$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
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.
1. While 33% seems high, 4.3% is impossibly low for doubling the MW and I have no idea where your numbers are coming from.
2. A phased increase only mediates inflation if the time period covers inflation roughly equivalent to the MW increase. In this case, roughly 20 years (assuming 3.5% inflation even if the Fed says less). Phased increases aren't about that though, but about decreasing shock costs to MW businesses that would result in closure or sudden large layoffs.
3. The economy is interconnected and it is fallacious thinking to assume MW increase only nets price increases at MW businesses.
Keep in mind that we're not talking about an unprecedented minimum wage value, 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
We ARE talking about unprcedented MW value!
The maximum relative buying power of MW was in 1968 equivalent to about $8.35 in today's dollars.
I'm not opposed to MW increases, especially to correct for inflation, but I would oppose doubling the MW over any single digit year span. Doing so is highly disruptive, drives inflation, and causes other labor force and economic disruptions I mentioned previously.
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).
That isn't communism. In communism, there is no private business or private property.
It isn't even socialism. In socialism, the government owns the means of production, but there is still private property.
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?
There are geographical adjustments made in reimbursement but I don't if enough difference to justify the extreme difference in wages.
Pages 6-7 show example between Santa Cruz (very high COL) and rural Alabama.
My personal gauge is what lifestyle is afforded with your experience and professional degree. If you can buy a 3Bd/2b home in a safe neighborhood, afford a horse (or whatever your passion), obtain good healthcare, and help your kid through college while saving for your own retirement, your wages are in the ballpark.
I find it difficult to get all worked up over excessive minimum wages. All their proponents do is price their unskilled constituents out of the labor market. $15 X 0 hours = zero pay.
Ten years ago we were at the mercy of foreign oil producers. Taking advantage of their monopoly, they raised the price of oil to the point that previously unviable methods of producing oil, such as fracking, became economically feasible. Today we are the #3 oil producer in the world, only slightly behind Russia (#1) and Saudi Arabia (#2).
So what does that have to do with the pay of a burger flipper? We're already seeing out on the west coast, where these overinflated minimum wages started, that the restaurant chains are exploring automation. Who takes your food order at a California Wendy's? A kiosk. Such things weren't financially feasible ten years ago... but they are now. So all those unskilled folks with dreams of untold riches courtesy of bloated minimum wage levels ought to be dreaming about the pink slip in their future instead.
So what saves you from that fate? Your skills. You haven't wasted your time acquiring them and all is not lost. Relax.
The positive multiplier effect: The final effect on national output/GDP/income is much bigger than the initial injection of aggregate demand (MW increase).
Increasing the MW manufactures demand because when you infuse cash into the hands of people who need it the most they spend it (demand), unlike the 1% who hoard it in offshore tax havens.
The cash is distributed back into the economy and multiplies: Spending stimulates more spending because one person's spending is income to the person receiving it. More spending increases demand which leads to increased employment to produce the increased supplies which leads to increased national output/GDP/income.
I asked my brother what effects the rise in minimum wage costs will have on our economy. He has graduated with a PhD in economics in Canada. Here is what he said:
Generally minimum wage laws aren't a good idea in my opinion. I agree with trying to help people at the lower end of the spectrum but distorting wages is not a good idea for a few reasons.
1) it causes unemployment, since employers will often lay people off as wages rise so as to keep their total wage bill the same.
2) if it doesn't cause unemployment employers have to pass on the cost to consumers, so this will cause inflation.
3) it may even create inflation through the direct channel of wage earners spending their income since low income earners tend to spend much more of their income than high income earners (in terms of proportion of income)
As for wages themselves, all wages above the minimum should rise to compensate. If a McDonalds worker now makes $15, now everyone who used to make $15, will ask for more and most likely get it because of competition.
The main thing people forget to realize about wages is that just like cars, shoes, and tennis rackets, there is a market for labour. That is, a market for people to work at a job. This market is governed by supply and demand (with the exception of unions that control supply to push wages up)
If labour markets are competitive, in theory, people will be paid their marginal real productivity. That is, they will be paid according to how much they marginally increase outputs for any given input in the business.
So say you work at McDonalds. Your inputs are burgers, bread, etc. Your capital is the machines you use to make the burgers, and the labour is the people.
Productivity is measured as the number of outputs (finished burgers) vs. the inputs required to make them. The more outputs you get for the same inputs, the better, and more productive a worker.
If a worker is given a better machine that makes more burgers with less inputs (including time) then that worker is more productive when coupled with that machine.
Due to minimum wage increases, Mcdonalds is going to try to find ways to save on their inputs despite like adding machines that replace some of their people and therefore hiring fewer people and raising unemployment. Or they are going to have to find ways to save money on the cost of food ingredients, in turn, likely lowering the quality. Mcdonalds will get around it... and if you try to force them what ends up happening is you ruin their business.
