"Poverty cycle" for businesses

That is what some people believe. But the guy making one dollar more than the minimum wage, will be wanting a dollar above the new minimum wage. And the accountant will know the multiply factor of his wage to the minimum wa ge. He may not raise his fees in lockstep, but he knows the cost of living in going up and will raise his fees accordingly.

The salary of a new graduate engineer is about the same multiple of the min imum wage now as it was is 1959.

Dan

Reply to
dcaster
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Obviously I don't have any experience in U.S. costs but, based on my Indonesian experiences (which may not have any relevance), if total cost is $8.50/hour then actual cash in hand would be about $4.25. Is that a reasonable assumption for someone mopping the floor in the U.S.?

In Thailand you would hire an illegal immigrant and pay them $3.00 a day.

In Singapore you would hire an immigrant and pay them S$11.50 a day and the government S$8.70 a day :-)

Reply to
John B. Slocomb

Exactly.

My grandfather was a great one for telling stories about "how it used to be" and one day he told a story about being paid $1.00 a day working as a carpenter. I later asked my grandmother about the story and she assured me that when she and my grandfather were first married that a "working man" was paid $1.00 a day. When I acted amazed at that she added, "well, bread was 3 cents a loaf, too".

Reply to
John B. Slocomb

It's not that simple. To the employer, it's close to that. But the employer is making a contribution to Social Security that is counted in their gross labor cost but not in the employee's gross income. In other words, it's not part of the $8.50, but it's part of what the employer figures as part of his labor cost.

In addition there is an income tax subsidy program (the Earned Income Tax Credit) that can give the employee a tax refund of up to several thousand dollars larger, annually, than their tax liability.

I think I'll stay here. d8-)

Reply to
Ed Huntress

That is what some people believe. But the guy making one dollar more than the minimum wage, will be wanting a dollar above the new minimum wage. And the accountant will know the multiply factor of his wage to the minimum wage. He may not raise his fees in lockstep, but he knows the cost of living in going up and will raise his fees accordingly.

The salary of a new graduate engineer is about the same multiple of the minimum wage now as it was is 1959.

Dan

How would a accountant working for the IRS or a Bank have the ability to raise thier salary based on the new minimum wage? An indepent accountant has to be competative with others in that field to stay in bussines. In the real world wages are based on supply and demand for a particular skill set.

Best Regards Tom.

Reply to
Howard Beal

erent multiple of the minimum wage. If the minumum wage goes up, all labor goes up by the same percentage.

It is not an exact amount, but pretty close. The minimum wage I am referri ng to is not the federal minimum wage. It is the actual wage that one has to pay to get unskilled labor. The wage required by law some times is less than the actual wage you have to pay to get unskilled labor. In Washingto n State before I left, you could not hire high school kids for less than a bout $12 an hour.

st of material is pretty much all labor costs if you look hard enough.

Do you really think you can raise the federal minimum wage and only have th ose getting the current minimum wage get more money?

You say it is bogus for that reason, but I do not see you stating the reaso n. Unless you mean it is bogus because the people that say that are not people you agree with.

vel, the backhoe operator would get the same amount of money for doing the same job. Say it took the backhoe operator 2 hours. So the backhoe operat ors made

There were a lot of owner operator backhoe businesses when I was doing cons truction. And you use to be able to go by the state employment office and hire people that were hanging around hoping to get some work. And we would make decisions on hiring a backhoe or casual labor depending on the size o f the job and how much the backhoe operators were charging. Small jobs you tended to go with casual labor as backhoe operators had a minimum charge t o make up for hauling the backhoe to the site. Larger jobs usually went t o te backhoe operator, as a backhoe was faster in actual time. But the cos t pretty much ran the same whether it was casual labor or backhoe. So rais ing the minimum wage also raised what the backhoe operators would charge.

ately goes to $60 an hour. Why would you pay more to use a backhoe if it c ost more than using unskilled labor? Why would you pay more to unskilled l abor than it cost to use a backhoe?

It is a real world example. And probably still works that way is most plac es. I can not find any place to hire casual labor around here. But you can hir e casual labor at a lot of the Home Depots. Just not here.

Well some of those minimum wage food workers are going away. Now you can o rder by texting on your smart phone, so some of the order takers jobs are g oing away.

Dan

Reply to
dcaster

I'd love to discuss this further, but I'm short of time. FWIW, here are the numbers that appear to have the widest belief and respect among economists. They came from a big study done last year by either the CBO or the OMB; I forget which.

They say that raising the federal minimum wage to $10.10 will cost

500,000 jobs. That's the number quoted widely in the press, but what they actually said is this: There is a 2/3 chance that it will cost between 0 and 1,000,000 jobs; a 1/6 chance it will cost more than 1,000,000 jobs; and a 1/6 chance it will actually increase the number of jobs. Their certainty on the absolute number affected is very poor, obviously, which is a consequence of the fact that the historical evidence is all over the map. However, as a percentage of the labor force, the numbers are miniscule, and the plus-or-minus numbers are correspondingly very precise. See below.

Next, they say that it will increase the wages of 900,000 people. Of those, roughly 2/3 are teenagers, so raising the minimum wage will have only a very small effect on reducing poverty.

Overall, their assessment is that it will have a small positive effect on the economy, largely though increased consumption and a small reduction of the cost of government subsidies they'd otherwise receive.

I have no problem with that. We're talking about effects on a fraction of 1% of the working population. What makes me crankier than usual is the claim that it will have sweeping effects throughout the economy, or that it will result in big, negative psychological effects because some people at the bottom end will lose their jobs. No way, Hose-A. The percentage affected will be too small to do anything except provide talking points for politicians.

