Unintended Consequences Minimum Wage

I read that the proposal for raising the minimum wage to $ 15/hr also does away with the tipping minimum wage, currently at $ 2.13/hr. although I don't know of anyone around here paying that. If the typical waitress now getting $6/hr plus tips will now get $ 15/hr will anyone continue to tip at 15-20% of the bill? My wife stated emphatically that we won't and her word is sacred. LOL The price of meals will go up to cover the proprietors cost so less people will eat out. Tip income will go down. The higher wage rate will be verifiable and taxable. Some jobs will be lost. I don't see many winners here.

Not a problem here in Michigan because eating in a restraunt is illegal.

I won't go out to eat anymore.

Great way to finish off any small business

I agree that it was a problem to be worked on but a "one size fits all" approach will always mess things up.

I don't know all the details yet but can't believe restaurants nationwide could survive at $15 an hour. Lots would go.... even the big franchises.

Pete

Or usher in more automation.

Some of the big franchises are already on it. McDonald's is working on a burger flipping robot. They have already installed ordering kiosks in many places to eliminate a cashier position.

They will use less servers and the service will decline. No one can cook better than my wife! Going out is a brake for her.

Wait a second are you saying the govt is too stupid to even be a good parasite?

If them getting paid more doesn’t effect the price of the food at said establishment I will tip the same

Just when this pandemic is causing hundreds thousands of businesses to close up and people losing their jobs, they do something this stupid. My nephew employs about 12 people in his company. He said he will lay off 1/2 of them permanently if this becomes the law.

Maybe someday they will realize some people are just not worth 15.00hr.One should have a skill for such money.The only thing they are doing is driving the cost of everything up.

Cragar....

For years here, every McDonalds uses ordering kiosks. No counter help for ordering.

In 13 years I have eaten at a McDonalds three times, (while travelling through Paris in a train station), and every single time was horrible. Cold food, mushy fries and crappy service. Yet Europe accounts for alot of their profits.

Pete

The argument is that you can't make a living on minimum wage. The reality is many minimum wage jobs aren't intended to provide a living.

What pays more to the government in taxes in taxable income 15 a hour or 2.15? Also employer will be paying more employee tax. How much do you think cash tips get claimed. I would say just enough. If a tip is paid on a credit card little harder not to claim. I think most folks waiting tables don’t want the change. Do the math on tips if your waiting three four tables at a time. Not much incentive also to wait on more than one table at a time at 15 a hour. This assuming no one tips after the 15 a hour hike. Local gas station/one stop just put in 4 self check out lines. A little up front investment but big return on investment with less employees. Everybody checking out used the self check out.

That's what these employees don't understand. If a business has a labor budget of say, $100 an hour, and they have 10 employees at $10 an hour, they're on budget. If they have to raise it to $15 an hour, some employees are gonna have to go, or the business closes, and everybody loses their job. Or, the rates go up and customers quit using the business and it goes under. Minimum wage workers are not gaining anything with this, because the cost of everything is going to go up

Is government setting the price of labor Socialism? I wonder how long this has been going on. Did it start in 2008?

a friend and his brother owned a Pizza place in ILL , Jan 1 2020 ILL raised the minimum to $10 with an additional dollar each Jan 1 till they reached $15 dollars in 2025

they closed shop knowing very well what their numbers were and both became long term substitute teachers. then covid hit.

As stated above Min Wage was never meant to be a "living wage" what ever that is supposed to be.

You would starve to death in a large metropolitan area on $15/hr. Some rural areas you could be moderately comfortable.

I pay $15 cash for spot labor when I need it, works for them works for me. Although they need to produce, to come back. Some have,some haven't

I think the $15/hr is intended to eliminate as much unreported income as possible. Not to help the down trodden underachievers.There are just not that many min wage jobs anymore.

EX. A local grocery chain has had a sign out for a couple years now, starting wage is $14.65
Fast food services are 12 + to start in this area
Even Mom & Pop grocery's are at 10 +

Firmly believe it's mostly about taxable income

Wow, your upper class around here at 15 an hour.

"The minimum wage was conceived as a way to help bolster wageworkers and decrease class stratification. It was first introduced in the United States with the Fair Labor Standards Act of 1938 (FLSA). Passed under President Roosevelt, this act called for the first national minimum wage of 25 cents an hour. This created a floor on wages in the labor market and overall helped to create fairer labor standards throughout the country.

Classical economic theory suggests that the minimum wage would have a stabilizing effect on the economy. As economist Richard Freeman explains in his 1996 book, Uneven Tides: Rising Inequality in America, there are three main ways that the minimum wage affects income disparity by distributing more earning power to people at the lower end of the economic spectrum. He refers to this as the “redistribution theory.”

The first outcome of increased minimum wages is that the cost of producing goods and services increases, which results in higher prices. These increased prices mean that everyone is paying more for goods, including the middle and upper classes, yet only the lower class is simultaneously increasing its income, thereby increasing the purchasing power of low-wage workers. In addition, higher wages decrease company profits, while simultaneously increasing the income of the poor. Increased wages also cost (some) jobs; often those are on the middle or higher end of the income spectrum. Overall, raising the minimum wage acts to decrease the wealth of the wealthier classes while increasing the wealth of lower paid workers."

