$15 Minimum Wage increases are expected to hit our nation, coast to coast, in the near future. I am concerned that my financial sacrifices & years of educational investments to become a nurse will be highly devalued once minimum wages are doubled around the country.
I am predicting that the higher $15 minimum wages will cause costs of everything else to increase (food, rent, services). Salary earners (RNs) making above minimum wage, will not get raises, yet our cost of living will dramatically increase (eventually by double in most cases, in order to offset the higher cost of minimum wage employees). This all will be fine for minimum wage workers, but I fear that because I make above minimum wage, I will see my budget cost of living budget increase by 1/3 or more and will no longer be able to afford to pay back my student loans once all this happens.
Then comes the bad credit debt & never owning a home & never being able to retire & this snowballs into my college career has been self-destructive, God help us all ...
I would like to hear other nurses input and opinion on the matter, if nothing else but to help me from catastrophizing this ~ Thank You
Specializes in NICU, PICU, Transport, L&D, Hospice.
Most of the fear that is expressed about the negative consequences of raising the minimum wage in a capitalist society is myth and made up.
If the masses have little in way of discretionary money to spend the economy doesn't do as well.
If the laboring masses are kept in poverty while the oligarchs prosper and hoard cash off shore there will be political revolution. Bernie Sanders has fanned that flame already.
Specializes in Psychiatry, Community, Nurse Manager, hospice.
If the minimum wage goes up to $15/hour the wages of most skilled workers will also increase. The economy will improve, and you will benefit from that.
Don't take my word for it. Look at history. Research what happened to the economy and quality of life for Americans when the minimum wage was instituted by Franklin Delano Roosevelt in 1938.
1. Offer some short term gains for MW workers offset by higher unemployment
2. Have little to no effect on the upper 1%
3. Screw everyone else in the long term through inflation
Allow me to explain:
1. Some MW workers will gain greatly from an increase in MW for obvious reasons, but it isn't so simple because some will lose their jobs due to automation (a machine that was too expensive vs $8/hr labor might be quite affordable vs $15/hr labor) or use of the labor black market (people working off the books). Others MW workers who are on many social programs with income caps will actually cut their labor hours so as not to lose those handouts. It is a hard and fast rule that increased MW = increased unemployment. Eventually the resulting inflation erases the standard of living gains from increasing MW (and unemployment falls).
2. Those at the top adjust where needed and feel little impact.
WHAT ABOUT RNS? HERE IS THE ANSWER:
3. Short answer: For everyone else, including RNs, your standard of living falls relatively quickly and recovers very slowly if ever.
Long answer: INFLATION is the reason. The basic necessities rise in price when the amount of minimum amount of labor most anyone needs to purchase them seems to fall, but there are fixed amount of those goods, prices rise. Or prices simply rise because the guy making a sandwich had their salary doubled. Well the price of your sandwich went up. Simple economics 101. So now you have rising dollar costs for basic goods and services that trickles to all other goods and services.
But did the RN's wages go up?
Can a RN can go to management and say "we need our wages increased 100% too!"? NO! You will get laughed at. They won't have to do that. They don't need to. There may be some small increases down the road as standard of living falls drastically enough for their to be major pressure, but it won't be enough to catch up with inflation.
Eventually, you run into labor pool problems where people go "wait, why should I spend huge $$$ and 4 years of my time on a BSN so I can start as a new nurse at $23/hr when I can keep working for $15/hr at a low responsibility job without college debt?" Then you see labor shortages and wages rise (or standards fall). But that correction is a nice thing for economists to think about, and a crappy experience if you are in that labor pool! And if there is another MW hike, it delays that recovery!
Lastly, it is worth noting that large MW hikes are hardest on the lower middle class and middle class in small cities, suburban and rural areas. The big big cities have market driven effective MW well above the current legal MW already.
Massive minimum wage hikes are a feel-good populist measure pushed mostly by those who are ignorant of economics... and the few that do know the above but do not care because of a sociopolitical agenda. Massive MW hikes are BAD economic policy.
