Minimum Wage: How rich is your country?

How much is your dollar worth?



So… Minimum wages have been a hot topic all over the place, and with a few business owners we were discussing the impact. Most were a little frustrated, worrying about having to pay workers more and cut already thin profit/operating margins, while a few didn't really mind the possibility.

The first concern was, "we're going to have to raise prices", to which I immediately thought, "so will everyone else." And the increase really isn't that much when you calculate wage cost to revenue. And increase of 10% could be as little as a 1-2% increase in per customer cost. Or as high as 5% depending on the industry. (Possibly more in ones I'm not thinking of)

Someone is going to lose to some degree, as money is redistributed and certain people/corporations gain/lose buying power. Unfortunately, looking at this for unbiased information is a tough deal. Giving consumers more buying power, means certain vendors will gain more client business. If they do not have labour intensive workforces, this can be a huge increase for them. As well, a nation with more buying power means more imports, and when you factor in global trading… A whole country of higher paid households makes a big difference. At the same time, there are plenty of industries that will be harder hit by it, but then again most of them have already shipped jobs overseas seeking the lowest paid workers possible.

Anything coming out of the media is highly biased. Heck, most people in econ are either being supported indirectly during their studies, or they have finished and are working for the system in place. Making it hard to find people with credentials making a reasonable effort to present unbiased information.

In any case, I was looking at Australia particularly. The highest minimum wage as far as I can tell. The following article discusses purchasing power, which I found after searching around on the topic.

Minimum Wage And Purchasing Power Parity: Only Nine Countries Have A Higher Minimum Wage Than The US’

www.ibtimes.com...


The info graphic (see top) is kind of funny as they point out Australia's purchasing power is not even close to its minimum wage, but most importantly, it's still near the top of the list. Other media sources report Australia's "worst rate in over a decade"**, yet they still have lower rates than the US, and many other countries.

-

Purchasing power. While it's nice to say I make (x) amount of dollars every year… It's been a long time since anyone could leave the west and hit a third world/developing nation, living like a king off marginal amounts of cash. Most places in the world are just as costly as any local city. The noticeable change happens when you hit rural areas, and it's apparent you can get by for next to nothing. But it's not like any tourist areas are going to let you do that.

When you factor in purchasing power though, you will notice the highest minimum wages also have the highest purchasing power.

I don't think a minimum wage is going to make/break an economy, but it for sure will have an impact which forces industries to reshuffle. As for small business, paying workers a little extra is something many do to encourage good workmanship, give incentives, and demand good performance.

Many small businesses rely on consumers. Some of them are the same people that work in for minimum wage. If I own any type of sales/service, I may have to charge a little extra or incur the cost of paying workers a little bit more, but if my clients start spending extra when they come in, suddenly those costs are easily offset.

I was going to source some of my opinions backed up with studies that might be similar. But I digress, in my search for unbiased information I could not find any studies that were not backed by either progressive or conservative think tanks. And I just find it bad taste.

If anyone has any good references to completely unbiased information I'd be interested.

Im pretty sure the minimum wage was introduced to give all people a basic standard so that you dont go without food, shelter, warmth and water. It has for many years been abused by big business, who CAN afford to pay their employee's more, but choose not to. Also, the UK minimum wage has never risen above inflation since its introduction in the late 90's - That is a conspiracy in itself in my eyes.

With more people with degree's and no job's for graduates, everyone's wages are just being grinded down. Its like capitialism's own twisted version of socialism.

And now for the "You dont deserve to make more than minimum wage" in 3.........2.......1.........

With more people with degree's and no job's for graduates, everyone's wages are just being grinded down. Its like capitialism's own twisted version of socialism.

No silly, tax cuts, government loans and bailouts, protectionism, cronyism, all these things are the foundation of the free market.

Oh wait…

What percentage of the population of those countries earn minimum wage ?

Statistics are a bunch of lies I heard

Interesting subject. Around here in the rural areas it is probably like Mexico's $0.80/hour on average, if they get anything. There is a culture of "utang", or... I'll pay you later, which usually never happens. In the province there is also a much lower cost of living, where food is free if you grow it/forage, and water is usually free or very cheap.

In the cities though like Manila, I'd say an average of $2.50 an hour with a much higher cost of living for everything. (If they are working for a legit business, most of which are not.)

