Because that would cost the companies more and they're happy to get away with paying less. It's really not a mystery.
Sadly this one only covers Sweden but you can look up what restaurants have signed the contract with the union. This guarantees fair wages and working conditions. The law in Sweden is pretty free so there exists unions that are supposed to talk to the companies and get an agreement on what is fair both ways.
I found it here: https://www.reddit.com/r/EndTipping/
I think the bigger issues are at play whether it's is the fact that minimum wages need to be adjusted, a more modern solution is needed to replace minimum wages, whether a job in question is simply suitable for a human to perform (in this case a doorman, they don't really have them where I live so I don't know their purpose), or maybe children (even adults) need to be taught better money management skills.
I personally think that an area for quick improvement would be helping folks with managing their money. Anecdotally, I know people who haven't paid more than the minimum on student loans because they that they will automatically be forgiven in 20 years. On a $40k loan, they have easily squandered away a down payment on a house or money they could have otherwise put in their 401k.
Sure this is technically correct according to the way the law is written but it ignores the reality which is that a large group of criminals ignore the law on a daily basis and face no consequences. Wage theft is MASSIVE and widespread across America especially for low wage workers, who often rely on tips (but it even effects high wage workers too!). More money is stolen in the US through wage theft than all other methods combined. Business owners (especially small business owners) steal from their employees by not paying them when they quit (oh I guess we just lost your last paycheck, sorry, we'll get it to you soon I promise), stealing tips, intimidating employees into not reporting wages under the minimum, refusing to pay legally mandated overtime or refusing to allow legally required breaks or a variety of other ways owners can use their power to illegally extract unpaid labor from their employees.
The solution is to abolish tips and require business owners pay their workers fair wages, or help the workers bargain collectively to ensure this themselves.
* steal from their employees by not paying them when they quit * intimidating employees into not reporting wages under the minimum * refusing to pay legally mandated overtime * refusing to allow legally required breaks
I'm owed between $20,000 and $40,000 by two (New Zealand) employers in particular, who refused to pay for or record my extra hours worked, and one of them threatened me with physical harm if I went to the government watchdog.
One of them was a small business, the other a multimillionaire. It was the latter who paid less than the minimum every day I worked, and demanded I work as many free hours as he could force me to. It's not just physical harm with him, because he also promised to destroy my reputation around town if I so much as stepped out of line.
Yeah, I'm a sucker for not resigning on the spot. I know.
2. The "teach better money management skills" has really nothing to do with this problem, but is continually trotted out as some sort of solution. If you don't have enough money, there's no "managing" it. This isn't an avocado toast problem, it's a wage issue.
Additionally, the incentives are a moving target. For example, with the federal government threatening to end forgiveness plans, can you blame someone for not taking advantage of the option with the potential they will be stuck with the bag, plus interest? Same goes for home ownership incentives, charitable giving incentives, and so on. If the incentive could be gone one day due to the massively complicated and political game that is the tax code, I can hardly blame someone who doesn't have money for a financial adviser for not taking advantage of those programs.
I made no claim that $7.25/hr is a livable wage. That is the current federal minimum. Employers are required to pay the minimum, if they aren't, they're breaking the law.
Money management is certainly no silver bullet, however, it plays a role. If you net $13k/year then you have to manage that money so you don't spend more than $13k/year. Most would agree that it is extremely tough to live on $13k/year. No matter the difficulty the money still has to be managed.
In my student loan example, if you have a loan schedule of 30 years @ 6% you will pay $46k in interest on a $40k loan when only paying the minimum of $240. That same loan if paid off @ $440/mo, nets you $33k over that time period. Here you would manage your money so that you can pay as much as possible on that loan as often as possible.
Making more money doesn't solve money issues, it just covers them up. Saying that there nothing to be done because the amount spent is greater than the amount earned seems rather foolish. I'm not saying that in any given situation there exists an outcome where you can manage spending less than you earn, but managing money wisely will always improve the situation.
The problem is that calculating such an amount is more than tricky. Consider that inflation changes "constantly" or whether newly enacted bills are factored in. From my quick research, it appears as though the affordable care act made the assumption that minimum wage already factored in mandatory health insurance.
Now consider what does it mean to say a person is "living." Are you living if you have a roof over your head and food in your stomach? Is the food being considered, the same meal morning noon and night, or a variety of foods? If you are making minimum wage are you eligible for SNAP (a.k.a.food stamps)?
What about access to the Internet, OTA television, radio broadcasts, or entertainment of some sort? Biologically none of these are needed to live, but I bet an argument could be made.
