[philosophical_recovery]

Fast food in L.A be like:

[Dismal Operator]

A few issues:

1. Why is $15 the magic wage? Why not $20 or $50?

2. People are paid based on their productivity. If the going rate for a certain skillset is $8/hr, mandating everyone pay $15/hr for that $8/hr production isn't going to end well. Employers are either going to start automating much more, or they're just going to fire those workers.

3. If an $8/hr skillset all of a sudden pays $15, the people who can only produce $8/hr are going to be all of a sudden competing with people who are capable of producing way more than that. An employer is going to have all kinds of options and will probably go with the person with the best 'credentials.' I can see a scenario where a bunch of college students and/or graduates start taking over a lot of jobs that were once populated by immigrants trying to hustle. The new wage is simply going to price them out because they're less likely to compete on 'intangibles.' Also that will be grounds for a lot of lawsuits methinks.

4. If it's such a great idea, why not implement it tomorrow? Instead they are phasing it in over 5 years. Im sure they know that if they did it tomorrow, the disruption that would follow would ruin their political careers, so they spread it out over 5 years so as to play the crash in slow motion.

5. Prices for final goods are going to have to rise dramatically.

[Eskhander]

I believe you can get an exemption if your company is organized by a labor union.
Boy, it would be a weird coincidence if the labor unions were pushing this ordinance.

[Disco_Volante]

So it's now illegal to sell your labor for less than $15 per hour.

What if the government mandated all used cars had to be sold for a minimum of $4,500.....in 'fairness' to the owner.
Well, people would no longer buy the used cars people previously sold for $1000 - $4000.
How can the government possibly tell you how much you can trade your labor for. Stupid.

Any students working part-time to avoid student loan debt will now be fired and take out more loans.

[Gringuito]

When the minimum wage was instituted in 1938 it was $4.10 adjusted for inflation. It hit it's highest level at $10.71 in 1968. As many of here have said, there are very good reasons that the minimum wage has not hit $11 or higher before. This will be a good experiment on what happens if you set it higher. While this level seems too high for the US or even California, perhaps LA is a special case. If it works out great for that city, they should continue to increase it until the downsides outweigh the benefits. It's just going to suck for the people in LA while this social experiment is being done.

[Basil Ransom]

A worker won't be paid more than his marginal revenue, but he can be paid a lot less.

"As a business owner, my production costs are going to increase. I'm either going to outsource my work to someone who'll work for less, I'll hire less employees, or I'll increase the cost of the product to the end user."

You left out a fourth option - you eat the higher cost. That happens too.

[kmhour]

When you make something more expensive, people use less of it. This is the basic principle behind 'sin taxes' and 'carbon taxes'.

Of course, nobody ever thinks when you make the price floor for labor more expensive..... people will use less of it.

For example:

[NilNisiOptimum]

The simple answer is that the stories from San Francisco (which recently went to $12 minimum wage on its way to $15) of small, niche bookstores, restaurants and other shops closing due to not being able to afford the increased wage expenses will be repeated in LA. In the meantime, I imagine neighboring Ventura and Orange counties will see an increase in business.

[WanderingSoul]

I'm no economist, but won't the cost of goods, services and housing in the area rise accordingly?

Then, won't the people in the $15-$30 per hour wage group be the real ones getting fucked? They won't get any pay raise, but their expenses will rise.

[Merenguero]

I see a drastic increase in lawsuits being filed in Los Angeles against employers who fail to pay $15.00 per hour. From a Plaintiff's attorney's end, those lawsuits may sound great because the Plaintiff can sometimes be awarded two or three times the amount of the unpaid wages. From my own experence, I can say that those cases tend to be one big headache. Proving the amount of hours which were worked can often be difficult, or even, impossible.

[WanderingSoul]

How many small and family owned businesses are going to have to shut down, or lay people off, because of this? I can imagine nearly doubling the minimum wage of low skilled workers is going to kill a lot of these businesses.

[monster]

(05-19-2015 09:57 PM)RioNomad Wrote:  

How many small and family owned businesses are going to have to shut down, or lay people off, because of this? I can imagine nearly doubling the minimum wage of low skilled workers is going to kill a lot of these businesses.

Most of them. CA already is one of the crappiest places to have a small biz - exorbitant taxes, welfare state, tons of red tape and regulations - this min wage is really the nail in the coffin.

15/hr is actually much more than 15/hr too. It's going to cost the employer about 20/hr after workers comp, FICA, and any other taxes. This is too much for unskilled labor. The only ones who will be able to afford it are the big chains and corporations, but its going to kill what California needs most: entrepreneurship and small business. It's going to eliminate all the delicious mom and pop italian and mexican restaurants and replace them with Applebees and Burger King and Taco Bell.

[CRR]

Good article on this:

http://www.theblaze.com/contributions/fa...-thats-ok/

[Goldin Boy]

(05-19-2015 08:34 PM)kbell Wrote:  

Won't the cost of the food have to simply go up to afford the help? And would people be willing to pay much higher costs for the same food?

