At a minimum asking employers to pay people $15/hr. will cause maximum pain for many of the people it is intended to help.
The US minimum wage is not meant to be a salary that you raise a family on, as my colleague Jon Trugman writes.
It’s for high school and college kids working on break to make some cash.
I believe if you are working at a job for more than a year and you are still making minimum wage then it’s time to look in the mirror and not to Washington for a raise.
Nearly doubling the federal minimum wage will put many people on the unemployment rolls. Roughly 6.6 million jobs could be lost, according to one Manhattan Institute study.
It’s simple math, a small employer would have to halve his work force to keep his compensation costs in line. And if he kept one or two extra workers, then prices for goods and services have to rise to accommodate the added expense.
Even the White House is looking for a more realistic $10.10/hr. raise, which according to the generous Congressional Budget Office estimate may cost the US economy 500K jobs.
It’s a bit disingenuous for NY Governor Andrew Cuomo to pledge raising state employees to $15/hr. It will take effect just as he is running for re-election in 2017 and will only raise about 10K seasonal workers such as life guards and other workers at state parks, since most of the jobs are unionized and get a higher wage by contract.
The minimum wage is for younger workers to get a toehold into the job market, with a $15/hr. compensation many will get a door slammed on that toe when looking for work.
Nordstrom’s earnings report Thursday after the market closed confirmed what we heard from Macy’s the day prior.
The US consumer is no longer an aspirational shopper. They don’t feel comfortable reaching for a more expensive item carried by these two outlets and are voting with their feet.
As proof, Kohl’s reported good growth for the quarter on its off-brands, last season merchandise.
How this plays out for holiday shopping is pretty apparent. Deep discounts as you move up the price point.
And not a very good year for margins at the larger department stores.