When Henry Ford Doubled His Minimum Wage (2014) • Hacker News Board

Re: When Henry Ford Doubled His Minimum Wage (2014)

#51

Post by jlokier » Thu, May 02, 2019, 2:01 PM UTC

dreamache wrote: post #28

bmmayer1 wrote: post #5

I can't believe this actually needs to be said, but a single employer raising its wages is not the same thing as a government raising a legally mandated minimum wage. It's so much not the same thing, that the very fact the article tries to conflate them by comparing Ford's decision with the proposal from the Obama administration makes me doubt the voracity of the entire piece. For one thing, Ford's logic is quite sou…

100% agree. In Ford's case, it was a voluntary decision to attract and keep the best workers. In the case of federally mandated minimum wage, it's a threat of force against business owners who are otherwise acting peacefully and quite literally, minding their own business. Raising the minimum wage results in: - A raise in the price of products (hurting the poor the most) - Firing employees - Reducing hours - Going ou…

> I'm a business owner, and I'm not going to sit here eating up the cost of a higher minimum wage.

Yes you are.(1)

(1) "You" here means the collective cohort. You as an individual business owner might be principled enough to refuse to hire, but I believe the data from other places that have a low but non-zero minimum wage indicates your cohort will usually raise wages, rather than not hire. Bearing in mind minimum wages are still very low wages. If business is so tight that would catastrophically affect profits, you will usually raise prices, and the cost isn't so much eaten as the pressures in the business adjust around the new reality; this is made easier by the fact that your competitors are doing the same.

> or they do, and they ultimately want more people dependent on them.

At least in some countries, raising minimum wage makes people less dependent on the state, not more. Two reasons: People need less top up from the state to plug the gap between low wages and high costs of housing and health, and people are more motivated to take a job because it makes a material difference to their situation, indeed poverty-level wages (far below minimum) often cost more to earn than they provide.

Re: When Henry Ford Doubled His Minimum Wage (2014)

#52

Post by jlokier » Thu, May 02, 2019, 2:05 PM UTC

leetcrew wrote: post #44

icebraining wrote: post #32

Earlier quoted context omitted.

This[1] discussion on the minimum wage (specifically centered on Seattle's recent laws) provides a more nuanced goal than just "helping workers" or "getting them dependent"; essentially he's saying there are two types of minimum wage workers - teenagers looking for summer money, and adults making a living -, and you can help the latter if you don't mind screwing the former. [1] http://www.econtalk.org/jacob-vigdor-on…

> there are two types of minimum wage workers - teenagers looking for summer money, and adults making a living -, and you can help the latter if you don't mind screwing the former. when you put it like this, it seems obvious to say that the right move is to screw over the teenagers who are much less likely to be supporting a family or themselves. I'm not sure this is great in the long run though. imo, having some kin…

I don't know about other countries, but in the UK the approach is to set the minimum wage significantly lower for teenagers.

Which sucks if you're an adult making a living who happens to be young, but that's what we do.

There's also a dirty hack: We call some young people "apprentices"(1), which sometimes means the same job as before and not having to pay the minimum wage, with a veneer of marketing. See also "unpaid interns".

(1) I don't want to disparage proper apprenticeships, which from reports can be excellent, e.g. at engineering firms like Rolls-Royce.

Re: When Henry Ford Doubled His Minimum Wage (2014)

#53

Post by logicchains » Thu, May 02, 2019, 2:09 PM UTC

blueline wrote: post #33

ApolloFortyNine wrote: post #14

Earlier quoted context omitted.

What are you arguing? That wages haven't risen since?

wages have absolutely not risen proportional to worker productivity https://www.epi.org/productivity-pay-gap/

An increase in aggregate worker productivity isn't necessarily an increase in the ability of workers; most productivity gains are attributable to capital investment. If you took a productive modern worker back 500 years, they wouldn't be much more productive than the locals of that time, as they'd lack the tooling, machinery, resources, equipment and factories that magnify human productivity today. It hence makes sense that the gains from rises in productivity wouldn't all accrue to workers, as the gains result from the actions of business owners investing in better means of production, not from action on the workers' part.

