WOW DIDN'T SEE THIS COMING (sarcasm)

See... unintended consequences. Politicians rarely see them/care about them.

Quote :

"New wage boost puts squeeze on teenage workers across Arizona Employers are cutting back hours, laying off young staffers Chad Graham The Arizona Republic Feb. 10, 2007 12:00 AM Oh, for the days when Arizona's high school students could roll pizza dough, sweep up sticky floors in theaters or scoop ice cream without worrying about ballot initiatives affecting their earning power. That's certainly not the case under the state's new minimum-wage law that went into effect last month. Some Valley employers, especially those in the food industry, say payroll budgets have risen so much that they're cutting hours, instituting hiring freezes and laying off employees. And teens are among the first workers to go. Companies maintain the new wage was raised to $6.75 per hour from $5.15 per hour to help the breadwinners in working-poor families. Teens typically have other means of support. Mark Messner, owner of Pepi's Pizza in south Phoenix, estimates he has employed more than 2,000 high school students since 1990. But he plans to lay off three teenage workers and decrease hours worked by others. Of his 25-person workforce, roughly 75 percent are in high school. "I've had to go to some of my kids and say, 'Look, my payroll just increased 13 percent,' " he said. " 'Sorry, I don't have any hours for you.' " Messner's monthly cost to train an employee has jumped from $440 to $580 as the turnover rate remains high. "We go to great lengths to hang on to our high school workers, but there are a lot of kids who come in and get one check in their pocket and feel like they're living large and out the door they go," he said. "We never get our return on investment when that happens." For years, economists have debated how minimum-wage increases impact the teenage workforce. The Employment Policies Institute in Washington, which opposed the recent increases, cited 2003 data by Federal Reserve economists showing a 10 percent increase caused a 2 percent to 3 percent decrease in employment. It also cited comments by notedeconomist Milton Friedman, who maintained that high teen unemployment rates were largely the result of minimum-wage laws. "After a wage hike, employers seek to take fewer chances on individuals with little education or experience," one institute researcher told lawmakers in 2004. Tom Kelly, owner of Mary Coyle Ol' Fashion Ice Cream Parlor in Phoenix, voted for the minimum-wage increase. But he said, "The new law has impacted us quite a bit." It added about $2,000 per month in expenses. The store, which employs mostly teen workers, has cut back on hours and has not replaced a couple of workers who quit. Kelly raised the wages of workers who already made above minimum wage to ensure pay scales stayed even. As a result, "we have to be a lot more efficient" and must increase menu prices, he said. While most of the state's 124,067 workers between the ages of 16 and 19 made well above $5.15 per hour before the change, the new law has created real-life economic opportunities. Liliana Hernandez brings home noticeably more under the new law. The 18-year-old, who attends Metro Tech High School in Phoenix and works part time at Central High School, is saving the extra money, maybe to put towards buying a used car. Hernandez said she deserves the raise just like any other Arizona worker even if she still lives with her parents. "I'm doing the best I can and working hard like everyone else," she said. In the months leading up to last November's vote, advocates of the new law maintained that it would help Arizona create a "living wage" for some of the poorest workers. The Economic Policy Institute estimated that 145,000 Arizonans would receive a pay raise. That was how many made $5.15 to $6.74 per hour. At one press conference, a mother described how she was unable to afford basic school supplies for her son. Opponents, however, said there was little talk about teenage workers. "Everyone wanted to focus on the other aspects of the minimum-wage campaign," said Michelle Bolton, Arizona state director of the National Federation of Independent Business. An Employment Policies Institute study determined that 30.1 percent of affected workers in Arizona fell between the ages of 16 and 19. "Workers affected by the minimum-wage increase are less likely to be supporting a family than the typical Arizona worker," it stated. "For example, 30.4 percent of the workers are living with their parent or parents, while only 7.6 percent of all Arizona workers are in this category." John Weischedel, a senior at the East Valley Institute of Technology in Mesa, knows he is lucky to be making $8 per hour at an auto dealership and learning technical skills. So are most of his friends who make $9 or more per hour while still attending high school. After the minimum-wage law went into effect, "a couple of my friends got laid off - they worked in fast food," he said. "They're going to wait until they're out of high school to find other jobs." "

[Edited on February 12, 2007 at 10:24 AM. Reason : .]

