70K Minimum Wage?

[dirk.wert.3]

Guess this isn't really a business question but from economic standpoint shouldn't this mess everything up. I mean why would someone push themselves harder if they're not going to gain from it. Plus shouldn't it also affect the dollar the service they're providing is only worth so much and now whatever they're producing (which isn't either worth much more than they're charging already) is also going to go up in price. ....

 

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[MJ DeMarco]

I wonder how this will turn out?

Guess it isn't turning out so good...

The right leaning view
http://www.foxnews.com/us/2015/08/0...g-rents-house-to-make-ends-meet/?intcmp=hpbt4

The left leaning view
http://www.nytimes.com/2015/08/02/b...klash-against-the-raise-that-roared.html?_r=0

You see, when you legislate or run a company based upon rules designed to mandate equality regardless of performance or value, it might look good on paper and provide nice soundbites for click-bait hungry media outlets, but eventually the shell game falls upon it's own weight once the people find out they are the ones paying for the "equality" with "inequality".

Fighting inequality with inequality is like fighting fire with newspaper.

 

[jazb]

"Now the people who were just clocking in and out were making the same as me,” he told the paper. “It shackles high performers to less motivated team members.”

brilliant

 

[NVious]

http://utopiayouarestandinginit.com/2015/04/12/americas-poor-are-richer-than-europes-nonpoor/

America’s poor are richer than Europe’s nonpoor

http://hotair.com/archives/2015/04/12/your-tax-dollars-at-work-ny-spends-28m-to-create-76-jobs/

Your tax dollars at work: NY spends $28M to create 76 jobs

http://dailysignal.com/2014/06/10/drilling-innovation-forcing-walmart-north-dakota-pay-17-40-hour/

Why One Walmart in North Dakota Is Paying $17.40 an Hour


http://www.businessinsider.com/costco-pays-retail-employees-20-an-hour-2014-10

Why Costco Pays Its Retail Employees $20 An Hour


http://www.huffingtonpost.com/2013/02/01/chipotle-salary_n_2601611.html

Chipotle Salary Can Top $95,000 Annually


http://www.nytimes.com/2010/09/27/world/africa/27safrica.html?_r=3&scp=1&am

*Wage Laws Squeeze South Africa’s Poor*

http://www.forbes.com/sites/carries...cally-racist-motivations-behind-minimum-wage/

*On The Historically Racist Motivations Behind Minimum Wage*


http://www.king5.com/story/news/loc...ced-vacations-minimum-wage-increase/70820788/

Employees lose vacation time amid minimum wage increase

Companies react as Seattle's higher minimum wage takes effect

http://www.komonews.com/news/local/Higher-minimum-wage-takes-effect-in-Seattle-298317351.html

Many other smaller businesses have struggled with how to pay for the raises, with some saying there may be layoffs and others looking at consolidating locations.

But there may be another issue that's yet to become clear - and that is the changing applicant pool. Higher wages may attract more skilled workers and higher education levels - qualifications that could make it very tough for others seeking summer jobs or part-time work.

"We're mostly concerned with how this will affect first-time workers or workers re-entering the work force," says Jasmine Donovan, Dick's Hamburgers vice president. "Those with low skills, or low education - those are the ones that are going to have a hard time getting a job, and they already have a hard time in this economy."

A University of Washington study estimated at least 90,000 people earn less than $15 an hour in Seattle.Some business owners, including those who already pay their employees $15 an hour or more, have said the new wage will be paid by consumers in higher restaurant and retail costs.
Seattle venture capitalist Nick Hanauer has been pushing the Washington state Legislature to pass a statewide $12 minimum wage and doesn't believe Seattle's $15 law goes far enough.

He has threatened to pay for a ballot initiative to raise the state minimum to $16 an hour if the Legislature doesn't take action this year.

Restaurants change pricing to adapt to new Seattle minimum wage


"We can either reduce quality, we can reduce the number of hours that people work and risk losing good people, or we can raise prices," Linker added. "For us, we didn't like any of those options. We're participating in a way we feel is a genuine."

