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Today’s number: $13

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A mayoral working group recommended [yesterday] that the city’s minimum wage be raised to $13 an hour within four years, and Mayor Rahm Emanuel promptly endorsed the plan. […]

Under the recommendation, the minimum wage would rise from its current level of $8.25 an hour to $9.50 next year. It would keep going up until hitting $13 an hour in 2018. After that, it would be adjusted annually to keep pace with inflation. The national minimum wage is $7.25 an hour.

Thoughts?

posted by Rich Miller
Tuesday, Jul 8, 14 @ 10:19 am

Comments

Inconsequential as an economic policy, but a winner politically for those whose policies are dictated by politics and not economics.

Comment by VanillaMan Tuesday, Jul 8, 14 @ 10:26 am
A person willing to get up in the morning and put in a hard day’s work should earn enough money not to live in poverty. And Chicago is an expensive city to live in so Federal poverty guidelines are meaningless.

Comment by Nonplussed Tuesday, Jul 8, 14 @ 10:27 am
Go for it. And then, watch people get laid off, watch prices rise and watch bosses demand and expect very high productivity from all those workers. Because a businesses expenses will go thru the roof!

Comment by Wally Tuesday, Jul 8, 14 @ 10:27 am
10!

10 Dollar!

10 Dollar Footlongs!!!

In Chicago Only!

Comment by Phenomynous Tuesday, Jul 8, 14 @ 10:28 am
I support increasing the minimum wage. It is extremely difficult to live on the existing minimum wage. The cost of all goods and services continue to increase.

We must remember that minimum wage is for those actually making an effort to work. It isn’t charity. As they get experience, they can be more productive and move up. For those who can’t move up, this may well be their best hope. I see this as a hand up and not a hand out.

Comment by Sunshine Tuesday, Jul 8, 14 @ 10:28 am
It’s a good start, and is needed to jumpstart this demand-starved economy from the current malaise caused by the austerity fools out there.

Comment by PublicServant Tuesday, Jul 8, 14 @ 10:30 am
Greedy Rahm grabbing all the political capital for the next four years all at once.

Spread it around, dude! Keep this issue in the news EVERY SINGLE YEAR.

Comment by Mike M Tuesday, Jul 8, 14 @ 10:32 am
The best argument for this is that a low minimum wage is a twofer business subsidy. Not only are employers allowed to pay shockingly low wages under law, but then taxpayers have to step in and subsidize those low wages with Medicaid, Food Stamps, etc.

In a perfect world, though, I’d base minimum wages on the number of employees. That way, wages aren’t an unnecessary impediment to starting a business. But once that biz gets going, and more people are hired, you gotta pay them more.

Comment by Rich Miller Tuesday, Jul 8, 14 @ 10:32 am
Go For It!
Think how much taxpayers will save by cutting the corporate welfare payments for food, housing and health care now available for employers who pay low min wage.

Comment by CirularFiringSquad Tuesday, Jul 8, 14 @ 10:33 am
And the mathematically challenged will continue drive employers to neighboring green pastures. Or enhance their automation capabilities for work that does not require a lot of education.

Comment by Fan Tuesday, Jul 8, 14 @ 10:35 am
I’m for it because it will generally be a progressive tax: businesses mostly will be able to afford to absorb the increase, plus the money will likely be spent locally and contribute to a local multiplier effect (those dollars are going towards food, not S&P 500 index funds).

Comment by lake county democrat Tuesday, Jul 8, 14 @ 10:36 am
Support it but am concerned about the small mom and pop businesses. Maybe a smaller jump

Comment by Former Merit Comp Slave Tuesday, Jul 8, 14 @ 10:37 am
And the ideology challenged will continue to spout economic baloney. Dude, if you think robots will be taking over minimum wage jobs because of a much overdue increase in the minimum wage, you’re on crack.

Comment by PublicServant Tuesday, Jul 8, 14 @ 10:39 am
If a company has 30 workers making $9 per hour and in a few years, they have to pay $13 per hour, let’s do the math.

Salary increase would be $4800 per week times 4.3 weeks in a month, so approximately $19,300 a month in additional wages. Throw in the employers share of FICA and Medicare, that brings the total to almost $21,000 a month, not including higher unemployment insurance and workers comp.

Annual wage increase on those 30 workers alone? A cool $250,000 to $270,000!!! But wait, there’s more. Workers making $12-$13 per hour will want $16-$18 per hour and so on.

Good luck!

Comment by Wally Tuesday, Jul 8, 14 @ 10:39 am
First, I would wager any amount that anyone beefing about the proposed new minimum wage doesn’t make minimum wage today.

Second, I think there should be a layered minimum wage: kids working their first job at Walgreens or McDonalds at 16 years old could conceivably make a little less. Those over say 18 years old should be able to earn enough to pay rent and put food on the table. Rich is correct, we all pay if folks can’t make it on their own.

Comment by Knome Sane Tuesday, Jul 8, 14 @ 10:39 am
Rich, that’s a good point - if a single employee that works full-time needs public assistance to survive, that’s strong evidence that the minimum wage is insufficient for the market.

