Chicago requires big-box stores to pay 'living wage'

Here's my opinion:

My Opinion

Sphinx

Here's my opinion:

My Opinion

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-rep

Very immature.

Oh no, not -rep. lol

Swift

That's exactly what I'm hinting at. This legislation will NOT stop with just the big names. It will trickle down to the not so big companies and force them to pay living wages in a job designed for 16 year olds.

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why do you conservatives always come up with the slippery slope idea?
thats basically off topic since this is not about what might happen, its about what actually happens.

It's simple math, the more the employer has to pay one person, the less people they can employ.

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what about some more simple math: the more someone earns, the more he can again spend.

do you really think that a store like walmart employs people to do nothing?
with that in mind, of course you could lay off half your workforce and let the rest do the job.

you're simplifying way too much here...

vladimir

do you really think that a store like walmart employs people to do nothing?
with that in mind, of course you could lay off half your workforce and let the rest do the job.

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I'm sorry, you've lost me. Who said anything about employing people to do nothing?


You said that someone who earns more, spends more.
I asked about the man who now earns nothing at all, because he doesn't have a job any more - his employer could previously afford to hire two people, but can now, with minimum wage laws, only afford to hire one, putting one guy out of work completely and seeing a concomittant loss in productivity themselves.


Look at it this way. I can afford to pay my employees $100 per hour and each employee make 10 reciprocating flangepipes an hour. If I'm paying $6 an hour to each employee and they're happy to take it, I can employ 16 people and make 160 reciprocating flangepipes an hour in my factory. Now along comes state law and says I must pay $10 an hour. I can only employ 10 people and I'll produce 100 reciprocating flangepipes an hour.

Minimum wage law has made 6 people, who were not well off to start with, unemployed altogether - and with similar trends in similar positions locally they will not be able to find a job doing the same thing and have to compete against all of the other people who have been laid off for fewer jobs. It has also reduced the output of my factory by 60%, meaning that I return less profit and can only afford to keep employing my fewer employees by sacrificing profit - and I risk my competitors' reciprocating flangepipes selling because there's 60% less of mine for the consumer to buy.

thats exactly what i mean, you're simplifying it.

you're only focusing on the amount of employees and leave everything else out of the equation. you're implying that with the new minimum wage law in place, a company will fire every second worker because they're now twice as expensive.
now, first of all, the minimum wage in this case is already at 6.50, so it won't be every second one. secondly, there is more to a product's cost than just labour (which of course is a factor.) thirdly, in this case, we're not discussing a pipefactory where the connection between labour and product price is that obvious.
according to the source, this law is entirely about "big box retail stores." like for example walmart, which employs people already for 7.25 an hour according to this article and makes a profit of 2.6 billion per quarter by the way. so its not looking like the wage increase from 7.25 to 10 is going to even hurt the company very much.

of course, it will have effects, but those are not as simple as you suggest. walmart is not just going to lay off every 4th worker (or even every second as you suggest.)
walmart is seeking profit, so it tries to fullfil the customers needs. but in order to make a profit, they have to be efficient. so they are employing just as many people as they need. if they lay some off, it will have an effect on sales and profit. thus they won't simply fire anyone who costs too much because it will decrease their profit. and if they would fire them and could not fulfill the same demand as they did before that would enable the competition to expand.
so they would probably look at the next option: increasing prices.
sounds bad at first, but then keep in mind that your walmart is nowhere near as labour intensive as your flangepipe factory and the walmart has a lot more customers than employees so i am fairly certain that this price increase wouldn't even be noticed by the vast majority (btw, i'd suspect that your pipes would be produced mostly by machines these days anyway.)
finally, there is of course the option of moving out of town.
now, with landprices in mind thats probably already done when possible. but they cannot move all their walmarts out of town because then they would loose a lot of customers who do not want or can travel all the way out to get some groceries. and considering that the law only applies to very large shops that could help smaller shops to survive and these tend to create more jobs than walmarts...

all in all, i wouldn't really say i'm qualified to find an ultimate conclusion on this issue. but then i don't pretend i'm the know-all and find one based on extreme simplification.
as far as i see it, the result could be anything from the loss of very few jobs to the gain of a few jobs and prices might rise by an unoticable amount.

