It seems like almost everyday, there are new concerns and warnings about the coming reality of replacing workers with Artificial Intelligence (AI) coupled with robotics.
Now, the latest news comes in a joint report from the consulting firm Deloitte and experts at Oxford University that suggests that 35% of the workforce will be replaced in just 20 years. This is a less aggressive prediction than last year's estimate of a 30% replacement -- including white collar jobs -- by 2025.
But, supporting those predictions are real life stories that prove we are -- right now -- on the path of high unemployment due to robotics. In China, the electronics contractor Foxconn Technology Group just announced the replacement of 60,000 factory workers with robots. At the same time, the former CEO of McDonald's, Ed Rensi, pointed to this year's National Restaurant Show and the number of working robots on display as a forewarning of the future of the restaurant industry; especially fast food. As he noted, it is cheaper to buy a $35,000 robotic arm to bag fries than to pay someone $15/hour to do the same. By the way, the annualized salary at $15/hour is $31,000; meaning a ROI (Return on Investment) in just a little over a year. Even less, if the cost of providing health insurance is added in.
This is just further proof that those pushing a $15 minimum wage are, in fact, pushing the minimum wage worker right off a cliff. And, once again, the unions are the ones doing the pushing. In fact, unions have done more to decrease their own membership in the last 50 years; down from 35% of the workforce in 1964 to just 10% today. Fast food workers should make note of that fact when union workers are picketing outside their workplace for a $15 minimum wage.
References:
Foxconn replaces '60,000 factory workers with robots': http://www.bbc.com/news/technology-36376966
Building robot McDonald's staff 'cheaper' than hiring workers on minimum wage: http://www.mirror.co.uk/news/weird-news/building-robot-mcdonalds-staff-cheaper-8044106
Experts predict robots will take over 30% of our jobs by 2025 — and white-collar jobs aren't immune: http://www.businessinsider.com/experts-predict-that-one-third-of-jobs-will-be-replaced-by-robots-2015-5
Union, not workers, behind push for $15 wage: http://www.heraldnet.com/article/20160417/OPINION03/160419427
The incredible decline of American unions, in one animated map: https://www.washingtonpost.com/news/wonk/wp/2015/02/24/the-incredible-decline-of-american-unions-in-one-animated-map/
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Showing posts with label $15. Show all posts
Showing posts with label $15. Show all posts
Friday, June 10, 2016
Wednesday, April 27, 2016
A $15 Minimum Wage? Try $4.25 a Day in Mexico!
I think a lot of people in this country take for granted how fortunate we are to live in this country.
While entry level workers in this country are marching in the streets for a near doubling of the federal minimum wage to $15 an hour, workers in Mexico just got a 4.2% raise in their minimum wage to 73.04 pesos a day as of January 1st. On that day, that was the equivalent of just $4.25 a day in U.S. dollars.
Mexico is a poor country with the World Bank estimating that 53.2% of the country living in poverty. Worse yet, the World Bank estimated that, in 2012, 10.3% of that country's population lived on $3.10 a day or less. Think about that when you're spending $5 at Starbucks for your daily venti frappucino.
The point here being is twofold.
First, these numbers explain why most of those coming across our southern border are Mexicans. They aren't so much wanting to come here but, instead, more interested in escaping severe poverty in their own country.
Secondly, I hate it when a company like Ford or Nabisco or Carrier is forced to move manufacturing to Mexico in order to be more competitive on costs with products made in other countries. But, when they do, it is really a kind of humanitarian aid. Today, nearly 1 million Mexicans are building U.S. and European cars in that country with the average hourly wage of 90 pesos. About $5.64 an hour in U.S. dollars. And for those workers, the need to come to this country is abated.
So, the bottom line is that we could do ourselves a favor by, somehow, instituting something akin to the post-World War II Marshall Plan to build that country's economy, reduce poverty, and help Mexicans earn a fair wage. In doing so, we could slow illegal immigration into this country.
References:
Mexico Approves an Increase to the Daily Minimum Wage for 2016: https://www.littler.com/publication-press/publication/mexico-approves-increase-daily-minimum-wage-2016
Mexico Data: http://data.worldbank.org/country/mexico
Poverty Headcount by Country: http://data.worldbank.org/indicator/SI.POV.2DAY
US, Mexican and Canadian autoworkers face common fight: https://www.wsws.org/en/articles/2015/08/12/mexi-a12.html
While entry level workers in this country are marching in the streets for a near doubling of the federal minimum wage to $15 an hour, workers in Mexico just got a 4.2% raise in their minimum wage to 73.04 pesos a day as of January 1st. On that day, that was the equivalent of just $4.25 a day in U.S. dollars.
Mexico is a poor country with the World Bank estimating that 53.2% of the country living in poverty. Worse yet, the World Bank estimated that, in 2012, 10.3% of that country's population lived on $3.10 a day or less. Think about that when you're spending $5 at Starbucks for your daily venti frappucino.
The point here being is twofold.
First, these numbers explain why most of those coming across our southern border are Mexicans. They aren't so much wanting to come here but, instead, more interested in escaping severe poverty in their own country.
Secondly, I hate it when a company like Ford or Nabisco or Carrier is forced to move manufacturing to Mexico in order to be more competitive on costs with products made in other countries. But, when they do, it is really a kind of humanitarian aid. Today, nearly 1 million Mexicans are building U.S. and European cars in that country with the average hourly wage of 90 pesos. About $5.64 an hour in U.S. dollars. And for those workers, the need to come to this country is abated.
So, the bottom line is that we could do ourselves a favor by, somehow, instituting something akin to the post-World War II Marshall Plan to build that country's economy, reduce poverty, and help Mexicans earn a fair wage. In doing so, we could slow illegal immigration into this country.
