Why Increasing Minimum Wage is Meaningless

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goldfish21
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18 Jan 2022, 12:39 am

cyberdad wrote:
Dox47 wrote:
or do I have to pay according to some calculation as to what is a "fair" price for the job? If the latter answer, why, and who sets the price?


There is the market rate. I used to get a guy to causally cut my grass from the backpages of my local paper. I negotiated a flat rate of $20/hr and he worked for 2hrs. I would use him maybe three times a year so my annual bill was $120

Then one day he told me that he didn't want to work for me anymore as he was able to negotiate a higher rate with other customers. I told him bye.

I rang another contractor and it turns out the standard practice is not just a flat rate of $50/hr but monthly 2hr gardening contract which would cost me $100/month x 12 months = $1200.

I purchased an electric lawnmower for $600 and I do it myself now.


Free market in action for all parties involved. Someone's offering higher pay? Work somewhere else. Don't want to pay? Do it yourself.


FWIW, lawn cutting is typically flat rate on regular contracts here. If people hustle hard they can make $60/hr cutting grass. I'm allergic to grass and don't want a career in it. My brother's ~14 year old step son went up to Alaska with him on a work assignment for a few months last year and ended up taking on the lawn maintenance contract where they were. He cut grass and pulled weeds for $100/hr, tax free, netting over $9,000.00 for his part time Summer job. Pretty damned awesome! 8) (and he's mildly on the spectrum, fyi. So is my brother but he'd never admit it.)


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18 Jan 2022, 12:41 am

Dox47 wrote:
DW_a_mom wrote:
But most illegal immigrants do come from places where what they expect from that housing is less, and are willing to live with a lot more people per square foot - if any their landlords will let them (which landlords usually don't).


You know, there's another interesting facet there that I came up against in the restaurant business, in that many of my local competitors were small immigrant run places where they actually were living on premises (legally or otherwise) and had the whole family working at the business without anyone taking a salary, grandparents to little kids, and thus were able to offer highly labor intensive dishes at a price that I couldn't match, sub $1 tacos, $3 banh mi, stuff like that. I didn't begrudge them that, being willing to work harder for less money is their competitive advantage, what I did resent the hell out of was people complaining about my prices and then pointing to these shops as evidence that I must be raking it in and ripping them off, when the only reason I was even keeping my head above water at my price point was that I was barely paying myself and getting a bunch of free labor from my family. I can tell you, since a lot of this happened over social media where I could see post histories, an awful lot of "fight for $15!" types also love cheap ethnic food, and it never seems to occur to them that there is a contradiction there.


Hm ... I see the small ethnic family restaurants as a very different business. It is an effective business model, and they don't always under-price; the popular ones that market price make really nice profits. The family members get something from the environment that a non-family business can never offer and they usually root deep in the local community. My kids went school with kids from several family restaurants; we all got close.

But it is very difficult to compete against, agreed. Kind of a pro and a con for those families; great if all the kids grow up to love the business; stifling if they want something else. I wouldn't hold higher prices against a non-family restaurant; I know how numbers go. I get annoyed at the chains with high prices and underpaid employees, but never a local venture that treats both employees and customers right; I expect that to raise the prices. With restaurants, no one is ever only buying food.


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18 Jan 2022, 12:58 am

cyberdad wrote:
Dox47 wrote:
or do I have to pay according to some calculation as to what is a "fair" price for the job? If the latter answer, why, and who sets the price?


There is the market rate. I used to get a guy to causally cut my grass from the backpages of my local paper. I negotiated a flat rate of $20/hr and he worked for 2hrs. I would use him maybe three times a year so my annual bill was $120

Then one day he told me that he didn't want to work for me anymore as he was able to negotiate a higher rate with other customers. I told him bye.

I rang another contractor and it turns out the standard practice is not just a flat rate of $50/hr but monthly 2hr gardening contract which would cost me $100/month x 12 months = $1200.

I purchased an electric lawnmower for $600 and I do it myself now.


There are some rich homeowners who have put in nice artificial grass in place of real grass for their lawns. Yes, it costs money up front to do so, but pays off over time with watering/mowing costs. Some of it looks/feels just like real grass.



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18 Jan 2022, 1:01 am

Dox47 wrote:
DW_a_mom wrote:
In my experience, its more the later. You propose the work you want done, and ask what the price would be. You accept their price or you don't; some potential employers counter. Some service providers take the counter. It all depends.


