fire/EMT. Most citizens would hate that, because they usually want public works money to stay to upgrade or maintain public works. Just my opinion there.

It's easier on a business, because they have much easier mechanisms to increase revenue. They can cut labor, raise rates, push higher profit margin items.

In a very tangential way, it's a similar issue I had with Trump's infrastructure plan, which was to get private money and states to pay for it. Yeah, it looks good on the Federal Budget, but it's just pushing the burden to smaller revenue pools, so it never happens.

We have a real rural America problem. It has been mostly decaying for decades. A few towns see resurgences, but usually that's vacation homes, outside of a factory or something moving in.

 

[wardorican]

Well,, there are some cogent points here about the benefits - both economic and social - of increasing the minimum wage. And I would probably applaud Biden for putting it on the table. If it wasn't for one thing....

Why is it part of a Covid Relief bill ? (but we've argued this already in another thread). It smacks of a lack of confidence to me. Does he think it might not get support if it was presented as a separate bill ?

I think the child tax credit expansion and structural change to a monthly pre-payment (vs tax credit/refund) is a good example.

The Democrats are using the crisis to not just throw money at the problem, but also fix some structural issues with the wealth gap to put people at the lower income and middle class in a better position to weather these kind of storms.

And since they're having to open up Budget Reconciliation to do this, they really only get one shot, and they won't be able to do it all. So, they're throwing out a bunch of ideas and seeing what sticks and what works out mathematically. That's my opinion.