In the real world minimum wage or a little higher or lower are the vast majority.

so how could it not effect anything ?


Get real .


The undergrounf ecompny ALONE of the US is larger than some countries GNP or GDP .

please read my post AND the news article before you answer, thanks.

(i have neither stated that it wouldn't affect anything nor does the article speak of a general minimum wage.)

I find it funny that this liberal here ^^^ is argueing with a Briton who lives in a Social-Democratic state that has done many of these things in the past. Quite frankly, if the Briton knows its a bad thing, can you not take it word for it?

So vladimir I'm sure that you want to raise everyone's taxes, introduce a national heathcare system, expand national welfare to all citizens older than 18 and give them the working wage, etc?

This is America, get with the program. Money is money, and there isn't anyway around it. Wal Mart is currently at the pinnacle of capitalism (unfortunately for us), and there really isn't much we can do to stop them. Remember when they tried to form a union at the Wal Mart in Canada? Yeah, same thing will probably happen in Chicago. Wal Mart closes up shop and heads for the suburbs.

Big business doesn't care if people can live on $6.50 an hour, and it isn't their problem if they can't. If they, or even you, want to go suckle off the teat of Big Government, by all means, move to Canada or Germany. You might like it better...

I don't know much about this stuff but when I read this, nor if this is going a bit off-topic but it makes me wonder.

http://www.macnewsworld.com/story/51110.html

'Workers live in dormitories on the site, 100 to a room, arriving with a few possessions and a bucket to wash their clothes. The accommodation may be free, but it comes at a cost: No one outside the plant is allowed to visit the workers.'

'Zang Lan, 21, from Zhengzhou in central China, has worked on the Apple assembly line for a month. Her 15-hour days earn her Pounds 27 (US$49.81) a month.'

"The job here is so-so," Zang Lan says. "We have to work too hard and I am always tired. It's like being in the army. They make us stand still for hours. If we move, we are punished by being made to stand still for longer. The boys are made to do push-ups."

'The site, as large as eight football pitches, is surrounded by barbed wire.
It employs 50,000 workers, and its six gates are manned 24 hours a day.'



I know this may be commonplace these days but this is just awful.

vladimir

why do you conservatives always come up with the slippery slope idea?
thats basically off topic since this is not about what might happen, its about what actually happens.

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It's not a slippery slope. This is how things are started. It's happening here in Maryland already with that stupid(just declared unconstitutional) Wal-mart bill. It's going on in Massachusetts now. The governments of many states are trying to force business to literally make sure that their employees are healthy and financially secure. Now, there's nothing wrong with that thought, the challenge is that people want to be healthy and financially secure working one job at a retail outlet for 40-50 hours a week while supporting a family of 4. That's just not right. If you agree to take the job for 9$, then that's what the wage is. Why does the government have to come in and tell the company to pay more to it's employees, causing a raise in the cost of their goods for most companies. Granted, businesses shouldn't be completely unchecked. But at the same time this is tearing at one of the most fundamental elements of a free market society.

vladimir

what about some more simple math: the more someone earns, the more he can again spend.

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Famine hit this point pretty well. But if the employers have to pay the employees more it 1) Causes a reduction in staff making the staff overworked in most cases. 2) Raises the prices of goods to consumers, the very people that this legislation is supposed to help. 3) Both 1 and 2

vladimir

now, first of all, the minimum wage in this case is already at 6.50, so it won't be every second one. secondly, there is more to a product's cost than just labour (which of course is a factor.) thirdly, in this case, we're not discussing a pipefactory where the connection between labour and product price is that obvious.
according to the source, this law is entirely about "big box retail stores." like for example walmart, which employs people already for 7.25 an hour according to this article and makes a profit of 2.6 billion per quarter by the way. so its not looking like the wage increase from 7.25 to 10 is going to even hurt the company very much.

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Here's what I want to know. WHY do liberals always punish the successful in America by taking the money they earned legally? It's like a penalty for success. "Don't make too much money giving people(the ones we represent) what they want or we'll punish you by taking some of that money!" And that's exactly what's happening here. Your and many liberals justification for this law is that Wal-Mart is making umpteen billion a year, so they should help their employees out more. That's the most ludicrous justification I've ever heard.