Bottom Line Up Front: Minimum wage anything is BS ... correction: Total BS

If a job doesn't pay enough ... you're stoopit to take it in the first place. Of course, if that's the only job you can get, it may be because you're stoopit ... and you might need to start looking at self-improvement.

reply to post by SearchLightsInc

Im pretty sure the minimum wage was introduced to give all people a basic standard so that you dont go without food, shelter, warmth and water. It has for many years been abused by big business, who CAN afford to pay their employee's more, but choose not to. Also, the UK minimum wage has never risen above inflation since its introduction in the late 90's - That is a conspiracy in itself in my eyes.

With more people with degree's and no job's for graduates, everyone's wages are just being grinded down. Its like capitialism's own twisted version of socialism.

I'm pretty sure minimum wage was introduced simply to assert government control. This may seem like a benefit to the common man, but it's ultimate benefit is to the corporation ... to the detriment of all other businesses. An increase in minimum wage is a guarantee of inflation, and how does that benefit anyone? Inflation most profoundly affects the middle and lower classes.

I don't hire people who are overqualified for a position. Hiring someone with a degree for a job that doesn't require a degree is an invitation to staff loss at the most inconvenient time. I love it when college grads come sniveling with their complaints that they were 'more qualified' than the person picked for a given job. It's a confirmation that I made the right decision. The only people I have ever had working for me, who optionally went to work for anyone else, were college grads.

There's a fair market value for goods. Each product is different so we don't expect to find the same price tag on an automobile tire that we find, say, on a can of soup. Employees are the same way ... so why should they all expect a level income?

There is an appropriate answer to the problem at hand. I assure you, it would not adversely affect anyone reading this post. Unfortunately, it is of no benefit to me to type it all out, so if you want to know what it is, I'll have to be elected POTUS.

reply to post by boncho


This was enlightening. Mexico .80 an hour? No wonder so many American companies are laying off American workers and having their parts and products be manufactured in Mexico. Not that I wasn't aware the minimum wage was low in Mexico, but 80 cents an hour? I'm sure a lot of these corporations who have plants in Mexico can easily pay workers a higher wage. This has GREED written all over it.

reply to post by WeRpeons


Basf, Sony, bayer American companies?

Sorry I had to say it

Nisan Nokia... I think half of your pic are not american, your message is true non the less

reply to post by boncho


The Economist (yes, the world's most respected free market magazine) said that boosting the minimum wage in the U.S. would increase purchasing power and actually raise profits for businesses due to an influx of spending that would make up for any wage increases up to around $10.00, after that, it would hurt businesses.

Mexico's minimum wage is only 80 cents an hour? Well, I went on a mission there and people make their houses out of scrap metal. Someone had a Super Nintendo back in 2005 or so.

I kind of liked it there, the people were nice and had strong communities. Although definitely poor. I was practicing my Spanish and I joked that I wanted to marry one man's daughter, and he was very excited about it - now I get it.

SearchLightsInc
Im pretty sure the minimum wage was introduced to give all people a basic standard so that you dont go without food, shelter, warmth and water. It has for many years been abused by big business, who CAN afford to pay their employee's more, but choose not to. Also, the UK minimum wage has never risen above inflation since its introduction in the late 90's - That is a conspiracy in itself in my eyes.

With more people with degree's and no job's for graduates, everyone's wages are just being grinded down. Its like capitialism's own twisted version of socialism.

And now for the "You dont deserve to make more than minimum wage" in 3.........2.......1.........

I will flame war with all of the idiots who say "that job is entry level" or "that job is low skill" etc..... If a man works 40 hours a week anywhere in the U.S. he deserves to be able to feed himself and his family, I dont care what job he has.

Anything less is slave labor at best, and anyone who thinks 40 hours of work shouldnt equal food and shelter is a parasite that simply feeds off the blood sweat and tears of humanity as a whole.

reply to post by Snarl


The main reason for the U.S. Minimum wage was to force the robber barons who were raping the working class back in the day to pay a wage a person could live on at a 40 hour work week. Just like over time pay, as a lot of them required their workers to work 60+ hours a week and they were still starving.

The robber barons are back, and they are wreaking havoc on society as a whole again, which is why walmart is the largest private employer in the U.S. but also has the majority of its workers being fed by U.S. tax payers in the form of food stamps and other welfare programs.

It should be a criminal offense for a company to make hundreds of millions in profits by way of the tax payers proping them up by feeding their underpaid employees.

If walmart and mcdonalds employees didnt get food stamps they would pay a lot more or go out of business as nobody would go to work 40 hours a week at these places if they couldnt even afford to eat.