References:
Mexico Approves an Increase to the Daily Minimum Wage for 2016: https://www.littler.com/publication-press/publication/mexico-approves-increase-daily-minimum-wage-2016
Mexico Data: http://data.worldbank.org/country/mexico
Poverty Headcount by Country: http://data.worldbank.org/indicator/SI.POV.2DAY
US, Mexican and Canadian autoworkers face common fight: https://www.wsws.org/en/articles/2015/08/12/mexi-a12.html
Wednesday, April 13, 2016
New York & California Just Killed Entrepreneurship
In just 16 years, the minimum wage in the State of California will see a rise of 222% from $6.75 in 2006 to $15 in 2022. That is an average annual increase of nearly 14%. In New York, the increase to $15 from, again, $6.75 in 2006 is more complicated as follows:
The point is that many people will find themselves less able to afford products and services that are heavily dependent on low wage workers; such as fast food businesses, retail, hospitality, and leisure. The same goes for this nation's 55 million seniors, who, at best have seen increases of just 1% a year in their Social Security checks. Additionally, millions more, such as waiters and waitresses, won't be eligible for minimum wage because they earn tips. And, so too, for the three quarters of 47 million Americans in poverty who aren't even working.
More importantly, the $15 wage will accelerate the death of entrepreneurship and its ability to create jobs. It will be much more expensive to start new businesses that generally depend heavily on entry level employees. Entrepreneurship has already been in decline for decades, but now it will become a much higher risk proposition. Even before instituting this excessive wage, 1-in-4 startup businesses failed in the first year. 50% will be kicked to the curb in just 4 years, and operational costs are one of the 4 main reasons for failure.
I hope I'm wrong, but I think the $15 minimum wage will be a real job creation killer. And, in fact, a job killer for businesses who must raise prices, and in turn, lose customers who can't afford those price hikes. Also, the $15 minimum wage will bring in automation to replace the humans making that wage. Already, you can rent a robo-security guard that can hear, smell, and has 360 degree night vision for just $6.25 an hour. So, if you can already automate a security guard, it only seems logical that other lesser tasks, such as flipping burgers, will follow suit.
References:
Governor Cuomo Signs $15 Minimum Wage Plan and 12 Week Paid Family Leave Policy into Law: https://www.governor.ny.gov/news/governor-cuomo-signs-15-minimum-wage-plan-and-12-week-paid-family-leave-policy-law
California, New York enact $15 minimum wages: http://www.foxnews.com/politics/2016/04/05/california-new-york-enact-15-minimum-wages.html
California Minimum Wage 2006: https://www.google.com/search?q=california+minimum+wage+in+2007&ie=utf-8&oe=utf-8
New York Minimum Wage 2006: https://www.google.com/search?q=minimum+wage+in+new+york+in+2006&ie=utf-8&oe=utf-8
Minimum Wage - United States Department of Labor: Questions and Answers About the Minimum Wage: http://www.dol.gov/whd/minwage/q-a.htm
The Mysterious Death of Entrepreneurship in America: http://www.theatlantic.com/business/archive/2014/05/entrepreneurship-in-america-is-dying-wait-what-does-that-actually-mean/362097/
The Slow Death of American Entrepreneurship: http://fivethirtyeight.com/features/the-slow-death-of-american-entrepreneurship/
Startup Business Failure Rate By Industry: http://www.statisticbrain.com/startup-failure-by-industry/
The Four Major Reasons for New Business Failure: http://smallbusiness.chron.com/four-major-reasons-new-business-failure-51924.html
Rent A Robot Security Guard for $6.25 an Hour: http://www.psfk.com/2014/12/rent-a-silicon-valley-security-bot-for-6-25-per-hour.html
- For workers in New York City employed by large businesses (those with at least 11 employees), the minimum wage would rise to $11 at the end of 2016, then another $2 each year, reaching $15 on 12/31/2018.
- For workers in New York City employed by small businesses (those with 10 employees or fewer), the minimum wage would rise to $10.50 by the end of 2016, then another $1.50 each year, reaching $15 on 12/31/2019.
- For workers in Nassau, Suffolk and Westchester Counties, the minimum wage would increase to $10 at the end of 2016, then $1 each year, reaching $15 on 12/31/2021.
- For workers in the rest of the state, the minimum wage would increase to $9.70 at the end of 2016, then another .70 each year, until reaching $12.50 on 12/31/2020 – then continue to increase to $15 on an indexed schedule to be set by the Director of the Division of Budget in consultation with the Department of Labor.
The point is that many people will find themselves less able to afford products and services that are heavily dependent on low wage workers; such as fast food businesses, retail, hospitality, and leisure. The same goes for this nation's 55 million seniors, who, at best have seen increases of just 1% a year in their Social Security checks. Additionally, millions more, such as waiters and waitresses, won't be eligible for minimum wage because they earn tips. And, so too, for the three quarters of 47 million Americans in poverty who aren't even working.
More importantly, the $15 wage will accelerate the death of entrepreneurship and its ability to create jobs. It will be much more expensive to start new businesses that generally depend heavily on entry level employees. Entrepreneurship has already been in decline for decades, but now it will become a much higher risk proposition. Even before instituting this excessive wage, 1-in-4 startup businesses failed in the first year. 50% will be kicked to the curb in just 4 years, and operational costs are one of the 4 main reasons for failure.
I hope I'm wrong, but I think the $15 minimum wage will be a real job creation killer. And, in fact, a job killer for businesses who must raise prices, and in turn, lose customers who can't afford those price hikes. Also, the $15 minimum wage will bring in automation to replace the humans making that wage. Already, you can rent a robo-security guard that can hear, smell, and has 360 degree night vision for just $6.25 an hour. So, if you can already automate a security guard, it only seems logical that other lesser tasks, such as flipping burgers, will follow suit.
