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Hospitality pay and how it brought my thoughts around to tipping.....

easyrider

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Raising wages would substantially increase the amounts going into the SS program. The higher the wage the higher the increase.

Bill


What Is the impact on Social Security?

According to a recent report from the Congressional Budget Office (CBO), an increase in the minimum wage would increase average Social Security benefits because initial benefits are indexed to economywide average wages, which would reflect the national increase.
 

am1

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Raising wages would substantially increase the amounts going into the SS program. The higher the wage the higher the increase.

Bill


What Is the impact on Social Security?

According to a recent report from the Congressional Budget Office (CBO), an increase in the minimum wage would increase average Social Security benefits because initial benefits are indexed to economywide average wages, which would reflect the national increase.
So end up costing more.
 

dioxide45

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Isn't the cost of a product mostly based on the cost to produce a product? With fast food and grocery, much of the cost is labor. Either labor to make the product, transport the product, cook the product. So wouldn't it naturally mean that either prices have to rise or quality has to decrease? Or both? So a fast food worker is now making $25, but the cost of fast food now has to go up. So that $25 won't buy as much as it would have before. Those in lower end unskilled jobs will always be fighting a battle against increasing costs and a poverty line that increases with their wages. Simply increasing wages doesn't mean that the bar for government assistance doesn't go up. The government also seems to always have a reason to keep people on assistance. Assistance has a tendency to buy votes.

As for increased wages causing increases in tax revenue. That certainly is possible. Though I think some in our government need to start looking at cutting expenses instead of increasing taxes. In reality, nobody's taxes should increase. We have an over bloated bureaucracy at the top where government spending is set to be almost 25% of GDP and the government (all levels) workforce is nearly 18% of the working population.
 

easyrider

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So end up costing more.
In taxes yes. SS represents 12.4% of earning. Medicare is an additional 2.9%. Together these cost about 15.3% of earnings. If wages were $25 per hour the tax would be about $3.82 per hour.

Bill
 

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I always tip when we stay at a timeshare, $20 per bedroom, even though we never have them clean, do a mid-week tidy, or anything else. I have no idea how I came to that figure, but I have been doing it for years. I also tip in a one-night stay hotel room the same amount.
I do the same, If you're cleaning for a living....enuf said.....
 

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When I was a teenager I was able to get a job at railway express agency in downtown Chicago every summer . I had typing and stenographer skills and mostly filled in as secretary. One summer I was in a department that worked on claims. There was a table loaded with long boxes of hand written claim receipts in duplicate. My job was to remove the perforated edge and do some sort of alphabetical order with the claims, all day. After about three boxes, I would notice one box missing. I discovered a much older gentleman was doing the same job at a much slower pace. Later I was warned to not work so fast or I would be out of a job.
This job was the most mind numbing boredom I ever experienced and strengthened my resolve to finish college. all the jobs paid about the same but I can’t imagine getting any satisfaction from some of them. I made enough from my summers to pay my college expenses and go on to become a teacher. U nfortunately that job paid less than my claim sorter job
I worked for a temporary agency from 14- 16 during the summer and school breaks. I got jobs all over Manhattan. Some of them very similar to yours. Some very boring and some were very hard physically. Also made me realize I better go to college and improve myself if I didn't want to be doing this all my life.

Best summer job was a runner at Solomon Brothers. I would run stock certificates and other paperwork around the financial district. Got paid $5/hr - I had more money in my pocket than I ever had before. Got to be outside a lot, exercise and most importantly: check out all the young women in their short summer outfits. Sadly the market crashed later that year (1987) and that was the end of that.

Joe
 

joestein

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Isn't the cost of a product mostly based on the cost to produce a product? With fast food and grocery, much of the cost is labor. Either labor to make the product, transport the product, cook the product. So wouldn't it naturally mean that either prices have to rise or quality has to decrease? Or both? So a fast food worker is now making $25, but the cost of fast food now has to go up. So that $25 won't buy as much as it would have before. Those in lower end unskilled jobs will always be fighting a battle against increasing costs and a poverty line that increases with their wages. Simply increasing wages doesn't mean that the bar for government assistance doesn't go up. The government also seems to always have a reason to keep people on assistance. Assistance has a tendency to buy votes.

As for increased wages causing increases in tax revenue. That certainly is possible. Though I think some in our government need to start looking at cutting expenses instead of increasing taxes. In reality, nobody's taxes should increase. We have an over bloated bureaucracy at the top where government spending is set to be almost 25% of GDP and the government (all levels) workforce is nearly 18% of the working population.
I thought there was a analysis I read that discuss the labor portion of the price of a big mac. I think that it was 10 or 20%. So if all employees gets a raise of $5 - the most the price should go up is $1.
 
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I thought there was a analysis I read that discuss the labor portion of the price of a big mac. I think that it was 10 or 20%. So if all employees gets a raise of $5 - the most the price should go up is $5.
The price of everything else that goes into making a big mac goes up also with a universal minimum wage increase. You can't isolate only labor cost unless ONLY McD's is increasing their wages.
 