The entire system is broken.

I say end welfare and watch the wages rise, or watch these places fail and get replaced by places with a business model that serves the bloated bank accounts of their share holders less and their workers more.

This wont happen though, as everyone knows the tax payer is the best source of corporate profits in the 20th century.

www.raisetheminimumwage.com...

These are your biggest minimum wage payers in the us. All require low skilled workers. DuPont, Exxon, Apple and General Motors dont have as many low wage workers as you might think because of a need for skilled and educated workers.
Pay scale is not the only reason business has moved out of the country. Every business pays social security taxes, work mans comp insurance, unemployment taxes and many have high healthcare costs and a large pension plan. One worker getting $8 an hour can cost $18 an hour to employ.



The below link is a good page to read for more perspective.

www.nfib.com...

Hoosierdaddy71
www.raisetheminimumwage.com...

These are your biggest minimum wage payers in the us. All require low skilled workers. DuPont, Exxon, Apple and General Motors dont have as many low wage workers as you might think because of a need for skilled and educated workers.
Pay scale is not the only reason business has moved out of the country. Every business pays social security taxes, work mans comp insurance, unemployment taxes and many have high healthcare costs and a large pension plan. One worker getting $8 an hour can cost $18 an hour to employ.



The below link is a good page to read for more perspective.

www.nfib.com...

Yes an employee making $8 an hour can cost $18 an hour to employ but the company is making in profit $45 an hour off his labors.

The company should not benefit more from a mans labors than the man laboring, it should be more in the mans favor or at a minimum equal, after all the man is doing all the work, the company is simply getting profit.

oblvion

Hoosierdaddy71
www.raisetheminimumwage.com...

These are your biggest minimum wage payers in the us. All require low skilled workers. DuPont, Exxon, Apple and General Motors dont have as many low wage workers as you might think because of a need for skilled and educated workers.
Pay scale is not the only reason business has moved out of the country. Every business pays social security taxes, work mans comp insurance, unemployment taxes and many have high healthcare costs and a large pension plan. One worker getting $8 an hour can cost $18 an hour to employ.



The below link is a good page to read for more perspective.

www.nfib.com...

Yes an employee making $8 an hour can cost $18 an hour to employ but the company is making in profit $45 an hour off his labors.

The company should not benefit more from a mans labors than the man laboring, it should be more in the mans favor or at a minimum equal, after all the man is doing all the work, the company is simply getting profit.

For instance a car repair place charging $180 an hour in labor, and paying the mechanic doing all the actual work $18 an hour, this is stupidity at its finest, and business 101.

Pay nothing take everything. That is the American business model.

Snarl
Bottom Line Up Front: Minimum wage anything is BS ... correction: Total BS

If a job doesn't pay enough ... you're stoopit to take it in the first place. Of course, if that's the only job you can get, it may be because you're stoopit ... and you might need to start looking at self-improvement.

I'm sorry I couldn't get past this hugely ignorant comment.

So someone is stupid because they choose to work?? How is someone stupid because they choose a to support themselves? I don't care if it's minimum wage or not.

Many people live on minimum wage because it's all they can find and many of those people have degrees and many don't that doesnt' make them stupid. You are an angry person with a huge ego it would seem. Why do you look down on people because of their choice of work? You don't know people's situation or why they have the job they do. You shouldn't judge another til you walked in their shoes.

I'd say more but the T&C's keep me from saying anymore.

reply to post by oblvion



Are you pulling these numbers out of the air? A business might charge $45 an hour. But they also pay for heat, electric, rent/mortgage, lawer fees, accountant fees , toilet paper, snow removal, advertising as so on. They can't just pocket the money and run.

Let me start by saying I can't entirely disagree with anything, except maybe the quoted portion, of your thread (below).

oblvion
reply to post by Snarl

 

The main reason for the U.S. Minimum wage was to force the robber barons who were raping the working class back in the day to pay a wage a person could live on at a 40 hour work week. Just like over time pay, as a lot of them required their workers to work 60+ hours a week and they were still starving.

Force, robber barons, starving ... unfair descriptives which make your argument sound personal and beyond rational discourse.