Re: When Henry Ford Doubled His Minimum Wage (2014)

#54

Post by icebraining » Thu, May 02, 2019, 2:17 PM UTC

leetcrew wrote: post #44

icebraining wrote: post #32

Earlier quoted context omitted.

This[1] discussion on the minimum wage (specifically centered on Seattle's recent laws) provides a more nuanced goal than just "helping workers" or "getting them dependent"; essentially he's saying there are two types of minimum wage workers - teenagers looking for summer money, and adults making a living -, and you can help the latter if you don't mind screwing the former. [1] http://www.econtalk.org/jacob-vigdor-on…

> there are two types of minimum wage workers - teenagers looking for summer money, and adults making a living -, and you can help the latter if you don't mind screwing the former. when you put it like this, it seems obvious to say that the right move is to screw over the teenagers who are much less likely to be supporting a family or themselves. I'm not sure this is great in the long run though. imo, having some kin…

It may be an important experience, but it's not such a common one: https://www.oecd.org/statistics/students-at-work.htm

Re: When Henry Ford Doubled His Minimum Wage (2014)

#55

Post by setr » Thu, May 02, 2019, 2:21 PM UTC

icebraining wrote: post #32

dreamache wrote: post #28

Earlier quoted context omitted.

100% agree. In Ford's case, it was a voluntary decision to attract and keep the best workers. In the case of federally mandated minimum wage, it's a threat of force against business owners who are otherwise acting peacefully and quite literally, minding their own business. Raising the minimum wage results in: - A raise in the price of products (hurting the poor the most) - Firing employees - Reducing hours - Going ou…

This[1] discussion on the minimum wage (specifically centered on Seattle's recent laws) provides a more nuanced goal than just "helping workers" or "getting them dependent"; essentially he's saying there are two types of minimum wage workers - teenagers looking for summer money, and adults making a living -, and you can help the latter if you don't mind screwing the former. [1] http://www.econtalk.org/jacob-vigdor-on…

I think the teenage bit is unnecessary; they’re talking more about anyone trying to find entry-level work. Which happens to often be teenagers, but would presumably also include low-level career transitions, homeless, etc.

The restaurant part is particularly notable: “'We're going to be fine. Our members of this [Washington Restaurant] Association--the minimum wage, it's not going to break them.' And the reason why, he said, is because, 'there are so many strategies that we have to basically reduce our labor.'”

And then it goes on to basically list alternatives to having any entry-level jobs in the first place; buying cut fruits from offsite, self-order machines, etc.

That is, its a bit more dangerous than the simple job-hour reduction; its a more permanent transition to the total removal of low-level full-service work

Re: When Henry Ford Doubled His Minimum Wage (2014)

#56

Post by rtkwe » Thu, May 02, 2019, 2:24 PM UTC

icebraining wrote: post #32

dreamache wrote: post #28

Earlier quoted context omitted.

100% agree. In Ford's case, it was a voluntary decision to attract and keep the best workers. In the case of federally mandated minimum wage, it's a threat of force against business owners who are otherwise acting peacefully and quite literally, minding their own business. Raising the minimum wage results in: - A raise in the price of products (hurting the poor the most) - Firing employees - Reducing hours - Going ou…

This[1] discussion on the minimum wage (specifically centered on Seattle's recent laws) provides a more nuanced goal than just "helping workers" or "getting them dependent"; essentially he's saying there are two types of minimum wage workers - teenagers looking for summer money, and adults making a living -, and you can help the latter if you don't mind screwing the former. [1] http://www.econtalk.org/jacob-vigdor-on…

It'd be very interesting to see the history of who was working minimum wage jobs over time and what kind of jobs were paid minimum wage. Anecdotally it seems more and more people are working a lot of minimum wage jobs that formerly wouldn't be minimum wage like retail or food service (a la fast food places) and there's more people working full time minimum wage.