Very well stated. I worry about a hike like this because it essentially decreases my purchase power by about 40%, and it's not like insurance companies are going to pay hospitals more, or hospitals pay nurses more, just because of it. It will probably take decades to get close to equalizing, and we already make crap in a lot of places. In AR, new hire RNs WITH experience starting at 19.50/hr when I was hired there. 4.50 above the expected minimum wage is just terrible. People in big cities in CA and NY for example are just ignorant of the way that wages work for other parts of the country where wages are lower. Sure, an RN in CA could make $55/hr, but that's really really high vs the southern states, for example.
Another peeve I have: if CA hospitals can afford to pay nurses $55/hr, and stay in business......where the hell does a southern hospital in AR get off paying $19? Don't the insurance companies pay them equally?
Unfortunately, Target, like many others, schedules employees in 4 hour blocks, making it impossible to achieve a decent paycheck from them, and making it next to impossible to make up the missing blocks of hours with another employer.
Good point. I have a friend who put in 15 years at McDonald's. They made sure to keep her under FT hours so she couldn't get benefits. The good news is, she's finally pursuing teaching, a career that she was told wasn't an option in the 1990's homophobic midwest. The bad news is, she probably won't make a great living at that either.
Most of the fear that is expressed about the negative consequences of raising the minimum wage in a capitalist society is myth and made up.
You can't hand wave away basic economics. THAT is a myth. Everyone who has ignored reality has been bitten in the behind when it catches up.
If the masses have little in way of discretionary money to spend the economy doesn't do as well.
To think that doubling the minimum wages is an effective long term monotherapy for increasing the discretionary spending of the laboring masses is sheer whimsical wishing that flies in the face of established evidence and basic economic facts.
Another peeve I have: if CA hospitals can afford to pay nurses $55/hr, and stay in business......where the hell does a southern hospital in AR get off paying $19? Don't the insurance companies pay them equally?
They do not pay the hospitals equally. In fact, even in the same hospital system in the same state, insurance companies and the government will give different hospitals different payouts for the same thing based on a number of factors.
Actually, no...not exactly the same, at least not physicians (so probably not facilities either). There is a conversion factor that is multiplied times the relative value unit (RVU) assigned to each procedural code. This factor is regionally based.
For instance, Chicago's multiplier is 1.016 whereas my rural area is 1.000. San Francisco is 1.079. Not enormous differences but I'm sure it adds up.
Another peeve I have: if CA hospitals can afford to pay nurses $55/hr, and stay in business......where the hell does a southern hospital in AR get off paying $19? Don't the insurance companies pay them equally?
Since the powers that be place their money into a CEO and their executive staff, and no one questions anything else and we fight amongst each other, well...
Like I said before, wage suppression is REAL...the work we do, well time for a raise, and anyone who is contemplating debating my response, MISS ME with it...We should have a national standard of pay, these executives DON'T.
If the minimum wage goes up to $15/hour the wages of most skilled workers will also increase. The economy will improve, and you will benefit from that.
As I stated earlier, that is true, but it is a nice thing to think about when considering economic theory.
It is crappy to experience because it is NOT an immediate process. First will be inflation and a loss of spending power for those above the MW. There will be decreased training and specializing. Then there will be a labor shortage in those fields, which for nursing will mean short staffing and mandatory overtime. Eventually wages rise to match, maybe overshooting, and people reenter the profession... perhaps there is a glut, and then it is hard to get a job or experienced folks are pushed out. Does this sound familiar yet? It should... but magnify it several times from what we've seen when talking about this type of disruptive market factor!
This process takes YEARS maybe decades to self correct! So when you read about in an economics textbook, great. But living through it will be unpleasant and the societal gain is questionable to nil.
Don't take my word for it. Look at history. Research what happened to the economy and quality of life for Americans when the minimum wage was instituted by Franklin Delano Roosevelt in 1938.
I suggest you look at the history as well. If you do, you wouldn't imagine that economy and quality of life of Americans was primarily driven by that singular intervention (the MW). You need to understand monetary policy, the rest of the new deal, the geopolitical situation at the time, and the already recovering economy present in 1938 combined with the economic stimulation from preparatory efforts and continuing support efforts covering that little event spanning 1939-1945.