Comment by Ken_in_Aurora Tuesday, Jul 8, 14 @ 10:42 am
“I support increasing the minimum wage.”

Me too. The cost of living in Chicago is higher, so it seems justified to raise the minimum wage higher than $10 per hour.

“Go for it. And then, watch people get laid off, watch prices rise and watch bosses demand and expect very high productivity from all those workers. Because a businesses expenses will go thru the roof!”

THEY’LL LEAVE THE STATE!!! WHY ARE THEY WAGING CLASS WARFARE???!!!

Wha? I’m sorry, I don’t know what got into me. It must have been a brief and sudden episode of IPIosis.

Just kidding.

With respect, several states raised their minimum wages this year, as well as maybe a few cities. I haven’t checked their unemployment rates, but I wouldn’t be surprised if the rates didn’t go up, or if the fearmongering didn’t materialize in the form of lost jobs and businesses closing down.

Comment by Grandson of Man Tuesday, Jul 8, 14 @ 10:42 am
Raise their wages. Raise their property taxes.

Comment by Befuddled Tuesday, Jul 8, 14 @ 10:43 am
This two-tiered fantasy that keeps rearing its ugly head is a joke. If it were to go into affect, who do you think businesses would hire first? You guys love it when the poor fight each other for the table scraps huh?

Comment by PublicServant Tuesday, Jul 8, 14 @ 10:44 am
Sounds like a plan to get people off SNAP, Medicaid, EITC and other taxpayer financed subsidies for low-wage employers.

Comment by wordslinger Tuesday, Jul 8, 14 @ 10:54 am
No one has brought up how this would foster an underground cash economy in a lot of businesses that require menial workers; i.e. landscaping, mom and pop small shops and food stands, etc. They’re already very tough to track. We’ve gone from talking about raising it a buck to 4 bucks an hour. If you sign the front of checks, that’s an incredible hike. Minimum wage jobs should be entry level. Most are high turnover positions. Really good employees will make more. I believe in a minimum wage to keep the scoundrels in line, but making every small business pay a “living wage” for menial work is not a good idea. It’ll suffocate small businesses.

Comment by A guy... Tuesday, Jul 8, 14 @ 10:59 am
Grandson, care to comment on my math example? How does a business cope with that type of expense increase?

What if their rent goes up? Insurance goes up? Utilities increase?

Comment by Wally Tuesday, Jul 8, 14 @ 11:00 am
—but making every small business pay a “living wage” for menial work is not a good idea. It’ll suffocate small businesses.–

There are plenty of exceptions to minimum wage laws. Make your case for others.

Comment by wordslinger Tuesday, Jul 8, 14 @ 11:02 am
Form an insider-outsider point of view, it will help the insiders, those that have jobs, but mostly like hurt the outsider, unempoyed lower skilled workers, by reducing the demand for that type of labor. In the long run it will probably enocurage more companies to subsitute capital for labor where possbile.

Comment by RMWStanford Tuesday, Jul 8, 14 @ 11:03 am
“Sounds like a plan to get people off SNAP, Medicaid, EITC and other taxpayer financed subsidies for low-wage employers.”

This is one of the key reasons why I support a minimum wage increase. Some of the wealthy business interests don’t support a minimum wage increase, and they also don’t support poor workers getting any public assistance. When these people call the poor “takers,” they’re talking about millions of people who work but can’t afford enough food and healthcare.

Other wealthy businessfolk and corporations provide decent wages and benefits for their employees. These are the unsung people and corporations and deserve praise.

Some corporate leaders also say that increasing wages decreases employee turnover, and that is good for business.

Comment by Grandson of Man Tuesday, Jul 8, 14 @ 11:10 am
Ya can’t blame Rahm for wanting to change the subject away from murder failure, pension failure, financial failure, education failure and on and on and on. Especially when the media falls for it everytime! Williamjkellyforchicago.com

Comment by William j Kelly Tuesday, Jul 8, 14 @ 11:10 am
Are union wages indexed to the minumum wage? Why not just order a wage increase for everyone for the same amount as the minumum wage increase?

Comment by Wumpus Tuesday, Jul 8, 14 @ 11:10 am
I fear this will backfire.

Comment by Jechislo Tuesday, Jul 8, 14 @ 11:11 am
Raising the minimum wage wipes out all the raises earned by retail workers.

Comment by Ret. Prof Tuesday, Jul 8, 14 @ 11:12 am
Wally, “If You Give a Mouse a Cookie” is not, in fact, an economics textbook.

As I understand it, the plan is to increase the minwage by $1.25 next year. So if a Mom and Pop store has one employee working 40 hours a week, that’s $50 a week.

Let’s take a look at a larger operation — say, an Ace Hardware. The average smaller Ace employs 15 people. So in the next year, the increase per week would be about $750. Over the course of a year, that’s about $37,500 — and agreed, that’s not hay.

