Tag Archives: minimum wage laws

Leaving for Las Vegas: California’s minimum wage law leaves businesses no choice, by Houman Salem

It takes an incredible amount of idiocy to demolish a great state like California, but the liberals are almost there. From Houman Salem on a guest post at theburningplatform.com:

California’s minimum wage jumped to $10.50 an hour at the start of the new year. As the founder of a small fashion design house and clothing manufacturer in San Fernando, I’m not a disinterested observer in this change.

After two years in business, my company now has more than 150 clients from all over the world and 18 employees. It’s what’s known as a cut-and-sew house, part of the garment industry that generates about $17 billion in annual economic activity in Los Angeles County, including $6.9 billion in payroll, according to a 2016 industry report by the California Fashion Assn. This is the epicenter of apparel design and manufacturing in the United States; domestically manufactured clothing is more expensive, but retail and wholesale customers who care about quality and working conditions have historically been willing to pay for it.

Unfortunately, the industry is on a downward trend. Los Angeles County used to have more than 5,000 apparel factories; today, my company is one of roughly 2,000 — and many (e.g. American Apparel) are looking for a way out. One Los Angeles Times headline, quoting a California State University economist, warned that “the exodus has begun.”

If not for the $15 minimum wage, I’d have zero interest in leaving California.

The biggest reason is the minimum wage, which will rise to $15 by 2021 in the county and by 2022 statewide. I write with some hesitancy, because I’m in no way an opponent of higher pay. When you have a company with fewer than 50 employees, you get to know them pretty well and have a genuine concern for them as individuals. But that has to be balanced with concern for keeping your clients, who can always take their business to other countries or states.

To continue reading: Leaving for Las Vegas: California’s minimum wage law leaves businesses no choice

He Said That? 12/17/16

From Thomas Sowell, (born 1930),  American economist, social theorist, political philosopher, and author, Basic Economics: A Citizen’s Guide to the Economy (2014):

Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force. Making it illegal to pay less than a given amount does not make a worker’s productivity worth that amount—and, if it is not, that worker is unlikely to be employed.

The Costs & Consequences Of $15/Hour——Not Good! by Lance Roberts

This is a very good analysis of the economics of minimum wage laws. Show it to all your liberal do-gooder acquaintances, not that they’ll actually read it. From Lance Roberts at davidstockmanscontracorner.com:

What’s the big “hub-bub” over raising the minimum wage to $15/hr? After all, the last time the minimum wage was raised was in 2009. The argument for increasing the minimum is to create a “livable wage” for those working at that level.

Given the amount of table pounding that has ensued after the current administration proposed increasing the minimum wage, you would have assumed that a vast majority of American workers were trapped at this horrifically low level of income. Let’s take a look at some numbers.

According to the April 2015, BLS report:

“In 2014, 77.2 million workers age 16 and older in the United States were paid at hourly rates, representing 58.7 percent of all wage and salary workers. Among those paid by the hour, 1.3 million earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.7 million had wages below the federal minimum.

Together, these 3.0 million workers with wages at or below the federal minimum made up 3.9 percent of all hourly-paid workers.”

Of those 3 million workers, who were at or below the Federal minimum wage, 48.2% of that group were aged 16-24.

Furthermore, the percentage of hourly paid workers earning the prevailing federal minimum wage or less declined from 4.3% in 2013 to 3.9% in 2014 and remains well below the 13.4% in 1979.

Hmm…3 million workers at minimum wage with roughly half aged 16-24. Where would that group of individuals most likely be found?

To continue reading: The Costs & Consequences Of $15/Hour——Not Good!

California Says To Hell With Economics, Will Hike Minimum Wage To $15/Hour, by Tyler Durden

From Tyler Durden at zerohedge.com:

Over the past 12 months, America has had front row seats for a real-life experiment with across-the-board wage hikes.

In January of last year, a grinning Doug McMillon appeared in a video message posted to Wal-Mart’s website to announce that the world’s biggest retailer was set to implement one of the “largest single-day, private-sector pay increases ever.”

Now first of all, McMillon and the rest of the executive suite probably should have reread the statement in quotes above and asked themselves whether that sounded like something that was likely to turn out well. Wal-Mart employs a whole lot of people, and giving everyone a raise is the kind of thing that can end up having unintended consequences – especially when your business runs on the thinnest of margins.

But Wal-Mart pressed ahead anyway and almost immediately, things started to unravel. First, Bentonville moved to squeeze suppliers by forcing them to plow their excess cash into savings rather than in-store advertising. Next came storage fees and eventually, Wal-Mart even tried to compel vendors to pass along any savings they might have recognized from the yuan devaluation.

But squeezing the supply chain proved inadequate to make up the money spent on higher wages and so, Wal-Mart did what anyone with any common sense knew they would end up doing: they fired thousands of people and closed hundreds of stores. Or, visually:

A valuable lesson was learned by all. Or maybe not, because over the weekend, California lawmakers and labor union reps struck a deal to raise the statewide minimum wage to $15/hour.

To continue reading: California Says To Hell With Economics, Will Hike Minimum Wage To $15/Hour

Minimum Wages Surged In 6 Cities Last Year; Then This Happened, by Jed Graham

From Jed Graham at investors.com:

Hiring at restaurants, hotels and other leisure and hospitality sector venues slowed markedly last year in metro areas that saw big minimum-wage hikes, new Labor Department data show.

Wherever cities implemented big minimum-wage hikes to $10 an hour or more last year, the latest data through December show that job creation downshifted to the slowest pace in at least five years.

Liberals fighting for a dramatic increase in the minimum wage have insisted that there would be a negligible impact on job creation. Though the data are preliminary and overly broad, Washington D.C., Oakland, Los Angeles, San Francisco, Seattle and Chicago seem to be finding out that the reality isn’t so benign.

A slowdown in job growth can fly below the radar, at least for those who aren’t seeking low-wage work. But the risk of raising the minimum wage too high became fairly obvious last month, when Wal-Mart (WMT) bolted from Oakland and Los Angeles and scrapped plans for two stores in low-income areas of D.C.

The big shortcoming in the available data for 5 of the 6 cities is that they cover broad metro areas, far beyond the city limits where wage hikes took effect. Still, the uniform result of much slower job growth in the low-wage leisure and hospitality sector, even as the pace of job gains held steady in surrounding areas, sends a pretty powerful signal.

To continue reading: Minimum Wages Surged In 6 Cities Last Year; Then This Happened

 

Happy “$15 Minimum Wage” Labor Day From McDonalds

From Zero Hedge:

Coming to, or rather from, every forced “minimum wage” provider near you. And don’t forget to thank your micromanaging, centrally-planning government.

http://www.zerohedge.com/news/2015-09-07/happy-15-minimum-wage-labor-day-mcdonalds