San Francisco to have $10.24 minimum wage. Highest in nation

"Again, answer me, why would a business that doesn't want to spend on competitive wages in the first place be inclined to spend more money when forced to?"

Because they need labor and because they want worker loyalty?

Increasing minimum wage this high doesn't do jack without making some kind of attempt to keep cost of living from increasing to match it. What San Francisco is doing is roughly equivalent to pulling as hard as they can on the end of a toy train and wondering why the caboose is still going with it.

Create a law that automatically raise minimum wage each year by the rate of inflation?

But is inflation a national phenomenon or does it vary by area?

You need a way to tie it to cost of living of wherever you live, because trying to use it against something determined nationally, rather than locally, is absurd in a nation the size of a continent. The cost of living can vary widely, for example, between urban and rural areas, and you wouldn't want the same minimum wage in both areas if it will help in one area and bankrupt everybody in another...

There's no national minimum wage, so I'd assume we're taking it as a given that this would vary by location.

Naturally. That wasn't my concern. My concern is, what do we tie it to in order to make sure it stays a living wage, rather than having to constantly update it with little gains each time.

Such is why my question is, is inflation a national figure or does it vary by location in the US? I honestly don't know...

It depends on your statistics agency. Statistics Canada keeps track of inflation down to the neighbourhood if you wanted that information (although maybe with the Tories attacking all the science ministries in the government that may no longer be true).

But typically you're unlikely to get a minimum wage that is any more geographically local than the state because it's not likely worth the extra bureaucratic costs to have so many different minimum wage calculations. The difference will be small, in terms of inflation, and probably not matter much. Local cost of living matters more than inflation rates. Cost of living changes are tied to inflation of course, but you could come up with some kind of cost of living to minimum wage ratio fairly easily.

Though again, I don't think it's worth the time. A single min wage for a state/province is good enough.

The larger problem is having sufficient number of good wage jobs. It seems some in this thread are focused on having the market decide everything blindly and not really consider the question "how should society look to maximise quality of life?". Afterall, the whole point of a market-based system was to have superior quality of life over other forms of economic arrangements. If you're just going to support an economic arrangement out of ideology, I have nothing I could really discuss since you're not basing it on anything humans actually care about.

edited 13th Dec '11 10:37:25 PM by breadloaf

When did I say that I disagree with the minimum wage? I specifically had issues with "minimum wage jobs are for the young and for people in between real jobs" things. See here. If someone is working a job, that job (and the skills required for that job) are what should determine the wage, not age or whether or not they can do some job other than what they're employed for.

Not keeping up with the ordinary US Treasury brand of inflation isn't the problem — that's the easy part.

The problem is that people who now have to pay employees more want to keep making the same profits to their bottom line. Trying to keep blindly raising wages to match that without attempting to restrain it is chasing your tail. Except it's actually worse, because people who were already being paid more than minimum wage for skilled labor and luxury/service goods aren't making any more than they were before, but cost of living went up around them, so you're shrinking that middle class too.

edited 14th Dec '11 12:08:48 AM by Pykrete

So why did unemployment go down in the United Kingdom from April 1998 to June 2008?

edited 14th Dec '11 3:26:25 AM by whaleofyournightmare

Here's the thing however, by and large it's demand which drives price increases. If a company thought that they could increase the prices and keep the same sales, they would regardless of input costs.

That's just an excuse (albeit one that often goes down smoothly). Economically, it's gibberish. Now, people making more can result in them being willing to pay more, ergo, inflation, but that's an entirely different argument.

I'd point out another problem with the idea that minimum wages are bad.

Its been proven time and time again that when the higher ups in a company support their workers over unruly customers, and treat their employees like valued workers instead of wage slaves, said workers are far more likely to give a shit about their job.

This is why there are companies out there that pay above minimum wage and dont appease unruly customers at every turn. Because its perfectly possible to turn a healthy profit without worrying so much about how much excess profit that you forget your workers are human.

Unfortunately, for those companies who do give more of a shit about getting an extra mansion this month, we need minimum wages to at least have some control over their reckless greed.

Because people who tout "minimum wage increases decrease unemployment" only look at short term because long term is hella more inconvenient to their argument

edited 14th Dec '11 10:50:16 AM by Midgetsnowman

Good on San Francisco. As well as doing good, they also provide us with the excuse to laugh at the free-market Austrian school rubbish.

I didn't know I needed an excuse for that.

If there wasn't a minimum wage, many employers would happily pay below that, and a lot of things would suffer. Obviously, the removal of a minumum wage wouldn't cause a total freefall, given the obvious benefits of offering higher wages to attract better staff, but there would still be definite reductions.

Obligating employers to pay a certain amount is massively beneficial for the market and for people generally. Obviously, there have to be limits to maintain economic viability, but increases are still a good thing, especially where the cost of living is high enough to severely affect net or adjusted wages.

TL;DR: Great move, delighted to see it.

@ deboss

The point is that if you have human beings whose work output is apparently so worthless that you cannot even survive on it, then you have a serious problem. I would not shrug it off as "meh, you're worth what you're worth". You're saying there's people worth so little they should die.

@USAF: Hohoho.

As good as the "higher minimum wages = lower employment" rhetoric is in theory, the fact is that it simply doesn't work in practice. Stingy employers will pay the minimum amount that they can; however, if an employee produces worth exceeding the value of what she is paid, the employer will likely increase her pay or risk losing him jumping to another company which will pay her for the work she does.

The employer has a greater advantage over the worker anyway, and will aim to screw the worker if they are able to do so. It is not "reality" to say that "actual worth" drives wages and employment, because it is clear that this "feel good popular [Keynesian thinking]" is what actually works in reality.

Unless the USA has greatly degenerated recently, inflation is a national matter. However, cost of living (which is what minimum wage is most relevant to) is dependent on the region. The minimum wage should at least have some rough correspondence with the cost of living in any given area.

@Allan,

Alright, but is there something quantitative to tie it to so that it rises according to costs of living? Or would we have to come up with some wishy-washy "cost of living index" and hope it works out alright?

Well, there are certain things that tend to have localized inflation. Rents, energy costs (sometimes), transportation costs (sometimes), but all these things have more to do with demand than costs.

Cost of index isn't very wishy-washy. Most countries have that per city, so that they can pay government staff the local amount (teachers especially). It's automatically recalculated each year and you can set your minimum wage to that level.

I should clarify: I say wishy-washy not because I'm worried about setting it too high, I'm worried about it being set too low...

Well that's all politics then.

Canada relies only on low-income cutoff and not on poverty rate to determine eligibility to state assistance (subsidized housing for instance). The minimum wage is pegged only against inflation and does not depend on your geographic location. That's not perfect, but it's good enough. At 10.25, if you take zero vacation and work 40 hours a week, you can earn 21k/year. That's pretty dismal so, I have no idea how Americans can accept something lower than that.

Eh, that's what happens when people are worth less than the cost of keeping them alive.

Like people who push carts at Home Depot?

Surely you're not implying that the fine individual who has opened our civilization's eyes to the worthlessness of S********** isn't an inestimable boon to our society?