But when you consider that the average hardware store reports about $1.9 million in annual sales, that’s not a jaw-dropping increase. And if that higher minimum encourages people to actually, you know, show up to work and keep their jobs, it’s not unreasonable to predict that sales might actually increase. (I speak as someone who has repeatedly walked out of my local hardware store empty-handed because the employees could not be bothered to acknowledge my existence.)

Comment by Soccermom Tuesday, Jul 8, 14 @ 11:14 am
$13 seems like a pretty big leap for businesses to absorb, but some increase coupled with Workers’ Comp reform makes sense to me. Jeez, I sound like Bruce Rauner now–I need to wash.

Comment by SAP Tuesday, Jul 8, 14 @ 11:17 am
I always chuckle at those social engineering folks. Why not raise the minimum wage to $20 per hour? Maybe, $25. Of course, the increase in minimum wage translates into higher benefits costs, also. The politicians supporting these increases, are the some politicians making some really dumb economic decisions about now failed development projects and sale/leaseback of city services to name a few. If these politicians were so good at determining the impact of wages on economic activity, they would be making lots of money in the private sector.

Comment by Apocolypse Now Tuesday, Jul 8, 14 @ 11:23 am
@williamjkelly: for a guy running for Mayor of the third largest city in the US, you sure have a lot of times on your hands for posting on this blog. OK, I’ll bite. What’s your plan to stop the gun violence? Cure the pension crisis? Blah, blah, blah…

Comment by Knome Sane Tuesday, Jul 8, 14 @ 11:25 am
Soccermom, don’t forget the other increases. And, that is the first year. What about the 2nd, 3rd, 4th year increases?

And, I feel comforatble with the finance and economic classes I have taken along with decades of small business experience, thank you.

Comment by Wally Tuesday, Jul 8, 14 @ 11:26 am
No problem from my perspective, but let’s face it, it’s political grandstanding. How much does it take for a family of four to maintain a middle class lifestyle in the US. Depends on where you live, of course, but the other day I read $130k in popular urban areas. That seems low to me, and I have adult children living in popular urban areas-and not lavishly either. More strategizing needed.

Comment by Cassandra Tuesday, Jul 8, 14 @ 11:30 am
Can a city raise the minimum wage outside of the state’s minimum wage laws?

New York has shot it down twice (Mayor of the City of New York v. Council of City of New York (2013); Wholesale Laundry v. City of New York). It has also upheld it twice (McMillen v. Browne, City of NY v. Bloomberg (2006)).

The 2013 case relied on Wholesale Laundry which held that private companies could only be forced to pay the state minimum wage which superseded the city minimum wage ordinance.

McMillen was upheld because it only applied to city workers, not private companies. Bloomberg was upheld because it applied to project labor agreements that would avoid strikes and thus save the city money.

I understand that there are serious differences between NYC and Chicago (as well as NY state and Illinois) but can the same arguments can be made in both?

Comment by Not yet a lawyer Tuesday, Jul 8, 14 @ 11:30 am
Awful idea to jack it up this much only for Chicago. I favor increasing the minimum wage. But the larger the area the better. Doing it for Chicago just makes people want to set up show away from Chicago.

Comment by Chicago Cynic Tuesday, Jul 8, 14 @ 11:51 am
==And, I feel comforatble with the finance and economic classes I have taken along with decades of small business experience, thank you.==

Decades of small business experience? For all the “decades” experience you have Wally you seem to be shockingly ignorant as to the many ways in which you can offset a wage increase.

reduction in hours worked
reduction in non-wage benefits
reductions in training
efficiency improvements, i.e. stricter human resource management, increased performance expectations

Comment by Precinct Captain Tuesday, Jul 8, 14 @ 11:56 am
Can you say “Automation”?? Fast food places, movie theatre, the places that are the groundswell for hiring inner city teens will be hit hardest. Their answer, more machines and computers to take the place of teenagers. You can put in a few kiosks and get the same service CHEAPER..

Comment by notRich Tuesday, Jul 8, 14 @ 12:00 pm
“that’s about $37,500″

The flaw in your math is to ignore the effects of what happens to the entire wage scale.

When you kick up the bottom range, you have to raise all the wages to maintain a differential between the entry level and the more advanced levels. To put is simply, when you add a dollar to the entry level employees salary, you have to add a dollar or more (if you make your differentials based on percentages) to each of the advanced wage steps. A more accurate estimate of increased labor costs would be to multiply the wage increase by the number of hours worked.. That would be far more than a measly 37.5K.

Many other costs are assessed to businesses based on the size of the payroll. Those costs will rise as the size of the payroll rises.

The increased costs will have to be recovered from somewhere. Higher prices anyone?

The net increase in buying power for the employees will be diminished or lost by all the price increases. Then will we need another round of wage increases?

The only ways out of a low wage job is to acquire a skill that has value to an employer and move on to a higher paying job or to start a business. It is poor public policy to pretend you can legislate the end of poverty by arbitrary wage increases.

