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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThere's NO reason the minimum wage should be below $10.10/hour
Chart below is from the following report from the Center for American Progress (it's a good read): http://www.americanprogress.org/wp-content/uploads/2014/01/PovertyAnniversary.pdf
EXCERPT:
share of national income going to the top 1 percent
has more than doubled. In fact, income
inequality is the largest contributor to today’s
stubbornly high poverty rates. Research by the
Economic Policy Institute reveals that income
inequality added nearly 6 points to the poverty
rate between 1969 and 2006.
This concentration of wealth has been accompanied
by an erosion of the minimum wage,
which has lost 30 percent of its real value
since 1968. If the minimum wage had been
indexed to inflation in 1968, it would be more
than $10 per hour today. If it had kept pace
with the growth in productivity that has fueled
increased profits for those at the top, it would
be more than $17 per hour.
It is more important than ever to improve the
quality of low-wage jobs. Economic projections
indicate that low-wage jobs will continue to
persist without serious policy reforms.90 Absent
efforts to improve job quality, we will consign a
significant share of working Americans to life on
the economic brink.
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LeftishBrit
(41,208 posts)which corresponds to $10.69 at current exchange rates.
Nowadays, many recommend that people should be paid a Living Wage, which is the amount calculated as the minimum needed to cover the basic cost of living. It's not legally enforceable, but internal and external pressure can be exerted on individuals and organizations to pay it (doesn't always work, unfortunately; but even Cameron pays lip-service to it). This is currently calculated as £7.45 in the UK in general - it's considerably higher in London. This corresponds to $12.57.
So yes, $7.25 seems shockingly low.
Benton D Struckcheon
(2,347 posts)That still doesn't get all the gains back from productivity, but it will go a long way.
DJ13
(23,671 posts)$10.10 is too big of a compromise.
JaneyVee
(19,877 posts)
n2doc
(47,953 posts)They do pay a comparative pittance to their politicians to keep things the way they are.
Indydem
(2,642 posts)Wal-Mart profits for 2013 were $16 billion dollars.
They employ 2,200,000 people.
If all 2.2 million employees make minimum wage (the steadfast belief amongst the members of the DU) and work 30 hours per week (because the belief here is that Wal-Mart employees just can't get full time work or health benefits) then raising the MW to 10.10 per hour will cost Wal-Mart approximately 14.7 billion dollars.
So the profit for Wal-Mart will be 1.3 billion dollars. That makes their margin .27%.
If you think that the profit margin for business people should be .27% then you should be prepared for every business in this country to shut down.
Response to Indydem (Reply #13)
JaneyVee This message was self-deleted by its author.
HughBeaumont
(24,461 posts)7.25 is a damned insult and 10.10 isn't even a proper inflation correction. When did it all of a sudden become "SOCALTITS" to correct for inflation? That's now bad capitalism? Did all of you think that the 7.25 insult would just be around forever and never plan for any kind of rise? Enron economics is as idiotic as saying every business would close if you at LEAST corrected the minimum wage to inflation. Tell Germany, most of Europe or Australia that.
http://finance.fortune.cnn.com/2013/11/12/wal-mart-pay-raise/
Remember, that's not money that Wal-Mart actually pays out to investors. Most of that money is reinvested in its business. But it does pay out some in the form of dividends. And Wal-Mart has a higher dividend yield than the average retailer in the S&P 500 -- 2.4% vs. 1.3%. Adjust that for Wal-Mart's valuation vs. other retailers, and that means 4.6% of the return shareholders are looking for comes from the giant retailer's outsized dividend. That means the ROE it has to satisfy investors after dividends is 15.4%. Wal-Mart's actual current ROE is 21%. "What that suggests is that even Wal-Mart's investors think the company should pay its employees more, or at least expects it will," says Lee.
How much more? Wal-Mart has a book value of $76.7 billion. Take 15.4% of that, and that means investors are looking to get paid $11.8 billion a year. That leaves $101 billion to pay employees.
Wal-Mart paid its top executives and board members $66.7 million last year. The rest of the money has to be split among Wal-Mart's remaining roughly 2.2 million employees. Of those, about 1.4 million work in the U.S. Assume that Wal-Mart spends about 2/3 of that on the salaries of its U.S. employees, because salaries are generally higher here. That leaves $66.6 billion for the U.S. workers, or $47,593. The Bureau of Labor Statistics estimates that 30% of the average U.S. workers' total compensation is spent on benefits.
That means the average Wal-Mart employee's take home pay should be $33,315. Wal-Mart doesn't say what its actual average salary is. But Payscale estimated it to be just over $22,000 at the end of last year.
HughBeaumont
(24,461 posts)The company may also very well decide not to pass the cost in that way. “It’s likely that some share of that cost would be passed through, but it’s not likely to be one hundred percent,” Jacobs said. An increased wage could increase its sales, as workers would have more money in their pockets to spend on its products, which could mitigate the cost. Bloomberg recently reported that the company is considering supporting a minimum wage increase, given that millions of its customers would “now have additional income,” according to a company spokesperson, although he said the company hasn’t made a decision. A $10.10 minimum wage would give 16.5 million workers across the country $31 billion more in earnings. Given all of that, “That penny per $16 an item may not turn out to be necessary,” Jacobs added.
There are also other ways the company could increase pay for its employees without needing to raise its prices. A report from think tank Demos argued that instead of putting $7.6 billion on buying back shares of its own stock, it could use that money to give its workers a $5.83 raise, which would ensure they would all make over $25,000 a year when working full time. That has been one of the key demands made by striking workers over the past year.
