NEW YORK (CNNMoney.com) -- The federal minimum wage is set to increase later this month as the job market shows signs of further decay.
The federal minimum wage will go to $7.25 an hour on July 24 from its current level of $6.55, according to the U.S. Department of Labor.
The impact will be felt in 29 states, and many of them plan to match the federal minimum when it goes through.
Seven states already have laws mandating $7.25 minimum pay, while 14 states and Washington, D.C., exceed the new minimum. Employers are required to pay whichever is the highest: Federal or state.
This is a nice gesture by legislators attempting to help the poor, but I doubt they considered the unintended consequences.
At the end of the day this will do more harm than good. Businesses currently struggling to make ends meet may throw their arms in the air and decide to close shop. Hiring managers will certainly think twice before they even consider hiring anyone. Higher labor costs will get passed on to consumers, which will reduce demand. More jobs will be outsourced overseas where there is no minimum wage.
In an economy that's already losing hundreds of thousands of jobs each month, this is a trainwreck waiting to happen. Many states already have higher than the federal minimum wage, but I'm not quite sure why anyone would want governments to come in and negotiate their wage to begin with. If someone doesn't like the pay rate at a job, then they are free to work somewhere else.
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More jobs will be outsourced overseas where there is no minimum wage.You realize we are talking about predominantly restaurant jobs taken by teenagers. Pretty hard to outsource to India.
And those can be outsourced, like the drive through order taking jobs, have already been outsourced.
I doubt this will have any real effect. The previous minimum wage hadn't been raised in years, so once you factor in inflation the real minimum wage probably won't be any higher than it was a decade go. Also, the old one was so low that you'd have trouble hiring anyone who wasn't a sex offender or a retard for that amount.
nycll said:More jobs will be outsourced overseas where there is no minimum wage.You realize we are talking about predominantly restaurant jobs taken by teenagers. Pretty hard to outsource to India.
And those can be outsourced, like the drive through order taking jobs, have already been outsourced.
Does this mean that some fast food places now have someone taking the order from the outdoor menu to across the internet to a call center in India? I've never heard of this.
I remember a few years ago watching a Travel Channel show about several McDonalds (I don't remember where in the US) that had a central call center that was taking drive through orders and displaying them on a screen in the restaurants for the workers to fulfill. The order takers I believe where not even in the same state as the restaurants. For more information, you can probably google it if you want.
SuperMxyz said:Does this mean that some fast food places now have someone taking the order from the outdoor menu to across the internet to a call center in India? I've never heard of this.
demku said:I remember a few years ago watching a Travel Channel show about several McDonalds (I don't remember where in the US) that had a central call center that was taking drive through orders and displaying them on a screen in the restaurants for the workers to fulfill. The order takers I believe where not even in the same state as the restaurants. For more information, you can probably google it if you want.
Wow, you are right. I thought it was bullshit at first, but apparently there are call centers for McD's drive throughs. Don't know if it caught on since 06, but still very odd.
The act raises the federal minimum wage in 3 increments: to $5.85 per hour 60 days after enactment (2007-07-24), to $6.55 per hour 12 months after that (2008-07-24), and finally to $7.25 per hour 12 months after that (2009-07-24).
The federal minimum wage is a moot point. The state minimum wage is typically higher and there are few workers in the work force actually earning it. Roughly 2-3 million of the 150 million workers or 1-2%.
So in summary it seems like market forces in fact do value sex offenders and retards more than one would expect.
SuperMxyz said:nycll said:More jobs will be outsourced overseas where there is no minimum wage.You realize we are talking about predominantly restaurant jobs taken by teenagers. Pretty hard to outsource to India.
And those can be outsourced, like the drive through order taking jobs, have already been outsourced.
Does this mean that some fast food places now have someone taking the order from the outdoor menu to across the internet to a call center in India? I've never heard of this.Then you heard it from me.
They also shoot a headshot of you so at the pick up window the local kid can be sure that you are the right joe blow who ordered.
bogalusa said:WalStMonky said:...The diatribe in the OP is propaganda and nonsense.Well, it is from CNN, after all.
I'd like to see some serious data to back up either side's contention.
And what does an increase in the minimum wage to $7.25 mean for those whose pay is, say, $7.50-$8.00?
ITA - regarding the meaning for those folks making $7.50 - $8.00 not much of an impact other than feeling a little bitter perhaps that they are only making a little bit more than new hires.
I do not know even teenagers that are making minimum wage, the fast food places and retail stores in my area pay them slightly more than the minimum wage required in PA
nycll said:More jobs will be outsourced overseas where there is no minimum wage.You realize we are talking about predominantly restaurant jobs taken by teenagers. Pretty hard to outsource to India.In the past 4 years, my typical starting wage (for part-time teenagers with zero work experience) had gone from $5.25 to $7.25. It's ment that instead of having 4 working at a time, I have 3 working, and the remaining 3 have more things to do than before (and I have to pick up alot of the slack).
So outsourcing may not be a result, but fewer jobs (and bigger workloads for those jobs that remain) is definately a consequence.
Another consequence that no one wants to talk about is certain jobs being moved "off the books".... The employee still gets the required minimum wage and is happy (actually happier, since no taxes are deducted), but the employer offsets the additional cost by not reporting/paying the related payroll taxes.
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