Comment by Plutocrat03 Tuesday, Jul 8, 14 @ 12:03 pm
Those that say: “this will kill jobs in Chicago” are the first ones to say “what happened to the middle class?”. You can’t have it both ways. A middle class can only sustain if they have the means to do so.

You can’t pay poverty wages and expect your employees to have a middle class life.

Comment by Knome Sane Tuesday, Jul 8, 14 @ 12:05 pm
I have a problem targeting businesses to subsidize our economic and political shortcomings. If we as a society decide not to be more forceful in requiring quality education for all and more proactive in trying to convince folks to review fiscal reality before they make a child bearing decision, it seems the inevitable financial problems should be spread around to all of us via supporting government programs through general taxation.

Furthermore, our leaders are not being candid about the availability of jobs going into the future for folks who once financially thrived in manufacturing. Foxconn, the huge Taiwanese electronics manufacturer, recently announced a new generation of “Foxbots” to be used on nextgen Apple products. Technology is rendering many jobs obsolete, and the process appears to be just starting.

A floor on wages is needed to prevent worker abuse. But the long term trends in employment need to be discussed before more government mandated wage increases, especially in Illinois. Many businesses are already stressed in Illinois. Do we really need to add more?

Comment by Cook County Commoner Tuesday, Jul 8, 14 @ 12:05 pm
“reductions”

and you think the small business owners have not been trying to save money in these areas before?

Like in the business world is not like life in the governments where you do what you have been doing despite the increased costs.

Comment by Plutocrat03 Tuesday, Jul 8, 14 @ 12:07 pm
At $13 an hour, soon the City of Chicago minimum wage will come closer to the starting or entry salary at Hobby Lobby! How ironic is that?

Some of the math exercises by other commentators are pretty spot on. So business either cuts back hours, reduces manpower a bit and raises its prices.

When the dust settles, who wins? Perhaps the pandering politicians on this subject. Not the working poor.

Comment by Louis G. Atsaves Tuesday, Jul 8, 14 @ 12:07 pm
Yeah, Pluto, the country sure did go down the drain with the wage increases of the late 40s, 50s, 60s and 70s.

Dark times.

Comment by wordslinger Tuesday, Jul 8, 14 @ 12:11 pm
=Sounds like a plan to get people off SNAP, Medicaid, EITC and other taxpayer financed subsidies for low-wage employers=

That is until these fast food workers (or any low skill worker that can be replaced by machine or have their position eliminated) are priced out of a job by something like the Momentum Machines’s burger flipper (it can flip 360 burgers an hour!) then these folks will be right back on welfare at a much higher cost to taxpayers.

I understand this is a state blog and there is little a state legislature can do about our nation’s monetary policy but in 1964 the minimum wage was $1.25 or 5 quarters. Today, those 5 quarters are worth $17.30 for their silver content, which quarters no longer contain. We don’t have a minimum wage or greed problem in this country, we have a money problem.

Comment by Anonymous Tuesday, Jul 8, 14 @ 12:19 pm
Louis, so the working poor will not win by making more money? What game are you playing?

The argument you’re making is not against an increase in the minimum wage, but the existence of the minimum wage itself.

The U.S. minimum wage was enacted in 1938. Some good bull years in there, don’t you think?

In fact, it was a broken field run from about ‘45 to ‘74, when the first gasoline shocks hit.

And oddly enough, the spike in gasoline prices had nothing to do with the minimum wage.

Comment by wordslinger Tuesday, Jul 8, 14 @ 12:24 pm
KS, you can’t expect your employees to have a middle class lifestyle on $13/hr either. Should people who go to work and earn their paycheck have to live in poverty? I don’t know. I do suspect you can’t legislate poverty away. I wonder how this all fits in with the concept of a living wage. I don’t know the answer to that either. I very strongly suspect that raising the minimum wage drives up wages for employees already making more than the minimum. I doubt it drives up CEO pay. I imagine it drives up prices, especially in businesses that employ lots of minimum and near-minimum wage workers. That probably drives up the cost of living for minimum wage workers as well as for everyone else. I support an increase in the minimum wage. Is $13 over 4 years the right number? Should a city go on its own? Should someone who has to (or chooses to) work at a minimum wage job expect to be able to support a family? Does that stop much of anyone from having babies they can’t support? Can we solve those sorts of social/cultural dysfunctions by raising the minimum wage? Even if the answer is “no”, should we be trying?

Man, I just don’t know what the right thing to do is on this issue, and I think of myself as reasonably intelligent and at least adequately educated. I’m very interested in reading others thoughts.

Comment by steve schnorf Tuesday, Jul 8, 14 @ 12:27 pm
Perhaps Rahm realizes that if you don’t have higher wages, they can ‘ t pay higher taxes. Something a lot of people in politics are beginning to realize, including his pal Barak Obama. The trickling down is no longer a stream, but a drip.

Comment by Madison Tuesday, Jul 8, 14 @ 12:28 pm
Are Rahm & the Stamps passing an ordinance to make this policy?

Or are they shopping for media coverage to make themselves appear more progressive than they really are?