So the bottom line is that people are paid what they are worth in terms of productive outputs.
People at the low end aren't that productive on their own, let alone with a machine. That's why computer programmers, engineers, etc. get paid more.
There is simply less of them around, and the output they produce is more valuable relative to the inputs.
The problem with minimum wages, or other forced distributional policies favoured by liberal politicians is that they distort the incentives in an economy.
That is they distort the decisions producers and consumers make based on prices, which are their source of information. That's exactly why communism, in its most extreme forms has never worked. Look at Venezuela, they have tons of oil under the ground and Chavez ran the country into the ground. It's now an economic basket case.
A better way to redistribute income is to offer shares in the company.. that way their income is tied to performance and it doesn't distort prices (other than share prices) (although it's debatable that you should in the first place, since those people who are paid low wages are typically low skilled -- and no one forced them not to improve their skills).
You can argue that some people are just born with poor skills or they are born into a culture or environment that doesn't provide them with useful skills. These are true facts. But then you get into questions about why it is that way and moral questions of "fairness" etc.
Then again, you get socialists trying to tilt/distort things, like with affirmative action. I mean ultimately it's a question of does survival of the fittest really matter and is it ethical to believe in that kind of principle.
My biggest concern is how blindly people are following people like Bernie Sanders or the Liberals like Cathleen Wynne in Canada.
I agree in principle with helping people, I have a heart. But, I think it's the way they want to go about it that is wrong. Since if you have to steal from someone productive, to give to someone unproductive, and it becomes systematic to the point that everyone is just trying to "get what they can" from this big government pot of money, it really is flirting with socialism.
I think generally economists are in consensus that minimum wage laws are bad, but you still find studies that support them, usually by leftwing economists.
I personally think everyone should be able to have a living wage! I've read if the minimum wage had kept up with inflation it would be around $21/hr. It just shows how much wage stagnation there is in America today! Why begrudge the working poor a living wage? Also let the corporations pay their fair share, right now they and their CEO and his buddies make millions while stiffing workers who thereby live off govt subsidies like food stamps and medicaid. It is crazy that we allow these businesses and their yahoos to get rich by short changing their own workers and also the govt that has to pick up the pieces! Let companies pay their fair share, then the govt won't have to subsidize them and people can have their dignity!
The current economy only enriches the top 1% and harms the rest of the people! It is time for a change!
If you feel shortchanged as a nurse, quit your job and go work at a minimum wage job. At least it will probably be less stressful! Stop being so selfish and cold hearted!
California's minimum wage is already $10 and I still make more than five times that despite starting in a new role at a entry-level wage. You're suggesting increasing it to $15 is going to dramatically devalue my experience and increase my cost-of-living?
I live in SoCal and I make $30/hr. If you make over $50/hr as a new grad, you must live in the Bay Area. Most nurses in non-bay-area CA make $25-45/hr. Most nurses outside CA easily make less than $30/hr on average. I have seen job ads for RN's that pay $22-23/hr.
My personal gauge is what lifestyle is afforded with your experience and professional degree. If you can buy a 3Bd/2b home in a safe neighborhood, afford a horse (or whatever your passion), obtain good healthcare, and help your kid through college while saving for your own retirement, your wages are in the ballpark.
TBH if you want to buy a 3Bd/2b home in a safe neighborhood, afford a horse, help your kids through college, etc., you cannot do that on a nurse's income alone in California. I could do some of those things if I was married to someone who made equal or more as me, but I definitely could not do that on my own. I don't even know how I can afford to survive on my own without taking roommates. After taxes, I get like $1500 biweekly, or approx. $3000 a month. When rent for a studio costs like $1600 a month and for a 2-bedroom apartment over $2000 a month, I would barely be getting by if I had a family and just getting by if I lived by myself. And I make a good income.
SummitRN, BSN, RN
2 Articles; 1,567 Posts
1. While 33% seems high, 4.3% is impossibly low for doubling the MW and I have no idea where your numbers are coming from.
2. A phased increase only mediates inflation if the time period covers inflation roughly equivalent to the MW increase. In this case, roughly 20 years (assuming 3.5% inflation even if the Fed says less). Phased increases aren't about that though, but about decreasing shock costs to MW businesses that would result in closure or sudden large layoffs.
3. The economy is interconnected and it is fallacious thinking to assume MW increase only nets price increases at MW businesses.
We ARE talking about unprcedented MW value!
The maximum relative buying power of MW was in 1968 equivalent to about $8.35 in today's dollars.
I'm not opposed to MW increases, especially to correct for inflation, but I would oppose doubling the MW over any single digit year span. Doing so is highly disruptive, drives inflation, and causes other labor force and economic disruptions I mentioned previously.
That isn't communism. In communism, there is no private business or private property.
It isn't even socialism. In socialism, the government owns the means of production, but there is still private property.
It is a weird welfare state with a mixed economy.