References:
Governor Cuomo Signs $15 Minimum Wage Plan and 12 Week Paid Family Leave Policy into Law: https://www.governor.ny.gov/news/governor-cuomo-signs-15-minimum-wage-plan-and-12-week-paid-family-leave-policy-law
California, New York enact $15 minimum wages: http://www.foxnews.com/politics/2016/04/05/california-new-york-enact-15-minimum-wages.html
California Minimum Wage 2006: https://www.google.com/search?q=california+minimum+wage+in+2007&ie=utf-8&oe=utf-8
New York Minimum Wage 2006: https://www.google.com/search?q=minimum+wage+in+new+york+in+2006&ie=utf-8&oe=utf-8
Minimum Wage - United States Department of Labor: Questions and Answers About the Minimum Wage: http://www.dol.gov/whd/minwage/q-a.htm
The Mysterious Death of Entrepreneurship in America: http://www.theatlantic.com/business/archive/2014/05/entrepreneurship-in-america-is-dying-wait-what-does-that-actually-mean/362097/
The Slow Death of American Entrepreneurship: http://fivethirtyeight.com/features/the-slow-death-of-american-entrepreneurship/
Startup Business Failure Rate By Industry: http://www.statisticbrain.com/startup-failure-by-industry/
The Four Major Reasons for New Business Failure: http://smallbusiness.chron.com/four-major-reasons-new-business-failure-51924.html
Rent A Robot Security Guard for $6.25 an Hour: http://www.psfk.com/2014/12/rent-a-silicon-valley-security-bot-for-6-25-per-hour.html
Thursday, March 31, 2016
Were Voter's Denied A Vote On The Minimum Wage In California?
Before it was announced that Governor Brown and the California State legislators had come to an agreement with labor unions to raise the minimum wage to $15 an hour by 2022, there was already a ballot initiative set for this Fall to raise the wage to $15 by 2021. So this begs the question; is delaying the $15 wage by one year a victory for businesses? Not hardly.
In my opinion, the agreement between the labor unions and California's liberal Democrat Governor and its liberal state legislators, only makes sure that the ballot initiative is not defeated by the voters. Thus insuring that the labor union's wish for the highest minimum wage in the nation, and in the world would be guaranteed.
But, why would the labor unions even care about the minimum wage since no union pay scale pays anything near it? The simple fact is that most union contracts and their embedded pay scales in those contracts are linked to the minimum wage as either some percentage over it, or by hiking union wages equal to the amount of the increase.
So the bottom line is that the Democrats want to maintain their symbiotic relationship with the unions by insuring that they too, get a wage hike when the minimum wage is increased. In return, Democrats get votes from the union membership; money for their campaigns; and get-out-the-vote activities that only benefit Democrats. It has nothing to do with what they call a living wage. As a result there will be lost jobs through automation; more unemployment; higher costs that affect those, like seniors and others not subject to minimum wage legislation, that won't see their incomes rise; and fewer new businesses due to higher startup costs.
References:
California "Fair Wage Act of 2016" $15 Minimum Wage Initiative (2016): https://ballotpedia.org/California_%22Fair_Wage_Act_of_2016%22_$15_Minimum_Wage_Initiative_%282016%29
California raises minimum wage to $15 an hour: http://www.usatoday.com/story/money/2016/03/28/california-raises-minimum-wage-15-hour/82348622/
Why Unions Want a Higher Minimum Wage - Wall Street Journal: https://www.google.com/search?q=Why+Unions+Want+a+Higher+Minimum+Wage+-+Wall+Street+...&ie=utf-8&oe=utf-8
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In my opinion, the agreement between the labor unions and California's liberal Democrat Governor and its liberal state legislators, only makes sure that the ballot initiative is not defeated by the voters. Thus insuring that the labor union's wish for the highest minimum wage in the nation, and in the world would be guaranteed.
But, why would the labor unions even care about the minimum wage since no union pay scale pays anything near it? The simple fact is that most union contracts and their embedded pay scales in those contracts are linked to the minimum wage as either some percentage over it, or by hiking union wages equal to the amount of the increase.
So the bottom line is that the Democrats want to maintain their symbiotic relationship with the unions by insuring that they too, get a wage hike when the minimum wage is increased. In return, Democrats get votes from the union membership; money for their campaigns; and get-out-the-vote activities that only benefit Democrats. It has nothing to do with what they call a living wage. As a result there will be lost jobs through automation; more unemployment; higher costs that affect those, like seniors and others not subject to minimum wage legislation, that won't see their incomes rise; and fewer new businesses due to higher startup costs.
References:
California "Fair Wage Act of 2016" $15 Minimum Wage Initiative (2016): https://ballotpedia.org/California_%22Fair_Wage_Act_of_2016%22_$15_Minimum_Wage_Initiative_%282016%29
California raises minimum wage to $15 an hour: http://www.usatoday.com/story/money/2016/03/28/california-raises-minimum-wage-15-hour/82348622/
Why Unions Want a Higher Minimum Wage - Wall Street Journal: https://www.google.com/search?q=Why+Unions+Want+a+Higher+Minimum+Wage+-+Wall+Street+...&ie=utf-8&oe=utf-8
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Tuesday, August 18, 2015
Can You Afford A Big Mac Meal Date on a $31,000 a Year Salary?
The Los Angeles City Council recently voted in a $15 an hour minimum wage by 2020. Therefore, the lowest paid McDonald's worker will be paid that wage; but, because nearly all McDonald's employees make less than $15 an hour, all workers should, and probably will, get a similar increase.
Back in 2013 and based on 2012 prices, it was determined that the average Big Mac would jump $1.28 if the minimum wage increased from $7.25 to $15. This was based on the average price of a Bic Mac at $4.20. Mathematically, this means a 30.4% increase in price. It also means a roughly 4% increase for every dollar of minimum wage increase, and this is before any other inflationary costs for food, utilities, etc. are factored in.
Of course,nobody just buys a Big Mac. They usually buy a "Meal" which includes the burger, fries, and Coke. Today, with a $9 minimum wage in California, the average "Meal" costs $7.67. Now, if I'm a single guy and the minimum wage is now $15 or around $31,000 a year, my after tax income will be about $12/hour. Total taxes being roughly 20%. With the increase to $15, that once $7.67 "Meal" should be about 24% higher; assuming an increase of $6 from the current $9. Thus, to treat myself and a friend, it will now cost $20.73; assuming a 9% sales tax in Los Angeles.
Therefore, I would have to work almost 2 hours in order to pay for this simple date. It's no wonder their losing business. No one can afford to eat there anymore. Especially millennials with their incomes around $37,600. A $15 minimum wage just may be the death knell for McDonald's and the rest of the fast food industry. A primary source of minimum wage jobs in this country.
