L.A. Raises Minimum Wage to 15 Dollars

[AniThyng]

Won't they need to also raise wages to avoid workers grumbling they are only earning minimum wage for work that previously rated above?

[GuppyShark]

They said they engaged economists to assess these impacts - I wonder if these are published.

[Patroklos]

I think that businesses forced to increase the wage by a significant amount (fast food joints, Jiffy Lubes, etc...) will have to raise their prices or lay off workers to maintain the same prices. Companies where the workers already make close to or more than $15 (technical jobs for example) will probably be unaffected.

Well there is that, but the simple fact that there is more money out there to be spent by consumers could increase the cost of living all by itself. I imagine rent prices, for instance, will dramatically rise since this affects primarily renter level incomes. If your average renter has 25%-50% more income they will quickly begin to out bid each other for prime locations and that phenomenon will just cascade down the market. This can have some other effects like driving workers to live outside the city they work to maintain the increased income while living in equivalent apartments.

[Guardsman Bass]

Businesses that are location-dependent (like restaurants) will mostly just raise prices, although in the longer run they might reduce work hours or staffing to make more money. Businesses that aren't location-sensitive, that have little latitude to adjust their prices upwards (think book stores and merchandise stores), or where people will drive out of their way to a different store outside the city limits if the costs are too high (grocery stores) will have more trouble.

[General Zod]

Businesses that are location-dependent (like restaurants) will mostly just raise prices, although in the longer run they might reduce work hours or staffing to make more money. Businesses that aren't location-sensitive, that have little latitude to adjust their prices upwards (think book stores and merchandise stores), or where people will drive out of their way to a different store outside the city limits if the costs are too high (grocery stores) will have more trouble.

All businesses are location sensitive. The type of location just changes depending on the business.

[Me2005]

Companies where the workers already make close to or more than $15 (technical jobs for example) will probably be unaffected.

The trouble with just raising the minimum like this is that unskilled workers are now in competition with skilled workers.

Another personal example. I used to be a roofer, doing work many people could do but choose not to as it's pretty hard labor. It paid above minimum wage, but below $15/hr. There are people working the minimum wage jobs who could not do the roofing job, because of a myriad of disabilities (actual disabilities, old age, heat sensitivity, general weakness, vertigo, etc. etc.). I would have been in competition with those people, and I would have been a better candidate than most of them because of my work history. Those working the minim wage jobs would have been forced out of the job market entirely. And with no lower-paying jobs to go to, they'd be out of luck.

Raising wages slowly gives the market time to adjust though. If you push the minimum up $0.50 or $1.00, it isn't enough for people working skilled or semi-skilled positions to take low/unskilled positions, and they'll stay put. It's less significant to the minimum wage earner, but they don't get displaced. Eventually this will all shake out in the wash, but as others have posted, I don't think minimum wage earners will be any better off in the long-term.

I'd also still like to see the stats showing that a majority of minimum wage earners are also self-sufficient and have a need to pay things like rent.

[Borgholio]

The trouble with just raising the minimum like this is that unskilled workers are now in competition with skilled workers.

Not really. If you're unskilled, then getting paid more isn't automatically going to make you better than the person who has a college degree or 10 years of on the job experience. It does feel a bit unfair that a burger flipper would make as much as a manager or a computer tech support agent, and that's the big issue I see people bringing up.

[Soontir C'boath]

All this talk about raising the minimum wage costing businesses and jobs makes me think of this.

Nail salons fear changes to law

"Manicures to cost more in future"
by Liz Rhoades, Managing Editor | 0 comments

Ladies, expect the price of manis and pedis to about double in the near future.

For the uninitiated, that’s short for manicures and pedicures, the topic of discussion by Korean leaders in Flushing on Monday.

Their press conference, organized by Assemblyman Ron Kim (D-Flushing) and Rep. Grace Meng (D-Flushing), didn’t exactly oppose Gov. Cuomo’s recent plan to take emergency measures to improve conditions in the nail salon business. But they didn’t offer a ringing endorsement either.

Instead they and Korean leaders are asking the governor to go slow, work together with the salons to solve the problems and not put them out of business.

But because new rules will cost money, the estimate for a Queens manicure in the future is $15, up from $9, and $40, up from $20, for a pedicure.

“As long as customers continue to seek nail salons with cheaper prices, the market will always race to the bottom, creating more illegal labor practices and making it impossible for good players to survive,” Kim said.

The assemblyman, whose parents ran a nail salon in Manhattan for 10 years, said the issue “is personal” and that he’s seen firsthand “the challenges for both owners and workers at these businesses.”