Businesses like Walmart don’t just potentially benefit from higher sales when Americans have more money. They can also see benefits within their own workforces, such as improved efficiency and lower turnover.
randys1
(16,286 posts)not one, then my need for that car outweighs your ability to live...
because i am a rightwing piece of shit
Indydem
(2,642 posts)I have a restaurant franchise I'd like to sell you.
oneofthe99
(712 posts)Small mom and pop pizza house or small sandwich you have a point.
My favorite coffee is Dunkin' Donuts and the ones in my area are mostly owned by two brothers.
They are just completing building and soon to be opening their 12th location.
They both drive exotics
Indydem
(2,642 posts)The average intake on a Subway is less than $500k.
The profit is probably around 10%.
10 Franchise locations is back to $500k.
Spending $250k on a car is unlikely. Doing it twice, even more so.
oneofthe99
(712 posts)This is MSRP ,you can take off another 15 to 20 grand
JaneyVee
(19,877 posts)Would be? Average McDonalds makes $3Million a year per store.
Indydem
(2,642 posts)That's 2.6 million GROSS.
So take out all the costs of food, employees, rent, franchise fees, etc.
The average profit margin for a franchise is 10%.
So they are going to NET $260k per store.
5 Stores - Total Net is 1.3 Million. That's before taxes and SS/Medicare.
So with an income tax liability of about $465,000, they are down to about $835,000.
Being conservative with their expenses, lets say their housing and all other expenses is $85,000.
Therefore, your McDonalds franchisee who is going to buy a $250,000 car just spent 1/3 of their yearly disposable income on a car. No one who has their shit together well enough to run a 5 franchise operation is going to spend that much on a car considering McDonalds wants stores renovated every 5-7 years at a cost of $800k.
http://www.forbes.com/sites/caroltice/2013/08/30/million-dollar-burger-the-most-lucrative-fast-food-restaurants/
http://www.franchisefoundations.com/mcdonaldsfranchise.html
JaneyVee
(19,877 posts)They own a fast food restaurant! Not exactly a great pillar of society. The employees are poor. Why should owning a fast food restaurant make you a millionaire while you force your employees onto food stamps and welfare?
Indydem
(2,642 posts)Wow.
Really?
Have you ever owned a business? Made a payroll? Done without so your employees can get paid? You look down on fast food restauranteurs, but they are actually more fair to their employees than sit-down eateries that pay the "tip-wage" and tell the servers to split their tips with the busboys.
Your world view is obviously corrupted.
JaneyVee
(19,877 posts)Fast food restaurant. Obviously they look down on their employees to exploit cheap labor while they make millions doing zero manual labor. Take some of that money and spread it to the 20 employees yearly gross. WHat does the CEO do that merits such a wide pay gap?
Indydem
(2,642 posts)We are talking about individual franchisees who own the stores.
Most of them work right along side the hourly workers. I know a McDonald's franchisee, a DQ franchisee, and a KFC franchisee through my fraternal organizations.
They often work long hours, they do work alongside their employees at the restaurants, and they spend a great portion of their day helping their employees with personal counseling and advice.
Again, your view of things is unbelievably twisted.
JaneyVee
(19,877 posts)In sales, most earn more depending on location.
Indydem
(2,642 posts)That is GROSS. Before expenses.
The links are in Post #10.
10% Net. $260,000 per location.
JaneyVee
(19,877 posts)Also, you seem to avoid the fact that they can raise prices 25 to 50 cents an item to make up the difference. I'm sure no one will complain if their $10 meal is $10.50. Especially if it puts more money in millions of people's pockets and alleviates the need for strain on public assistance.
yeoman6987
(14,449 posts)Why do we make the workers out to be naive or something?
LanternWaste
(37,748 posts)"Why do we make the workers out to be naive or something?"
Less naive I think, and more desperate for any job that pays, regardless of how low that pay may be. However, I do realize the convenience that conflating the two may bring...
oneofthe99
(712 posts)That gross 500k a year
strange
Indydem
(2,642 posts)Most of the successful people I know don't either.
oneofthe99
(712 posts)People that gross 500k or more on average will put down 25K to 50K
on a 150K automobile , they trade for a new on average after 3 years
Very common
Most successful people always have debt , whether it's start up for a new building ,new business venture , machinery , real estate etc...
Indydem
(2,642 posts)I guess it doesn't surprise me, but the people I know who have been successful are more modest than to drive those kinds of cars, and smarter than to finance something that depreciates.
oneofthe99
(712 posts)the engineering of them , I met all kinds when I sold them.
randys1
(16,286 posts)Restaurant industry as a whole, no, Mcdonalds and subway and the like franchises are very successful...
This is only my observation being in the business world for 30 plus years
OK, I exaggerated, 5 McDonald's you would own two Audi's and a Porsche, and you wouldnt need all of those
Minimum wage everywhere in America should be $15...and for the small mom and pop shops you could make exceptions based on gross receipts or something...as there would be a certain group that couldn't afford this, but not McDonalds
But if we made here what we bought here none of this would be an issue, trade tariffs is where the real problem is
Laelth
(32,017 posts)-Laelth
joeglow3
(6,228 posts)This has been a causality of politics. The OBVIOUS answer is it should have been indexed to inflation in 1968, let alone the dozens of times it has been brought up since then. The cynic in me thinks the party establishment (not all rank and file Democrats) does NOT want it indexed, because they could not bring it up as often. I think both parties have their groups they are loyal to, but that is secondary to getting re-elected. These no-brainer issues piss me off.