References:
Los Angeles is the largest city in America with a $15 minimum wage: http://money.cnn.com/2015/06/14/news/economy/los-angeles-minimum-wage-15-garcetti/
McDonald's Hourly Wages By Job Type: http://www.glassdoor.com/Hourly-Pay/McDonald-s-Hourly-Pay-E432.htm
Taxes on a Worker Making $30,000 in California: http://www.taxformcalculator.com/tax/30000.html
2012 Big Mac Price: http://big-mac-index.findthedata.com/
About that68-Cent $1.28 Big Mac Price Increase: https://www.minimumwage.com/2013/07/about-that-68-cent-big-mac-price-increase/
McDonald's Fast Food Prices: http://www.fastfoodmenuprices.com/mcdonalds-prices/
Average millennial income: https://www.google.com/search?q=average+millenial+income&ie=utf-8&oe=utf-8
Back in 2013 and based on 2012 prices, it was determined that the average Big Mac would jump $1.28 if the minimum wage increased from $7.25 to $15. This was based on the average price of a Bic Mac at $4.20. Mathematically, this means a 30.4% increase in price. It also means a roughly 4% increase for every dollar of minimum wage increase, and this is before any other inflationary costs for food, utilities, etc. are factored in.
Of course,nobody just buys a Big Mac. They usually buy a "Meal" which includes the burger, fries, and Coke. Today, with a $9 minimum wage in California, the average "Meal" costs $7.67. Now, if I'm a single guy and the minimum wage is now $15 or around $31,000 a year, my after tax income will be about $12/hour. Total taxes being roughly 20%. With the increase to $15, that once $7.67 "Meal" should be about 24% higher; assuming an increase of $6 from the current $9. Thus, to treat myself and a friend, it will now cost $20.73; assuming a 9% sales tax in Los Angeles.
Therefore, I would have to work almost 2 hours in order to pay for this simple date. It's no wonder their losing business. No one can afford to eat there anymore. Especially millennials with their incomes around $37,600. A $15 minimum wage just may be the death knell for McDonald's and the rest of the fast food industry. A primary source of minimum wage jobs in this country.
References:
Los Angeles is the largest city in America with a $15 minimum wage: http://money.cnn.com/2015/06/14/news/economy/los-angeles-minimum-wage-15-garcetti/
McDonald's Hourly Wages By Job Type: http://www.glassdoor.com/Hourly-Pay/McDonald-s-Hourly-Pay-E432.htm
Taxes on a Worker Making $30,000 in California: http://www.taxformcalculator.com/tax/30000.html
2012 Big Mac Price: http://big-mac-index.findthedata.com/
About that
McDonald's Fast Food Prices: http://www.fastfoodmenuprices.com/mcdonalds-prices/
Average millennial income: https://www.google.com/search?q=average+millenial+income&ie=utf-8&oe=utf-8
Monday, July 27, 2015
Is New York Trying To Kill Fast Food Businesses?
It's no secret that many in the U.S. -- especially those in the liberal political class -- blame fast food restaurants for America's obesity problem.
It's no wonder then, that New York State's proposed minimum wage increase to $15 will only be applied to fast food operations throughout the State. The primary argument for doing so won't be about obesity (wink...wink!), but instead, because McDonald's and Burger King underpay their employees. New York must pay out millions of dollars each year in various forms of welfare for these workers. Of course, the State doesn't mind that other minimum wage workers like busboys, dishwashers, hotel workers, etc. will continue to be supported with welfare payouts.
So what's the impact on, let's say, McDonald's food prices once the wage hits $15:
Simply, going to McDonald's or any other fast food store may still be fast but no longer cheap. For some people, the cost to eat there may just be too steep; especially since traditional sit-down restaurants won't be hit by the minimum wage increase. Thus, expect business declines and business closures as people relegate eating fast food to being a luxury. Make no mistake, this imposed wage is like any tax on liquor and cigarettes that is used as a means to deter the buying of those products. To me, that looks like the real intent here.
Lastly, as far as the obesity issue goes, it's not true. Seven years ago the City of Los Angeles banned any new fast food restaurants in South Los Angeles as a way of curbing the growing obesity problem in that part of the city. Obesity wasn't abated. Instead, it got worse; going from 63% to 75%. Also, regarding fast food, poverty, and welfare; this country has 45.3 million people in poverty and on welfare. The fact that there are only 3.7 million fast food workers hardly proves that the industry is placing some massive burden on the country and the State of New York; especially, since 61% of all fast food workers are part-timers working before and after school or as a means to earn some extra money.
References:
New York Plans $15-an-Hour Minimum Wage for Fast Food Workers: http://www.nytimes.com/2015/07/23/nyregion/new-york-minimum-wage-fast-food-workers.html
McDonald's Menu Pricing for New York: http://www.fastfoodmenuprices.com/mcdonalds-prices/
McDonalds Salaries in New York, City: https://www.google.com/search?q=McDonald%27s+Salaries+in+New+York+City%2C+NY+|+Glassdoor&ie=utf-8&oe=utf-8
Real Earnings: http://www.bls.gov/news.release/pdf/realer.pdf
Cost of McDonald's Labor: https://www.minimumwage.com/2013/07/about-that-68-cent-big-mac-price-increase/
Ban on fast-food eateries in South L.A. hasn't cut obesity: http://www.latimes.com/local/california/la-me-food-study-20150319-story.html
In 2013, the official poverty rate was 14.5 percent, down from 15.0 percent in 2012. This was the first decrease in the poverty rate since 2006. In 2013, there were 45.3 million people in poverty: http://www.census.gov/hhes/www/poverty/about/overview/
http://www.statista.com/statistics/196630/number-of-employees-in-us-fast-food-restaurants-since-2002/Employees in the U.S. fast food restaurant industry:
Characteristics of Minimum Wage Workers, 2014:http://www.bls.gov/opub/reports/cps/characteristics-of-minimum-wage-workers-2014.pdf
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It's no wonder then, that New York State's proposed minimum wage increase to $15 will only be applied to fast food operations throughout the State. The primary argument for doing so won't be about obesity (wink...wink!), but instead, because McDonald's and Burger King underpay their employees. New York must pay out millions of dollars each year in various forms of welfare for these workers. Of course, the State doesn't mind that other minimum wage workers like busboys, dishwashers, hotel workers, etc. will continue to be supported with welfare payouts.
