Op-Ed: My family had to survive on the minimum wage, but I’m not ready to pay $15 an hour

Posted by $ nickursis 7 years, 2 months ago to Government
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An interesting, rational discussion on minimum wage and it's impact, by a person who says he has been on both sides. Good points, I think.
SOURCE URL: https://www.yahoo.com/news/m/ed6f9290-b1e6-3105-8f18-971d3046d9cc/op-ed%3A-my-family-had-to.html


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  • Posted by GaryL 7 years, 2 months ago
    Base the Minimum wage on the military pay scale.
    An E-1 right out of boot camp makes a bit under $10/hr if you base it on a 40 hour work week which it surely is not. Pay a kid right out of HS around $8/hr and that sounds about right to me. The Minimum wage was never designed to be an adult sustenance pay rate and shame on those who do not strive for more by moving up the ladder. I have had new employees that were not worth the $8 and let them go after the first two weeks. Others who showed great potential and got a substantial raise in short order. Reliability was a much bigger issue and when I need a crew of 3 guys and one can't drag his rear out of bed to come to work that guy becomes worthless to me at any price.
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    • Posted by dark_star 7 years, 2 months ago
      Good idea!
      However, I don't think the government should have any say in wages paid to employees.
      That being said, maybe we could try using social pressures to set up the pay scales you mentioned. That's how we've been trained to tip people perhaps society could be trained to do the same with starting pay scales as well .....
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      • Posted by $ 7 years, 2 months ago
        Correct, dark star, government does not have any say in wages, it is an economic, not legal thing. Remember though, it is a powerful tool for several reasons, least of all: Vote for me, I will raise min wage! It also is self serving, raise min wage, raise SS and Medicaid income. If they truly cared, they would exempt those below a set level of income from all taxes, giving them an effective 20-30% raise right away.
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    • Posted by $ 7 years, 2 months ago
      Indeed: Value. It is the value of the work done that you are paying for, not the fact they are working, and that is the flaw in the whole min wage thing, it assumes all are equal in value, and thus it is out of the equation.
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  • Posted by term2 7 years, 2 months ago
    I am a small business owner. To be honest about it, and politically incorrect also, I am in it to make money for MYSELF . Thats why I go to work. Thats why I try to compete with other businesses and stay alive in the process. I enjoy some parts of what I do, but put up with a lot of other parts because I have to in order to be able to do the things I want for my life.

    I could care less about "creating jobs" or "paying a living wage". My customers demand what THEY want at the price they want to pay. Its my job to give that to them. I have competitors also trying to satisfy the same customers with better and cheaper products.

    When it comes to employees, I hire them because I HAVE to. If I could do business without employees, I would certainly do that if there were less expensive alternatives. The alternatives, such as automation and robotics, all have costs too. When the cost of the person in terms of money and management time exceeds the cost of automation, guess what? Layoffs.

