
Fight for $15 swells into largest protest by low-wage workers in US history - edward
http://www.theguardian.com/us-news/2015/apr/15/fight-for-15-minimum-wage-protests-new-york-los-angeles-atlanta-boston
======
calinet6
Despite the debate over short-term effects, I think many forget that this is a
rebellion over a general and widespread shift of income and wealth toward
higher-paid executives and knowledge workers, and away from lower-paid service
and production workers.

There are a ton of possible reasons for this (less powerful unions,
automation, globalization, etc. etc.) but my favorite is that it happened
simply because it could happen; because wages concentrate power and therefore
self-reinforce. The power vacuum (and therefore value vacuum) that emerged out
of that shift was filled, because it was available.

This is an effort to break that self-reinforcing cycle and say, hey, we as a
society do not support the idea that corporations exist solely for the benefit
of shareholders; we demand that they start existing a little more for the
benefit of their employees too.

We can debate about what effects it will have or not til the cows come home,
but the large scale effort is sensible and commendable to create a better
economic balance. So far, there's very little evidence to show that it will
make the sky fall.

~~~
socalnate1
The minimum wage is just really inefficient way to help people. I'd much
rather see a large increase in the earned income tax credit (which directly
helps those who need it most, without the distorting effects of a minimum
wage) or an introduction of a basic income system.

~~~
anigbrowl
How is the Earned Income Tax Credit not an economic distortion? One could
easily argue that it's a form of welfare to business as much as to people,
with the government picking up the slack for employers who won't pay adequate
wages. Minimum wage laws can indeed a challenge for small businesses and
filter through to consumer prices, but wages are not the biggest or only
expense most businesses face, and the pleas of poverty from many business
owners do not stand up to rigorous scrutiny.

~~~
greedo
It may not be the biggest, or only expense, but it is the largest controllable
expense for most retail and restaurants.

------
pdeuchler
People who browse HN should be some of the biggest advocates for this wage
increase, as it's our efforts in automation that is creating such huge profit
centers for these corporations. Yet instead of these profits being
redistributed throughout the business they're being funneled into financial
schemes to inflate stock prices.

The entire point of automation is to give the average person less work, yet
the capture of the benefits has already begun by those at the top. Make no
mistake, this fight will eventually end up on our doorstep as well, minimum
wage increases are merely the first salvo. If we back down now we are only
harming our future selves when this inane startup culture of "dedicate your
every waking hour to making the VC's rich" becomes the defacto MO of tech. If
neccessarily be completely selfish and realize that an increase in the minimum
wage will directly cause an increase in your very own salary... if for the
only reason that automating these more expensive jobs will become that much
more valuable.

But even if that doesn't convince you, the economic argument is pretty simple.
Minimum wage hasn't even kept up with inflation, much less cost of living in
this country. You don't have to give a flying crap about someone's "lifestyle"
to understand that creating a class of workers that will forever be trapped by
poverty is inherently bad for anyone without enough capital squirreled away to
live off the interest. If you want a healthy economy you can't have insane
gaps between just the middle class and those earning the lowest wage (not even
going into the gaps between higher earners).

At the very least you have to realize that your responsibility as a citizen of
the US (sorry non-US people, we still like you!) is to other citizens, not the
corporations.

Edit: I'll quickly address those arguing that the increase in wage will put
certain businesses out of profitability: In startup land we have no sympathy
for those who cannot raise/earn enough money to pay the costs for quality
engineers, why should we have any sympathy for a business that cannot continue
it's business model in the face of increasing it's _lowest paid workers '
wage_? I've not infrequently seen blatant scorn towards those startups with
terrible business models... let's not become advocates for MBAs who exhibit
the same kind of ineptitude.

------
imglorp
Remember what happened when the big financials got bailouts? One under Bush
and another under Obama? The banks said, please help us, if we fail we'll take
the economy with us. If you help us, we promise to make more loans and
stimulate housing growth.

What actually happened was they tightened up their standards and gave out very
few new loans, while dumping billions into board room bonuses. This is exactly
what happens when there's a tax cut: we used to call that voodoo economics or
trickle down. Sounds good in practice but it depends on the good will of
executives, which has been proven largely absent time and time again.

Now, take that behavior into the board room at Walmart or Target, and instead
of a windfall, it's a new expense (just flip the sign bit :-). Of course
they're going to raise prices; where else will it come from? Touching share
price is verbotten, as is anything in the executive suite.