So what's the impact on, let's say, McDonald's food prices once the wage hits $15:
- A $15 minimum wage is a 71% increase from New York's current $8.75.
- That $15 wage is higher than every current McDonald's worker's pay except for Shift Manager and Store Manager; both salaried. Thus, every worker, including the salaried, will also have to see a proportionally-based 71% increase. Therefore, we can assume that whatever a McDonald's store's total cost of labor is today, it will be 71% higher once the $15 kicks in.
- According to the website MinimumWage.com, the average cost of labor for every dollar you spend at McDonald's is 32%. So, if you spend $10 today at a New York McD's, $3.20 will go to cover the cost of labor. When the 71% increase is finally applied, the cost of labor will be $2.27 higher. Or, in other words, that formerly $10 meal will then cost you $12.27 or 22.7% more. That's before any other inflation that may also affect pricing.
Simply, going to McDonald's or any other fast food store may still be fast but no longer cheap. For some people, the cost to eat there may just be too steep; especially since traditional sit-down restaurants won't be hit by the minimum wage increase. Thus, expect business declines and business closures as people relegate eating fast food to being a luxury. Make no mistake, this imposed wage is like any tax on liquor and cigarettes that is used as a means to deter the buying of those products. To me, that looks like the real intent here.
Lastly, as far as the obesity issue goes, it's not true. Seven years ago the City of Los Angeles banned any new fast food restaurants in South Los Angeles as a way of curbing the growing obesity problem in that part of the city. Obesity wasn't abated. Instead, it got worse; going from 63% to 75%. Also, regarding fast food, poverty, and welfare; this country has 45.3 million people in poverty and on welfare. The fact that there are only 3.7 million fast food workers hardly proves that the industry is placing some massive burden on the country and the State of New York; especially, since 61% of all fast food workers are part-timers working before and after school or as a means to earn some extra money.
References:
New York Plans $15-an-Hour Minimum Wage for Fast Food Workers: http://www.nytimes.com/2015/07/23/nyregion/new-york-minimum-wage-fast-food-workers.html
McDonald's Menu Pricing for New York: http://www.fastfoodmenuprices.com/mcdonalds-prices/
McDonalds Salaries in New York, City: https://www.google.com/search?q=McDonald%27s+Salaries+in+New+York+City%2C+NY+|+Glassdoor&ie=utf-8&oe=utf-8
Real Earnings: http://www.bls.gov/news.release/pdf/realer.pdf
Cost of McDonald's Labor: https://www.minimumwage.com/2013/07/about-that-68-cent-big-mac-price-increase/
Ban on fast-food eateries in South L.A. hasn't cut obesity: http://www.latimes.com/local/california/la-me-food-study-20150319-story.html
In 2013, the official poverty rate was 14.5 percent, down from 15.0 percent in 2012. This was the first decrease in the poverty rate since 2006. In 2013, there were 45.3 million people in poverty: http://www.census.gov/hhes/www/poverty/about/overview/
http://www.statista.com/statistics/196630/number-of-employees-in-us-fast-food-restaurants-since-2002/Employees in the U.S. fast food restaurant industry:
Characteristics of Minimum Wage Workers, 2014:http://www.bls.gov/opub/reports/cps/characteristics-of-minimum-wage-workers-2014.pdf
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Wednesday, June 10, 2015
The Rapidly Evolving Living (Minimum) Wage
In 2007, Congress incrementally raised the $5.15 an hour minimum wage by 40% making it $7.25, effective July of 2009. At that time we were told that $7.25 an hour was a "fair" wage; or, in other words: a "living wage". In fact, the law responsible for the increase was called the "Fair Minimum Wage Act of 2007". Now, if that $7.25 wage was truly a "fair wage" in 2009 and, if it had been automatically adjusted for inflation each year, then the "fair wage" of today should be about $8.
Instead, in 2013, President Obama kicked off a national debate on what is a "fair wage" by campaigning around the country promoting a 24% increase to $9 an hour. A year later, he was pushing a 40% increase to $10.10; or, more than $2 above a supposed fair wage if that $7.25 had been inflation-adjusted all these years. Meanwhile, unions, who don't have a single minimum wage earner as part of their membership, have decided $15 is a living wage and picketed company stores like those of McDonald's and Walmart to give their cause public attention.
As a result of all this, the public is left with the impression that millions of Americans earn the minimum wage and are, literally, living in poverty. Believing all this, 63% of those surveyed in a recent Hart Research poll support a $15 minimum by the year 2020.
The truth about the $15 minimum wage was exposed when the unions in Los Angeles asked the city council to provide an exception to the law for unionized operations in the City. This, after those very same unions had pushed hard by picketing and lobbying to pass the $15 wage in that city.
Suddenly, they realized that a bunch of inexperienced 16-year olds, working part time at cash registers at fast food restaurants, would earn as much or more than their supposed experienced union members. This is because 71% of the 1.25 million workers earning the minimum wage in this country are part-timers. In Los Angeles, union members can make as little as $12/hour. That apparently was a good enough "living wage" for their union members. Let's hear it for the brash hypocrisy of the union living wage argument.
References:
Fair Minimum Wage Act of 2007: http://en.wikipedia.org/wiki/Fair_Minimum_Wage_Act_of_2007
Feb 12, 2013 · President Obama wants to raise the minimum wage to $9 an hour, the first increase since 2009: http://money.cnn.com/2013/02/12/news/economy/obama-minimum-wage/index.html
March 5, 2014: Obama pushes for $10.10 minimum wage: http://wtnh.com/2014/03/05/obamas-minimum-wage-campaign-comes-conn/
Unions and the $15 Minimum Wage: http://www.nationalreview.com/corner/418936/unions-and-15-minimum-wage-kevin-d-williamson
Hart Research Poll on Minimum Wage: http://www.nelp.org/content/uploads/2015/03/PR-Federal-Minimum-Wage-Poll-Jan-2015.pdf
Bureau of Labor Statistics: Characteristics of a Minimum Wage Worker for 2014: http://www.bls.gov/opub/reports/cps/characteristics-of-minimum-wage-workers-2014.pdf
Hypocrisy Thy Name Is Union; Unions Demand Exemption From LA's $15 Minimum Wage: http://www.forbes.com/sites/timworstall/2015/05/27/hypocrisy-they-name-is-union-unions-demand-exemption-from-las-15-minimum-wage/
Instead, in 2013, President Obama kicked off a national debate on what is a "fair wage" by campaigning around the country promoting a 24% increase to $9 an hour. A year later, he was pushing a 40% increase to $10.10; or, more than $2 above a supposed fair wage if that $7.25 had been inflation-adjusted all these years. Meanwhile, unions, who don't have a single minimum wage earner as part of their membership, have decided $15 is a living wage and picketed company stores like those of McDonald's and Walmart to give their cause public attention.