    $15 per hour minimum wage will simply exceed the cost of automation in a lot more businesses, such as mine. I can try to get our customers to pay more, but believe me, if I could increase prices now, I would do it now and just make more money. But I cant increase prices. Paying employees more means I make less, and I will do whatever I can to keep that from happening.
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    • Posted by $ 7 years, 2 months ago
      Great response and exactly what most business people say. Staffing is part of the cost of doing business, and most businesses cannot survive without some form of staffing. The cost, though, cannot exceed what you make, and I work at Intel, who went through a convulsive 12% cut in April, and the damage is still being felt, especially in the manufacturing end. What took 4 people is now 3, and with no consequent reduction in work needed, things do not get done. Not only is that not efficient, it actually increases costs with wasted time with product sitting. Basic Lean 6 Sigma explains that, but a lot of "managers" just do not comprehend the relationship. Politicians who want to dictate pay, will next dictate prices, and then there is no economic system, just ask the Russians.
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      • Posted by term2 7 years, 2 months ago
        My first approach to reducing costs has always been to change the way the product is made or the process used to make it- with the idea of taking less labor or materials. Only then do I cut employees. Getting people to simply work faster ( more than about 10% or so). Seems to have unintended negative side effects as you have noted. Right now I am redesigning work flow with the idea of eliminating about 25% of our labor hours. I am getting ready in advance for a minimum wage hike, on the day it comes (or before), I can keep production up with the 25% fewer people
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        • Posted by $ 7 years, 2 months ago
          You are doing the right thing then. My experience in Lean 6 Sigma, is that most productions systems are " what works", vice "whats optimum" It is amazing at how something that looks good to you, makes sense, and seems to work can be made20-40% using the tools and some careful observation, because it makes gains in small improvements (a step here, a keystroke there). Toyota is the often quoted creditor for it, but the system has been around a lot longer, and started with Demmings approach to standardization and statistical process control. Good luck to you.
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          • Posted by term2 7 years, 2 months ago
            Gains are made in small steps usually. Sometimes one is fortunate to come up with a large improvement. The employees who keep looking for improvements are the ones to keep. Robots aren't to the point they can do that yet
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            • Posted by $ 7 years, 2 months ago
              Exactly, and it depends on what you want it to do. A 2 axis robot, off the shelf, costs probably 10-30K, and then you have to have the software, as well as an error detection system, and then experts on hand to recover when it goes "bork". I have a tool with a 6 axis robot in it to move wafers and the tool itself is about 10 million. We use robots not to replace humans, but for quality movement into and out of process tools. We are working to perfect a new tool and the cost is huge, but the end result is an improved system to ship wafers that will cut shipping costs in half. That is not a "replace people" type thing. Replace people things are normally simple motions, but the control software will need to mimic the reason that you had the humans there in the first place, and then costs skyrocket.I woulkd hesitate to eat a robot produced burger, simply because that robot would just as soon pick up a cockroach laden patty, that a human would not, especially if they go cheap on the error detection software. I would hope the human would not, but then you never know....
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              • Posted by term2 7 years, 2 months ago
                Humans are good at dealing with unforeseen situations and notoriously bad at dealing accurately with highly repetitive situations. It's interesting to see how amazon and mouser use robots in their warehouses. To get the robots to work well, there is a lot of work to prepare the parts that initially go into the warehouse.
                I want to make myself a home assistant robot, but houses are not currently robot friendly. "Alexa, go to the garage and bring the groceries from the car to the kitchen and put them away" would not be very feasible today. We would need standardized containers, automatic doors, very limited clutter, and specific locations for each item. Humans just deal with disorganization and houses are designed cheaply to suit the abilities of humans

                Optical comparative systems could keep the cockroaches out of your hamburger better and more consistently than a human could, but currently the cost of robotic burger prep is prob still more expensive. Maybe at $15/hr the line will be crossed tho. The age of pick and place fast food robotic solutions isn't far away
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                • Posted by $ 7 years, 2 months ago
                  Indeed, exactly accurate observations. I think that your points illustrate why robots are not going to be taking over anytime soon. Now, specific automated systems that do not qualify as "robots" are viable today. There are a lot of places, even fast food, where automated systems could reduce headcount. But robots: you are correct sir!
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                  • Posted by term2 7 years, 2 months ago
                    I suppose a robot needs only to be better and cheaper than the typical human counterpart it was replacing. A lot of human workers do not perform up to human potential whereas robots/automation do perform up to their programmed potential . This blurs the difference between a robot and a human. Hence the "Turing" test becomes an important indicator.
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  • Posted by $ blarman 7 years, 2 months ago
    And what frequently gets overlooked in the minimum wage debate is that employment mobility is a factor of economic growth. When economic growth is stagnant, it is harder for people making minimum wage to leverage their experience (absent education) to improve their station. They are the most vulnerable to market conditions because they have the most direct competitors - thus the least job security.

