Good explanation of min wage negative impact

[Yewheng]

http://www.wsj.com/articles/another-minimum-wage-backfire-1439249236

This article is a good explanation of why setting minimum wage is no good for lower income people.

Many people think setting minimum wage does benefit do good for lower income people as they will earn more which in turn will be less stressed out in their financial expenses. However they overlooked on the fact that by setting minimum wage, it actually backfire as explained in the above article.

Many Singaporeans had been voicing out for government to set minimum wage just like other country but our government stay firm and say "No, we cannot do that" this I feel government is doing the right thing for lower income people. However one thing that the government lack of is clear explanation to convince why setting minimum wage is no good.

I post this article to educate people that setting minimum wage do more harm than good, and hope people can see the good intention of government to stay firm to say no to minimum wage.

 

 

President Obama has frequently demanded an increase in the federal minimum wage to $10.10 from $7.25. Meanwhile, dozens of states have set minimum wages above the federal level and politicians from Seattle to New York are congratulating themselves for taking it all the way to $15. Maybe they should look back at the workers they’re leaving behind on their march to progressive-landia. Make that ex-workers.

 

Last week the Wendy’s Company did a public service on its second-quarter earnings call by explaining how mandated wage hikes will lead to fewer jobs for the low-skill workers that progressives claim to be helping.

 

First, CFO Todd Penegor talked about the pressure to pay higher wages and said that “we continue to look at initiatives and how we work to offset any impacts of future wage inflation through technology initiatives, whether that’s customer self-order kiosks, whether that’s automating more in the back of the house in the restaurant. And you’ll see a lot more coming on that front later this year from us.”

 

So the company will now use machines to do jobs that used to be done by people who have become too expensive to employ. We keep hearing that these minimum-wage laws benefit restaurant workers. But since many will no longer be working in restaurants at all, the reasonable conclusion is that the activist campaigns to raise the minimum wage are mainly intended to benefit the unions that back them.

 

On last week’s call with securities analysts, Wendy’s CEO Emil Brolick was asked how the franchisees who own and operate Wendy’s locations could raise prices to offset the higher wage costs in places like New York. He replied that “our franchisees will likely look at the opportunity to reduce overall staff, look at the opportunity to certainly reduce hours and any other cost reduction opportunities, not just price. You know there are some people out there who naively say that these wages can simply be passed along in terms of price increases. I don’t think that the average franchisee believes that.”

 

Mr. Brolick elaborated that “we believe that some of these increases will clearly end up hurting the people that they are intended to help. And we continue to believe that one of the great opportunities you have in a business like ours is that an entry-level person, in a very short period of time, can rise to become a manager in a restaurant, and have an income above the median household income in the United States of America.”

 

We see here again the vast gulf between progressive claims and progressive reality. Remember last year when McDonald’s then-CEO Don Thompson, amid protests over entry-level wages, agreed to President Obama’s idea for a wage hike? Then came news of new automation plans at McDonald’s. Just what struggling low-wage workers need. Another law that prices them out of a job.

Edited August 11, 2015 by Yewheng

[Atonchia]

http://www.wsj.com/articles/another-minimum-wage-backfire-1439249236

 

This article is a good explanation of why why setting minimum wage is no good for lower income people.

 

Many people think setting minimum wage does benefit do good for lower income people as they will earn more which in turn will be less stressed out in their financial expenses. However they overlooked on the fact that by setting minimum wage, it actually backfire as explained in the above article.

 

Many Singaporeans had been voicing out for government to set minimum wage just like other country but our government stay firm and say "No, we cannot do that" this I feel government is doing the right thing for lower income people. However one thing that the government lack of is clear explanation to convince why setting minimum wage is no good.

 

I post this article to educate people that setting minimum wage do more harm than good, and hope people can see the good intention of government to stay firm to say no to minimum wage.

 

Cannot read, not a WSJ subscriber

[Yewheng]

Cannot read, not a WSJ subscriber

Pai Sei, updated with quote from WSJ article.

Edited August 11, 2015 by Yewheng

[Lala81]

The productivity drive already affecting even macs.

Quite a few macs now have counters where u pay with nets

[Yewheng]

The productivity drive already affecting even macs.

Quite a few macs now have counters where u pay with nets

That is why government is now pushing for productivity growth instead of just setting minimum wage. As setting minimum wage will force more companies to go on automation, if those companies already on automation, they will ramp up automation at a faster rate. This will impact low wage worker as they will be out of job.

 

Actually I think Macs come up with nets thing is not because of wage issue, it is because they find it hard to hire people due to quota issue in Work Permit. Very little Singaporeans want to work at mac and that's the fact. When they already hit the quota and still need people but cannot hire, go on automation lor.