As a result of all this, the public is left with the impression that millions of Americans earn the minimum wage and are, literally, living in poverty. Believing all this, 63% of those surveyed in a recent Hart Research poll support a $15 minimum by the year 2020.
The truth about the $15 minimum wage was exposed when the unions in Los Angeles asked the city council to provide an exception to the law for unionized operations in the City. This, after those very same unions had pushed hard by picketing and lobbying to pass the $15 wage in that city.
Suddenly, they realized that a bunch of inexperienced 16-year olds, working part time at cash registers at fast food restaurants, would earn as much or more than their supposed experienced union members. This is because 71% of the 1.25 million workers earning the minimum wage in this country are part-timers. In Los Angeles, union members can make as little as $12/hour. That apparently was a good enough "living wage" for their union members. Let's hear it for the brash hypocrisy of the union living wage argument.
References:
Fair Minimum Wage Act of 2007: http://en.wikipedia.org/wiki/Fair_Minimum_Wage_Act_of_2007
Feb 12, 2013 · President Obama wants to raise the minimum wage to $9 an hour, the first increase since 2009: http://money.cnn.com/2013/02/12/news/economy/obama-minimum-wage/index.html
March 5, 2014: Obama pushes for $10.10 minimum wage: http://wtnh.com/2014/03/05/obamas-minimum-wage-campaign-comes-conn/
Unions and the $15 Minimum Wage: http://www.nationalreview.com/corner/418936/unions-and-15-minimum-wage-kevin-d-williamson
Hart Research Poll on Minimum Wage: http://www.nelp.org/content/uploads/2015/03/PR-Federal-Minimum-Wage-Poll-Jan-2015.pdf
Bureau of Labor Statistics: Characteristics of a Minimum Wage Worker for 2014: http://www.bls.gov/opub/reports/cps/characteristics-of-minimum-wage-workers-2014.pdf
Hypocrisy Thy Name Is Union; Unions Demand Exemption From LA's $15 Minimum Wage: http://www.forbes.com/sites/timworstall/2015/05/27/hypocrisy-they-name-is-union-unions-demand-exemption-from-las-15-minimum-wage/
Wednesday, April 29, 2015
Seattle's $15 Minimum Wage and the Liberal Spin
On April 1st, Seattle, Washington's $15 Minimum wage law technically went into effect. Already, the liberals have attacked Republicans who had claimed that raising it that high would cost jobs and shutter businesses. The argument is that none of that has happened. In fact, on April 10th, the far left think tank, "Think Progress", wrote an online article titled: "Seattle Restaurant Data Demolishes Conservative Argument Against $15 Minimum Wage."
The problem with the "Think Progress" article is that it leads people to believe that a $15 minimum wage completely went into effect April 1st. It didn't.
If you are a small business of less than 500 employees, you have seven years to gradually raise it to $15. That's about an 81 cent per hour raise per year from the previous $9.32 in Washington state. All other businesses have just three years to increase it, and since most small business like restaurants and retail operations employ minimum wage workers, overall impact will be minimal; at least this year.
There's another reason that Seattle can handle the $15 minimum wage over time without a lot of impact on jobs. Seattle is wealthy. The average per capita income is $43,237 (in 2013). That's much higher then our nation as a whole at just $28,155 (again, in 2013). Because of its wealth, and the city's ability to keep people working, the unemployment rate was just 3.9% in December of 2014.
So, I guess from the 'Think Progress" article, we're supposed to conclude that raising the national minimum wage to $15 won't do any harm. That reminds me of that old adage: "But, will it play in Peoria." In Peoria, Illinois the average per capita salary is only $28,438 (in 2013); or, about $13.67 an hour (based on a 40-hour work week). In terms of the unemployment rate, Peoria is already hurting at 6.9% as of December 2014. Compared to Seattle's poverty rate of 13.6%, Peoria sits at 17.2%; meaning that 1-in-6 wouldn't see their salaries increased anyway.
Let's not have a national minimum wage of $15. If Seattle, with its high standard of living, does it...then, fine. But not every community can afford the price hikes that will result from it.
References:
Seattle approves $15 minimum wage: http://money.cnn.com/2014/06/02/news/economy/seattle-minimum-wage/
Seattle Restaurant Data Demolishes Conservative Argument Against $15 Minimum Wage: http://thinkprogress.org/economy/2015/04/10/3645268/new-evidence-buries-lie-about-seattle-minimum-wage/
We Are Seeing The Effects Of Seattle's $15 An Hour Minimum Wage: http://www.forbes.com/sites/timworstall/2015/03/16/we-are-seeing-the-effects-of-seattles-15-an-hour-minimum-wage/
USA Quick Facts: http://quickfacts.census.gov/qfd/states/00000.html
Seattle Quick Facts: http://quickfacts.census.gov/qfd/states/53/5363000.html
Seattle Unemployment Rate: https://www.google.com/search?q=seattle+unemployment+rate&ie=utf-8&oe=utf-8
Peoria Quick Facts: http://quickfacts.census.gov/qfd/states/17/17143.html
Peoria Unemployment Rate: https://www.google.com/search?q=peoria+unemployment+rate&ie=utf-8&oe=utf-8
Will it Play in Peoria: http://en.wikipedia.org/wiki/Will_it_play_in_Peoria%3F
The problem with the "Think Progress" article is that it leads people to believe that a $15 minimum wage completely went into effect April 1st. It didn't.
