If and when the minimum wage (local, state or federal) is raised to $15, Chicago will be forced to add a dollar a mile to the taxi meter – or it might not have any taxi drivers. If we honestly want a much higher minimum wage, then, we could add the dollar right now. Cannot possibly harm drivers (ask them).
It could be a test for today of whether our hearts are really in the right place on the minimum wage. In the future.
I had been wondering why the price of the taxi medallion had multiplied something like 12 X over approximately 25 years to $360,000 – for the privilege of working such a miserable job?
From 1981 to 1997, when I was driving, the city allowed one 30 cent a mile increase, at which 1990 midpoint it began building subways to both airports, opening up unlimited number of limo licenses and putting on free trolleys between all the hotspots downtown (the aquarium use a be our second hottest spot, after O’Hare). Today’s meter is $.50 a mile lower then it was in 1981 adjusted for inflation.
These drivers come 10,000 miles through fire and water (or whatever immigrants come through these days :-]) only to find that, if you are not trained as a x-ray technician or some such skill in this labor market, about the most you can expect to earn is about $400 a week, $500 at most.
Now I personally am horrified (there’s that word again) that most of the not specifically skilled people I see working all day every day must to be living in near destitution! “The median wage in the US per person is $26,695.“
Then, I read that only 800 Chicago drivers own medallions. Mmm. Most medallions were owned long before the price reached today’s heights – up five times since 2006. If the city is able to auction off 50, how many other owners are selling? Maybe it’s a bubble. Maybe the bubble will burst when the minimum wage reaches $15. Which is where we came into this movie.
* * * * * * * * * *
Uber? When I was a gypsy cab driver in the Bronx in the ‘70s we had livery plates – we could legally pick up by dispatch – our insurance was double that of medallion cabs (reflecting that our driving skills were twice as good?) – we could not legally pick up passengers by hail, but the mayor instructed the police not to ticket us for that because the yellow cabs would not service areas we did.
Little did we realize we were being ripped off – we and the limo companies and the taxi drivers! We never guessed we could just use any central dispatch station (VHF radios – before the existence of cell phones) and” share rides” with anyone with any car! Holy cow!
I think it’s time for taxi drivers in Chicago to begin putting in some time in their own cars during the hours when the city won’t let them work under the new rules – especially on their days off which might become Friday and Saturday nights – sharing rides. Gradually we could move from all taxis to no taxis.
Something for new immigrants to think about.
Legal aficionados may see some resemblance between Uber’s “ride sharing” self-description and the recently deceased Aereo’s claim it was just leasing antennas, not purveying copyrighted material without paying royalties. But legalities may never be able to intrude as long as yuppies like it (and Chicago’s mayor’s brother Ari Emanuel, is a major investor in Uber?). It is a good thing “ride sharing” did not begin on Chicago’s poor West side or South side neighborhoods or it would have been squished in the first month – literally.
Wal-Mart’s labor costs (7% – average $11 an hour) would go up 9 X (900%) – Wal-Mart prices could go up NEARLY 65%!
McDonald’s labor costs (33% – average $9 an hour) would go up 11 X (1100%) – McDonald’s prices could go up NEARLY 400%!
Wal-Mart employees wages would go up 900% – compared with 70% price increases.
The doll someplace wages would go up 1100% – compared with 400% price increases,.
So far these workers look clearly ahead (in our crazy scenario) – if only they could live their whole lives on these two job sites. What would happen when the rest of the employee world caught up with their wild raises is hard to say.
It’s not hard to imagine that what would happen if the federal minimum wage were raised to $15. Wal-Mart wages would jump 50% – prices up 7%. McDonald’s wages would about double – prices up 25%. Even if Wal-Mart sales dipped 7% and McDonald’s sales tips 25%, their employees would be way ahead.