If you make more money then someone else, do they have the right to go to you and say, "Hey, you make more then I do. So help me pay my bills." Of course not. But the government has a right to go to the company that already pays a ridiculous amount of money in taxes and say, "Pay your employees more because you're making so much or we'll punish you with more taxes"? I don't care if the average rate is 7.25 an our. If there are 2500 employees that work 40 hours a week at the new 10$ an hour rate that will cost the company $13,200,000 a year just in new wages for absolutely no more work then they are currently getting. That's fair...how? Oh, right just because they make 2.6 Billion a quarter so it's fine to take 13 million since it's only a small fraction of that. Sorry, that still doesn't make it fair or right or even justified. Except to help politicians look good in the eyes of the voters. Of course, they'll look really good when the voters are looking from the unemployment and social services lines.

vladimir

thats exactly what i mean, you're simplifying it.

you're only focusing on the amount of employees and leave everything else out of the equation. you're implying that with the new minimum wage law in place, a company will fire every second worker because they're now twice as expensive.
now, first of all, the minimum wage in this case is already at 6.50, so it won't be every second one. secondly, there is more to a product's cost than just labour (which of course is a factor.) thirdly, in this case, we're not discussing a pipefactory where the connection between labour and product price is that obvious.
according to the source, this law is entirely about "big box retail stores." like for example walmart, which employs people already for 7.25 an hour according to this article and makes a profit of *2.6 billion per quarter by the way*. so its not looking like the wage increase from 7.25 to 10 is going to even hurt the company very much.

of course, it will have effects, but those are not as simple as you suggest. walmart is not just going to lay off every 4th worker (or even every second as you suggest.)
walmart is seeking profit, so it tries to fullfil the customers needs. but in order to make a profit, they have to be efficient. so they are employing just as many people as they need. if they lay some off, it will have an effect on sales and profit. thus they won't simply fire anyone who costs too much because it will decrease their profit. and if they would fire them and could not fulfill the same demand as they did before that would enable the competition to expand.
so they would probably look at the next option: increasing prices.
sounds bad at first, but then keep in mind that your walmart is nowhere near as labour intensive as your flangepipe factory and the walmart has a lot more customers than employees so i am fairly certain that this price increase wouldn't even be noticed by the vast majority (btw, i'd suspect that your pipes would be produced mostly by machines these days anyway.)
finally, there is of course the option of moving out of town.
now, with landprices in mind thats probably already done when possible. but they cannot move all their walmarts out of town because then they would loose a lot of customers who do not want or can travel all the way out to get some groceries. and considering that the law only applies to very large shops that could help smaller shops to survive and these tend to create more jobs than walmarts...

all in all, i wouldn't really say i'm qualified to find an ultimate conclusion on this issue. but then i don't pretend i'm the know-all and find one based on extreme simplification.
as far as i see it, the result could be anything from the loss of very few jobs to the gain of a few jobs and prices might rise by an unoticable amount.

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As a former employer I have a bit of insight into exactly what the cost of labor is and how it effects productivity and pricing. The cost to an employer of each employee can range from 21 percent to 50 percent or more of their base pay depending on the benfits offered. at the minimum you have your workmans comp insurance . so a 6.50 hr employee cost ( .ave) 7.77 and a ten dollar an hr employee cost 13.50 ...each hr. In a retail store each hr is not a PRODUCTIVE hr . unless each 13.50 employee is making sales that cover more than his cost , so on a slow day your employees could be costing you 22.00 and hour or more.
So here is reality at the rates above you are not offering any health care insurance ..and you wont be able to afford to . You will be offering the minimum benifits you can to reduce overhead . You will alos reduce the size of your work force. You KNOW from records of previous months / years approxomately what to expect in sales reciepts and what you need to meet your overhead . So to be PROFITABLE you must reduce your workforce .
it ludicrouse to assume that you can make up the extra 40 .00 per person a day by increasing productivity because in retail you do not produce you sell and to increase sales you either LOWER prices or increase advertising or both.
these options cost cash...cash you are spending now on unproductive employees .