Reply to
Ed Huntress

It follows, but no tat the same percentage. The minimum wage goes up

5%, the low earning non-minimum wage goes up 4% or 5%, the skilled and semi-skilled workers get 3%, the professional gets 1% - and the CEO and other 1%ers get 15% -- More or less
Reply to
clare

I didn't mention employer-paid health insurance, because it's likely that few people making minimum wage get it. But I realize your "doubling" of wages for calculating the employer's cost probably takes into account all wage earners.

Among those working for larger companies, who have been there a while and are making more than minimum, health care is a big expense to the employer that isn't counted as wages or salaries. I worked for a big multinational communications company until about five years ago. Their contribution to my health care insurance was close to $13,000/yr. Mine was just over $1,000.

Reply to
Ed Huntress

Like polishing each others shoes.

Reply to
Tom Gardner

Larry Jaques on Sun, 02 Nov 2014

16:41:21 -0800 typed in rec.crafts.metalworking the following:

Google Sea-Tac and min wages. Seems that the City of Sea-Tac voted to raise the minimum wage to $15. And "unexpectedly" people are not getting the usual perks. E.G., Free lunch and parking at work. No

helped out the "working class". Not to mention the surcharges being tacked on to everything to help raise money for the payroll.

I already despise the Seattle City Council, so that they want to do the same in Seattle, just confirms it. I'll fly out of Bellingham. Or Vancouver BC.

-- pyotr filipivich "With Age comes Wisdom. Although more often, Age travels alone."

Reply to
pyotr filipivich

John B. Slocomb on Mon, 03 Nov 2014 08:30:25

+0700 typed in rec.crafts.metalworking the following:

As I say "I quite smoking when cigarettes went to $2 a carton."

I lived overseas for a long time - I grasped the concept of the "Big Mac Index" long before it became popular.

-- pyotr filipivich "With Age comes Wisdom. Although more often, Age travels alone."

Reply to
pyotr filipivich

Yes, but I thought that the implication was that the company calculated their employee cost, which implies, in most cases, the total employee cost to the company inclusive of pay, allowances, lunches furnished, transportation, all insurance necessary to employee that man/woman, etc. At least that is how we used to calculate "employee cost". Everything it cost us to have you around.

Reply to
John B. Slocomb

In the case of someone "body shopped" it is the total cost to us for you being there. Mob and demob, salary, insurance both medical and liability, transportation, etc. This implies that you ask for a body, at your office, in Jakarta (for example) for a one year period.

For our own employees it varies, at least partly on what the Comptroller wants to show the tax man this year, but usually salary, bonuses, any tax liability paid by the company, and possible an allocation of part of the company's insurance costs.

We used the double salary for at least the first draft of a cost analysis for a bid tender and it was usually in the ball park although the accounts people might move costs from this account to that account so that the final tender costs might show, for example, that the people were competitively price while the "overhead" might be higher.

For example USAID project salaries are limited to 110% ( believe) of the individual's last salary. In come cases. for certain individuals, you might need to pay a higher salary so you would bill the 110% + overhead and profit and hide the extra in, say transportation costs :-)

That is true too and it might be tax wise to lump all the insurance into one place or another rather then in "Personnel Costs".

But your example demonstrates one of the many reasons that U.S. companies move certain operations outside the U.S. Our medical insurance, for expatriates, was nothing like the numbers that you mention. But of course we got shipped to Singapore for real medical problems.

Reply to
John B. Slocomb

For reference, when I hired employees at McGraw-Hill, '73 - '74, our rough budgeting figure was 1.6 times salary. By the early 2000s, at a much smaller company, it was 2.0. Most of the difference was healthcare.

For the employee, deductions from that $8.50 will be federal income tax, half of the total Social Security contribution (12.4% of salary for the employee) 2.9% of salary for Medicare, and, if applicable, state income tax, union dues (not likely if one is making only $8.50), and, commonly today for those who get company insurance, an individual contribution of up to $100 or so a week. That varies widely with the company. Some still pay nothing.

So the take-home is nothing like $8.50/hr.

Reply to
Ed Huntress

It's still the same, but lunches, transportation, and so on are rare here today. There is a workman's compensation insurance payment for the employer.

Reply to
Ed Huntress

It depends on what contract the non-hourly employee or independent contractor signs.

Reply to
mogulah

I was talking to a guy at the food store the other day about just this. He said they would work out great unless management painted them black. I don't believe in racial humor but I laughed out loud.

Reply to
Tom Gardner

Um, how does one lose all those things without a company- (city-?) wide meeting and confirmation hearings, etc?

Loverly!

There ya go! Write to them to let them know _why_ you no longer fly from their cities. Better yet, write an article for one of their newspapers and see if a sympathetic journalist will get it printed for you.

Reply to
Larry Jaques

Good idea!

"In July 2013, hotelier Scott Ostrander stood before the city council in SeaTac, Wash., pleading with the town not to adopt a $15 minimum wage.

really hurts. . . . And what I am going to have to do on Jan. 1 is to

"SeaTac, a community around Seattle-Tacoma International Airport, went ahead with its plan, becoming, on Jan. 1, the first jurisdiction in the nation to set a $15 minimum wage, according to the labor movement.

as the new wage law took effect that it was proceeding with the

hotel to add rooms, revenues and workers. The horror!"

And there's more. to that story:

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Reply to
Ed Huntress

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