It is easy to calculate*that a $15 an hour minimum wage would add about 3.5% to the cost of American products and services (10X what E.I.T.C. transfers clumsily, once a year). The 45% of the workforce below today’s ($1.50 below 1956”s) minimum wage is not going to be laid off over that.
* Half the workforce, 70 million workers X $8,000 average raise = $560 million = 3.5% of our $16 trillion GDP (bottom 5% now at minimum wage get to average raises).
If Congress in 1983 had set the FICA tax rate so that collections were just a bit above then current payout the Trust Fund bonds would have come into play very quickly — and been exhausted very quickly.
If Congress in 1983 had set the FICA rate much higher than it did Trust Fund bonds might have accumulated of another 50 years before coming into play.
If — a much more plausible could-have-been (should-have-been!) — working incomes (the 83% that pay FICA) had shared equally in the near 50% per capita income growth since 1983 (83s keep popping up) — and continued into the future keeping up with what hopefully would be reasonably good per capita growth — then, the Trust Fund bond accumulation could theoretically grow, diverting retirement taxes to on budget items, never to payout a single dime, forever.
The big boys (and girls) on the Pro Social Security side had an extended e-mail exchange Friday about the actual impact of income inequality growth since 1983 on actuarial gap outsoles today. The people with the best mathematical chops seemed to group themselves round a 40% number.
Plus the 1983 deal DID put FICA rates just a little above payouts, initially anyway. The actual 2 point increase was phased in over 10 years and backloaded at that. There just wasn’t some flood of excess cash into the Trust Fumd that first decade. A lot of the current surplus is the result of the relatively high wage low unemployment environment we had from 1996 to 2001. A state of affairs that foolish people like me thought was sustainable and which indeed would have fully funded Social Security.
If and when the minimum wage (local, state or federal) is raised to $15, Chicago will be forced to add a dollar a mile to the taxi meter – or it might not have any taxi drivers. If we honestly want a much higher minimum wage, then, we could add the dollar right now. Cannot possibly harm drivers (ask them).
It could be a test for today of whether our hearts are really in the right place on the minimum wage. In the future.
I had been wondering why the price of the taxi medallion had multiplied something like 12 X over approximately 25 years to $360,000 – for the privilege of working such a miserable job?
From 1981 to 1997, when I was driving, the city allowed one 30 cent a mile increase, at which 1990 midpoint it began building subways to both airports, opening up unlimited number of limo licenses and putting on free trolleys between all the hotspots downtown (the aquarium use a be our second hottest spot, after O’Hare). Today’s meter is $.50 a mile lower then it was in 1981 adjusted for inflation.
I would guess the $360,000 explanation is the American $400 maximum wage labor market – which I was recently horrified to understand at these two sites:
http://www.jobitorial.com/browse.php?Filter=A
http://www.glassdoor.com/Salary/AutoZone-Salaries-E610.htm
These drivers come 10,000 miles through fire and water (or whatever immigrants come through these days :-]) only to find that, if you are not trained as a x-ray technician or some such skill in this labor market, about the most you can expect to earn is about $400 a week, $500 at most.
Now I personally am horrified (there’s that word again) that most of the not specifically skilled people I see working all day every day must to be living in near destitution! “The median wage in the US per person is $26,695.“
Then, I read that only 800 Chicago drivers own medallions. Mmm. Most medallions were owned long before the price reached today’s heights – up five times since 2006. If the city is able to auction off 50, how many other owners are selling? Maybe it’s a bubble. Maybe the bubble will burst when the minimum wage reaches $15. Which is where we came into this movie.
* * * * * * * * * *
Uber? When I was a gypsy cab driver in the Bronx in the ‘70s we had livery plates – we could legally pick up by dispatch – our insurance was double that of medallion cabs (reflecting that our driving skills were twice as good?) – we could not legally pick up passengers by hail, but the mayor instructed the police not to ticket us for that because the yellow cabs would not service areas we did.
