Seattle raises minimum wage to $15/hour (1 Viewer)

[Juxtatarot]

Jobs are hot. Paychecks? Not so much.

The American jobs machine churned out another 2.1 million new jobs in 2019, driving the unemployment rate to the lowest level since 1969. At a 3.5 percent jobless rate, employers report difficulty finding workers to fill the 7.3 million unfilled jobs in America.

Textbook economics would suggest paychecks should be getting considerably fatter as employers chase after workers to hire and retain. So why is wage growth just muddling along?

Year-over-year wage growth reached 3.4 percent in February only to stall, ending the year a disappointing 2.9 percent.

"As would-be workers become scarcer, we would expect employers to have to work harder to attract and retain the workers they want," wrote Elise Gould Economic Policy Institute in a blog post after the December jobs report release. "Wage growth is the most important indicator to watch in 2020."

America Inc. boasts strong hiring, stocks at record highs, a bright housing market and a consumer willing to spend. But American paychecks have not kept up.

Researchers at Brookings Institution say rosy jobs numbers each month don't tell the whole story.

Its analysis found 53 million workers aged 18 to 64 earn "barely enough to live on." That is a stunning 44 percent of the labor market whose median earnings are just $10.22 an hour, or about $18,000 a year. Typically, these are low-wage workers in big box stores and malls, restaurants and bars, janitors and housekeepers, child care workers and home health aides.

"It would be a mistake to assume that most low-wage workers are young people just getting started, or students, or secondary earners, or otherwise financially secure," the researchers write. They write that about two-thirds of low-wage workers are in their prime earning years of 25 to 54.

The fastest wage growth has been at the lowest end of the pay spectrum, partly because of labor shortages that give workers more bargaining power, and partly because states and cities have been raising their minimum wages. This year 24 states and 48 cities and counties will raise their minimum wages, a record. The Federal minimum wage has been $7.25 an hour since 2009

Many of those wage gains are laddered in over a period of years, so the impact may be delayed. But the overall lack of wage inflation is perhaps the biggest riddle in economics today.

Writes EPI's Gould, "Many working people are still not seeing the recovery reflected in their paychecks -- and the economy will not be at genuine full employment until employers are consistently offering workers meaningfully higher wages."

Some economists think higher wages are just around the corner. "Wage growth is a lagging variable, so it's possible that reflects the slowdown in payroll growth earlier in 2019," says Michael Pearce, senior US economist at Capital Economics. "With the labour market regaining some momentum in recent months, it's likely that wage growth will re-accelerate in 2020."

Many thought that 10 years into a recovery, we still wouldn't be waiting for meaningful wage growth.

Ironically, the December 2019 jobs report marks the 12th anniversary of the official start of the Great Recession.

 

[Zegras11]

Let's forever keep talking about the minimum wage instead of focusing on the education needed to raise wages.

 

[msommer]

Let's forever keep talking about the minimum wage instead of focusing on the education needed to raise wages.

If 53 million Americans can barely scrape by it does not seem like an issue that education can address in the short term.

How would you practically educate that amount of workers? 

What fields combine to 53 million open higher paying jobs that the previously lesser educated workers can immediately slide into after graduation

What happens to the 53 million less attractive and low paying jobs that they leave?

 

[stlrams]

Let's forever keep talking about the minimum wage instead of focusing on the education needed to raise wages.

Correlates into more student debt that will never get paid back. It’s a societal problem thus education is not the solution for most people.  

 

[tommyGunZ]

Let's forever keep talking about the minimum wage instead of focusing on the education needed to raise wages.

Didn’t realize you were on board for Warren/Sanders college subsidy expansions. 

 

[MAC_32]

If 53 million Americans can barely scrape by it does not seem like an issue that education can address in the short term.

How would you practically educate that amount of workers? 

What fields combine to 53 million open higher paying jobs that the previously lesser educated workers can immediately slide into after graduation

What happens to the 53 million less attractive and low paying jobs that they leave?

Of course it wont be a short term fix. In order for this problem to be addressed a long view approach is a necessity. And our society lacks the vision and patience to see that through. 