A store like wallmart with a few hundred epmloyees WILL move someplace where the labor pool is less expensive . They have to ..a small retail will either close or have less emloyees working longer for less to no benifits.

This bullsnot arrow was aimed at stores like Wallmart but it hits RiteAids and other retails as well ..So if you are a large chain you decrease the amount of stores per demographic area and either reduce employees or benifits . you do what needs to be done to keep your net income as close to your projections as you can..or YOU get fired ( if your a regional manager or store manager in a " chain ' type operation " ) or go out of business if you are privately owned.

So the results of this bill are a higher base rate for labor .
Less labor to be hired
for jobs with less benifits like health care .
a shrinking pool of jobs in areas that need them..inner city stores in lower income areas wont be able to support or pay the higher prices that increased labor cost bring with them . so the stores will close or move..along with them go the jobs .

This bill is a disaster for the working people . And Chicago will pay in spades for their stupidity .


* The reason they make this type of money is through sound management and marketing and to KEEP making this type of money they will fire or lay off every person in Chicago and move to the Suburbs .
Also if I wanted to live in a country that could determine or was allowed to determine how much money I was allowed to make ..I would go to some socialist paradise and NOT live in the US .

vladimir

why do you conservatives always come up with the slippery slope idea?
thats basically off topic since this is not about what might happen, its about what actually happens.

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It is on-topic because the slippery slope concept refers to any new precedent set that can now be used to justify other legislation that targets specific companies or types of business. If this survives the courts it will tell the government that they have the Constitutional ability to step into any company's workings and regulate them specifically.

Can you think of a good founded reason why a law can target Wal*Mart or even big-box stores specifically? Are fast food and small grocery employees in any less need of that extra money? What about mom and pop shops? Why not them? Better yet, why not government run tourist attractions? What is the justification for targeting a specific type of business and by what Constitutional basis is that legal? Allow this and the precedent is set to target laws and you have fast food chains being told how to fix their food so that it is healthier and a million other situations like this. It opens a very ugly door that communist countries enjoy.

what about some more simple math: the more someone earns, the more he can again spend.

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And the less the employer has. That's fair.

thats exactly what i mean, you're simplifying it.

you're only focusing on the amount of employees and leave everything else out of the equation.

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Actually you are simplifying it to just the fact that employees need more money without considering how much they technically have when they all have that much money. You are using micro-economics, something which I find too many liberals doing. You have to look at it from a macro-economic standpoint. There is a large chain reaction here.

First of all, if I remember correctly Wal*Mart only has one store in the Chicago city limits and they have said they will move it and the new store they are planning to open to the Suburbs. Each Wal*Mart Supercenter can employ 700 or more people. That is 1400+ jobs that just moved out of Chicago. I guess they won't have more money.

Now, let's assume they don't move out of the city. Everyone will want teh higher paying Wal*Mart jobs. I mean, why would you work at McDonald's for $6.50, or whatever it is, when you can work at Wal*Mart for $10? Now, surrounding businesses must also raise their wages in order to keep employess and draw the work force. Now all the lower-income people are making $10. Poverty is not determioned by the number of dollars in your pocket, but how much you have compared to everyone else. If all the lowest paying jobs pay $10 then that is still poor and people in other businesses who made $10 before are suddenly poor as well. Plus other things will go up, such as housing and food, because every business has had to increase wages/prices to compete. The lower-income bracket might be making an extra $3 but now everything costs an extra $3. They are in the same boat as before.

Do you see where this goes? You don't just cause change in one sector, the entire local market changes to adjust.

Then other, less public, actions occur as well. Instead of just firing every other employee a company could be encouraged to replace them with an illegal immigrant. Or in order to reduce a workforce without actually firing people they just don't rehire. Reduction through attrition in a Wal*Mart type store is easy. These kinds of businesses have a high rollover rate and they could just not hire. So insteasd of current employees suffering, there are just not any new jobs. Or the third quietly performed option is, as danoff said earlier, the money is saved by outsourcing more people in a call center or technical type job. You have to pay guy A more money so you outsource teh job of guy B. What did guy B do to deserve that?