Little did we realize we were being ripped off – we and the limo companies and the taxi drivers! We never guessed we could just use any central dispatch station (VHF radios – before the existence of cell phones) and” share rides” with anyone with any car! Holy cow!
I think it’s time for taxi drivers in Chicago to begin putting in some time in their own cars during the hours when the city won’t let them work under the new rules – especially on their days off which might become Friday and Saturday nights – sharing rides. Gradually we could move from all taxis to no taxis.
Something for new immigrants to think about.
Legal aficionados may see some resemblance between Uber’s “ride sharing” self-description and the recently deceased Aereo’s claim it was just leasing antennas, not purveying copyrighted material without paying royalties. But legalities may never be able to intrude as long as yuppies like it (and Chicago’s mayor’s brother Ari Emanuel, is a major investor in Uber?). It is a good thing “ride sharing” did not begin on Chicago’s poor West side or South side neighborhoods or it would have been squished in the first month – literally.
$100 minimum wage – what would REALLY happen?
Wal-Mart’s labor costs (7% – average $11 an hour) would go up 9 X (900%) – Wal-Mart prices could go up NEARLY 65%!
McDonald’s labor costs (33% – average $9 an hour) would go up 11 X (1100%) – McDonald’s prices could go up NEARLY 400%!
Wal-Mart employees wages would go up 900% – compared with 70% price increases.
The doll someplace wages would go up 1100% – compared with 400% price increases,.
So far these workers look clearly ahead (in our crazy scenario) – if only they could live their whole lives on these two job sites. What would happen when the rest of the employee world caught up with their wild raises is hard to say.
It’s not hard to imagine that what would happen if the federal minimum wage were raised to $15. Wal-Mart wages would jump 50% – prices up 7%. McDonald’s wages would about double – prices up 25%. Even if Wal-Mart sales dipped 7% and McDonald’s sales tips 25%, their employees would be way ahead.
It is easy to calculate*that a $15 an hour minimum wage would add about 3.5% to the cost of American products and services (10X what E.I.T.C. transfers clumsily, once a year). The 45% of the workforce below today’s ($1.50 below 1956”s) minimum wage is not going to be laid off over that.
* Half the workforce, 70 million workers X $8,000 average raise = $560 million = 3.5% of our $16 trillion GDP (bottom 5% now at minimum wage get to average raises).
ALTERNATE TRUST FUND REALITIES
If Congress in 1983 had set the FICA tax rate so that collections were just a bit above then current payout the Trust Fund bonds would have come into play very quickly — and been exhausted very quickly.
If Congress in 1983 had set the FICA rate much higher than it did Trust Fund bonds might have accumulated of another 50 years before coming into play.
If — a much more plausible could-have-been (should-have-been!) — working incomes (the 83% that pay FICA) had shared equally in the near 50% per capita income growth since 1983 (83s keep popping up) — and continued into the future keeping up with what hopefully would be reasonably good per capita growth — then, the Trust Fund bond accumulation could theoretically grow, diverting retirement taxes to on budget items, never to payout a single dime, forever.
[Okay Bruce; tell me where I’m all wrong 🙂 ]
CORRECTION in the $100 minimum wage above:
McDonald’s wages would go up 1100% – compared with 400% price increases.
I suspect a Naturally Speaking Dragon was listening when I didn’t know it.
The big boys (and girls) on the Pro Social Security side had an extended e-mail exchange Friday about the actual impact of income inequality growth since 1983 on actuarial gap outsoles today. The people with the best mathematical chops seemed to group themselves round a 40% number.
Plus the 1983 deal DID put FICA rates just a little above payouts, initially anyway. The actual 2 point increase was phased in over 10 years and backloaded at that. There just wasn’t some flood of excess cash into the Trust Fumd that first decade. A lot of the current surplus is the result of the relatively high wage low unemployment environment we had from 1996 to 2001. A state of affairs that foolish people like me thought was sustainable and which indeed would have fully funded Social Security.