    One other thing that government wage manipulation does, however, is not only to price these people out of the market entirely, but to waste money on a "fix" that can't work in the first place without gross monetary inflation. It's a circular cycle that only profits those in power.
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  • Posted by ProfChuck 7 years, 2 months ago
    The push for another increase in the minimum wage is a natural consequence of currency manipulation buy the government and the resulting decline in the value of the dollar. In the last 50 years the dollar has dropped in value by more than 95 percent. Th government runs on deficit spending and the loans are in dollars. By engineering the decline of the dollar it is possible to pay back these loans at an effective discount. If anyone but the government were to pull this kind of fraud it would be considered grand larceny. Just another reason to return to precious metals as a form of currency. Once again, Ayn Rand was right. No surprise.
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    • Posted by $ 7 years, 2 months ago
      Exactly, and therein lies the seeds of the next crisis: when they raise interests rates, it will drive all that off the rails. I do not have an in depth understanding, but Graham Summers has been predicting a huge debt implosion when they do, as it will totally destabilize all the funny money schemes that have been allowed to grow out of the last 8 years of no interest, weak dollar, now in the face of a change. The loss of value is one of the hidden secrets they keep pushing (just like ObamaCare): effective inflation has been at about 20% for the last 8 years, and "creative" math and selective "samples" have been used to make it seem to be non existent. When ground beef was 99 cents a pound 8 years ago, and is now 2.99, that says to me my money is worth about 33% of what it was. My wife and I have seen this happening for years in the price of Hay, we used to get it for 1-2 dollar a bale in the field, now it is 5-7, and from a storage barn it is 15-20. But I got a .05% raise in my Navy Retirement "to adjust for inflation" this year, which matches what SS got. It is all about lies and deception, and will have to implode at some point, when they run out of tricks.
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  • Posted by $ allosaur 7 years, 2 months ago
    Good find, Nick. A free market should be none of the government's business.
    Dobrien has it right with his stated reply: "The free market should always determine the wage for an employee."
    Now I'm reminded of what Ronald Reagan said were the scariest words you can here as being~
    "Hi, we're from the government and we are here to help you."
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  • Posted by Dobrien 7 years, 2 months ago
    Hi Nickursis,
    The free market should always determine the wage for an employee.
    The best way for the market or an economy to increase wages ,
    is with a strong growth that creates demand for workers which exceeds the supply
    of workers. The next best step is for people to be educated , to teach them early on in life that the skills and knowledge they attain will provide value to get value.
    We all understand wage collusion among companies hurts employees. Why is it different for the state to do it?
    I always think about the worker who has increased his value receiving wage increases with time and experience and is now earning $15 an hour.
    When new employees are hired making $15 , how will he get compensated for his greater value?
    Some would say raise prices but those higher prices could cause a drop in market share due to lower wages with a competitor.
    BTW in the story a 30 something man hurting his back so bad he can't work would result in disability as well as an insurance claim against his oil co.
    Regards,
    DOB
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    • Posted by $ 7 years, 2 months ago
      Yes to all the above Dob. The basic tenant is that anytime government regulates anything, it is now an artificial environment where normal rules do not apply. By regulating wages, they are establishing the value of a workers efforts. IT also removes any incentive to say "take this job and shove it" and move on to better grounds. Add to that the influence of unions (where removing an incompetent is sometimes harder than Hillary Beast getting elected) adds more skew to the mix.
      I think another little thought of issue is the "brilliant" minds that get hired at incredible wages, mainly due to connections, and not ability, who then go on a "cut costs" rampage, cutting headcount (which never seems to involve the management ranks), but further neuters the dysfunctional balance between supply and demand. Lots of laws and rules were added between 1930 and today "to protect workers rights" that really resulted in "protecting workers" to the point they no longer have an incentive to improve or change. I see that in my own line of work where a good 80% or more show up for work, and then get upset if rated "average". This is part of the whole dichotomy of our society, where the Dumbocraps have set to building a dependent culture of subservience, that a lot of people accept, as long as they get their basic needs met, and a little more.
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  • Posted by $ Olduglycarl 7 years, 2 months ago
    I think many of the low wage beginner jobs will go robotic and other jobs that now pay well that can't go robotic will start out at a reduced wage of 15.00 an hour.
    So my take will be that it will hurt all of us eventually.
    New type jobs on the horizon though for the Highly skilled robot fixers!
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  • Posted by RonC 7 years, 2 months ago
    We used to have a career economy with economic ladders for people to climb in nearly all endeavors. Since the second depression (great recession) America has slipped into a "gig" economy; i.e. lots of part time work with no benefits and fewer ladders to climb.