Also note that the period following the institution of the MW in 1938 (at $0.25/hr) was followed by years of inflation, although I wouldn't attempt to place the primary blame for that inflation on the FLSA. Really, $0.25/hr was not radical at the time (average yearly income was around $1800).
If you look at the history of MW, most increases are modest and help adjust for inflation. Never has there been such a radical increase as would be the discussed $15/hr, more than doubling the MW.
I think you're overstating the likelihood of a $15 federal minimum wage, but you're fears are based on some very bad math, which seems to be common to most anti-minimum wage increase hysteria.
First, cost of living and inflation would not increase by the same amount the federal minimum wage increases, which is where I assume you got your "cost of living budget increase by 1/3 or more" figure from. Even at businesses most heavily affected by an increase in the MW (fast food and other predominately near MW paying restaurants), an increase to $15 would raise prices only 4.3%, which is a far cry from the 33% or more that you quoted. And that 4.3% increase assumes a sudden increase to $15, when actually a phased increase to $12 is more likely. And for you to experience all of that 4.3% increase your entire budget would have to be spent at MW paying businesses.
Keep in mind that we're not talking about an unprecedented minimum wage value, the relative buying power of the MW has been steadily declining, the proposals that are out there only catch us back up to where we once were, and when the MW was at those levels the economy thrived. We can also look at smaller minimum wage increase experiments, Washington state has had a minimum wage tied to inflation and despite having the highest minimum wage in the nation they also have one of the most vigorous economies including in terms of job growth in the country.
The biggest problem with allowing the MW to continue to fall is that it moves more towards a federally subsidized business economy, not all that much different from communism. Currently, the majority of those on public assistance programs work. We've been allowing businesses to transition from having to cover their costs to simply paying employees a token amount and then having the government pay for the rest of their basic expenses (ie communism).
I'm a small business owner, and as a result I fully support returning the MW to it's historical peak, here's why: With a MW far lower than a livable wage, as a responsible owner of a successful business I get punished and end up having to support less responsible and poorly run businesses. While I may pay my employees a livable wage, the restaurant next door is free to underpay their employees and make up for it with public assistance programs that I then also have to pay into. So my "reward" for running a good business is that I also get the bill to make up for the failings of other businesses.
In general, I don't agree that businesses should be immune to the competitive market forces that keep an economy healthy by replacing an adequate minimum wage.
As you can see RNs in the NYC area already make substantially more than MW, so even with the recent increase pushed by the governor to $15, it won't have much of an impact. Salary: Registered Nurse in New York City, NY | Glassdoor
Where the impact of higher MW is likely to be felt in New York is with lower skilled/paid assistant/tech positions. The median annual wage for nursing assistants in NYC is around $35K per year. Those represented by a union (usually 1199) tend to do better and in some instances are already getting around $17/hr. plus bennies. OTOH home health aides (especially those working for/through Medicaid providers) are at the lower end, in some cases barely making at or above MW. Between several changes involving OT and other rules from the Obama administration that is set to change however. Gov. Andrew Cuomo agrees to pay health care employers millions to raise minimum wage | Crain's New York Business
The oft used argument is that by increasing the MW (which is normally paid to low and unskilled labor) those in higher paying/skilled positions will demand an increase as well to bring up their floor in comparison. Fair enough I suppose. However even if earning $15/hr. cannot see a RN whose wages are easily double or triple that being somehow slighted.
set period of time, not a huge lump sum. So, as it increases, our wages should also rise accordingly, probably in the form of Cost of Living adjustments.
My my one daughter makes $13/HR at Sam's club as a summer college student. Not a shabby wage.
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toomuchbaloney
16,017 Posts
Most of the fear that is expressed about the negative consequences of raising the minimum wage in a capitalist society is myth and made up.
If the masses have little in way of discretionary money to spend the economy doesn't do as well.
If the laboring masses are kept in poverty while the oligarchs prosper and hoard cash off shore there will be political revolution. Bernie Sanders has fanned that flame already.
I would recommend taking a look at some of these;
Minimum Wage | Economic Policy Institute