Why not raise it to $35.00 an hour, Then everyone will be out of poverty, and we will be the richest nation again. Heck , if everyone makes 35 an hour we would be able to afford reparations for the ex slaves and injuns.

They forgot the part about minimum wage was to combat the new source of labor coming into the market at the time...

Did they ever start taxing the robots over there? I remember that being floated to make up for the lost tax revenues

Of course it’s about taxable income. “They” need the money for all the policies they intend to implement. When they can’t get enough taxes through income “they” will come for control of the companies. “They’ve” said so.

Q- What is as big as a house... Consumes 10 gallons of gas per hour... Produces a crap ton of smoke and noise... And cuts an apple into 3 pieces?

A- A government machine made to cut an apple into 4 pieces.

Mike

Doubt that most business's have any choice in the matter, either they raise with some sort of tiered program over a set limit of time or they go our of business.

Most already understand that min. wage jobs are stand by jobs to help live, not totally live on ! However it will increase competition for the jobs by some that have no education or where with all to go to school to learn how to work at a living job, pushing most younger people out of work !

Tipping will simply stop for the most part even if prices stay the same because of value of the purchase or the wealth determined of what a person is buying.

Most tip for service on the meal not because of the meal, employers for the most part absorb these tips and then distribute them equally to all in most case's that I'm aware of, which of course only PO's those who are great servers with personality and pay attention to their customers, while the other support group, cooks, table cleaners and cleaners are not given tips, unless shared by the servers. Total chaos for moral if you ask me !

Who ever figured that it would increase the peoples living standards never looked down the road to see how that increase is going to be made up for by the business's, as most costs are always passed on to the buyer in at least food service, other larger business's can absorb that cost for a short time, but not forever, depending on their public interest in their companies.

Might be a simpler way to increase min wage with a lower top wage, for instance $10.00 an hour plus your own tips tiered to a graduated amount on higher end meals, if people want a higher end meal then they pay the higher end tip, guaranteed to go to the server, no business allowed to take tips any more from the servers.

Yes some business's may suffer for their higher end meals, however most people who do go out like to have a great evening and if the meal and service is to their agreement the cost is not really a detriment to that evening out. I would imagine that most eat outs who would do this might make a concerted effort to increase the clientele rather than have just a steady lower class menu.

They could also make server teams that work together and share the tips for a more roundabout effort to keep the place moving. I know when we go out that waiting in a decent place to have a diner usually is a nightmare even when you make a previous reservation as advised, people tend to relax and enjoy a higher end meal than just going to eat a simple dinner, just ideas I feel might work better for both the worker and the business giving the idea that you can't have both if wages are raised !!

What happened to O'bama's minimum wage increase to 15.00 Disappear??? It was big news for awhile but Mc'd's and others dropped employee's hours to under 40 making them part time and eligible for minimum wage

I'd be fine with tipping being done away with. I shouldn't have to bribe someone to give me decent service.

Will prices at restaurants go up? Absolutely and I'm fine with that. If you can't afford to go out to eat then don't just like the rest of the world.

Its also a misnomer that they only get paid $2.13/hr. That is merely their base wage. If they do not make the equivalent of minimum wage per hour including tips, the establishment needs to cover the difference.

I look at tipping as the ultimate reflection of merit. The better the service the better the tip. Everything should be that way IMO.




So if prices go up and customer traffic goes down.......should the restaurant raise their prices even more to make up the difference ?

If you get paid the same amount whether you provide marginal service or excellent service... What's the incentive to provide excellent service?

Mike

Most waitresses their tip money is mostly how they get paid.Very low hourly wage.

In her younger days my wife was a waitress at the local hoity-toity lakeside resort... With tips she would clear on average $1000 a week. She worked her butt off and was well compensated for it. A straight $15 an hour wage would have been a 36% pay cut. Taxes would cut it even more.

Mike

If you can't make more than min wage as a waiter...you either are horrible at it or your restaurant attracts a bunch off jerks.

Whatever changes they decide.

I just looked up Juniata county Pa. and our per capita income on the U.S. census website to make sure I wasn't overstating...

Our per capita income is 26,200 a year, or 12.60 an hour wage.

If an increase in prices results in a decrease of customers, I suspect the most likely change would be to shut their doors. Who benefits from that ?

Those of use that aren't self-employed are pretty much paid that way. If I'm providing good service to my client which increases my employer's bottom line, an employer with a decent head on their shoulders would increase my wage because its partly because of my excellent labor that is keeping clients spending money.

How would doing away with tipping decrease customers?

I go out for dinner and spend $40 on the meal. I leave a 20% tip meaning that the total experience cost me $48.

Well....the establishment raises their prices by 20% to meet the high wage, I pay the same price. Also the establishment would more than likely become more profitable because the server is working 8 tables. It cost them $15/hr for 1 server for a $64 increase in revenue.