Yes prices will rise but I think that portions will get incrementally smaller. Restaurants will need to anything they can to still turn a profit(payroll expense just doubled and all other expenses are the same afterall).

I was at McDonalds for the first time in 4 years this week and was surprised that I could eat a Big Mac in three bites.

It won't affect sales, fast food is still far too convenient than actually cooking for most people.

[kosko]

(05-19-2015 08:54 PM)Dismal Operator Wrote:  

A few issues:

1. Why is $15 the magic wage? Why not $20 or $50?

2. People are paid based on their productivity. If the going rate for a certain skillset is $8/hr, mandating everyone pay $15/hr for that $8/hr production isn't going to end well. Employers are either going to start automating much more, or they're just going to fire those workers.

3. If an $8/hr skill set all of a sudden pays $15, the people who can only produce $8/hr are going to be all of a sudden competing with people who are capable of producing way more than that. An employer is going to have all kinds of options and will probably go with the person with the best 'credentials.' I can see a scenario where a bunch of college students and/or graduates start taking over a lot of jobs that were once populated by immigrants trying to hustle. The new wage is simply going to price them out because they're less likely to compete on 'intangibles.' Also that will be grounds for a lot of lawsuits methinks.

4. If it's such a great idea, why not implement it tomorrow? Instead they are phasing it in over 5 years. Im sure they know that if they did it tomorrow, the disruption that would follow would ruin their political careers, so they spread it out over 5 years so as to play the crash in slow motion.

5. Prices for final goods are going to have to rise dramatically.

Because the magic number to be just above the poverty line in most places is at around $14.25-14.50/hr so giving somebody $15/hr isn't some amazing jump, it just means that you can just be above the poverty line and have a chance to provide yourself the basics of life in food, shelter, heat, transportation. It is just bad policy to mandate in the way LA Country is trying to do.

You need a open floor for wages as the reality is somebody will always work for less and if they have the ability to sustain themselves off that lesser wage then employers should be able to pay that, just make sure protections are in place so nobody is exploited or the work is not going to hurt or kill anybody. For example, why should some HS kid who lives at home and is still classified as a dependent make this $15/hr? They shouldn't.

If the kid is in school and still at home there should be a lesser wage for these types of employes then Burger King or McDees would have no worries in being priced out as you would have youth who historically worked those crappy jobs ready to work them for more business friendly wages. One of my first jobs was getting $10 a day to sweep and mop and stock shelves in a grocery store, I would work 2-3 hours after school twice or three times a week. The math worked out to around $5/hr, way lower then the min wage that was probably around $7-8 at that time but I didn't complain.

I also don't see wages as a price of productivity. Americans are far more productive then Canadians but you make shit wages versus us. Wages are the price in profit generation you give your employer, you can call it productivity but I don't even think it is priced like that. McDees has high costs, inefficiency that is not tied to its physical force, it is forced to pay these people nothing because its their business model is so overhead heavy and complex to run that they run super tight profit margins. McDees could easily implement more efficiency into its business model but that would mean it would have to raise cheeseburger prices $1-2 which they don't want to do. So let them fail if they can't figure it out. I give no fucks. In-and-Out burger has surived with paying living wages and giving their employer benefits. There is a way to make lots of money and make sure your employees have a shot at getting ahead.

The outcry from this will come from low level employers, small business, of course... but more so for mid-level and entry level workers who have been making that $13-17 and thinking they live the high life, on a life of BMW payments, Credit Cards, and Starbucks evreyday. When they realize now that Julio Franco Escobar makes just as much washing dishes at the hipster restaurant they like to eat at they start to get angry.

The truth is wages have been stagnant or have regressed for close to 40 years now. A low skill meat cutter in the 70s who made bottom barrel wages would make the same today that would equal $19.00/hr+. They will poke fun of how coke used to cost .25 cents, or a hamburger at McDees in the 70s would cost you $1 but they leave out the part that if you factor in dollar devaluation for wages everybody should be making more across the board also.

This is why in North America people hate unions so much. Leave out the politics of it all. People hate that some how these people do less work but make more money. All unions have done is been able at the very minimum, to keep wages tied to inflation which means you have a dude who makes macaroni and cheese for a City run Old Folks Home making $22/hr. It sounds crazy, but remember that low skill meat cutter I was talking about? He would be making around the same as that too in 2015 so what is more crazy.. the system.. or the fact we all are still getting played by the system so badly.


Is that with more money low earners will be able to upgrade housing and options. Ironically low incomes earners will be more subject to save anything extra that comes in which is good (long term). Now many will have more options now to get a car going, maybe move farther out to to find housing they can afford to possibly even buy if they have been keeping their credit clean. Maybe they can afford to stay in the city now closer to work and services, a lot of good things will happen because of this.

The move for higher wages needs to happen. I don't like how it was mandated in, you need bigger structural adjustments to fix the waste and mess in the economic system that has suppressed wages for so long. Let the system run at its optimal state and let wages sit where they need to.

You will likley see Wage Whores now who will attempt t move to LA to get a better wage/lifestyle. Middle class lowlifes from Kansas will flock to LA to be hipsters selling coffee for 15/hr. Non-rent control housing will skyrocket because of that.