If you are a small business of less than 500 employees, you have seven years to gradually raise it to $15. That's about an 81 cent per hour raise per year from the previous $9.32 in Washington state. All other businesses have just three years to increase it, and since most small business like restaurants and retail operations employ minimum wage workers, overall impact will be minimal; at least this year.
There's another reason that Seattle can handle the $15 minimum wage over time without a lot of impact on jobs. Seattle is wealthy. The average per capita income is $43,237 (in 2013). That's much higher then our nation as a whole at just $28,155 (again, in 2013). Because of its wealth, and the city's ability to keep people working, the unemployment rate was just 3.9% in December of 2014.
So, I guess from the 'Think Progress" article, we're supposed to conclude that raising the national minimum wage to $15 won't do any harm. That reminds me of that old adage: "But, will it play in Peoria." In Peoria, Illinois the average per capita salary is only $28,438 (in 2013); or, about $13.67 an hour (based on a 40-hour work week). In terms of the unemployment rate, Peoria is already hurting at 6.9% as of December 2014. Compared to Seattle's poverty rate of 13.6%, Peoria sits at 17.2%; meaning that 1-in-6 wouldn't see their salaries increased anyway.
Let's not have a national minimum wage of $15. If Seattle, with its high standard of living, does it...then, fine. But not every community can afford the price hikes that will result from it.
References:
Seattle approves $15 minimum wage: http://money.cnn.com/2014/06/02/news/economy/seattle-minimum-wage/
Seattle Restaurant Data Demolishes Conservative Argument Against $15 Minimum Wage: http://thinkprogress.org/economy/2015/04/10/3645268/new-evidence-buries-lie-about-seattle-minimum-wage/
We Are Seeing The Effects Of Seattle's $15 An Hour Minimum Wage: http://www.forbes.com/sites/timworstall/2015/03/16/we-are-seeing-the-effects-of-seattles-15-an-hour-minimum-wage/
USA Quick Facts: http://quickfacts.census.gov/qfd/states/00000.html
Seattle Quick Facts: http://quickfacts.census.gov/qfd/states/53/5363000.html
Seattle Unemployment Rate: https://www.google.com/search?q=seattle+unemployment+rate&ie=utf-8&oe=utf-8
Peoria Quick Facts: http://quickfacts.census.gov/qfd/states/17/17143.html
Peoria Unemployment Rate: https://www.google.com/search?q=peoria+unemployment+rate&ie=utf-8&oe=utf-8
Will it Play in Peoria: http://en.wikipedia.org/wiki/Will_it_play_in_Peoria%3F
Sunday, December 21, 2014
The $15 Minimum Wage and Maribel versus McDonald's
Recently, I ran across a story in the DailyMail about a Mexican immigrant by the name of Maribel who organized a strike against a McDonald's in her Los Angeles neighborhood. Her grievance was that she and her two toddlers couldn't live on the $9.35/hour that McDonald's was paying her. Which, by the way, is 35 cents higher than California's minimum wage of $9/hour, which is set to be $10/hour as of 1/1/16.
Because of her situation, she says she needs $15/hour. Not $10. Not $12. But, exactly $15. Which is what apparently the magic number that everyone in the U.S., who is earning a minimum wage, thinks they should be making in order to live. This despite the fact that the cost of living varies widely in this country; from state to state and, from urban areas to rural America.
My biggest problem with the $15 minimum wage is that it is higher than the average annual income of everyone living in the County of Los Angeles. In that county of 10 million people, the average per capita income was $27,749 in 2013. When broken down to an hourly wage, it is equal to $13.34. As such, are we then supposed to believe that as many as 5 million Angelenos, making less than $15/hour, are unable to live?
My other problem is with Maribel's story itself. While it was never stated, it is obvious that she is living in this country illegally because her mother brought her here from Mexico when she was just 7 months old. That's a problem for a lot of people like Maribel. Because, if she was a naturalized citizen and given the fact that she had two children and is only making $9.35/hour -- even if she worked a full 40 hour week -- she would be eligible for all kinds of state and federal welfare programs. Programs that have an aggregate worth in the tens of thousands of dollars.
Also, because she is in poverty, she will not have to pay any federal taxes. Something that wouldn't be the case if she made $15/hour. She is also eligible to get money back from the IRS by filing a tax return and by claiming Earned Income Tax Credits for herself and her children. An amount that could be as high as $3300; something she would lose when making $15/hour.
Once again, the $15 minimum wage proponents don't seem to see what many single parents, assuming they are citizens, will be giving up by going to this level of a minimum wage. As is often said: Be careful of what you wish for.
References:
Maribel vs McDonald's: Single mother of two goes on strike against fast-food giant demanding $15 minimum wage and a union for employee: http://www.dailymail.co.uk/news/article-2878565/Maribel-vs-McDonald-s-Single-mother-two-goes-strike-against-fast-food-giant-demanding-15-minimum-wage-union-employees.html
2014 Poverty Guidelines: http://aspe.hhs.gov/poverty/14poverty.cfm
Welfare In California: http://en.wikipedia.org/wiki/Welfare_in_California
Cost of Living Calculator - CNN Money: http://money.cnn.com/calculator/pf/cost-of-living/
"Poverty" pays better than middle-class employment: http://humanevents.com/2012/11/28/poverty-pays-better-than-middle-class-employment/
Policy Basics: The Earned Income Tax Credit: http://www.cbpp.org/cms/?fa=view&id=2505
Because of her situation, she says she needs $15/hour. Not $10. Not $12. But, exactly $15. Which is what apparently the magic number that everyone in the U.S., who is earning a minimum wage, thinks they should be making in order to live. This despite the fact that the cost of living varies widely in this country; from state to state and, from urban areas to rural America.
My biggest problem with the $15 minimum wage is that it is higher than the average annual income of everyone living in the County of Los Angeles. In that county of 10 million people, the average per capita income was $27,749 in 2013. When broken down to an hourly wage, it is equal to $13.34. As such, are we then supposed to believe that as many as 5 million Angelenos, making less than $15/hour, are unable to live?