Comment by Carl Nyberg Tuesday, Jul 8, 14 @ 12:29 pm
Precinct Captain, by your post at 11:56, I can say with 100% certainty that you have never run or owned a small business. At least, not for long.

Reductions in training? REALLY?
Reductions in hours? HUH?

I guess you mean a few salaried people should increase their hourly load from 50+ hours weekly to 60-70.

Comment by Wally Tuesday, Jul 8, 14 @ 12:32 pm
===You can put in a few kiosks and get the same service CHEAPER..===

You have proof for your position? Seattle raised theirs to $15. Is there a rush on kiosks? If there is, I must have missed it. When you post on these boards essentially saying that if we raise the minimum wage, business will convert to kiosks, you usually should support that contention by citing a source of support for that position. If you have one (or more) I’d appreciate seeing it.

Thanks in advance.

Comment by PublicServant Tuesday, Jul 8, 14 @ 12:33 pm
More questions. Will a large increase in the minimum wage increase the attractiveness of dropping out of school to go to work, or to be able to work more hours? Should a minimum wage be layered? Should a training wage be allowed? What about people who make most of their income from tips: how will they be affected?

Comment by steve schnorf Tuesday, Jul 8, 14 @ 12:34 pm
The SBA estimates 80% of small businesses close within 5 years. Not only will a large wage increase severely harm most small businesses, it will impede start-ups dramatically.

Small businesses currently drive much of the job growth. What happens when they reduce the work force, shut down completely or never open?

Comment by Wally Tuesday, Jul 8, 14 @ 12:51 pm
==- steve schnorf - Tuesday, Jul 8, 14 @ 12:27 pm:==

You can’t legislate poverty away, but you can’t wish it away either. The answer is whether we are willing to actually value a society free of poverty, using whatever means necessary be it the machinery of government or the machinery of individual and community compassion, most likely both. For LBJ, it was expanding the New Deal into the Great Society, using the machinery of government. Herbert Hoover, who said, “We in America today are nearer to the final triumph over poverty than ever before,” did not see a role for government like LBJ or FDR, but when he did support intervention it was on the side of corporations.

Today, I think we have a large class of people who do not want poverty to go away. For those in the middle class, the poor provide a target which they make into “the other” in order to make themselves look comparatively good and make themselves feel good. For the rich, the poor are simply another commodity to take advantage of through their labor or their need for subsistence.

Comment by Precinct Captain Tuesday, Jul 8, 14 @ 12:57 pm
==That is until these fast food workers (or any low skill worker that can be replaced by machine or have their position eliminated) are priced out of a job by something like the Momentum Machines’s burger flipper (it can flip 360 burgers an hour!)==

Seriously? Automats went out of business a long time ago because there is simply no way they can compete with fast-food restaurants staffed with real people. A sandwich chain tried to bring them back in NYC a few years ago with more modern machinery and failed miserably. So your Whopper goes up 50 cents as a result of this. Big deal. The fact is taxpayers are subsidizing minimum wage businesses because the minimum wage hasn’t been raised in years. Rents, gas, food prices, on the other hand, have steadily risen. An apartment that cost $500 per month in Chicago in 2005 costs anywhere from $700 to $1,000 today. It’s beyond time we do this.

Comment by OldSmoky2 Tuesday, Jul 8, 14 @ 12:59 pm
I’m less inclined to weigh in on a Chicago-specific minimum wage, since I don’t operate in it. That said, a few comments really have to be responded to:

- PublicServant - Tuesday, Jul 8, 14 @ 10:39 am:

“And the ideology challenged will continue to spout economic baloney. Dude, if you think robots will be taking over minimum wage jobs because of a much overdue increase in the minimum wage, you’re on crack.”

Aside from using asinine language to make your point, you didn’t really say anything. Why? Why won’t machines replace workers? Why won’t business models less reliant on workers starting winning out?

For example, one of the biggest business model crazes around the country right now is self-service froyo. Red Mango, PinkBerry, etc., all built a model that requires less labor and thus gets a financial leg on on their competitors when fighting in the dessert/snack market. You think trends like that won’t continue? If so (genuine questions), what are you basing that on?

Comment by liandro Tuesday, Jul 8, 14 @ 1:04 pm
Wally, you are a liar.

“About half of all new establishments survive five years or more and about one-third survive 10 years or more.”

http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf
http://www.washingtonpost.com/blogs/fact-checker/wp/2014/01/27/do-9-out-of-10-new-businesses-fail-as-rand-paul-claims/

Comment by Precinct Captain Tuesday, Jul 8, 14 @ 1:04 pm
Another example I’ll note: when I was younger, automated grocery lines weren’t really a thing. Now you can find them in almost any major grocer, seeming giving them a leg-up on indie places that can’t afford that kind of initial investment. Certainly that is a function of technology, but labor costs are a huge factor in that formula. I’m not a grocer, so I have no idea what that formula looks like–but I know it exists.

Comment by liandro Tuesday, Jul 8, 14 @ 1:10 pm
===automated grocery lines weren’t really a thing. Now you can find them in almost any major grocer===

Supermarkets are phasing them out or cutting back these days.