That's the thing though, if I don't have any takers at my price, I can raise it, decide to do the work myself, or maybe buy one of those Roomba like robomowers if I really hate doing it and the locals want too much, there isn't some agency arbitrarily setting the price, the market determines what the job is worth.


The market determines worth only when there is adequate, unbiased competition. Wages get out of whack when the power players in an area are all fixating on the same understated value for entry level work, and adhere to it. Or when companies get too big and there isn't real competition anymore. They stop asking themselves if it makes sense. Market forces, simply put, work faster and better for independent contractors who work for multiple employers than they do in employer - employee relationships, IMHO.

I personally think the real time scheduling really messed the model up. Employees don't even know what they are saying yes to. The ridiculously high turnover in those jobs proves the point; employees get frustrated and disillusioned very quickly. When my daughter was working at Starbucks, it seemed to me like 25% of their hires ghosted them almost immediately.

And condescending attitudes can be a huge killer. I remember talking to another family about doing a nanny share. Their child had been at daycare and they were upset how often the child was getting sick. So I laid out what we were paying our nanny and what a split would look like. The mom flipped out on me, asking how they would ever save if they were paying that much. I was trying to figure out what she thought it would cost, and how she got there; did she think nannies lived under bridges? I wasn't paying for a premium nanny with a degree in childhood education; I was paying the fair rate for a legal immigrant nanny, and dipping into savings to do it because my ASD son couldn't cope with group care.

I strongly believe that when you hire someone under terms that demand they commit the majority of their available working hours to you, you have a responsibility to them. I can't relate to people who don't feel that, especially when it comes to nannies, the person they leave their children with. People who aren't ready for that have no business becoming employers IMHO. But I am aware there are two distinct schools of thought, and mine is only 1 of 2.

Finding the fair balance is never easy, and I prefer it when the market does it successfully. Government involvement can create its own problems.


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Last edited by DW_a_mom on 18 Jan 2022, 1:05 am, edited 2 times in total.

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18 Jan 2022, 1:03 am

DW_a_mom wrote:
Hm ... I see the small ethnic family restaurants as a very different business. It is an effective business model, and they don't always under-price; the popular ones that market price make really nice profits. The family members get something from the environment that a non-family business can never offer and they usually root deep in the local community. My kids went school with kids from several family restaurants; we all got close.

But it is very difficult to compete against, agreed. Kind of a pro and a con for those families; great if all the kids grow up to love the business; stifling if they want something else. I wouldn't hold higher prices against a non-family restaurant; I know how numbers go. I get annoyed at the chains with high prices and underpaid employees, but never a local venture that treats both employees and customers right; I expect that to raise the prices. With restaurants, no one is ever only buying food.


Let me put it another way; I suspect that if we started sending the wage inspector into all of the family run ethnic places and forcing them to abide by the prevailing labor laws, many of the people in this thread and elsewhere would not be happy campers at the result. Honestly, for a lot of people I don't even think it's about the money, it's more tribal proxy war BS, they just see business owners as the enemy tribe and want to punish them. I suspect that's why my repeated "tax the rich and redistribute down" calls are being completely ignored, it's not punitive and doesn't allow for moral grandstanding the way minimum wage fights do.


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18 Jan 2022, 1:18 am

Dox47 wrote:
DW_a_mom wrote:
Hm ... I see the small ethnic family restaurants as a very different business. It is an effective business model, and they don't always under-price; the popular ones that market price make really nice profits. The family members get something from the environment that a non-family business can never offer and they usually root deep in the local community. My kids went school with kids from several family restaurants; we all got close.

But it is very difficult to compete against, agreed. Kind of a pro and a con for those families; great if all the kids grow up to love the business; stifling if they want something else. I wouldn't hold higher prices against a non-family restaurant; I know how numbers go. I get annoyed at the chains with high prices and underpaid employees, but never a local venture that treats both employees and customers right; I expect that to raise the prices. With restaurants, no one is ever only buying food.


Let me put it another way; I suspect that if we started sending the wage inspector into all of the family run ethnic places and forcing them to abide by the prevailing labor laws, many of the people in this thread and elsewhere would not be happy campers at the result. Honestly, for a lot of people I don't even think it's about the money, it's more tribal proxy war BS, they just see business owners as the enemy tribe and want to punish them. I suspect that's why my repeated "tax the rich and redistribute down" calls are being completely ignored, it's not punitive and doesn't allow for moral grandstanding the way minimum wage fights do.