My other problem is with Maribel's story itself. While it was never stated, it is obvious that she is living in this country illegally because her mother brought her here from Mexico when she was just 7 months old. That's a problem for a lot of people like Maribel. Because, if she was a naturalized citizen and given the fact that she had two children and is only making $9.35/hour -- even if she worked a full 40 hour week -- she would be eligible for all kinds of state and federal welfare programs. Programs that have an aggregate worth in the tens of thousands of dollars.
Also, because she is in poverty, she will not have to pay any federal taxes. Something that wouldn't be the case if she made $15/hour. She is also eligible to get money back from the IRS by filing a tax return and by claiming Earned Income Tax Credits for herself and her children. An amount that could be as high as $3300; something she would lose when making $15/hour.
Once again, the $15 minimum wage proponents don't seem to see what many single parents, assuming they are citizens, will be giving up by going to this level of a minimum wage. As is often said: Be careful of what you wish for.
References:
Maribel vs McDonald's: Single mother of two goes on strike against fast-food giant demanding $15 minimum wage and a union for employee: http://www.dailymail.co.uk/news/article-2878565/Maribel-vs-McDonald-s-Single-mother-two-goes-strike-against-fast-food-giant-demanding-15-minimum-wage-union-employees.html
2014 Poverty Guidelines: http://aspe.hhs.gov/poverty/14poverty.cfm
Welfare In California: http://en.wikipedia.org/wiki/Welfare_in_California
Cost of Living Calculator - CNN Money: http://money.cnn.com/calculator/pf/cost-of-living/
"Poverty" pays better than middle-class employment: http://humanevents.com/2012/11/28/poverty-pays-better-than-middle-class-employment/
Policy Basics: The Earned Income Tax Credit: http://www.cbpp.org/cms/?fa=view&id=2505
Friday, December 12, 2014
The Minimum Wage Protestors Are Too Naive To See What Is Already Happening To Their Jobs
Just last Saturday, CNBC posted a story entitled: "Hiring R2D2 to protect your mall or campus—all for $6.25 per hour". In that article, it showed a robot that was capable of making security rounds at an hourly depreciated and operational cost that is a full dollar below the minimum wage.
Additionally, these robots won't need vacation time or a matching pay in to Social Security and Medicare; and, for sure, won't cost the company a single cent in providing mandated healthcare under ObamaCare or the fine that would be imposed for not providing it.
Then, just before Thanksgiving, Amazon announced the deployment of 15,000 robots of its own to streamline its picking, packing and shipping in their warehouse operations.
Saving approximately 20% in labor costs, the little orange robot is designed to bring a storage rack of goods to a human so they can pick the product off the rack and then package it for shipping. No longer would real people have to roam a large warehouse in search of product that needed to be shipped; and, then, return to a shipping point to pack it and complete the process.
Earlier this year, in a joint effort between Adept Technologies and SwissLog, a labor saving hospital robot was announced that could shuttle specimens and, I would think, medications throughout a hospital autonomously.
Of course, one has to ask, why couldn't a robot like this also deliver food to a restaurant table in the not too distant future.
The simple fact is, that already, robotic workers are cheaper than paying the current minimum wage at $7.25 an hour plus benefits for a human worker doing the same job. And, don't think that ObamaCare and the employer mandates won't also be at the heart of this trend of replacing humans. So, what do you think will happen if Obama and the Democrats get their way and the minimum wage is set 40% higher at $10.10, or if the short-sighted $15 minimum wage protesters got their wish?
The high cost of union labor has driven much of American manufacturing jobs overseas in the last 5 decades. Now, labor's wish for a higher minimum wage is sure to banish the existence of most of those jobs through robotics. It's a matter of simple economics, and right now, there are at least 50 companies (link below) chomping at the bit to have their robot technologies added to our everyday lives.
References:
Hiring R2D2 to protect your mall or campus—all for $6.25 per hour: http://www.cnbc.com/id/102240810
Amazon's new robot army is ready to ship: http://www.sacbee.com/news/business/article4216163.html
Florida Hospital Orlando to automate laboratory transport with Swisslog autonomous mobile robot: http://www.prweb.com/releases/2011/4/prweb8336301.htm
Robotic Business News: 50 Robot Producing Companies: http://www.roboticsbusinessreview.com/companies/category/top_50/list
Additionally, these robots won't need vacation time or a matching pay in to Social Security and Medicare; and, for sure, won't cost the company a single cent in providing mandated healthcare under ObamaCare or the fine that would be imposed for not providing it.
Then, just before Thanksgiving, Amazon announced the deployment of 15,000 robots of its own to streamline its picking, packing and shipping in their warehouse operations.
Saving approximately 20% in labor costs, the little orange robot is designed to bring a storage rack of goods to a human so they can pick the product off the rack and then package it for shipping. No longer would real people have to roam a large warehouse in search of product that needed to be shipped; and, then, return to a shipping point to pack it and complete the process.
Earlier this year, in a joint effort between Adept Technologies and SwissLog, a labor saving hospital robot was announced that could shuttle specimens and, I would think, medications throughout a hospital autonomously.
The simple fact is, that already, robotic workers are cheaper than paying the current minimum wage at $7.25 an hour plus benefits for a human worker doing the same job. And, don't think that ObamaCare and the employer mandates won't also be at the heart of this trend of replacing humans. So, what do you think will happen if Obama and the Democrats get their way and the minimum wage is set 40% higher at $10.10, or if the short-sighted $15 minimum wage protesters got their wish?
The high cost of union labor has driven much of American manufacturing jobs overseas in the last 5 decades. Now, labor's wish for a higher minimum wage is sure to banish the existence of most of those jobs through robotics. It's a matter of simple economics, and right now, there are at least 50 companies (link below) chomping at the bit to have their robot technologies added to our everyday lives.
References:
Hiring R2D2 to protect your mall or campus—all for $6.25 per hour: http://www.cnbc.com/id/102240810
Amazon's new robot army is ready to ship: http://www.sacbee.com/news/business/article4216163.html
Florida Hospital Orlando to automate laboratory transport with Swisslog autonomous mobile robot: http://www.prweb.com/releases/2011/4/prweb8336301.htm
Robotic Business News: 50 Robot Producing Companies: http://www.roboticsbusinessreview.com/companies/category/top_50/list
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