2/12/2007 10:24:26 AM

If the cost of giving families a more livable wage is high schooler unemployment, that's a cost we can bear.

2/12/2007 10:25:50 AM

CANT MAKE AN OMELET WITHOUT BREAKIN A FEW EGGS!

I thought this was the republican philosophy with everything.

2/12/2007 10:27:11 AM

This is just from the state's increase. The federal increase isn't even mentioned.

2/12/2007 10:27:37 AM

Quote :

"If the cost of giving families a more livable wage is high schooler unemployment, that's a cost we can bear."

Honestly, are you retarded? Because you would have to be retarded to be an adult and work at the minimum wage level. .00000000000001% of able adults work at that level. The raise will only affect the high school students while marginally affecting the rest of the adult population.

2/12/2007 10:28:22 AM

There are plenty of adults making minimum wage. It will also ripple up, b/c the older works are going to say, this kid got a raise, where's my raise?

2/12/2007 10:30:17 AM

Perhaps now those teenagers who were busy making money will go study more so that Europeans won't make fun of how stupid Americans are.

2/12/2007 10:30:46 AM

^^^ you are the fuckin dumb one.

2/12/2007 10:31:29 AM

your evidence to support that claim is breathtaking...

2/12/2007 10:33:35 AM

oh i was commenting on how walmart employs more than .000000001% of the population by themselves and most of those fuckers are well over high school age.

2/12/2007 10:34:41 AM

according to this:
http://www.bls.gov/cps/minwage2005tbls.htm

40.9% of minimum wage workers were 25 or over in 2005.

minimum wage workers (exactly 5.15/hr) make up 0.3% of the >25 workforce and 3.2% of the 16-19 workforce.

[Edited on February 12, 2007 at 10:42 AM. Reason : .]

2/12/2007 10:37:39 AM

back when this was being debated lots of articles mentioned the last wage hike and how these layoffs are just a short term effect. im not old enough to know how short term they were talking, but it would make sense.

2/12/2007 10:47:57 AM

i mean people like this pizza guy will either get more efficient with the workers they have, raise prices to cover the wage increase, or go out of business. i don't really see what the big deal is.

2/12/2007 10:50:51 AM

^seriously?

Problem 1: more efficiency with fewer workers. THis is not a problem for me, I support more efficiency, but some people lose jobs.

Problem 2: raise prices. So long to that whole livable wage the increase was supposed to create.

Problem 3: go out of business. Enough said.

2/12/2007 10:54:21 AM

unless the business is seriously pathetic, the price increases would not be nearly as substantial as the wage increase (for a single person).

[Edited on February 12, 2007 at 11:04 AM. Reason : .]

2/12/2007 11:04:02 AM

if a company cant deal with that then they shouldn't be open.

wage increases is like a purging of poorly managed companies.

2/12/2007 11:06:20 AM

Quote :

"Honestly, are you retarded? Because you would have to be retarded to be an adult and work at the minimum wage level. .00000000000001% of able adults work at that level. The raise will only affect the high school students while marginally affecting the rest of the adult population."

Quote :

"according to this: http://www.bls.gov/cps/minwage2005tbls.htm 40.9% of minimum wage workers were 25 or over in 2005. minimum wage workers (exactly 5.15/hr) make up 0.3% of the >25 workforce and 3.2% of the 16-19 workforce."

that shit is hilarious.

2/12/2007 11:16:23 AM

also most fast food pays a few cents more than minimum wage.

2/12/2007 11:18:56 AM

Quote :

"the price increases would not be nearly as substantial as the wage increase "

X dollars in Y dollars out. When businesses with extremely thin margins (independent restaurants) see an automatic increase in Y, without making an equal increase X (prices) or manually decrease in Y (layoffs), they won't survive.

then those mom and pop shops that "don't deserve to be open" shut down.

and now they and their employees are now unemployed.

larger companies that can absorb it raise prices and/or lay off workers to make up the difference.

and when the economy equalizes itself you wind up with a combination of higher prices (increase in CPI) and less minimum wage jobs. of course once a business reaches a point where they can't operate with less workers, then the only adjustment that can be made is to raise prices. Again, once it equalizes, the end result is inflation.

It's the same principle of why you need 100,000 a year in New York to maintain the same standard of living as $40,000 in Raleigh.