Comment by Rich Miller Tuesday, Jul 8, 14 @ 1:11 pm
@Rich,

Are they? That’s interesting. That would seem to indicate that the formula was tipping. How do we think raising minimum wage affects it? I honestly don’t know, in terms of grocers. I think its fascinating if they are pulling away from that. Now I’m going to have to do some researcg tonight after work.

Comment by liandro Tuesday, Jul 8, 14 @ 1:14 pm
Theft is a real problem. And people have a real hard time with the automated checkouts. I hate them, personally. Takes me much more time than a checkout person would.

Comment by Rich Miller Tuesday, Jul 8, 14 @ 1:16 pm
Yeah, I know that shrinkage was a big factor in the formula. Even with better security, what are you gonna do, hunt down every theft? I know some grocers just factor in the shrinkage cost and ignore the petty stuff. I was always curious how much automated lines added to that. I know a few people in the industry, so now I might have to hit them up for lunch and see how much they’ll spill, lol.

Side-note: I hate them too. I like interacting with people. My bank thinks I’m weird because I always walk inside instead of going through the drive-through (unless I’m in a super hurry). Main reason I picked my bank (besides rates!) was how personable they are top to bottom.

Comment by liandro Tuesday, Jul 8, 14 @ 1:20 pm
Wages are hardly the be-all or end-all regarding automation. It’s very industry specific.

Groceries were making a big move to self checkout until a new business model of grocers started beefing up customer service and the store “experience.” Now, Jewel is pulling out the self checkouts at its stores.

Gas stations hate the pay-with-card-at-the-pump technology, but consumers demanded it. They’d rather you have to walk in the store to pay and be tempted by impulse buys.

Really, folks. The minimum wage doesnt’t drive the economy. That is way too simple-minded. It does put a little more money in some pockets, which will be spent immediately because they’re so broke. A boost might get some folks of public aid programs, too.

And if stagnant wages were good for the economy, we’d all be living in a Golden Age right now.

Comment by wordslinger Tuesday, Jul 8, 14 @ 1:22 pm
If Rahm was really sincere about this issue why did he wait till today? Why not when he was first elected? Why didn’t he push for this when he was a congressman or chief of staff? But more importantly why can’t he solve any of these problems or get anything done with all his so called experience and influence?

Comment by William j Kelly Tuesday, Jul 8, 14 @ 1:25 pm
@Steve Schnorf:

I agree with you about this dilemma and I share your interest in reading more about it. But one commenter, @ Precinct Captain said: “You can’t legislate poverty away, but you can’t wish it away either.” I think there is something to that. If government did nothing, wages would never rise unilaterally. The dialogue has to move more in the direction of “how can we ressurect the middle class”. Is it by boosting workers’ wages vs cutting CEO pay (to bridge the wage gap)? I don’t have the answer.

Comment by Knome Sane Tuesday, Jul 8, 14 @ 1:52 pm
Precinct Captain, you are right and I am wrong. I was reading too fast and typing too fast.

Thanks for calling me a liar though.

Comment by Wally Tuesday, Jul 8, 14 @ 1:55 pm
Wally, you were more than mistaken. You didn’t read that “fact”, you thought you remembered hearing it on some like minded radio programming. When confronted, you admitted you were wrong, so kudos. Fact is though, you presented false information as fact. That is the definition of lying.

Comment by Jimbo Tuesday, Jul 8, 14 @ 2:09 pm
A major issue here should be the net margin of most business where minimum wage is significant. Average margin for most employers is around 8% according to NYU.edu.

http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html

Go back to Soccermom at 11:14. If an average ACE does $1.9M in sales, net of retail(building supplies) is 5.6% or about $106,400. Most of the workers in our local ACE make minimum or slightly higher. Drop in the additional $37,500 cost of minimum wage increase and what is that owner going to do? Hire more people? Doubt it. Raise prices? If they can. Let 2-3 positions go away. Likely.

Comment by zatoichi Tuesday, Jul 8, 14 @ 2:44 pm
Actually I read it and mixed the numbers up, but I was wrong and I admit I was wrong.

Comment by Wally Tuesday, Jul 8, 14 @ 2:46 pm
Precinct Captain and Jimbo…

Liar is more than a little harsh. Dude made a mistake reading fast. Said sorry. Accept it. Being a jerk isn’t any better.

Comment by A guy... Tuesday, Jul 8, 14 @ 2:55 pm
Look, you work an honest days work, you deserve an honest days pay, and that pay should be enough to put food on the table and a roof overhead. If companies can’t pay that wage, they are selling their products and services too cheaply. Their customers are getting a free ride on the government teat, because currently, the government subsidizes substandard wages. The fed targets 5% unemployment because it puts downward pressure on wages, which they believe is necessary to prevent inflation. However, with anything less than full employment, a corporation can find someone willing to work for less than their due. So, because we need some unemployment to prevent inflation, we also need a minimum wage that prevents a race to the bottom by the unemployed. That minimum wage should be high enough that the government doesn’t need to provide assistance to someone with a full time job. I’m not sure $13 is the right number. It might be lower downstate, and it could very well be higher in Chicago. The point is that this won’t shutter businesses. They may raise prices. They might reduce headcount. They might see a huge increase in productivity when their workers stop worrying about where their next meal will come from or feel shamed by having to use food stamps. A lot of things might happen, but one thing is guaranteed. Less people working full time jobs will have to apply for government benefits. Many will no longer meet eligibility requirements. Can’t we all agree that is a good thing?