I don't know; I'm not inside their heads. I'm more in the "most pragmatic way to get to the desired result within a reasonable amount of time" school of thought. I feel like there is no temperature in this country for more "tax the rich" talk. Our social structure (or politicians, or pundits, or all of the above?) has done too good a job of getting most citizens fighting amongst themselves for the last cookie, and believing the hoard of cookies at the table over in the corner is incentive for everyone to better themselves even when armed guards are keeping them from crossing the room.

One thing about the world of small business is that we mostly seem to self-sort and, within reason, do what we want. I work for owners whose philosophies I can live with; they hire like-minds; and even the clients who hire the firm tend to follow similar philosophies. Safety in numbers tends to reinforce beyond that. So in the section I operate in, everyone tries to pay fair and take care of their people. In other sectors, it can be entirely different. I get really saddened by people trapped in the "dog eat dog" sector who don't realize it doesn't have to be that way. I don't hesitate to tell them to CHANGE JOBS, but it isn't usually something they feel they can do. If more employees understood they had the agency to find positions that treat them better, market forces would work better, and we wouldn't have this debate. But society works hard at killing that sense of agency, it really does.

It would be good to have easier ways to start and run a small business. As it stands, its like the ultimate test of steel. It is a shame that it is so hard. Even when the business fails, I think the experience makes it worth it, though. I've never learned so much about myself and the way the world works as I did running my own business. So many parts I loved, but it's better for me working as I do now. No regrets. My husband, either. Sometimes I think everyone should do it at least once, but I don't sugar coat anything for new entrepreneurs. Hardest is helping people keep perspective when they close doors, but I try. I'm been proud of every single last one of my clients. Never regret.


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Last edited by DW_a_mom on 18 Jan 2022, 1:25 am, edited 2 times in total.

Dox47
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18 Jan 2022, 1:20 am

DW_a_mom wrote:
I personally think the real time scheduling really messed the model up.

And condescending attitudes can be a huge killer.

I was trying to figure out what she thought it would cost, and how she got there; did she think nannies lived under bridges?

I strongly believe that when you hire someone under terms that demand they commit the majority of their available working hours to you, you have a responsibility to them.


I snipped this post up because I don't disagree with any of it, I've run up against all of these issues and more in my largely working class career, I just don't think any of it is fixable through a mandated wage. What is needed is for labor to have more bargaining power, and for that to happen, the supply of labor needs to be tightened... Do you see where I'm going with this?

This is an area where my own views are continuing to evolve, because I've spent my adult life as an open borders free trader, but also in working class jobs, and the ability to constantly undercut labor value either by shipping the jobs overseas or bringing people here who will do them for cheaper is the elephant in the room no one (on the left) is talking about when it comes to workers being treated as disposable. I mean, it's been a cliche for years that American workers are spoiled, we won't do certain hard work and demand too much money and too many privileges, and you can get a Mexican to do the job and be happy while he does it, but I'm starting to think that maybe the spoiled Americans demanding better pay and treatment might have a point, and there is a real downside to having a ready supply of cheap hardworking Mexicans, no matter how cheerful they are. Uggh, I feel dirty just talking about this.


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18 Jan 2022, 1:24 am

DW_a_mom wrote:
I don't know; I'm not inside their heads.


But do you have a better theory that fits the evidence? These are supposed liberals, I'm the evil capitalist, and I'm saying "yes, tax the rich!" and being ignored...


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18 Jan 2022, 1:30 am

Dox47 wrote:
DW_a_mom wrote:
I don't know; I'm not inside their heads.


But do you have a better theory that fits the evidence? These are supposed liberals, I'm the evil capitalist, and I'm saying "yes, tax the rich!" and being ignored...


Thing about taxing the rich - - they're still going to be rich.


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18 Jan 2022, 1:34 am

auntblabby wrote:
goldfish21 wrote:
auntblabby wrote:
what a wicked world we live in.


Indeed. And what am I going to do about it? Maybe buy a home in a market that's cheaper than where I live and collect rent. :lol: If ya can't beat 'em, join 'em I guess..

i can't be a renter nor would i be a landlord. to each his own.



We're renters. Sure, you'll never get rich renting, but at least someone else pays for the upkeep of the property.


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18 Jan 2022, 1:46 am

Kraichgauer wrote:
auntblabby wrote:
goldfish21 wrote:
auntblabby wrote:
what a wicked world we live in.


Indeed. And what am I going to do about it? Maybe buy a home in a market that's cheaper than where I live and collect rent. :lol: If ya can't beat 'em, join 'em I guess..

i can't be a renter nor would i be a landlord. to each his own.