2/12/2007 11:22:40 AM

Quote :

"oh i was commenting on how walmart employs more than .000000001% of the population by themselves and most of those fuckers are well over high school age."

Walmart workers make substantially more than minimum wage, and they get benefits.

2/12/2007 11:27:53 AM

^^ the fundamental problem with this is that most "low paying" jobs still pay more than minimum wage. Even working at the Record Exchange I made 6 bucks an hour. Thats almost a dollar over minimum. The only companies truly effected are larger companies who employ huge numbers of high schoolers.

^ regardless it was debunked. Also thats a fine example of Walmarts wage expenses going up less because the employees already get paid over minimum.

[Edited on February 12, 2007 at 11:29 AM. Reason : ^^]

2/12/2007 11:28:07 AM

^that is because you live in North Carolina.

2/12/2007 11:30:06 AM

yes I do live in NC and everything I said applies to 70% of the country.

2/12/2007 11:37:02 AM

Quote :

"If the cost of giving families a more livable wage is high schooler unemployment, that's a cost we can bear."

What gives you the right to advocate the use of force in who gets to earn a wage and who doesn't?

2/12/2007 11:55:11 AM

it's not the use of force. It's the market.

2/12/2007 12:07:17 PM

Quote :

"the price increases would not be nearly as substantial as the wage increase (for a single person). "

It's worth noting that in response to recent wage changes here, a local restraunt increased the prices on all of their food by ~$.50 give or take. An additional $.50 / day becomes an additional $3.50 a week, which if you're smart with your spending is a little less than one additional days worth of food each week. So while the price increase may not be as large as the wage increase, it's certainly something that can have an impact.

2/12/2007 12:09:50 PM

Quote :

"it's not the use of force. It's the market."

It's restrictions on the market which cause these kids to get laid off. When you try to manipulate the market, there are bound to be consequences. In this case, the trade-off is higher wages at the cost of higher unemployment and/or inflation.

PS I spent a year out in Orange County, CA working for what amounted to minimum wage. Orange County is one of the most expensive places in America. The only assistance I recieved from the government was about $120 in food stamps every month. I managed to get by. This talk about a "living wage" is bullshit. Some people just need to be more economical with their money.

2/12/2007 12:37:39 PM

The fact that people who work need food stamps is a problem. It amounts to taxpayers paying employers payrolls. Also, if you needed medical care, who would have paid for it?

2/12/2007 12:43:14 PM

Ah, but we are forgetting a key component of the market system: substitution. At first, pizza joints start going out of business due to the higher labor costs; if they could just raise prices they would have already done so, the greedy bastards. As joints go foul they cut back production and compete less vigurously, allowing prices to rise.

As the price of fresh pizza goes up, however, customers take stock of their lives and realize that while $5 is a great price for a fresh medium pizza, $7 is too much, when you can go to food lion and get a larger digiorno pizza for only $6 and throw it in the oven, no need to call anyone and no delivery charge.

So, what we should expect to see is within a few months of the minimum-wage hike is a rash of layoffs as employers cut costs. Then, as prices rise customers cut back on consumption and thus cause another round of layoffs as businesses permanently close.

So, this unempoyment is not transitory, it is permanent. If jobs existed for these workers at $7 an hour they would have already taken them; since they did not we can only draw one conclusion from their actions.

2/12/2007 12:46:33 PM

We could use a few less pizza places around here.

2/12/2007 12:49:22 PM

Quote :

"since they did not we can only draw one conclusion from their actions."

no we cant, because this is not an instant transition we can not conclude that they will not take other jobs

[Edited on February 12, 2007 at 12:50 PM. Reason : .]

2/12/2007 12:50:43 PM

Are you suggesting jobs existed that paid $7 an hour but the workers did not take them because $5.15 was plenty?

Patman, note pizza consumption does not necessarily fall, just the source of pizza changes.

[Edited on February 12, 2007 at 1:02 PM. Reason : .,.]

2/12/2007 1:01:51 PM

The bottom line is that businesses will always try to use our society's safety net to subsidize their payrolls. This subsidy artificially lowers payrolls so the minimum wage is need to artificially raise payrolls, keeping things in check.

2/12/2007 1:08:45 PM

Quote :

"it's not the use of force. It's the market"

Of course it's the use of force. Pretty much everything the government does involves the use (or threat) of force.