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Raising wages would substantially increase the amounts going into the SS program. The higher the wage the higher the increase.

Bill


What Is the impact on Social Security?

According to a recent report from the Congressional Budget Office (CBO), an increase in the minimum wage would increase average Social Security benefits because initial benefits are indexed to economywide average wages, which would reflect the national increase.
while the ceiling on wages to which SS applies is relatively low. It also needs to be lifted and move along at least at SS COLA rates.
 

joestein

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while the ceiling on wages to which SS applies is relatively low. It also needs to be lifted and move along at least at SS COLA rates.
If you are going to do that you need to pay people additional SS on the higher wages taxed. Payouts are tremendously geared towards lower earners:
  • 90 percent of the first $996 of your AIME;
  • plus 32 percent of any amount over $996 up to $6,002;
  • plus 15 percent of any amount over $6,002.

Basically you only get back 15% of the amount of your wages over $72K, but still pay in at the same rate until you reach $142K in wages. Not to mention that the FICA limit has increased tremendously in the last few years. If you are at the tail end of your career, you will pay in the higher FICA, but not have enough additional AIME to make much of a difference..

If I calculated this correctly, that maximum payout on a AIME of $142K (FICA Limit) is $3,372/month. But of that the wages from $79K to $142K only account for $875/month of that amount. Plus on top of that, you will pay income tax on 85% of your benefits if you have any other decent income (over $44K/couple).

How much more progressive do we need to make this?
 

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If your business depends on hiring employees that taxpayers have to cover rent, healthcare, and food then it does not need to exist.
Keeping them in the work force is better then giving them 100% support and no way to improve their situation. I am for workfare not welfare.
 

rickandcindy23

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States have their own minimum wage requirements. Colorado's are quite high, Georgia's are consistently low. If you aren't paying enough to entice workers, you need to increase what you are offering. I don't think there is a restaurant or fast food restaurant near me without a sign in the window. My sister was a restaurant owner in the boondocks of Colorado (Wiggins exit off of I-76). It killed her to pay minimum wage for restaurant help and she had to close her doors. The restaurant is missed by the locals, but farm families don't want to pay a lot for lunch or dinner. She had too many expenses and it had to stop. She wanted to stay open. Such good food! My sister can cook! She was the main cook and the manager and sometimes she did everything, especially for breakfast. And her cinnamon rolls were the best. She also baked carrot cake for the restaurant every day. She was a crazy busy lady.
 

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@rickandcindy23 's sister is just one example of a small store not being able to compete in a small area of a large state. Large stores are shutting down in CA. I can't imagine what would happen with a federal minimum wage.

Coming soon to a restaurant near you, and they will be getting rid of lots of workers with higher minimum wages:



I think @Ty1on should teach an economics class on TUG.

The price of everything else that goes into making a big mac goes up also with a universal minimum wage increase. You can't isolate only labor cost unless ONLY McD's is increasing their wages.
Increased productivity is good, but I don't know what will happen if we get rid of all these entry level jobs quickly.
 

easyrider

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Increased productivity is good, but I don't know what will happen if we get rid of all these entry level jobs quickly.
Aren't all jobs that people take at the beginning of their work career considered "entry level jobs". Entry level when I was hiring meant that person had a skill and they received a competitive wage. Before regulations made hiring minors not worth it, they were at a minimum wage level.

Bill
 

dioxide45

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I'd like to see a maximum wage. I don't understand quibbling over those trying to survive while CEOs make millions every year.
Very few people actually do the math here. Jeff Bezos's total compensation in 2020 was $1.7 million. Amazon has a about 1.3 million employees. Let's take all of Jeff's compensation (much of which isn't pay but rather security costs) and divide it up between everyone. Yay! They will all make a buck fifty more a YEAR! Don't even do the math to figure out what that is hourly for a full time employee working over 2,000 hours a year. Let's say the top level executives make combined $100 million a year at Amazon. I don't know the number. You could make it $200 million. At most it works out to $200 more a year for each Amazon employee. That certainly isn't going to bring people out of poverty.
 

easyrider

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The price of everything else that goes into making a big mac goes up also with a universal minimum wage increase. You can't isolate only labor cost unless ONLY McD's is increasing their wages.
Yes, but with every one receiving a fair wage every one could afford to pay a bit more for a Big Mac.

Bill
 

dioxide45

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Yes, but with every one receiving a fair wage every one could afford to pay a bit more for a Big Mac.

Bill
The only way this will work is if companies are willing to cut proffits. In the end, increases in wages will increase the cost of goods. Goods go up and those working the minimum wages jobs still won't have enough. You can't control the economy in such a way to really make that work. It isn't that easy. We have already seen what pumping trillions of dollars into the economy is doing. It certainly isn't good. Inflation really only hurts the poor and those on fixed incomes.
 