In order to cover more macro-economic effects would require going off-topic, but too many business-related laws are passed in order to appease a specific group without looking at the effect on the overall economy.

And despite all my rambling about macro-economics, I still stand by my argument that this is just unconstitutional to begin with. Free market does not have room for this kind of regulation, otherwise it is a socialized-market, which we do not have.

Everyone participating in this thread should read this.

http://www.tcsdaily.com/article.aspx?id=072806B

Vladimir, would you support a minimum wage of $100/hr? Why not?

We had a choice in Florida to raise the minimum wage, and I voted against it. Not surprisingly, the majority of the voters approved it. After all, the uneducated voter looks at that measure and thinks: "Free money for me...I'll vote yes, of course".

The people at the bottom of the chain feel like they've won something, however fleeting. The next day, the boss want productivity to increase...he'll naturally have to let a few complainers go from his payroll.

Well even as a Conservative, I could concede to the fact that the minimum wage could be moved up (as they are doing in many states) on the Federal level in order to keep pace with inflation and other rising costs of living. I'm not talking about $11 here, but something more reasonable, say $7-ish or so...

I don't think it would KILL business to do so, but with some solid data gainst it, I assume I could be proven otherwise. But I don't know for sure. I've never had to live on minimum wage (nor do I plan on it), so maybe my reasonings would be different.

YSSMAN

Well even as a Conservative, I could concede to the fact that the minimum wage could be moved up (as they are doing in many states) on the Federal level in order to keep pace with inflation and other rising costs of living. I'm not talking about $11 here, but something more reasonable, say $7-ish or so...

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Three things:

1) Raising wages to keep up with inflation doesn't work as it will cause inflation and they are still not making a "living wage."

2) Minimum wage jobs were never intended to be jobs for living on. They are the kind of jobs intended for teenagers or people just getting started and using them as a stepping stone. I only worked for minimum wage during college when I wanted minimum responsibility and some extra cash to get out of the dorms. Those jobs have a turnover rate of 50%-80%.

I worked at a Meijer for two summers at $7.25 (I was at $8.25 when I quit due to raises) and even being over two dollars above minimum wage they had an 80% turnover rate because it wasn't a job where people were expected to work long-term. The only people that hung around long-term were the ones that typically got promoted into management or had no drive to achieve anything more, despite rambling on non-stop about how they could be so much more and how they would go back to school one day.

3) Imagine you make $7 now due to working hard and getting merit raises over the past couple of years, or even getting hired into a job that starts at $7. Now, we raise minimum wage to $7. Suddenly you make minimum wage. Do we also raise your wage as well? If so, when do we stop this ripple effect? Does everyone get a raise? If not, how is this fair? We just put you at the bottom of the ladder. You were just punished for doing better. Why work harder when minimum wage increases will grow faster than your merit raises? Why do anything more than you need to keep your job?

I don't think it would KILL business to do so, but with some solid data gainst it, I assume I could be proven otherwise.

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No, it wouldn't kill a big business to do so (small businesses that scrape by are a different story) but find me a business that will accept a hit to their profit margin. It will hurt the employees down the line, even if the employees getting hurt aren't the ones getting the wage increase.

But I don't know for sure. I've never had to live on minimum wage (nor do I plan on it), so maybe my reasonings would be different.

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And did you do anything that others couldn't do in order to not live on minimum wage?

danoff

Would you support a minimum wage of $100/hr?

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I like this question...

I would actually be in favor of a phased raise to 7.50 hr in the minumum wage. As long as it was incremental over a year or two . Most states are already heading or are there and the min wage has not been adjusted for years... I actually know of NO jobs that pay min wage , (it doesnt mean they dont exist) for example my son went looking for a summer job...16 yrs old....no job started at less than 7.00 hr and he was hired to wash dishes at a resturant for 8.00 hr . He was working for a landscaper at 9.00 hr . And has worked for a painting contractor at 10.00 hr ...16 yrs old would qualify him as " entry level " .
This could be seen as the " market " taking care of itself also..as no one will work for min wage so wages must rise to attarct workers , especially for jobs that are being competed over...like low skill mundane dishwashing jobs.