When I joined the Army, I was paid an even $550/mo. You served, you know the hours we were expected to pull, and I know you can do the math. Someone might address the three hots and a cot, but you and I know the raw values of those too. I'm not here to whine. It was a bed I made and I slept in it without making a fuss. Point is, most of us make choices without understanding the long-term consequences. If people allow themselves to become trapped by circumstances they're directly responsible for, I feel no sympathy, and I would back no measure forcing others into obligation. I do empathize.

Fast forward 20 years, and I'm starting at the bottom of the food chain again. Salary doesn't quite cover the rent, retirement check's the only thing getting us by, I'm taking a subway train 32 miles one-way to get to the office, and I'm still putting in at least 60 hours a week without drawing overtime. This, brother ... this is a rock bottom moment few expect with a wife and two kids to support.

Fast forward another 15 years, and I've put both kids through college while keeping head and shoulders above water. This was the result of hard work, patience, and perseverance. Over the past 10 years, I've helped more people out than I can remember, and the one's who failed taught me something. Some folks aren't born to succeed, and if you're not careful they'll drag you under like a drowning man will sink a rescue swimmer. So, for anyone who has made it to this point: Raise your kids right and get 'em started out in life on the right foot. That's your job description.

Now, about minimum wage ... as long as there's a job open in an oil field ... it's clearly a choice to accept that salary. If there weren't so many people who believed they were too good to get their hands dirty, it'd be hard to find a person willing to work at menial tasks. Kids could still earn some money after school instead of me having to deal with an attitude bearing forty-five year old cashier at McDonalds. But ... AmeriKa went and got all soft on the guy with a sob story, and they subsidize that lifestyle, while she occupies ... a blockade to progress.

No, not everyone's going to make it into management. You might not have a hundred people working for you and a hundred more than that responding to taskings from your desk. But, I'm the guy looking at un-polished resumes who's here to tell you there are jobs going unfilled because people aren't making an effort worthy of consideration. Ask ... and they've all got a custom made excuse.

The whole minimum wage issue is cover for the further tearing of the fabric of a republic which was once respectable. And while you're distracted, the corporatists are gaining foothold on the next rung up their ladder and the socialists are counting out cash in the wallets of thousands of small business owners.

I've often wondered where that other path might have led ... the one that didn't start at a recruiter's office. Looking back over my shoulder I can see a lot of wrong turns I could've made. I just can't tell if that first foray into adulthood was my personal high road.

oblvion

Yes an employee making $8 an hour can cost $18 an hour to employ but the company is making in profit $45 an hour off his labors.

The company should not benefit more from a mans labors than the man laboring, it should be more in the mans favor or at a minimum equal, after all the man is doing all the work, the company is simply getting profit.

Spoken by someone who has NEVER owned a business I bet. The average American doesn't even begin to fathom actually how hard it is to succeed in Business. When you figure all the other expenses and costs they have to take into consideration, you would find your profit margin shrinking rapidly. Taxes, rent, utilities, licensing, supplies, marketing, insurance and a host of other costs will eat you alive.

In your example, let's assume it's a restaurant. Not every employee is actually generating those sales, so it's more like 2 employees per $50 of sales per hour. Labor is around 30% roughly, food costs run 24% to 28%, taxes paid by the business run at least in the 8 to 10% on the low end and up to 14% when they are all factored in. So far we have eaten up 62% of the profit at a minimum, now add 4% for utilities, 3% to 5% for marketing, payroll and accounting will add about a 1% to 2%. Various other normal operating costs, ie repairs,replacements will tack on another 3% to 5%. Now we are at 24% profit. Rent will be 7 to 10% and financing will add another 6%. Now we are at 11%. Let assume the restaurant is open from 7am to 9pm. 14*50*11% profit margin. The owner,who probably is at the restaurant all that time, made a whopping $77 dollars profit for 14 hours work or $5.50 an hour after paying ALL the bills, which I might add, he still has to pay taxes on. And people wonder why most restaurants fail.......... You have to have the volume flowing or it's a quick death.

Being the small business owner isn't glamourous when you are struggling to just keep the doors open and the lights on. I've been there, it's a lot more enjoyable looking back on those days now then it was when we struggled to make payroll. It wouldn't have taken much for our fledgling business to falter in those days. More burdens placed on them will only have the effect of hurting those businesses. But our Government and our Leaders (who for the most part have never owned their own business, let alone actually WORKED a real job) know what's best for us.

reply to post by Snarl


Excellent post. Hit the nail on the head.

pavil
reply to post by Snarl

 

Excellent post. Hit the nail on the head.

Yours too. I'm saving my own small business story for rebuttal.