I agree with you that no one should work for minimum wage, always the maximum. I think simply raising the minimum wage amount is treating symptoms of bigger issues.
You are beyond naive if you really think that because these laws are on the books they’re not being routinely and widely flouted or ignored.
If you really find it hard to be true that employers will try to spend less on employees, you’re not capable of participating in this discussion because you lack even basic familiarity with the real world.
I tried to get a labor lawyer to intervene but the total losses weren't enough for them to bother litigating. They sent a demand letter and it was ignored.
Next option would have been small claims but I didn't have the time or inclination to fight it anymore at that point. I can't imagine a waitress would fare much better.
As long as a shady employer keeps their take below $10k, it seems they are untouchable.
According to the most recent census data I could find (2015), there are approx. 27M businesses in the US[1]. Assuming half those businesses are wage thieves, that would mean 13.5M businesses are currently in violation of the the law. The DOL can place a $10k sanction on the business owner for a first infraction[2]. This would then mean that the US gov't stands to make $135B by placing sanctions on these businesses. To catch each business, let's say it costs the DOL $2500/business. After looking into each and every business, they would run a total of $67.5B. Now they have made $67.5B after all expenses have been made. To put that in perspective, the US gov't has put aside $9.7B for the DOL in 2018[3]. As you might figure on your own, $67.5B is nearly 7 (6.9587628865979381443298969072165 if you want to be super accurate) times the DOL's 2018 budget. Now if you mean to tell me that the gov't is going to leave that sort of money on the table, then you and I need to figure out how we benefit from this.
You might well be thinking something along the lines of "The gov't is inefficient, etc. There is no way they could reclaim all that." You're right this is definitely a perfect world scenario, but even if they could only claim 1%. That still makes up a 10th of next years DOL budget. For the gov't , these numbers only get better as more businesses commit these crimes.
Now we have to look at this from the perspective of a business. Again there is only roughly 27M in the US. To make it fiscally responsible to take the $10k bet of sorts the business must save at least $10k/violation, obviously. For the sake of this argument let's say violations are handed out per person per month. ((404)7.25)+(((3024)-(404))(7.251.5)) = $7250, that is how much you make at minimum wage including overtime... If you worked literally every hour of every day for a month (30 days, technically). So if we assume the business thinks a person is going to report the violation, they are better off just paying minimum wage upfront. Let's reel this in a bit and say you work 40/wk/mo in overtime. ((404)7.25)+((404)(7.25*1.5)) = $2900. So now the business definitely comes out ahead. They would risk $7000 by trying to save, what, $1000? Remember, this is an extreme case, not everyone is going to work 80 hours a week. Even if a business isn't more likely to hire another person to cover your 40 hours of overtime a week, they can only save $580/mo compared to the $10k/violation.
I know that there are businesses that will literally do anything under the sun to make a buck, but I find it hard to believe that even half of businesses would go against some of the math above.
[1]: https://www.census.gov/data/tables/2015/econ/susb/2015-susb-...
[2]: https://webapps.dol.gov/elaws/elg/minwage.htm#Penalites
[3]: https://www.dol.gov/sites/default/files/FY2018BIB_0.pdf
A report from the Economic Policy Institute[1] found that minimum wage violations affected 17% of workers in the states surveyed (the ten most populous in the US) and averaged $3,300 per worker who was affected.
[1] http://www.epi.org/publication/employers-steal-billions-from...
Tipping in the service industry in the US is part of the culture, which has been historically difficult to change by declaration.
However, I'd like to start with two labor patches (in the same set).
1) Pro-rate all benefits (with 3/4ths of median 'full time' work hours as full time).
2) Eliminate that tip as part of wage 'loophole'.
That is interesting. As I understand it now, the way tips are factored into wages, it benefits the employee more so than the employer. Society loses because the employee is supposed to report tips so they are taxed, the employer loses because they still have to pay minimum wage, and the employee wins because they are paid minimum wage and get their tips tax free.
Maybe I'm just being dense, but how would this elimination be beneficial?
Employers of workers in customarily tipped jobs can and do use tips as a performance metric, so if the employer has to top up your tips to minimum wage, it probably also means you are also losing your job. This also motivates overreporting tips.
Not tax free. Your employer reports 8% of your total receipts to the IRS as income. It's likely less than you make in tips, but you still pay some tax.
Even if customers end up paying the same price in the end they are not thinking about the cost of the tip when ordering their food. They are just looking at the price on the menu.