What happens if you don't comply with the minimum wage law? There's the force.

2/12/2007 1:28:59 PM

god there are a lot of ugly, unintelligent posts in this thread.

If one of the following belongs to you, tuck your head between your legs and make your way to TRACS in the coming weeks and sign up for any course with an "EC" prefix.

Quote :

"If the cost of giving families a more livable wage is high schooler unemployment, that's a cost we can bear."

Ew, thats like nails on a chalkboard.

Quote :

"It will also ripple up, b/c the older works are going to say, this kid got a raise, where's my raise?"

While we're at it, why don't we just print more money and then everyone will be rich!!! Inflation ftw!!!!

Quote :

"i mean people like this pizza guy will either get more efficient with the workers they have, raise prices to cover the wage increase,or go out of business. i don't really see what the big deal is."

Yeah who gives a fuck if a few people can't get jobs, we have to pay more for goods & services, and a few people lose their business? Inefficiency ftw!!!

Quote :

"if a company cant deal with that then they shouldn't be open. wage increases is like a purging of poorly managed companies."

You're damn right. If a company can't stay afloat while they're being forced to pay more than the equilibrium wage they must really be stupidheads!!!

Quote :

"it's not the use of force. It's the market."

Are you trolling us?

Quote :

"The fact that people who work need food stamps is a problem."

Why? Winners compensate losers. As long as they're doing productive jobs why should they stop doing them? Would you rather they sit on their couch all day and receive 100% of their income from the government instead?

Quote :

"The bottom line is that businesses will always try to use our society's safety net to subsidize their payrolls. This subsidy artificially lowers payrolls so the minimum wage is need to artificially raise payrolls, keeping things in check."

Remind me not to buy bonds ever. I wouldn't be able to sleep at night knowing there are sick puppies out there who openly support inflation.

[Edited on February 12, 2007 at 1:37 PM. Reason : a]

[Edited on February 12, 2007 at 1:38 PM. Reason : a]

2/12/2007 1:37:02 PM

Quote :

"The bottom line is that businesses will always try to use our society's safety net to subsidize their payrolls."

If you actually follow the supply/demand curves, if the Government stopped giving free stuff to poor people wages would actually fall as workers attempt to work more hours (increased supply) to afford services which were previously free or subsidized.

To put it bluntly, wages fall in proportion to the desperation of the workforce. If the workers get free healthcare, direct subsidies, and subsidized housing then their need to earn money is reduced; thus their desire to work long hours is reduced; thus the supply of working hours is reduced; thus, at a given employer demand, wages will rise.

[Edited on February 12, 2007 at 2:05 PM. Reason : .,.]

2/12/2007 1:55:50 PM

^^So you don't like my posts but can't offer anything to refute them?

^ That's ignoring a lot of things, like how people would resort to crime to make ends meet, starve to death, turn out their children, give up, commit suicide, etc. The market is only one aspect in these sorts of issues. You can't ignore our values and needs as a society just because it doesn't result in maximum market efficiency. The market works for us, not the other way around.

[Edited on February 12, 2007 at 2:03 PM. Reason : ?]

2/12/2007 1:57:19 PM

^ My sole point was that you were 100% incorrect. You said subsidies for the poor allowed low wage employers to pay less. This is incorrect, the subsidies make low wage employers pay more.

My personal opinion is that subsidies for the poor, particularly the EITC, are extremely beneficial, cheap, and maintain a flexible labor market. A minimum wage does the exact reverse: it hurts those it is designed to help, is quite costly for the rest of society, and damages the flexibility of the labor market.

2/12/2007 2:08:55 PM

Quote :

"The market works for us, not the other way around"

Not a capitalist market sir. Don't you know we are all just units of work input to the system?

2/12/2007 2:09:09 PM

What is there to refute? You are advocating inflation and saying who cares if businesses close...


Common sense would tell you that you're on the wrong side of the issue here.

2/12/2007 2:17:16 PM

Quote :

"A minimum wage does the exact reverse: it hurts those it is designed to help, is quite costly for the rest of society, and damages the flexibility of the labor market."

It is more dangerous than this. A minimum wage has the unintended consequences stated above while being a politically beneficial cause to champion. Couple those together and it's a recipe for disaster.