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Aren't all jobs that people take at the beginning of their work career considered "entry level jobs". Entry level when I was hiring meant that person had a skill and they received a competitive wage. Before regulations made hiring minors not worth it, they were at a minimum wage level.

Bill
And this is part of the problem, more government intervention and not less. Regulation around the hiring and employment of minors isn't a good thing. I get that a kid shouldn't work the graveyard shift at the gas station or fast food joint, but was this ever a real problem? Or just a few isolated incidents? If the minor can't get their school work done because of a job, they can quit. Most school kids don't NEED the job. Then they can go and work for a different employer who respects their time.
 

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Yes, but with every one receiving a fair wage every one could afford to pay a bit more for a Big Mac.

Bill
"Fair wage" is a fairy tale. It's a fairy tale because the world has finite resources, and the way we have chosen to work out distribution of those resources is through (something that is looking less and less like) a market. The market determines the wage and the price of goods. When a government tries to artificially manipulate the wage side, then the cost of living side will necessarily rise. When the government tries to artifically suppress the cost of living side, then scarcity of goods results because no one is willing to produce their good or service at a loss.

Let's say right now the average salary in the US is $35K and that Big Mac costs $5. Just an arbitrary number. If you doubled the minimum wage, the ripple effect on labor market as I described earlier will raise the average salary to $70K. Actually a bit less than this because unemployment will soar. The price of that big mac is going to increase to $10. No one has gained an inch in the race for a living wage. Money doesn't go on trees, but Uncle Sam prints it. And if you create an artificial labor cost, the money presses are going to be working overtime. The number of citizens is the same and the demand for Big Macs is the same. What changed is that McD's has to charge a higher price to keep up with the cost of selling it and making a profit to keep it worth keeping the stores open, and the pool of people competing for that Big Mac have double the dollars in their hands and are willing and able to spend double on the burger.

You really should look at the economic disaster that was the USSR. China's economy only started its meteoric rise to power when it conceded that a market that was more free than their centrally controlled economy should be allowed to flourish. North Korea continues to starve to death on a centrally controlled economy.
 

dioxide45

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States have their own minimum wage requirements. Colorado's are quite high, Georgia's are consistently low. If you aren't paying enough to entice workers, you need to increase what you are offering. I don't think there is a restaurant or fast food restaurant near me without a sign in the window. My sister was a restaurant owner in the boondocks of Colorado (Wiggins exit off of I-76). It killed her to pay minimum wage for restaurant help and she had to close her doors. The restaurant is missed by the locals, but farm families don't want to pay a lot for lunch or dinner. She had too many expenses and it had to stop. She wanted to stay open. Such good food! My sister can cook! She was the main cook and the manager and sometimes she did everything, especially for breakfast. And her cinnamon rolls were the best. She also baked carrot cake for the restaurant every day. She was a crazy busy lady.
This sadly is another unintended consequence of government intervention. Amazon and Walmart aren't really all that concerned with increases in minimum wage. Shoot, Amazon fully supported states mandating the collection of sales tax on internet purchases across the board. Why, because they could afford the small hit to the bottom line and they knew it would put smaller operations out of business leaving less competition for them.
 

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Very few people actually do the math here. Jeff Bezos's total compensation in 2020 was $1.7 million. Amazon has a about 1.3 million employees. Let's take all of Jeff's compensation (much of which isn't pay but rather security costs) and divide it up between everyone. Yay! They will all make a buck fifty more a YEAR! Don't even do the math to figure out what that is hourly for a full time employee working over 2,000 hours a year. Let's say the top level executives make combined $100 million a year at Amazon. I don't know the number. You could make it $200 million. At most it works out to $200 more a year for each Amazon employee. That certainly isn't going to bring people out of poverty.
But people do not care about the details.
 

bluehende

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Again what no one is considering is the government subsidies these people get. Wic, housing assistance, child care assistance, medicade. That money does not come out of thin air either. If a business pays it those dollars are free for other purposes even if it just reduces the deficit. Why should my money as taxes support a business. Let them foot their own bills. With all these predictions of doom and gloom show where any city that raised their minimum was seriously hurt.
 

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Harvard Business Review published a study on what happened to grocery workers after raising the minimum wage.

This guy quotes it and has other commentary that might be relevant to the discussion.


Basically, the grocery stores ended up cutting hours to decrease benefits. Read the whole thing for more.
 

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If I calculated this correctly, that maximum payout on a AIME of $142K (FICA Limit) is $3,372/month. But of that the wages from $79K to $142K only account for $875/month of that amount. Plus on top of that, you will pay income tax on 85% of your benefits if you have any other decent income (over $44K/couple).

How much more progressive do we need to make this?
Joe, I get where you are coming from, but this is one area my social liberalism comes out. I really have no issue with progressive taxes, and honestly, those who are currently maxing out the FICA limit can certainly afford to continue to pay FICA on their earnings above the current limit, even if they will not get it back in their SS benefits when they retire. I say raise the FICA income limit to $1 million. It would be a small step in keeping SS viable.

Kurt
 
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