Comment by Jimbo Tuesday, Jul 8, 14 @ 3:47 pm
I wonder if the minimum wage is policy which is just treating a symptom of a larger issue(s)? Let me try to explain…

I read an article yesterday which stated that using BLS “output per hour” data (see http://www.bls.gov/data/#productivity ), one could show that 1 hour of labor today produces ~70% more output than it did in 1980. The author then stated that our standard of living should therefore be 70% better today than in 1980. But with regards to price and quality/quantity of things like our homes, health care, and education, the author did not believe most of us are experiencing that much (if any) improvement. So where did the productivity increase go? The author contends it was taken via monopolistic schemes in areas like banking (un-backed credit creation) and healthcare/insurance (cost shifting), and that if these cartels could be properly regulated/broken up, most people struggling financially today would no longer be.

Does anyone have other evidence that the issue regarding monopolistic behavior stated above might be the root cause to the problem which minimum wage laws are trying to alleviate? Thanks.

Comment by Rharaz Tuesday, Jul 8, 14 @ 4:23 pm
==Can’t we all agree that is a good thing?===

No. That’s the most foolish and cynical thesis on Economics I’ve ever heard. People should aspire to earn more than the minimum wage. It’s an entry level wage that often requires no experience, little education and it’s not meant to be long term. This whole discussion takes the emphasis off of providing real, sustainable, good jobs with good wages. There are places where there may be lines to get a minimum wage job, but not too many.

This is pandering at it’s worst and actually even cruel. Moving someone from poverty level B from poverty level A doesn’t alter their lives in such a positive way, but it does stall economic growth in all sectors of the workforce.

I think Schnorf brought it up a foot and a half up the thread. This could provide incentive for students to drop out of school and end any chance those individuals could ever get beyond minimum wage. Raising minimum wage appreciably will artificially gild a position no one should be holding up as a standard of a decent living. Successful small businesses grow…and pay more. Kill them before they can succeed and the middle class jobs they could ultimately provide will never be realized.

Comment by A guy... Tuesday, Jul 8, 14 @ 4:33 pm
===but it does stall economic growth in all sectors of the workforce===

That’s never been proved.

Comment by Rich Miller Tuesday, Jul 8, 14 @ 4:36 pm
–It’s an entry level wage that often requires no experience, little education and it’s not meant to be long term.–

It’s meant to be a minimum. And there are exceptions to it.

Flapping around about “economics,” claiming any raise to the minimum wage is deleterious to the economy is just nonsense and betrays that you just think there shouldn’t be one at all.

There’s been a minimum wage since 1938. Been some good economic times since then, don’t you think?

Comment by wordslinger Tuesday, Jul 8, 14 @ 4:56 pm
As of the most recent year of Census data, 2012, Chicago’s unemployment rates were

Youth 16-19: 50.6%
Youth 20-24: 22.9%
Blacks: 26.8%

This helps them how?

Comment by Johnny Utah Tuesday, Jul 8, 14 @ 5:08 pm
Guy, a $13 wage isn’t gilded. Jesus, in Chicago, that isn’t going to buy much. It certainly doesn’t prevent people from seeking better jobs. They can do that just as easily as they can now. But since you clearly don’t understand how the world works for the working poor, I’ll explain a few things. Most children of impoverished families don’t get an education and once in the workforce they don’t get much training for advancement in a minimum wage job. They might be looking for better jobs, but the opportunities are fewer than you suppose.
Additionally while struggling to put food on the table with three part time jobs or two full time ones, how are they to have the money and time for education or training outside of employment? The thing is, people are worth something. That figure is an amount that keeps them alive without handouts from the government. You want forty hours per week, you should pay enough for that person to eat and live somewhere other than a shelter. Jeez man, not everyone moves up from the bottom. Those that can’t don’t deserve to starve, and my tax dollars shouldn’t be used so that their employer can exploit them by paying less than a living wage.

Finally, if your business model requires you to pay folks other than high school kids 8 bucks an hour you should re-evaluate it. Your profit margins shouldn’t be that thin, and you should be ashamed if your workers have to be on medicaid and food stamps.

Comment by Jimbo Tuesday, Jul 8, 14 @ 5:13 pm
And Guy, what’s foolish is thinking that a business can’t adapt to changes. They will do a myriad of things before shutting down. That’s like a last resort thing Guy. As for innovation, most small businesses begin with partners being the only staff. They expand as revenue allows. Most small businesses don’t pay minimum wage either. They want to attract good employees. This wage is more about fast food and Big Box stores similar to Walmart. Those business exploit their workers for profit not survival.

