Open thread Nov. 4, 2014 Dan Crawford | November 4, 2014 9:30 am Tags: open thread Comments (1) | Digg Facebook Twitter |
My response to “A $20 an hour minimum wage really would cost a lot of people their jobs”
by Matthew Yglesias, in Vox, October 28, 2014
If average Walmart nonsupervisory pay were raised to $100 an hour, the price of $10 items rise to $15. Walmart labor costs are 7%. Nonsupervisory workers average $12 an hour. $12 X 8 = almost $100. One of the $12s is there already. 7×7% = 49%.
Double current Walmart nonsupervisory pay to $24 hourly, throw on 25% for benefits to make it $30 and prices rise about 10%.
Somebody challenged me that raising Walmart prices 10% (at $30 — only 3.5% at $15 min wage) would charge low income consumers $26 billion more a year ($260 billion sales). I pointed out they could take it out of the $560 billion raise they would get from a $15 minimum wage.
A $15 minimum wage would shift about 3.5% of income from the 55 percent of the workforce who garner 90% of income to the 45% who scratch only 10%. $8,000 average raise X 70 million (45% of 140 million + 5% at minimum now) = $560 billion out of $16,000 billion GDP. BTW, 45% of workforce not going to be sent home over a 3 1/2 percent shift in income share.
100,000 out of (my estimate) 200,000 gang age, Chicago males are in street gangs – I say because they wont work for a minimum wage several dollars below LBJ’s 1968 minimum wage ($10.95) after per capita income about doubles. A $15 an hour minimum wage might actually put American born workers back to work at America’s McDonald’s.