Receipts from the South Lake Union location of Serious Pie and Biscuit showed the surcharge on Thursday. A $5 coffee, for example, had an additional $.08 fee tacked onto it.A survey of 500 members found that restaurants would likely decrease hours, increase prices, or layoff staff if the minimum wage went to $15 an hour, Davenport added.

"I think over time the increase in the minimum wage will increase the money in workers' pockets that they'll spend at these stores," countered Jess Spear, organizing director of 15 Now, which led the push for the change in Seattle's minimum wage. "There's no need for the businesses to add a surcharge. There's no need to pass that off to customers."
"Our hope is that they're going to see it and they're going to celebrate," he said. "We're all in this together. We want the best for everyone."

"Let's make Seattle the best city in the nation," he added, "and celebrate the quality of life "

http://www.komonews.com/news/local/...hike-prices-to-a-298542821.html?tab=video&c=y

http://www.nationalreview.com/artic...r-whos-not-sure-he-can-survive-san-franciscos

I’m hearing from a lot of customers, ‘I voted for that, and I didn’t realize it would affect you.’”
But that may not last. Hibbs says that the $15-an-hour minimum wage will require a staggering $80,000 in extra revenue annually. “I was appalled!” he says. “My jaw dropped. Eighty-thousand a year! I didn’t know that. I thought we were talking a small amount of money, something I could absorb.” Hibbs is not the first person to encounter this problem. On February 1, San Francisco’s renowned science-fiction bookstore Borderlands Books published the following on its website:

[size=+3] Although all of us at Borderlands support the concept of a living wage in princip[le] and we believe that it’s possible that the new law will be good for San Francisco — Borderlands Books as it exists is not a financially viable business if subject to that minimum wage. Consequently we will be closing our doors no later than March 31st.[/size]

Nobody ever considers the blowback from these idealist notions:
Some people want to work and do certain jobs, but for less
Higher wages/=more employment, if anything it gives employers incentive to trim the fat because it puts a premium on workers
Someone earning something is better than them earning nothing, the experience can lead them to more

All it does is keep unskilled workers and people who would want to get at least some sort of job out of the market

Racist origin of the minimum wage, what it does:

 

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[theag]

@NVious

 

[theag]

The right leaning view
http://www.foxnews.com/us/2015/08/0...g-rents-house-to-make-ends-meet/?intcmp=hpbt4

Making matters worse for Price is a lawsuit his older brother filed two weeks after the pay hike announcement.

Lucas Price, who owns 30 percent of the company, accuses his brother of taking millions of dollars out of the company while denying him the benefits of his minority ownership.

The lawsuit has forced Gravity to pay mounting legal fees at a time when the new salary scale is being eaten up by profits.

“We don’t have a margin of error to pay those legal fees,” Dan Price said.

Hehe

 

[DayIFly]

70k is way too much, there is no question about it! But more generally speaking and in realistic proportions, I don't think it's as clear-cut as it seems to be.

This is misleading, you need to keep your facts straight. Here is some info, so you can update your compilation of evidence.

The rate of unionization in the Nordic EU countries and Austria is very high. The minimum wage is secured through collective agreements, which apply almost comprehensively. For example, 11.4% of workers in the United States belonged to a union in 2010, whereas it was 70% in Finland.

The minimum wage in Germany is generally 8.50€. In Italy, actually, the right of adequate or fair pay is codified into the constitution.

In Switzerland, the population voted against a minimum wage in 2014. The proposition was 18€(!). So this was a high-level proposition because the swiss wages are generally very high.

As a side note, Iceland puts its corrupt bankers in jail rather than bailing them out, so you can't compare them to the US system at all.

There is no such thing as a "free market fairy," which regulates supply and demand with its magical benevolent powers. It's not as simple as: There are supplies and demands roaming through the country independently from each other, then they meet and the fairy makes "poof" and everything is efficient.

The free market is amoral and there are way to much externalities at work here. Especially in regards to this diagram which has NONE, not a single "real world" complicacy. Demand is created by anonymous marketing agents in their back rooms and the rest follows from this.