~~~
stephengillie
When I saw companies like Walmart raising their wages:

[http://www.theatlantic.com/business/archive/2015/02/why-
walm...](http://www.theatlantic.com/business/archive/2015/02/why-walmart-
raised-its-wages/385670/)

And closing stores in response:

[http://www.zerohedge.com/news/2015-04-28/walmarts-
mysterious...](http://www.zerohedge.com/news/2015-04-28/walmarts-mysterious-
store-closure-devastates-california-city)

I realized that of course they would close the stores that are no longer
profitable. It's simple economics.

------
Domenic_S
I had an idea a while back that a job doesn't provide _wages_ per-se, but a
level of lifestyle.

E.g. as a software developer in Silicon Valley, my salary is somewhat large
compared to the rest of the world, but my lifestyle is fairly unremarkable for
a working professional (2 used cars, a house that needs updates, weekends off,
vacation time, etc).

I could move somewhere with a lower cost of living, and my compensation would
decrease, and if I did the same job I would probably live approximately the
same lifestyle (perhaps with marginal improvements to the house considering
SV's real estate situation).

If I moved up the career ladder my lifestyle would improve a bit; if I moved
down my lifestyle would get a bit worse.

Using this rubric of job type = lifestyle, what kind of lifestyle is a
minimum-wage job meant to support? There will always be a bottom-rung
lifestyle, and those that support themselves on minimum-wage jobs will always
occupy the next rung up from the bottom. The ladder itself may move up or
down, but compared to fellow workers in other jobs, they will always feel the
delta. And that's what this is really about, the unhappiness caused by seeing
that delta.

We were never meant to support entire families on minimum wage jobs.

~~~
gue5t
Some of us are interested in providing every human being with dignity and
comfort, if at all possible.

~~~
Alupis
> Some of us are interested in providing every human being with dignity and
> comfort, if at all possible.

Providing? Or Enabling?

How about you empower every human being to achieve dignity and comfort?

Education and high-skilled job training.

The solution isn't to just "provide", it's to empower. Providing is a short
term solution... one that must be re-visited every few years. Empowering
people to build themselves a future lasts forever.

~~~
Dylan16807
Providing dignity _is_ enabling. And we could provide it long-term to everyone
if we wanted.

~~~
Alupis
> Providing dignity is enabling. And we could provide it long-term to everyone
> if we wanted.

We have 77 years of history proving raising minimum wage is absurdly
ineffective at enabling individuals to climb out of minimum wage jobs.

Yes, one can indefinitely raise minimum wage every few years (as we have been
since 1938), but that doesn't provide long term growth for the individuals
trying to live on it.

Providing better and cheaper/easier access to higher education and high-
skilled job training has proven time and time again to be the only permanent
solution which lifts individuals out of minimum wage jobs.

~~~
Dylan16807
People should have a place to call home and not starve whether they have a
good job, a minimum wage job, or no job at all.

Education and training are a great way to help people move up, but we need a
ground floor too, rather than a basement full of jagged rebar.

------
jstalin
Make low-skill labor more expensive and you'll make it more attractive to find
ways to eliminate low-skill jobs, such as the hamburger machine:
[http://www.gizmag.com/hamburger-
machine/25159/](http://www.gizmag.com/hamburger-machine/25159/)

McDonald's is already testing ordering machines. I'm sure most of us have been
to a grocery store with self checkouts.

The minimum wage doesn't necessarily cause unemployment, but it does increase
unemployment amongst those with the least skills.

~~~
cgearhart
Your examples are instances of technology affecting employment, not effects of
the minimum wage. And continuing to depress the cost of wages will not stop
development of labor automation.

~~~
natecavanaugh
It doesn't stop the development of labor automation, but instead increases it,
much against the interest of those that fought against the maintenance of
current wages. It's like when oil producers increase prices, as a side effect,
they also increase the likelihood of a competing technology replacing them. It
makes sense in the short term, but speeds up the long term effect. Of course,
this is neither here nor there to the "aught/naught" debate.

~~~
anigbrowl
A bird in the hand is worth two in the bush; I think most people in low-wage
jobs would rather get paid a decent amount today and have some meaningful
financial options than be offered an alternative of longer tenure on slim
wages, which is only attractive if you don't think there's any prospect of
getting any other kind of job.

------
skrowl
I wish someone would stop some of them and ask them:

"What do you think will happen if you actually GET $15/hr?"

"Do you expect your employer to keep his same prices and same amount of work
force and just eat the labor cost?"