 

That is also why government is very careful not to set quota too strict, if not it will also drive out companies to go automation too,

Edited August 11, 2015 by Yewheng

[Atonchia]

Pai Sei, updated with quote from WSJ article.

Thanks!

[Evillusion]

http://www.wsj.com/articles/another-minimum-wage-backfire-1439249236

 

This article is a good explanation of why setting minimum wage is no good for lower income people.

 

Many people think setting minimum wage does benefit do good for lower income people as they will earn more which in turn will be less stressed out in their financial expenses. However they overlooked on the fact that by setting minimum wage, it actually backfire as explained in the above article.

 

Many Singaporeans had been voicing out for government to set minimum wage just like other country but our government stay firm and say "No, we cannot do that" this I feel government is doing the right thing for lower income people. However one thing that the government lack of is clear explanation to convince why setting minimum wage is no good.

 

I post this article to educate people that setting minimum wage do more harm than good, and hope people can see the good intention of government to stay firm to say no to minimum wage.

 

 

 

well...even without minimum wage i think the company will turn to automation comes the day. Business is about profitability and effeciency is what automation is all about. Without minimum wage workers can be exploited for maximum gain but with minimum wage we may lose the edge. It cut both ways....best is to set a level which wont makes the worker feeling exploited and cheap but still gives that business edge. The numbers is up for everyone's debate. Edited August 11, 2015 by Eviilusion

[Atonchia]

The productivity drive already affecting even macs.

Quite a few macs now have counters where u pay with nets

 

I know the usage of self service tools wasn't directly affected by minimum wage. But the restriction of manpower.

 

We have seen supermarket retailers having more stores with Self checkout counters.

 

Restaurants with self service order chits or tablets to alleviate the manpower reduction.

[Yewheng]

well...even without minimum wage i think the company will turn to automation comes the day. Business is about profitability and effeciency is what automation is all about. Without minimum wage workers can be exploited for maximum gain but with minimum wage we may lose the edge. It cut both ways....best is to set a level which wont makes the worker feeling exploited and cheap but still gives that business edge. The numbers is up for everyone's debate.

The thing is let the market force do the adjustment, If the company is exploiting people but pay very little wages, sooner of later the employee will get fed up, quit and look for other job that they will be treating them better. If come to worst case scenario, employees may protest or complain to MOM about the company exploiting people. Plus nowadays with social media, if they spread on the bad image of the company, the said company will also be affected.

 

In that way, it is a self-sustainable cycle as it does not involved government intervention, company no good, look for other company, no big deal. If government step in minimum wage, even if people willing to accept lower wage for the job, the employer will also not hire them due it is against the law to do that. So it will backfire terribly.

Edited August 11, 2015 by Yewheng

[Atonchia]

Even our central rubbish chutes in HDB block was meant to reduce manpower reliance.

 

Old HDB units require manpower to collect rubbish chutes by chutes, now centralised chutes

 

Reduce manpower requirement

Reduce smell

Less pest around the block

[Tonyng]

http://www.nytimes.com/2015/07/24/opinion/david-brooks-the-minimum-wage-muddle.html

 

 

Minimum wage is controversial topic. As it stands, both sides can have good arguments. If it is always so bad (and so simple to understand) - why economists can hold up examples where it succeeds?

 

I could only wonder if minimum wage would succeed in OUR context.

 

So far the government has been stating their conclusion. No real debate.

 

This is the problem.

 

 

Which is part of a wider problem.

[Tonyng]

http://www.forbes.com/sites/neilweinberg/2010/10/23/nyt-vs-wsj-liberal-bias-vs-conservative-bias/

 

One more thing - media bias is very very real.

[Evillusion]

The thing is let the market force do the adjustment, If the company is exploiting people but pay very little wages, sooner of later the employee will get fed up, quit and look for other job that they will be treating them better. If come to worst case scenario, employees may protest or complain to MOM about the company exploiting people. Plus nowadays with social media, if they spread on the bad image of the company, the said company will also be affected.

 

In that way, it is a self-sustainable cycle as it does not involved government intervention, company no good, look for other company, no big deal. If government step in minimum wage, even if people willing to accept lower wage for the job, the employer will also not hire them due it is against the law to do that. So it will backfire terribly.

i know of many who worked 8-5 paid about 1000-1200 a month. They dont complain because its definitely better then not having a job at all and luckily most of their children have growned up or has joined the workforce. These are the uneducated and a luckily only a few handful are below 30. As i already said its a fine balance between minimum sum and not.....doesnt need that 15 bucks an hour thingy...

[Yewheng]

http://www.nytimes.com/2015/07/24/opinion/david-brooks-the-minimum-wage-muddle.html

 

 

Minimum wage is controversial topic. As it stands, both sides can have good arguments. If it is always so bad (and so simple to understand) - why economists can hold up examples where it succeeds?