    In my youth, minimum wage was always considered an entry level (starting point) for the new worker with few, if any, skills to bring to the job. In that era it was never intended to be a "living wage", it was a "foot in the door" leading to better things.

    As recently as 1989 the US Postal service was paying $5.00 per hr. for workers who were starting. By the mid 90s wage inflation has raised that to about $11.00 / hr. Were the $11 workers more skilled that the $5 workers? No, scarcity in labor had force the USPS to pay more. The Postal Service had also perfected the 30 hour work week, and 12 week position to avoid paying benefits to this entry class of worker. Workers were terminated after 12 weeks, then in 2 or three weeks, after your name had been removed from the payroll system, they would rehire the same workers. This created a class of worker with no raises, no ladders to climb, no bid rights (you need to be full time to bid and a total of 12 weeks seniority would not sustain a bid even if you went to court to win bid rights), and no benefits. Postal management believed it to be best for their model. Maybe, but when was the last time anyone wrote a praise letter to the editor regarding the courteous and cheerful service at the USPS. And, I would add, even they couldn't keep the hourly rate at $5, scarcity forced the issue.

    These are the same strategies that many American businesses adopted to avoid the burden of ObamaCare.

    We do not have wage inflation to amount to much because the 4.7% unemployment is erroneous. If labor were that tight, businesses would have to pay more. With barely 60% of the workforce participating in the economy there is plenty of labor to be had at less than $15.

    A career economy will not prosper until the disincentives from ObamaCare are removed. Small and larger businesses will continue to work people 35 hours or less, or hire less than 50 workers to avoid the issue. Larger firms may continue to provide employer based health insurance, or pay the fine an surrender the difference to the employee allowing them to purchase their own insurance. Until this model is disrupted, and the need for employees causes business to hire, hire full time, hire at higher wages, and offer benefits as incentives,....we will continue to flounder in a "Gig" economy. "Gig" meaning when this work situation runs out the worker must find a new situation.

    So, what will a forced $15/ hr. minimum wage do in the economy? Every business will do a cost benefit analysis to determine if they can get suitable production out of the $15/ hr. cost. Everybody wants more money, but the catch is there is no free lunch. To get more money, productivity has to go up. Since the unskilled worker cannot produce more because he does not have the skill set to produce more, then to make the equation work the price must go up. That means the wage is subsidized by the loyal customers (maybe). Or, the business will find another way. Like paying more skilled workers (overtime) who can produce more and forgoing the hiring, training, and payroll compliance costs of another new employee. Or, maybe automation is now worth the investment with a prevailing minimum wage of $15/ hr. Automation has been employed at the USPS too, killing about 10 jobs for every 1 that remains.

    The incorrect thought in the progressive policy of pushing minimum wage is that the employer or customer has no choice. If it becomes too expensive to eat out, people will cook at home. If the productivity model cannot be satisfied then businesses large and small will find another way. The only way to raise the living wage is to increase productivity. That's why the guy with the back hoe, makes more than the guy with a shovel...the back hoe worker can produce more.

