Thursday, April 7, 2016

"What’s the big “hub-bub” over raising the minimum wage to $15/hr?"

"...[California] Governor Jerry Brown recently caved to Unions and passed legislation to hike the minimum wage in California to the magical level of $15...

...the math of $15/hr assuming [a]  full-time [worker];

$15/hr X 40 hours per week = $600/week
$600/week x 4.3 weeks in a month = $2,580/month
$2580/month x 12 months = $30,960/year.

More than an average retail manager?

Let that soak in for a minute.

We are talking paying $30,000 per year to 16-year olds to flip burgers. increase of $23.5 Billion Dollars in Los Angeles alone which equates to:

An Increase takes in of $764,678,880 California State Taxes.
An Increase takes in of $342,014,400 Medicare Taxes.
An Increase takes in of $1,462,406,400 Social Security Taxes.
An Increase takes in of $3,423,971,250 Federal Taxes.

Plus the employer pays equal amounts in taxes to what the employee pays.

...But there is also the inevitable unintended consequences of boosting the minimum wage.

Gotta pay everyone above those making $15 per hour more.

...when Seattle hiked their minimum wage, employees wanted less hours to remain on welfare. While a higher wage sounds good, after taxes it produced less income for low-income households by reducing their welfare benefits.

...the number of jobs that will likely be lost to automation will increase. A one-time cost to increase technological innovation in a restaurant is quickly repaid given a substantial increase in payroll costs.

...the unintended consequences of a minimum wage hike in a weak economic environment are not inconsequential. Furthermore, given that businesses are already fighting for profitability, hiking the minimum wage, given the subsequent “trickle up” effect, will lead to further increases in productivity and “off shoring” of jobs to reduce rising employment costs. 

Fewer jobs via robotic automation

So much for bringing back those manufacturing jobs."