 

[msommer]

Of course it wont be a short term fix. In order for this problem to be addressed a long view approach is a necessity. And our society lacks the vision and patience to see that through. 

There may be a short term fix....

 

[FairWarning]

How is this working out for everyone?  Should have made it $25.

 

[whoknew]

How is this working out for everyone?  Should have made it $25.

Do you have a study or article that you are referring to? I'd love to see it.

 

[stlrams]

How is this working out for everyone?  Should have made it $25.

This is the perfect storm for inflation and increasing wages plays a part.  When I testified at state capital 3 years ago, I told my elected officials that their is a cause and effect that when you increase wages you get inflation.  But I never imagined something this bad happening.  

 

[Juxtatarot]

The prices of energy, cars and many of the other things we’ve seen a lot of rising prices on are certainly not caused by government imposed minimum wage increases.
 

 

[FairWarning]

This is the perfect storm for inflation and increasing wages plays a part.  When I testified at state capital 3 years ago, I told my elected officials that their is a cause and effect that when you increase wages you get inflation.  But I never imagined something this bad happening.  

The best way for people to beat the min wage is to learn a marketable skill.  I never thought it would get this bad either, but it was the perfect storm with COVID and global monetary policies.  

 

[FairWarning]

The prices of energy, cars and many of the other things we’ve seen a lot of rising prices on are certainly not caused by government imposed minimum wage increases.
 

A lot of the retail prices are due to wage increases.  

 

[Juxtatarot]

A lot of the retail prices are due to wage increases.  

Retail is having tremendous problems finding decent workers in the COVID/post-COVID era. Workers are requiring hirer wages. Unemployment is low. It not like there is this huge pool of legal workers who are willing to work at below minimum wage but the minimum wage laws are getting in the way.

 

[FairWarning]

Retail is having tremendous problems finding decent workers in the COVID/post-COVID era. Workers are requiring hirer wages. Unemployment is low. It not like there is this huge pool of legal workers who are willing to work at below minimum wage but the minimum wage laws are getting in the way.

Even at the production level.  My main supplier has had 2 price increases in 4 months, talking about another shortly.

 

[stlrams]

The best way for people to beat the min wage is to learn a marketable skill.  I never thought it would get this bad either, but it was the perfect storm with COVID and global monetary policies.  

That’s what I told my state senator who asked me how would you solve the problem of the working poor.  My first thought was your the senator and I’m a private citizen so isn’t that your job?  My answer was if you think $15 is a living wage why not just raise it to $25 or $50 so everyone has plenty of money but you know that won’t solve the the problem.  The best way out of poverty is job training that leads to better opportunities with a higher wage/salary. 

 

[FairWarning]

That’s what I told my state senator who asked me how would you solve the problem of the working poor.  My first thought was your the senator and I’m a private citizen so isn’t that your job?  My answer was if you think $15 is a living wage why not just raise it to $25 or $50 so everyone has plenty of money but you know that won’t solve the the problem.  The best way out of poverty is job trading that leads to better opportunities with a higher wage/salary. 

Some numbers about earning power and dropouts from Alabama -

https://alabamajag.org/why-a-high-school-diploma-matters-2/

 

[The General]

I don’t run a small business but I think this 15 an hour thing is an afterthought. 

 

[FairWarning]

I don’t run a small business but I think this 15 an hour thing is an afterthought. 

Depending on the area, one is selling themselves short at $15/hour min.

 

[General Malaise]

A lot of the retail prices are due to wage increases.  

Pardon the question, but isn't inflation a global concern?  

 

[The General]

Depending on the area, one is selling themselves short at $15/hour min.

Haven’t looked closely but I don’t think even many entry level jobs have paid that low in awhile. 

 

[FairWarning]

Haven’t looked closely but I don’t think even many entry level jobs have paid that low in awhile. 

Places like Dollar General still start out at minimum.  It’s amazing they get anyone to work.

 

[FairWarning]

Pardon the question, but isn't inflation a global concern?  

To different extents, yes - especially with the pandemic.