The impetus for the governor’s actions was a New York Times investigation published last week about the widespread mistreatment of nail salon workers and the health problems that ensue.

On Monday, Cuomo introduced legislation that would punish nail salons that mistreat workers and would make it easier for workers to get licenses.

Changes he had announced last week include increasing the number of languages for the licensing exam and clarifying the application process for workers, explaining that their immigration status does not affect their application.

Manicurists will be told that they are entitled to earn the minimum wage regardless of their immigration status and cannot be forced to pay a fee in exchange for a job.

Kim said it’s important to educate salon owners and workers of their rights and that “we need the consumers to accept the higher pricing points.”

Meng said nail salons play a viable role in the city’s economy, but that it’s important that the industry operate above board and not violate workers’ rights.

Also speaking and offering their input were Sang-Ho Lee, president of the Korean American Nail Association of New York; Minsun Kim, president of the Korean American Association of Greater New York; Christopher Kui, executive director of Asian Americans for Equality; and Larry Lee, executive director of the New York Asian Women’s Center.

The press conference was held outside Alpha Nails and Spa on 32nd Avenue and its owner, Nancy Chu, spoke through an interpreter. She told reporters she had worked at the store for 30 years and owned it for four. “Now I’m working alone because the workers left when they were told they would have to pay taxes,” Chu said.

“We shouldn’t blame each other and we should work on a compromise with the law,” she added.

Linda Sun, who works for the governor as global New York trade manager at the Empire State Development Corp., attended the press conference and told the Chronicle after it concluded that Cuomo “won’t come in and close everyone down.”

Boo fucking hoo, but as long as these people have jobs that pays something, it's ok!

[Me2005]

The trouble with just raising the minimum like this is that unskilled workers are now in competition with skilled workers.

Not really. If you're unskilled, then getting paid more isn't automatically going to make you better than the person who has a college degree or 10 years of on the job experience.

That's exactly the problem. Unskilled workers are *not* better, from an employability standpoint, than someone with a college degree and/or 10 years experience. So those people with experience and degrees will go gunning for the now higher-paid unskilled positions - especially in this climate where all they'd need to do to get them is travel from an adjacent city. If I was roofing at $10/hr outside Seattle and I could get an immediate raise by doing *any job* to $15/hr, just by traveling to Seattle? Done and done. Shoot, even if I'm a walmart greeter near Seattle, but I can make $15/hr by driving to work in Seattle, I'm going to try to get a job in Seattle. Now, if the whole state had done it, that obviously wouldn't apply, though we'd sure be in competition with our neighboring states and it'd probably be a draw to people thinking about moving somewhere, so competition for those jobs would still be up.

Don't know the LA area well enough to know whether the same logic applies there or not. Seattle isn't that large compared to other cities in the state (it's at +/- 600,000, but there are about a dozen around 100,000-200,000 within 30 miles).

[Borgholio]

Boo fucking hoo, but as long as these people have jobs that pays something, it's ok!

These salons are clearly engaging in illegal practices...that's different compared to a fully legit business that simply doesn't have the ability to pay their employees more than they currently do for whatever reason.

[Simon_Jester]

Thing is, the number of jobs available in LA (or Seattle, or anywhere) is finite. So while everyone in a 200-mile radius may try to pack up and move to the city to get the $15/hr jobs, that doesn't mean they'll get one.

The cumulative effect would be that the people with the best credentials (work experience, etc.) can outcompete long-time area residents with worse credentials, while commuting into the city from a relatively long distance made possible by the high income from the high minimum wage job... while people who lack those credentials and live in the city center may not be able to find work at all.

Thing is, this is exactly what's been happening for the past several decades anyway, so it's not exactly news. People moving to the city in search of better paying work is old hat. Local residents who lack good education, college degrees, and strong work experience being stuck in permanent unemployment is also old hat.

[Soontir C'boath]

Boo fucking hoo, but as long as these people have jobs that pays something, it's ok!

These salons are clearly engaging in illegal practices...that's different compared to a fully legit business that simply doesn't have the ability to pay their employees more than they currently do for whatever reason.

You did read the part in the article where they decry that they will have to raise prices, go out of business, or all that other junk you guys basically argued that the legal abiding companies would do? Only difference is the current minimum wage is a legal way of paying people less than they should be.

[Borgholio]

You did read the part in the article where they decry that they will have to raise prices, go out of business, or all that other junk you guys basically argued that the legal abiding companies would do?

Well yeah of course they're going to use the same excuses. They're not going to publicly complain about being forced to actually pay their employees a legal wage this time around.