 

I could only wonder if minimum wage would succeed in OUR context.

 

So far the government has been stating their conclusion. No real debate.

 

This is the problem.

 

 

Which is part of a wider problem.

It's seems to be that minimum wage is successful without looking deep into the picture. Government will always want to paint a good picture even if the numbers are bad. When numbers are bad, what government do? Change the mode of calculation to make the figure look good, or remove certain aspects that push down the number and end result is the numbers look not too bad.

 

Just look at unemployment rate for example. If government includes those who did not managed to find a job within 6 months. The unployment rate is actually a lot higher, plus the calculation is that those working part time temporary are also considered as employed. So you see, it is because of these little details that government trying to hide and remove that make the number looks better.

 

If look deeper into the labor participation rate, you will notice that it is of all time low in USA. So why so little people join the workforce? Is it many people are too rich to end up no need work? NO, it is because they can't find job for many months and had given up on finding.

 

The negative impact of minimum actually outweighs the positive. If our government would to implement minimum wage due to public pressure. Maybe in the future, the government maybe forced to change the mode of calculation to make the figure looks good, but in fact it is not. So which one do you prefer?

[Joseph22]

All this set what level is all nice talk only.

 

I say deal with cost of living.

 

Namely housing price. If house not so expensive rental not so high. Everyone can earn that bit lesser to live more comfortably.

 

But I wonder, how many here are truly for the poor and willing to have lower property price.

 

I say before and shall say again, min wages is so that we can maintain a certain level of rental and property price.

[Wt_know]

i also agree setting minimum pay "regulation" is not a good idea

it's like you do or don't do also got the "pay"

but govt failed to control rapid rise of cost of living ... that's the problem

salary that one earns is not enough to cover cost of living or merely living paycheck to paycheck

although govt does not agree to set minimum pay but govt also "somewhat" apply minimum pay for low pay worker

so it's not entirely true that govt does not believe in minimum pay

the argument for minimum pay is mainly due to cost of living outrun income 2F2F

 

Many Singaporeans had been voicing out for government to set minimum wage just like other country but our government stay firm and say "No, we cannot do that" this I feel government is doing the right thing for lower income people. However one thing that the government lack of is clear explanation to convince why setting minimum wage is no good.

I post this article to educate people that setting minimum wage do more harm than good, and hope people can see the good intention of government to stay firm to say no to minimum wage.

 

Edited August 11, 2015 by Wt_know

[Yewheng]

i know of many who worked 8-5 paid about 1000-1200 a month. They dont complain because its definitely better then not having a job at all and luckily most of their children have growned up or has joined the workforce. These are the uneducated and a luckily only a few handful are below 30. As i already said its a fine balance between minimum sum and not.....doesnt need that 15 bucks an hour thingy...

But still without government intervention is good as if would be free market choices, if government step in, it disrupt the free market, if people willing to work for lower pay as set by the government for whatever reasons like working part time, can't find job for very little long and getting desperate etc, company will not be able to hire them due it is against the law to do that. See it disrupt the flow. Should there be no minimum wage, those willing to accept lower wages may actually gets hired by the company. And then at least they can get to earn some income 1st, who knows on the way the found a better paying job and jump ship. That would be better right? Company little loss, employees happy as they finally found a job at least temporary 1st.

i know of many who worked 8-5 paid about 1000-1200 a month. They dont complain because its definitely better then not having a job at all and luckily most of their children have growned up or has joined the workforce. These are the uneducated and a luckily only a few handful are below 30. As i already said its a fine balance between minimum sum and not.....doesnt need that 15 bucks an hour thingy...

But still without government intervention is good as it would be free market choices, if government step in, it disrupt the free market, if people willing to work for lower pay as set by the government for whatever reasons like working part time, can't find job for very little long and getting desperate etc, company will not be able to hire them due it is against the law to do that. See it disrupt the flow. Should there be no minimum wage, those willing to accept lower wages may actually gets hired by the company. And then at least they can get to earn some income 1st, who knows on the way the found a better paying job and jump ship. That would be better right? Company little loss, employees happy as they finally found a job at least temporary 1st. Edited August 11, 2015 by Yewheng

[Joseph22]

i also agree setting minimum pay "regulation" is not a good idea

it's like you do or don't do also got the "pay"

but govt failed to control rapid rise of cost of living ... that's the problem

salary that one earns is not enough to cover it's cost of living or merely living paycheck to paycheck

although govt does not agree to set minimum pay but govt also "somewhat" apply minimum pay for low pay worker

so it's not entirely true that govt does not believe in minimum pay

 

 

Let's not talk about gahmen first..

Are u willing to have a depress value of property for ur own property? if gahmen want and willing to control?

This one be honest.