We're renters. Sure, you'll never get rich renting, but at least someone else pays for the upkeep of the property.

i don't make enough to pay rent.



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18 Jan 2022, 1:49 am

Kraichgauer wrote:
Thing about taxing the rich - - they're still going to be rich.


So what you're saying is, it's not about lifting up the poor, it's about punishing the rich. I mean, I kinda figured as much, but it's still good to get confirmation of the theory.


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18 Jan 2022, 1:53 am

Dox47 wrote:
DW_a_mom wrote:
I personally think the real time scheduling really messed the model up.

And condescending attitudes can be a huge killer.

I was trying to figure out what she thought it would cost, and how she got there; did she think nannies lived under bridges?

I strongly believe that when you hire someone under terms that demand they commit the majority of their available working hours to you, you have a responsibility to them.


I snipped this post up because I don't disagree with any of it, I've run up against all of these issues and more in my largely working class career, I just don't think any of it is fixable through a mandated wage. What is needed is for labor to have more bargaining power, and for that to happen, the supply of labor needs to be tightened... Do you see where I'm going with this?

This is an area where my own views are continuing to evolve, because I've spent my adult life as an open borders free trader, but also in working class jobs, and the ability to constantly undercut labor value either by shipping the jobs overseas or bringing people here who will do them for cheaper is the elephant in the room no one (on the left) is talking about when it comes to workers being treated as disposable. I mean, it's been a cliche for years that American workers are spoiled, we won't do certain hard work and demand too much money and too many privileges, and you can get a Mexican to do the job and be happy while he does it, but I'm starting to think that maybe the spoiled Americans demanding better pay and treatment might have a point, and there is a real downside to having a ready supply of cheap hardworking Mexicans, no matter how cheerful they are. Uggh, I feel dirty just talking about this.


I think life is insanely complicated, and businesses made a huge mistake in the way they choose to utilize globalization. It all looked so good on paper, but businesses cannot thrive in communities that are not thriving, and communities cannot thrive without a balanced market for the labor generated. Whether that community is in Mexico or the US, the market of the community has to balance to itself. To the extent globalization can help a local market achieve more balance, great. What I cannot tell you is where the boundaries for a market community are; the size and shape of what, exactly, needs to be balanced. Except to say it isn't how the US has been playing it.

We sold out the middle of our labor market, and we're paying for it.

But I also don't know if we could have foreseen it. If we could have predicted the mistake until after it was made. Technology really changed the game and what could be done where.

For years, if someone said American labor was spoiled, I could honestly say I had NEVER met an employee who acted self-entitled. But I did finally meet one. I was so surprised, funny if it wasn't sad. They didn't last long with us, and maybe their still blaming it on us, not themselves. Well, you know, if they can find a job where that attitude works out, good for them.

Plus "spoiled" means different things in different places.

And even when we are spoiled, that doesn't mean there aren't offsetting strengths.

All humans are mixed bags. I believe that, for the most part, it works out if we can match the right strengths and weaknesses to right position in the wheel. So the ideal is to move around the parts until each has its right fit. No right or wrong, no good or bad, just right placement, wrong placement.


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18 Jan 2022, 1:54 am

businesses that turned their backs on american labor deserve to be punished IMHO.



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18 Jan 2022, 1:58 am

Dox47 wrote:
DW_a_mom wrote:
I don't know; I'm not inside their heads.


But do you have a better theory that fits the evidence? These are supposed liberals, I'm the evil capitalist, and I'm saying "yes, tax the rich!" and being ignored...


Pragmatic me says that taxing the rich is never going to happen. You can try, and they volley back. There is always a play they can make to avoid paying high tax.

Minimum wage rates are more difficult to avoid.

That may be the biggest argument for them.

PS - More and more I like the idea of using UBC instead of minimum wage, so if you can figure out how to make that acceptable to the masses, go for it.


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18 Jan 2022, 3:06 am

Dox47 wrote:
Kraichgauer wrote:
Thing about taxing the rich - - they're still going to be rich.


So what you're saying is, it's not about lifting up the poor, it's about punishing the rich. I mean, I kinda figured as much, but it's still good to get confirmation of the theory.


And just how did you come to that conclusion? No, I said the super rich will still be rich after paying taxes. No punishment about it. But making the poor shoulder taxation would be punishing for them, as they could only become poorer. It's about taxing people who can afford to be taxed so the rest of us can have infrastructure, police and fire services, a social safety net, a strong national defense, etc.


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