Little intro:
https://mises.org/library/myth-efficiency (I only skimmed it)
and

 

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[redsfaithful]

Politics will ruin this message board.

This is the takeaway for me:

About 70 percent of the businesses that occupy this nearly century-old marketplace use Gravity to process their credit card payments, Mr. Price said. He started courting customers there more than 11 years ago, while still attending Seattle Pacific University, a small Christian college. He would go from stall to stall, shaking hands, scribbling down phone numbers. Early on, he signed up Pure Food Fish. The shop was a backdrop in the film “Sleepless in Seattle,” but more important, it was run by the 86-year-old Solly Amon, who inherited the pocket store from his father and is lovingly known as the “cod father.” When other merchants heard Mr. Amon trusted Dan, they did too.
“They give us tremendous service,” Mr. Amon said. He remembered an incident years ago when Mr. Price had a new credit card machine up and running within three hours after his old one died.

In addition to providing the devices and software that merchants use when a customer whips out a credit card, Gravity makes sure the money shifts securely and quickly among buyer, bank and business. In an industry dominated by global banking giants and mammoth processors, the company last year processed $6.5 billion in sales for 12,000 clients, most of them small and medium-size businesses.

Was Mr. Amon bothered by Mr. Price’s new payroll policy? “He takes care of his business, and I’ll take care of my business,” he declared.

I respect the hustle, and I'm not surprised he built a company that profited $2.2 million last year. And, obviously, the story for the company is ongoing, so if your takeaway has to do with the salaries the man pays I think it's mostly politically motivated. I'm interested to see how it plays out.

I come here to read about business, if I wanted right wing talking points like that @NVious post (or left wing, for that matter) there are plenty of other places to visit.

This is a pretty good takeaway too ...

Dan Price, the chief executive of Gravity Payments, estimated his current net worth at about $3 million. Credit Matthew Ryan Williams for The New York Times

 

[redsfaithful]

And in case someone tries to peg me politically, I think this guy is probably misguided, not because of politics, but because of motivation. Motivation is an odd thing - some people can't be motivated at all, some people are happy once they get to a certain salary and start to become motivated by perks and things like vacation time, some people are motivated by recognition and accomplishment. I think uniformity misses some nuance in how people differ.

I do think the minimum wage should be increased - the industries most affected externalize their employee costs on to the rest of us, e.g. Wal-Mart employees on food stamps.

 

[DanC]

I wonder how this will turn out?

Early days, but needing to rent out his house to make more money, losing some customers, losing a few employees and a lawsuit not as rosy as we would hope.

http://www.washingtontimes.com/news/2015/aug/1/dan-price-seattle-ceo-who-set-company-minimum-wage/

 

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[Bila]

70k is way too much, there is no question about it! But more generally speaking and in realistic proportions, I don't think it's as clear-cut as it seems to be.



This is misleading, you need to keep your facts straight. Here is some info, so you can update your compilation of evidence.

The rate of unionization in the Nordic EU countries and Austria is very high. The minimum wage is secured through collective agreements, which apply almost comprehensively. For example, 11.4% of workers in the United States belonged to a union in 2010, whereas it was 70% in Finland.

The minimum wage in Germany is generally 8.50€. In Italy, actually, the right of adequate or fair pay is codified into the constitution.

In Switzerland, the population voted against a minimum wage in 2014. The proposition was 18€(!). So this was a high-level proposition because the swiss wages are generally very high.

As a side note, Iceland puts its corrupt bankers in jail rather than bailing them out, so you can't compare them to the US system at all.



There is no such thing as a "free market fairy," which regulates supply and demand with its magical benevolent powers. It's not as simple as: There are supplies and demands roaming through the country independently from each other, then they meet and the fairy makes "poof" and everything is efficient.

The free market is amoral and there are way to much externalities at work here. Especially in regards to this diagram which has NONE, not a single "real world" complicacy. Demand is created by anonymous marketing agents in their back rooms and the rest follows from this.