    If we want to raise the living wage, the fastest way possible, we need to change the incentives that businesses operate under today. That means taxes, regulations, and trade agreements need to be optimized. Of course this is only my opinion.
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    • Posted by $ 7 years, 2 months ago
      Great comment! Right on. TANSTAAFL has been a stalwart cause (especially with Robert Heinlein in The Moon is a Harsh Mistress) to explain a simple concept: You can not make money when your costs are more than your price, and your price cannot be higher than your competitor. The corollary to that is "Reduce costs through efficiency and waste reduction, and increase profit, or cut price". Yet, American management is immune to such logic, most layoffs are always the lowest "herd" workers, and very few upper managers, who seem to always get higher raises, stock awards, etc, for almost any reason. I tend to lump them and politicians into the same category: Looters.
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  • Posted by CircuitGuy 7 years, 2 months ago
    "I can possibly pay them for the value they deliver and would love to pay them more, but I simply can't."
    And Mr. McKissen probably loves the feeling when he figures outs a way to solve someone's problem in way they're happy to pay for, so he can give a raise not as alms but out of "yes! We're making this work, and I want more of the same!!"

    I agree with this article completely. The world has teenagers who don't need the money, lazy people, and hard-working people busting their bottoms (probably not for long) for $2/hr on Upwork or $8/hr at Taco Bell. .
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    • Posted by $ 7 years, 2 months ago
      So, being a business guy, you believe he is accurately stating the problem and framing it right? It seemed so to me, and he had good points for both sides, however, paying a mom 15.00 an hour because she is a mom and a kid 8.00 an hour for the same work does not seem right either. Would have been better if the mom was a manager managing the kids.
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      • Posted by CircuitGuy 7 years, 2 months ago
        "he had good points for both sides"
        Did he actually have any points in favor of a minimum wage?
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        • Posted by $ 7 years, 2 months ago
          No, none as such, I think his point is the same one I have seen for a long time, and that is, it is a lot more complex of an issue than just "pay them this" dictate. For instance, you may have someone who is older, more skilled, but not experienced. They may offer more to a company than the teenager. You might pay them more for a number of reasons, but their value drives the bottom line. The teenager, who may blossom into an awesome star, starts at the bottom and, if blossoms, rises fast. A dictated wage takes all that away, and means an employer must spend a defined amount for a person, whether they are worth it or not. Lots of people love to complain about the minimum wage, but I ask: Why are you working there? The excuses and stories get long and detailed, but usually add up to: for some reason, it is not a greater value to themselves to go or do something else, than to be where they are. So, they want to be where they are, and yet they want to "make money". I see people who are both unemployed, get food stamps, and yet have a 4 wheeler and a boat. Their kids wear rags, and they get their food from whatever is allowed, but, by golly, that 4 wheeler and boat are to be saved at all costs. Same argument with :inner cities" people. Why live in a cess pool like Chicago, when there are a billion other choices? The minimum wage just makes it that much harder by enabling such lack of value in themselves.
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      • Posted by $ Radio_Randy 7 years, 2 months ago
        I don't believe the author stated that his mother was making $15/hour. He only says that she was making "minimum wage", which may have put her on par with the kids that were working there.

        Don't mean to pick nits, but...
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        • Posted by $ 7 years, 2 months ago
          Nope, Randy, that was what I read it as as well, his point being that she was trying to raise 2 kids and family, on minimum wage when dad couldn't work. Of course the question of disability etc comes up as well, but his flip side of "now, as a businessman" was where I thought the discussion had merit, as he was trying to show how a detailed discussion is a better way to look at an issue, then the current model of screaming till you get what you "think" you want (until you get it and find you are even more screwed). I would say a better system would be eliminate the minimum wage and not levy any taxes on income until you hit a threshold of 20 or 30K a year. But then the same people wanting to tell someone else what to give up, would then have to give up some of their treasured giveaways to compensate, and they are NEVER ready to do that. Look at Obamamcare, and the BS tripe they all are driveling about. The Dumbocraps will defend it even in the face of 100% increases (despite their lies it wouldn't), and the loss of your doctor (again they lied) and a whole host of other lies and misstated things.
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