Also I can't see how this isn't a bait and switch. LA County must assume the upward of sales tax and income tax revenues. This is simply a business and goods tax in another name and I can't be not my typical cynical self and not think subsidies are worked it for the eventual moaning that low rung employers like McDees will do to city and County.

[kerouac]

Will Los Angeles even be around by 2020?



It will take a lot more than $15/hr to keep workers around if there's no water

[Cr33pin]

I haven't eaten fast food in a few years a least. But I remember when I did and have been with people who still order it.... and those idiots working t fast food joints don't deserve $15 a hour in any way shape or form. It was news worthy when I got exactly what I ordered.

Ridiculous giving fast food workers $15 a hour...

[KorbenDallas]

"People will move from the midwest to California." Kosko


Hahaha..good joke. The truth is Californians have been moving to the interior of the country in order to live under less regulation and have a better life, the only added population Cali is getting is from Mexicans.

[Porfirio Rubirosa]

*shrug*

McDonald's is trying to 're-invent' itself after disappointing figures across the globe; automating most of their restaurant operations thereby dismissing most employees is a very interesting possibility. Personally, I find it quite exciting; mankind has speculated and endlessly theorised on the capacity of machines to replace manual labour since the advent of modernity and especially after the Industrial Revolution and I'm starting to believe that will happen in the foreseeable future. In my opinion, it is fascinating; our own creations (or rather the creations of the intellectual elite of our species; I find it a bit dishonest to take credit for the mental machinations of my fellow men) could replace us within the next decades. I'm not too worried; we'll eventually find a way to cope.

I'm an ordoliberal. Unsurprisingly, I passionately oppose minimum wages for they can never improve the economic situation; at times they are useless and do absolutely nothing but at other intervals they are extremely harmful. Apart from the usual 'it'll cause a rise in prices for consumers' I also think minimum wages are harmful to the very demographic they are supposed to aid in achieving a 'decent standard of living'. This demographic is of course the unskilled and often very young segment of the populace. Basically, young students and non-students alike would find it difficult to find jobs at all. Remember we're talking about people with very little experience or qualifications in any field so a minimum wage job at McDonald's is pretty much all they can hope for at that age unless they're smarter than most and start an internet business but that's a topic for another time. Finally, it will undoubtedly affect smaller businesses unable to cope with the costs of paying higher salaries to their employees; large businesses might take a hit but they'd be perfectly to afford the cost of employees or 'mechanisation'. I doubt smaller businesses could afford literally buying robots to conduct most operations although technological developments might make them more accessible in the next few years.

So yea, I don't consider it a particularly intelligent move on part of the authorities in Los Angeles. Quite frankly, I don't think it would benefit anyone and it could be harmful to the local economy. Nevertheless, it might be a blessing to neighbouring jurisdictions; something similar to the Paradise vs Las Vegas situation could happen albeit on a much smaller scale.

[Parlay44]

I was making $15 an hour when I was 21. I won't get out of bed for that now.

[CH-Toronto]

While there will/should be a negative impact on the rise of the minimum wage, we should really be looking at Seattle (a year from now). They should be a decent litmus test for what will happen in LA.

[Suits]

The real problem is that there isn't enough balance in the work place between the supply and demand of the skills that people have or are willing to get / capable of getting.

That imbalance is almost always exploited by the people with more power.

However, increasing minimum wage is simply a Band-Aid that will inevitably get ripped off by inflation, sooner or later.

Communism was an attempt to fix this consistent problem in many economies, but we all know how well that much power in the hands of a few works out.

I think the real solution would be a move away from a consumer culture and economy, towards investing in real value that lasts for generations.

Imagine a region with a consistent population, enough sturdy housing for all of them that required few and inexpensive repairs, and with every man and woman capable of gardening enough vegetables to survive well enough that they always have the option to tell their asshole boss to shove it.

Not sure if that imaginary world is realistic, but I'd rather be moving in that direction than away from it.

The real reason why people make less than $15 an hour is because they have no real power to leverage.

[KorbenDallas]

^^

It's almost as if a large amount of unskilled workers have flooded the United States labor market in the last 30 years that has stagnated wages and depressed the negotiating power of workers.

[la_mode]

Standard divide & conquer.

Don't be surprised if it somehow gets delayed to 2025 or even 2030 - or simply never happens.

The idiots in most of the country will use to point out how liberal California is, how low-skilled workers don't deserve it, how it's LA being LA.

The economy is theoretical, yet the left & right always think they know what is best. If somehow society could sustain itself where everyone could make a living wage, that really shouldn't be a bad thing. You think they'd have it figured out by now. If the lower-income didn't exist, the hivemind wouldn't feel such a need to brag about their latest Apple product. May actually make society less insufferable if it works.

[Jumppy]

Milton Friedman got a bit on this with his case against equal pay for equal work.

Nowadays with these government restrictions, people have less power to bargain their wages. What is going to happen to the college student who wants to wash dishes just to get by? With this state interference, the government is requiring people to be paid more than they're worth to businesses.