Little intro:
https://mises.org/library/myth-efficiency (I only skimmed it)
and

Chomsky on this forum !! Could not believe my eyes

 

[Testament]

I think it's admirable that he lowered his salary by so much and started renting out his house. Obviously he's got a commitment to his ideals. However communism/socialism just doesn't work in the real world.

 

[redsfaithful]

Company is growing fast: http://www.inc.com/magazine/201511/...ce=slate&utm_medium=referral&utm_term=partner

Owner signs large book deal: http://www.inc.com/christine-lagorio/dan-price-force-of-gravity-book.html

 

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[Testament]

Company is growing fast: http://www.inc.com/magazine/201511/...ce=slate&utm_medium=referral&utm_term=partner

Owner signs large book deal: http://www.inc.com/christine-lagorio/dan-price-force-of-gravity-book.html

The article isn’t very clear, but from what I can tell his company is now making money primarily because of all the free positive (left-wing) publicity and buzz he’s getting, not because he’s paying his employees more money. (Though I could be wrong.) The guy has pretty much become a celebrity now.

 

[iAmTrade]

The government should get the hell out of the- free market/capitalistic markets.

Haven't these politicians and senators or presidents learned a thing or two in economics class? Its a basic and easy concept!!

--
As for the CEO... he was making 1Million a year... now he makes 70k...JUST so he can pay his employees more?

Hmm If I was making 1Million, I think I earned it. And then publicly displaying my lower wage, I would not be able to publicly, safely increase it again = I'm doing 1 Million$ worth of output and getting 70k for it..... I quit.

The end.

A motivator is $. You put a cap to how much I can make and I'm out. He's a smart guy in some senses, but he's also an imbecile in another.

Just my thoughts.

 

[hellolin]

The government should get the hell out of the- free market/capitalistic markets.

Haven't these politicians and senators or presidents learned a thing or two in economics class? Its a basic and easy concept!!

--
As for the CEO... he was making 1Million a year... now he makes 70k...JUST so he can pay his employees more?

Hmm If I was making 1Million, I think I earned it. And then publicly displaying my lower wage, I would not be able to publicly, safely increase it again = I'm doing 1 Million$ worth of output and getting 70k for it..... I quit.

The end.

A motivator is $. You put a cap to how much I can make and I'm out. He's a smart guy in some senses, but he's also an imbecile in another.

Just my thoughts.

His brother is suing him now and apparently he really did to gain publicity, some people works for money, some people works hard for the 15 mins of fame I guess, if he is really that obsessed about publicity.

 

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[Lavi Fletcher]

Well he's gotta do what he's gotta do.

Have to feel sorry for the guy, he's been building Gravity Payments since 2004 with no real market share taken from paypal, then stripe comes 7 years later and dominates the space and IPO's within 4 years of establishment unlucks ducks

 

[Bekit]

Interesting interview released today by Valuetainment with the guy who made this decision and how it turned out.

I wonder how this will turn out?

Seattle Business Owner Raises His Workers' Minimum Pay to $70,000

View: https://www.youtube.com/watch?v=X7XZlFnqnBU&t=28s


A few of the things he mentioned...
- They went from 2 babies born on the whole team to more than 60 babies born in the last 5 years, so they had a baby boom of more than 10x the previous rate
- People who were first time homebuyers went up 10x.
- 70% of people in the company paid down debt.
- They between doubled and tripled employee savings rate with 401k program

 

[MJ DeMarco]

I wonder how this will turn out?

Seattle Business Owner Raises His Workers' Minimum Pay to $70,000

Looks like the experiment is still ongoing, but the CEO is in a world of hurt. Not sure why these "virtue signaling" types are always (allegedly) hiding a closet full of skeletons.

Dan Price, CEO who cut his pay so workers earned $70,000, quits amid legal woes

Chief executive who slashed his own pay to cover the cost of employee raises is stepping down to fight "false accusations."

www.cbsnews.com

 

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[EmotionEngine]

Here is one from my local news as well:

View: https://www.youtube.com/watch?v=uZL8PHUEkQQ