Hacker News Reader

Comment by partiallypro | Hacker News Reader

It's more than that. If you have higher margins or more discretionary pricing power than your competitors and they are forced to raise wages (as you are,) by law, you can squeeze them out of business entirely by raising the minimum wage and destroying their margins. You're not likely to make minimum wage at Wal-Mart, but some of their small shop competitors do pay lower wages. In the end it's in Wal-Mart's interest to push for minimum wage hikes for this very reason (which they have in the past.)

View on HN

Exactly, for a company like Walmart, they know that (a) small competitors are not as efficient has they are, (b) small competitors will not able to invest in large scale capital projects to ameliorate wage increases (eg. robotics, self-checkout, etc)

It is simply a game of eliminating competition.

Well, unless people then make enough money to not shop at Wal-mart and shop at less dystopian visions of the future.

If people suddenly have more cash, prices will rise until equilibrium. After all, if everyone has $1 million and you auction off something in demand, you're likely to get a lot more currency than if everyone had only $1,000 to spend.

Of course, the money will be worth more when it's scarcer too.

You can't have capitalism both ways. Either the market will result in lower prices / greater efficiency (which negates your argument) or it won't (which means we need more regulation to correct market distortions).

The reality is a lot of companies, banks, and politicians have finally recognized that the US consumer class is tapped out and a significant portion of the world relies on that as a central economic engine. Even China isn't ready to fully switch away from being export-driven. To have consumers you need people with money in their pockets to spend. That means management and capital need to move back toward the historical division of profits with labor. We'll all end up better off in the long run.

California raising the minimum wage will barely impact unemployment. A few prices will rise a bit but the net effect should be positive. Some of the money will be due to multiplier effects but some will come from obsessively high corporate profits which is fine (companies are so overflowing with cash many are doing record stock buybacks for lack of a better ROI).

I feel compelled to point out that you're arguing against a ton of things I've never claimed to be true, primarily because I don't believe them.

There is zero reason to believe that prices will go up as much as wages.

Prices constantly rise faster than wages all over the world, there is actually zero reasons to believe that prices would only rise as much as wages, because they usually don't.

Companies that trying to sell you stuff don't look for an equilibrium it's not like they are saying you have to buy milk, apples, and bread so lets see how much you make to maximize profits if they are the ones that selling you milk and bread they'll charge you as much as "humanly" possible to the point of forcing you to give up on the apples.

You only have to look at long-term trends to see what nonsense that is.

Since you mentioned milk, let's use that. In the UK, in 1914, a pint of milk cost 1d, and the average wage was 16s 6d for a standard 58 hour working week.

That's an average wage of 198 pints of milk per week, or 3.4 pints of milk per hour.

In 2016, a pint of milk is 45p. The minimum wage is £7.20, or 16 pints of milk per hour. If you buy your milk in four-pint bottles (economies of scale not available in 1914), your wage doubles to 32 pints of milk per hour, a nearly 10-fold increase on a hundred years ago, and you're only working two-thirds of the amount of time per week, too!

To be pedantic there is no reason to believe increasing the minimum wage to 15 usd will increase prices proportionally to the increase in wages.

Ex. Someone who would be making 9 would see 66% increase in wages but because wage earners as a whole would only be earning a little more so the increase in prices would be proportional to the overall increase not the much larger individual increase.

Suppose that wages earned only increased 6%. The individual would easily see a great increase to his standard of living despite a small bump in price.

Also note there is no reason to believe that costs of businesses that rely on minimum wage work would go through the roof. Imagine 30% of their costs are labor and 2/3 is minimum wage work. 20% of their cost then double it perhaps and their costs increase 20%.

Note we are talking about an atypical service oriented business dominated by minimum wage labor.

This means that your taco costs a few more dimes but the dude making it doesn't need food stamps and welfare on your dime.

Prices constantly rise faster than wages all over the world

Perhaps you made a typo, but if not, you just said something that's exactly the opposite of reality.

Do you have any data that even slightly backs up what you just wrote?

http://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/@p...

Also googling "prices increasing faster than wages"...

People will still shop at Walmart, they'll just buy more stuff.

This could be solved by keeping taxes higher on bigger businesses than smaller ones (which are the bigger "job creators" anyway).

ALDI manages to continually beat Walmart – while paying far higher wages.

How? Efficiency.

Putting the pallets directly into the store saves 2 people who’d otherwise be stocking up shelves, for example.

Making shopping carts cost a deposit, which you get back upon bringing them back, ensures that you save another employee who’d otherwise work on that – instead, money-conscious families, homeless and teens do that for you.

A lot of companies can compete with Walmart at lower prices and higher wages – even in its home market.

I think you vastly overestimate how much Walmart pays its employees. Google "Walmart food stamps" and you'll lots of reading such as http://www.forbes.com/sites/clareoconnor/2014/04/15/report-w...

It's entirely possible to be paid above minimum wage and require food stamps, since minimum wage applies to everyone, to include minors and dependent spouses.

Increases to the minimum wage have had a brutal effect on black and youth employment, for obvious reasons. It's amazing how minimum-wage advocates refuse to accept reality.

The minimum wage should be the lowest amount a person is willing to work for.

The amount I'm willing to work for is effected by the availability of subsidized housing, food stamps, and Medicaid for all. Free minimalistic cellphones.

I probably benefit 15k annually. Making the crappy 14k I'm making survivable. My wife can't work due to medical issues.

Basically we don't have a rational market now and can't so the only rational way to keep companies from riding on everyone's tax dollars is to set an artificial floor.

That would be just abolishing the minimum wage.

What positive effect would be accomplished by abolishing the minimum wage. People don't actually have to be rational let alone moral actors. Do you really believe the middle class should be taxed to provide benefits for people that are working so that their employers don't have to pay more in wages?

That is literally what is happening now and there is no reason to suppose that in the absence of benefits that wages would be adjusted upward to compensate with any degree of expediency.

The people of our nations are precisely stupid enough to let the economy crash and burn as has been previously shown.

Reply on news.ycombinator.com