Comment by Jimbo Tuesday, Jul 8, 14 @ 5:30 pm
JU, your statistics don’t show that the current system is helping many, either.

Comment by Rich Miller Tuesday, Jul 8, 14 @ 5:41 pm
Wow. What a unique approach.

Comment by John a logan Tuesday, Jul 8, 14 @ 6:08 pm
Rich, agreed that current system is failing.

I don’t see how the solution is “let’s make it worse.”

58% wage hike makes it worse.

Comment by Johnny Utah Tuesday, Jul 8, 14 @ 8:21 pm
If Chicago wants to do it, then let them. I am opposed, but if the people want it…

i think Rich’s analysis that younger people should have a smaller minimum wage is merited. The youth unemployment is ridiculously high especially for young African American men - that may help them attain employment.

Comment by modest proposal Tuesday, Jul 8, 14 @ 8:22 pm
I read the report and info on the “working committee” and this was no more than a Delphi committee. The objective of the committee wasn’t to study IF the minimum wage should be increased, or even the wisdom of the government setting wages for private sector employees, but by HOW MUCH the minimum wage should be increased.

Of the 16 members, 7 were Alderman, 2 were from union leadership whose members may have contracts linked to the minimum wage ( a multiple or percentage above the minimum wage), the usual “Foundations” and activist groups, and about three people representing those who would actually be PAYING the increased costs (IRA, CCC, and one other). They were there for window dressing. They had no hope for impacting the results of the committee.

This will probably pass after the election. Those SEIU and AFCSME members working with a contractual link to the min. wage will all get raises, and Chicago won’t have the money to pay them, so lay offs will happen. Those working in low skilled jobs that just aren’t worth $13/hr will be laid off, or perhaps their company or government program will be shut down. Businesses with low skill workers will move to the suburbs. Low cost food stores and repair businesses will close in the neighborhoods that were marginally profitable to start with, or will pay untaxed “under the table” money to employees where only a few are involved.

Just another nail in the coffin of the late, great City of Chicago where consequences eventually catch up the perpertrators.

When Rahm complains in the upcoming about how companies are “abandoning” his City and causing all his problems, I hope somebody has the guts to call him out on overreaching like this that’s making Chicago one of the worst business environments to grow in, and how he’s created the toxic business environment that causes the desperate unemployment in minority communities that makes drug dealing and gunplay one of the few viable alternatives.

Sad all the way around.

Comment by Arizona Bob Tuesday, Jul 8, 14 @ 11:40 pm
I guess Forbes is wrong about Chicago being one of the top ten best cities to start a business then huh Bob? Also, you might want to talk to Boeing which recently relocated to Chicago. Can I borrow your Crystal Ball pal?

Comment by PublicServant Wednesday, Jul 9, 14 @ 5:37 am
@ public servant
“I guess Forbes is wrong about Chicago being one of the top ten best cities to start a business then huh Bob? Also, you might want to talk to Boeing which recently relocated to Chicago.”

Ummm…PS, if you call a relocation for Boeing that was announced in May of 2001 under George Ryan as “recent”, then it just confirms how out of touch you are. Back then Illinois was rolling in cash from the Gingrich economic growth, and prospects looked good for Illinois. That was two incarcerated governors and about $70 billion in increased pension liabilities ago. They also never disclosed their “incentives” for moving. Please note they refused to move any of their union manufacturing jobs here. Those jobs went appropriately to right to work South Carolina.

Regarding Forbes listing Chicago as one of the top ten best cities for business, I couldn’t find it. I did find a list from last year for Forbes business and jobs that listed Des Moines #1, but NO Illinois city made that list.

How did they rate Illinois? 38th overall (lower ranks are the worst), 36th in business costs, 32nd in labor supply, 34th in regulatory environment, and 38th in prospective growth. I’ve seen other evaluations that rank Illinois 48th or 49th in new business environment.

You don’t need a crystal ball to see where the Illinois economy and jobs situation is heading, PS. Is “flushing” in your public union job description, or does that take someone with a plumbers union card to accomplish?LOL

Comment by Arizona Bob Wednesday, Jul 9, 14 @ 8:08 am
Will this hike help the productivity of any city worker? No. They will still be as useless as the unemployed and we are supposed to pay them more to be just as useless. If you reward people with a higher wage, it let’s them know that laziness is tolerated and rewarded. Let them earn more by decent work ethic. Costs for business will go up and passed to the same consumer. Like Walmart..

Comment by stymieme Wednesday, Jul 9, 14 @ 8:31 am
Arizona Bob:

So you’re saying a $13 minimum wage would be one hell of a gang recruiting tool? I’d agree with that.

$13 means high school dropouts, young men who went to prison for non-violent offenses, and most students on the campus of a local university are out of a job permanently.

The question is where do these kids turn once the city outlaws their jobs? The answer isn’t pretty.

Comment by Johnny Utah Wednesday, Jul 9, 14 @ 8:46 am