"What happens if you make $9 now, make $15 tomorrow, but tomorrow the prices
of everything you buy suddenly doubled?"

~~~
Mikeb85
> Do you expect your employer to keep his same prices and same amount of work
> force and just eat the labor cost?

Many will simply eat the cost, actually. The minimum-wage debate is more about
politics than economics. There's not as many minimum wage workers as people
think, so for very little economic cost, you can increase the quality of life
for the lowest paid workers in our society.

A few businesses may be forced to change, but those are the ones that run
razor-thin margins.

> What happens if you make $9 now, make $15 tomorrow, but tomorrow the prices
> of everything you buy suddenly doubled?"

Nothing will double in price. Given the amount of minimum wage workers that
actually exist in the US, prices shouldn't increase by more than 5%. Anything
more would just be opportunistic gouging.

~~~
greedo
That's incredibly naive. Most business owners won't eat the cost. They'll cut
hours. How do I know? Because I used to work in the fast food industry as a
GM. Whenever CA increased the min wage, the first thing our owner would do is
ask us how much more this was going to cost us, then he'd instruct us to cut
the number of hours scheduled. Because in fast food, it's not like it only
affects the workers making minimum wage, it bumps the entire pay scale. So if
min wage is raised by $1, everyone working hourly gets a $1 bump. For a
restaurant that has say 100 man hours of labor a day, that means $100 extra
cost per day right out of the owner's pocket. Multiply that by 365 and you
have a pissed off owner. He can't always raise prices, and labor costs are the
largest controllable expense. So what happens is that each store manager is
told that they need to make everyone work harder, and they have to cut $100
worth of labor each day. So the survivors get more money, but they get worked
harder; the losers get their hours cut, or they don't get hired as the
positions/hours are not replaced when attrition occurs. TANSTAAFL!

~~~
tzs
I don't understand why the restaurant waited until there was a wage hike to do
that. If they were able to cut hours and make the remaining people work harder
in order to make up for the extra costs due to minimum wage, couldn't they
have cut hours and made the remaining people work harder long before that,
when instead of the savings going to offset a new expense, they would have
gone into profit?

~~~
fragmede
Well, first off, maybe the restaurant doesn't run on greed? Hopefully there's
room in your philosophy for that to be a possibility.

Outside of that though, raising prices immediately hurts sales, but worse
customer service due to the restaurant being chronically short-staffed takes
longer to hurt sales. Being chronically short-staffed also makes for a worse
working environment which leads to employee turnover, which is more costly in
the long run, but when you're struggling to make rent _this month_ , the long
term costs may not be as apparent.

Finally, if it's a small restaurant where the owner also helps with the day-
to-day operations of restaurant (maybe they're even the chef), it mean's _they
'll_ have to work even harder. The owner may just find it worth the cost to
have an extra employee and be able to work just a little bit less.

~~~
greedo
Another issue is the misperception of franchisees as fat cats. Our owner had
five franchises; each cost over $2M back in the 80's. The average annual sales
were around 1-2 million, and he would net around 10%. So he invests $10M to
make $750K a year before taxes. That's 7.5% return. Not exactly AAPLesque.

So if you increase his labor costs from 20% to 30%, you just wiped out his
return. If you double it to 40% like a $15 increase would do, then he's got to
either automate or cut to the bone.

And yes I realize I'm conflating figures from the 80s to today, but the
percentages still hold.

~~~
Mikeb85
Sounds like he overpaid for the franchises themselves. That's just called a
bad investment.

I'd generally expect a restaurant to do twice as much in sales (or more) in a
year compared to the initial cost, and be able to recuperate the initial
investment in 5-10 years (one of the more recent restaurateurs I worked for
paid back his investors in 3 years, and has a second location 5 years in).

But even using his sub-par numbers, $750K a year since the 80's means he's
already recuperated his costs and made some serious profits since. What more
does he expect? He could close them all tomorrow and be ahead. If anything,
this anecdote does show just how greedy some people are.

~~~
greedo
The franchise business is just wacky really. The parent corporation owns the
land you use, so they become real estate tycoons, and they can cause huge
headaches to franchisees who don't play ball with their latest initiatives.
It's really hard to compare them to regular restaurants though. I'm not sure
if it's much different in Canada, as I've lost touch with a cousin who owned
some White Spots in BC when I was a kid.

------
rrss1122
Give them more money. Then they'll be able to pay more taxes to fund
unemployment benefits for all the people who will be laid off.