Restaurants that automatically add the gratuities to the. I'll tend to (This word is unacceptable on Trapperman) off the customers. They don't always come back.

I agree. I don't like a tip automatically being added to the bill. I'm saying the price would be built into the items on the menu and no tips given/expected and noted as such.

So all you self proclaimed conservatives (anti-socialist) are good with this government redistribution scheme?

If you're averaging $18+ an hour with tips waiting 8 tables are you going to be OK taking a $3 an hour pay cut to wait those same 8 tables?

The good servers will find something else to do as soon as they are able... The servers who were poor or marginal will stay and soak up the $15 and not care about improving their service.

Mike

Has anyone said they for it?

In a previous post you said it would lead to an increase in prices. I think that's true. So I was responding to the circumstances you constructed.

No tips requires higher minimum wage, which requires higher prices...........leading in turn to fewer customers. I don't think most people would view it as spending the same amount. They would respond to the prices on the menu.

That's why you don't see prices posted on exterior menus of nonfastood or chain restaurants. Unless they deliberately are trying to keep the "riffraff" out.

I remember the government contract staff in the mess hall when I was in basic... So courteous and eager to please.

Can't wait for that to be the norm.

Mike

I do think there could be a curve there. When I traveled (feels like another life ago) at first there was sticker shock but after I got used to it and realized that it balances out I preferred it.

What are you talking about!? This guy gave the best service ever!

I think I'd prefer to keep tipping. It's a direct, immediate reward for work well done.

Most tips are not included on tax returns, the government does not like losing money from that, so they raise the minimum wage and people don't leave a tip. They want everything traceable. We are spiraling downhill fast

I'm not as anti-tipping as I'm coming across right now. I'm just looking for a good robust debate.

The 1 problem I have with tipping are the cheapskates that we are inadvertently subsidizing with our own tips in order to keep decent staff. They are benefiting from the good service they are receiving because the staff are expecting a good tip that decent adults will provide.

That used to be true but not anymore. Tips are tracked and factored in the majority of establishments.

Oh! I have a terrible idea but just for fun....


Pay and tip up front so the server knows how to deal with you. If they're not happy with the tip they can make the decision not to serve you.

The unions use min wage as part of their wage formula.
So the higher the min wage the higher the union wage.
So this is just a kick to unions shrouded, just like when they saved the auto unions by
claiming to want to save the auto companies.

Why do you dabble in the details of unintended consequences? Don't you understand the role of big government is to hand out trinkets to keep their dependents dependent.

Yes, cheapskates happen. Nothing is perfect. However the government in their infinite wisdom has decided that they are going to burn down the house to get rid of a few mice.

Mike

Minimum wage $15.00 / hr. I teach it in econ every day to my students. Results will be
Higher prices
Fewer businesses
Buying power for everyone else that does not see this increase decrease. Unless you get the same increase, which you won't.
Minimum wage is not a nor ever was intended to be a livable wage.
If you want something work for it, better yourself.

PS my 9th grades just got the talk about being lazy and always giving up when looking for information gets a little bit tough!! ARRGGHHHH!!!!

That's partly why some places automatically include the gratuities on the bill

"What Is a Living Wage?
A living wage refers to a theoretical income level that allows an individual or family to afford adequate shelter, food, and the other basic necessities. The goal of a living wage is to allow employees to earn enough income for a satisfactory standard of living and to prevent them from falling into poverty. Economists suggest that a living wage should be substantial enough to ensure that no more than 30% of it gets spent on housing."

"What Is Poverty?
Poverty is a state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living. Poverty means that the income level from employment is so low that basic human needs can't be met. Poverty-stricken people and families might go without proper housing, clean water, healthy food, and medical attention. Each nation may have its own threshold that determines how many of its people are living in poverty."

Lol....this works great in a bar. BEFORE you order your mixed drink from the bartender, tip first , then order your mixed drink. If you tip decent , your drink will taste like premium gasoline on steroids......

"Fast-food workers across the U.S. are striking Thursday to demand higher wages, and it turns out they're not alone in believing the federal minimum wage of $7.25 an hour is much too low. A majority of Americans—71 percent—support hiking the minimum to $10, according to the 2013 American Values Survey by the Public Religion Research Institute. Democrats overwhelmingly support an increase, and even a majority of Republicans do. The minimum wage “is that rare issue where there is bipartisan and cross-religious support,” says Dan Cox, PRRI's research director. Except for the Tea Party, that is."

Blast from the past.

Or beer and they'll determine how much head you get.

You have failed to see the genius of Pike River. lol

Perhaps because it was hidden behind stark reality.

Mike

Spot on

So will a raise In the minimum wage have an effect on how much welfare will be paid out. I may be wrong but I'm thinking that anyone working for minimum wage as It Is know Is also getting a government hand out.

Well Beav I have been qualified for gubmint handouts most of my adult life, doesn't mean they give them to you. You actually have to ask, or at least say "Yes" to them. I know a lot about living large below the official poverty level without gubmint handouts for the poor. That is why I have zero sympathy for the so called people living in poverty as defined by the government.