No matter what the goal of raising it I think the fact that it's now a fraction of what it was in real dollars demands we either raise it or completely rethink how it's applied and what kinds of jobs can be min wage. People working full time should be able to live on their wages, anything else is just subsidizing the labor costs for huge profitable companies.

Re: When Henry Ford Doubled His Minimum Wage (2014)

#57

Post by Consultant32452 » Thu, May 02, 2019, 2:24 PM UTC

jimmaswell wrote: post #50

dreamache wrote: post #28

Earlier quoted context omitted.

100% agree. In Ford's case, it was a voluntary decision to attract and keep the best workers. In the case of federally mandated minimum wage, it's a threat of force against business owners who are otherwise acting peacefully and quite literally, minding their own business. Raising the minimum wage results in: - A raise in the price of products (hurting the poor the most) - Firing employees - Reducing hours - Going ou…

As you must know being a business owner, labor is only one component of expenses, so prices don't go up x% just because labor went up x%. In McDonald's case, a 100+% rise in wages would represent a 4% rise in price. Obviously most minimum wage increases don't double at once so it would be even less. You don't go on a firing spree and shut down the business when property taxes or materials go up so why would you need…

The production cost of a McBurger may only go up 4%, but the consumer price of goods is also significantly dependant on how much money is in consumer's hands. If you just hand everyone in the country $500/mo, rent is going up everywhere.

Re: When Henry Ford Doubled His Minimum Wage (2014)

#58

Post by crdoconnor » Thu, May 02, 2019, 2:27 PM UTC

exabrial wrote: post #25

There is a massive difference between employers raising minimum wage (healthy for the economy, good for the individual, healthy for the employer), and the government raising minimum wage ( hurts the economy, regressive against low income individuals, bad for the individual, bad for employers).

>and the government raising minimum wage ( hurts the economy, regressive against low income individuals, bad for the individual, bad for employers

Government raising the minimum wage is:

* Bad for profits (the main effect is to redirect cash flows from profit to wages).

* Progressive for low income individuals (it raises the bar on low wages - raising wages just about the minimum). The inflationary impact is very muted compared to this.

* Positive for GDP growth - the multiplier effect of money going to low wage earners is much higher (>3x) than profits (<1x) because they have a higher proclivity to spend the money than profit recipients will.

Re: When Henry Ford Doubled His Minimum Wage (2014)

#59

Post by brightball » Thu, May 02, 2019, 2:28 PM UTC

jimmaswell wrote: post #50

dreamache wrote: post #28

Earlier quoted context omitted.

100% agree. In Ford's case, it was a voluntary decision to attract and keep the best workers. In the case of federally mandated minimum wage, it's a threat of force against business owners who are otherwise acting peacefully and quite literally, minding their own business. Raising the minimum wage results in: - A raise in the price of products (hurting the poor the most) - Firing employees - Reducing hours - Going ou…

As you must know being a business owner, labor is only one component of expenses, so prices don't go up x% just because labor went up x%. In McDonald's case, a 100+% rise in wages would represent a 4% rise in price. Obviously most minimum wage increases don't double at once so it would be even less. You don't go on a firing spree and shut down the business when property taxes or materials go up so why would you need…

> There would be no need for a minimum wage if we had UBI but thay kind of thing is too far off.

This is my primary reason for supporting it.

Re: When Henry Ford Doubled His Minimum Wage (2014)

#60

Post by dredmorbius » Thu, May 02, 2019, 2:35 PM UTC

The industry didn't take kindly to this:

Dodge v. Ford Motor Company, 204 Mich. 459, 170 N.W. 668 (Mich. 1919)[1] is a case in which the Michigan Supreme Court held that Henry Ford had to operate the Ford Motor Company in the interests of its shareholders, rather than in a charitable manner for the benefit of his employees or customers. It is often cited as affirming the principle of "shareholder primacy" in corporate America. At the same time, the case affirmed the business judgment rule, leaving Ford an extremely wide latitude about how to run the company....

https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.