[Edited on February 12, 2007 at 2:25 PM. Reason : .]

2/12/2007 2:23:38 PM

look at what it has done for america so far. disaster i tell you.

2/12/2007 2:27:49 PM

I don't know about "disaster", like most forms of regulation, the poison is in the dosage. A $5.15 minimum wage is manageable on a macroeconomic level (on a local level it can still be disasterous, but people can migrate, thus mitigating the damage).

2/12/2007 2:30:40 PM

^^ Thats because for the most part the equilibrium wage is above minumum wage.

However, if the minumum wage ever surpasses the equilibrium wage it could do a lot of damage to our economy.

And like ^^^ he said, it's potentially dangerous because its a political winner.

Some people are stupid and will fall for anything. Hell there are people who are actually considering voting for John Edwards. Its a scary thought but thats why we all have to do the best we can to make sure the right information is out there.

[Edited on February 12, 2007 at 2:34 PM. Reason : a]

2/12/2007 2:34:19 PM

Oh I see, there are two sides to every issue, right and wrong.

Quote :

"You are advocating inflation and saying who cares if businesses close..."

I'm not advocating inflation. While increase in pay can certainly cause some inflation, it will probably be mostly localized to businesses paying min. wage. It will produce far less inflation than things like an expensive war, borrowing money to give tax breaks, and keeping interest rates to low, none of which seems to bother the opposition to min. wage.

I certainly care about businesses closing, but I know that is just circling the wagons. How many businesses were shuttered as a direct result of minimum wages? In addition, if a business is that dependent on gov't subsidizing it's labor, its benefit to the economy is probably minimal.

[Edited on February 12, 2007 at 2:37 PM. Reason : ?]

2/12/2007 2:35:56 PM

^ My sole point is still that you are 100% incorrect. You said subsidies for the poor allowed low wage employers to pay less. This is incorrect, the subsidies force low wage employers pay more.

If you want to drive wages up then you need to reduce employment. You can do this voluntarily by increasing the EITC, thus encouraging workers to seek reduced hours. Or, you can do it directly by getting a percentage of the workforce layed off, such as with the minimum wage. You choose.

In the first scenario all workers are better off. In the second scenario only those lucky enough to keep their jobs are better off, everyone else either goes on welfare, finds illegal work, or dies.

2/12/2007 2:45:53 PM

I understand the whole argument about minimum wage increase and layoffs and whatnot.

But I don't get the whole thing. CEO pay has gone up 450% since 1992. 450 percent! Nevermind some of those astounding golden parachutes and such. Non-Ag production went up 18%, but the workers's wages only went up 1%. The cost of housing exploded, but wages remained about the same so women have to work, which means there is childcare to be paid for. Shoot, in real terms, minimum wage has actually been declining for years. Cost of living went up dramatically, and wages were just like, "Hey, wait for us! Wait up! Don't leave us!" And all that was 40 years ago...so is this how the system is supposed to work? Are people supposed to work more and more for less and less while the CEOs get loaded? That's what it seems like to me.

2/12/2007 2:57:34 PM

Well, I don't think you have it quite right. Civilian Worker Compensation has gone up 3.3% just in 2006, so I find the assertion that it only went up 1% since 1992 very unlikely.

Also, information technology has allowed today's corporations to grow much larger, it only seems logical for their quantity of waste to grow as well (such as lavish CEO Packages).

BUt that does not have anything to do with a minimum wage. If we are right and a higher minimum wage makes the poor poorer, then who cares if CEO salaries have gone up? A higher minimum wage will hurt the poor, so stop it! Do why I and everyone else is advocation: raise taxes on non-poor (which includes CEOs) and use the money to pay a higher EITC.

2/12/2007 3:16:41 PM

CEO salaries have also gone up because of globalization. They get paid because their job is very important and not just anyone can do it.

Also worker wages have been growing slower because of expanding healthcare costs.

Our healthcare system is set up to make doctors and pharmaceuticals rich while the typical worker seeks too much care and therefore everyone suffers with high premiums.

If we reformed healthcare then worker wages would skyrocket.

2/12/2007 9:36:41 PM

exorbitant CEO pay is bad for society. It increases the divide between rich and poor, which no one will argue is a good thing.

2/12/2007 9:42:33 PM