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California's minimum wage will go to $15

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Lawmakers, Unions Reach Deal To Raise California's Minimum Wage To $15

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Under the new deal — which still needs to go before the state legislature — the minimum wage would increase gradually over the next six years. 

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That initiative would gradually raise wages by a dollar a year for the next five years, and "impose future increases with inflation," The Los Angeles Times reports.

 

No surprise really.  This is the left coast after all.  

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I would love to see someone calculate the reduction necessary to minimum wage to go beneath the threshold for domestic human hire-ability given a free market and the current replacement costs of technology or shipping tasks to the third world.

e.g.  Foreign sneaker factories or other domestic manufacturing now hire few Americans for manual labor, robots being cheaper to create and use on an assembly line, and shipping and 3rd world labor costs much cheaper...  what would the hypothetical "hourly rate" have to be in order for the manual labor of the US to compete? 

Of course there are some manufacturing tasks robots are essential for.. but where a human or a robot could perform a particular task (moderate sized welding for example) I wonder what the economics would need to work out to in order to allow competition. 

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California's unemployment rate (percentage of non-institutional working age adults without a job) is currently 38%. The under-employment rate (people working less than 35 hours/week) is more like 50%. It will be interesting to see how much that goes up in the next five years. I'm especially curious what this will do to agriculture in California. The service industry can for the most part pass on the costs to consumers, but farms have to compete on the global marketplace. So, unless they start hiring on the black market, they're screwed.

11 hours ago, StrictlyLogical said:

I would love to see someone calculate the reduction necessary to minimum wage to go beneath the threshold for domestic human hire-ability given a free market and the current replacement costs of technology or shipping tasks to the third world.

e.g.  Foreign sneaker factories or other domestic manufacturing now hire few Americans for manual labor, robots being cheaper to create and use on an assembly line, and shipping and 3rd world labor costs much cheaper...  what would the hypothetical "hourly rate" have to be in order for the manual labor of the US to compete? 

Of course there are some manufacturing tasks robots are essential for.. but where a human or a robot could perform a particular task (moderate sized welding for example) I wonder what the economics would need to work out to in order to allow competition. 

The minimum wage is not even the main problem. Especially not in more high skill manufacturing, where wages are well above minimum wage anyway. If it was just the $8/hour minimum wage, US manufacturing would probably still be relatively competitive. But taxes, fees and regulatory costs for a minimum wage job add up to more than the salary of the employee himself. And then there are the laws giving undue power to unions, in many states, which inflate the cost of labor as well.

 

Edited by Nicky

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4 hours ago, Nicky said:

California's unemployment rate (percentage of non-institutional working age adults without a job) is currently 38%. The under-employment rate (people working less than 35 hours/week) is more like 50%. It will be interesting to see how much that goes up in the next five years. I'm especially curious what this will do to agriculture in California. The service industry can for the most part pass on the costs to consumers, but farms have to compete on the global marketplace. So, unless they start hiring on the black market, they're screwed.

The minimum wage is not even the main problem. Especially not in more high skill manufacturing, where wages are well above minimum wage anyway. If it was just the $8/hour minimum wage, US manufacturing would probably still be relatively competitive. But taxes, fees and regulatory costs for a minimum wage job add up to more than the salary of the employee himself. And then there are the laws giving undue power to unions, in many states, which inflate the cost of labor as well.

 

Aha... so with all the "bloat" and regulatory-govt machinery, essentially to compete, the salaries of the workers would have to be negative...  yikes

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