ledhed

I would actually be in favor of a phased raise to 7.50 hr in the minumum wage. As long as it was incremental over a year or two . Most states are already heading or are there and the min wage has not been adjusted for years... I actually know of NO jobs that pay min wage , (it doesnt mean they dont exist) for example my son went looking for a summer job...16 yrs old....no job started at less than 7.00 hr and he was hired to wash dishes at a resturant for 8.00 hr . He was working for a landscaper at 9.00 hr . And has worked for a painting contractor at 10.00 hr ...16 yrs old would qualify him as " entry level " .
This could be seen as the " market " taking care of itself also..as no one will work for min wage so wages must rise to attarct workers , especially for jobs that are being competed over...like low skill mundane dishwashing jobs.

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I think that by the end of that you managed to defeat the opening statement.

FoolKiller

3) Imagine you make $7 now due to working hard and getting merit raises over the past couple of years, or even getting hired into a job that starts at $7. Now, we raise minimum wage to $7. Suddenly you make minimum wage. Do we also raise your wage as well? If so, when do we stop this ripple effect? Does everyone get a raise? If not, how is this fair? We just put you at the bottom of the ladder. You were just punished for doing better. Why work harder when minimum wage increases will grow faster than your merit raises? Why do anything more than you need to keep your job?

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I'm actually in that boat right now, making $7.75/hr as the minimum wage in Michigan will slowly be raised over the next two years. I'm not upset about it, but it is a little odd knowing that I will be making barely more than minimum wage (atleast in Michigan) as compared to when I was ahead by more than $2.

...It was a mild suggestion, so I really could go either way with this situation.

YSSMAN

I'm actually in that boat right now, making $7.75/hr as the minimum wage in Michigan will slowly be raised over the next two years. I'm not upset about it, but it is a little odd knowing that I will be making barely more than minimum wage (atleast in Michigan) as compared to when I was ahead by more than $2.

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While I have a problem with minimum wage in general I really have a problem with huge jumps like this for just this reason. You worked to make what you do and now you are being told that your work isn't worth too much more than the lowest you can be paid.

By telling the minimum wage workers that their efforts are worth more than they are currently paid they have told you that your efforts aren't worth what you thought they were.

The question now becomes, are they bringing them up or pushing you down?

You should ask why they want to do this. Because a person can't live on minimum wage and needs the money? That is what they say, and many believe that. The response should be, why do we pay based on needs? If a guy has five kids should he be paid more because he needs it? If not, then why pay a single person more because they need it?

[/RANT] - sorry, I got carried away.

FoolKiller

You should ask why they want to do this. Because a person can't live on minimum wage and needs the money? That is what they say, and many believe that. The response should be, why do we pay based on needs? If a guy has five kids should he be paid more because he needs it? If not, then why pay a single person more because they need it?

[/RANT] - sorry, I got carried away.

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That statement right there debunks the entire "philosophy" behind the minumum wage.

YSSMAN

by all means, move to Canada or Germany. You might like it better...

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i can only support that piece of advise because i already live in germany and i quite like it here.

I find it funny that this liberal here ^^^ is argueing with a Briton who lives in a Social-Democratic state that has done many of these things in the past. Quite frankly, if the Briton knows its a bad thing, can you not take it word for it?

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i don't see nationality as a qualification for anything.

Big business doesn't care if people can live on $6.50 an hour, and it isn't their problem if they can't.

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so you are also in favour of third world child labour?

So vladimir I'm sure that you want to raise everyone's taxes, introduce a national heathcare system, expand national welfare to all citizens older than 18 and give them the working wage, etc?

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yes, i am all for a national healthcare system.

as for the rest, why don't you guys ever get bored with that stupid stereotyping? i'm fed up with it. as soon as you start with that typical "every liberal is a commie, wants the highest taxes, welfare so much that nobody will work anymore and no more punishment for rapists and murderers than shoplifters" attitude you are disqualifying yourself.

vladimir

so you are also in favour of third world child labour?

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Child labor is a totally seperate topic. We're talking about adults here.