The Effects of Major Retailers Raising Their Minimum Wages | Hacker News Reader

The Effects of Major Retailers Raising Their Minimum Wages

nber.org

79 pointsrufus_foreman169 comments

I found this to be many words with little information. It largely boils down to "when Amazon increases wages, other employers follow suit, to varying extents."

There was almost nothing about the myriad of other effects, including things like inflation, effects on already higher wage earners, effects on automation, and more.

They touched on the increase in unemployment from competitors, but that was it.

The article just looks like a presentation of some data, whereas the other effects you're talking about would require analysis or speculation.

Or the most critical consequence: rent. Rent goes up. Landlords get richer, minimum wage earners go back to poverty.

Pretty obvious cycle. High paying employer moves somewhere? Rent goes up. Normal employer pays more? Rent goes up.

Really shows the power land owners have to capture upside.

The more things change, the more they stay the same.

Isn't it more about the inelasticity of housing supply? When demand goes up, prices go up?

Just who do you think relentlessly votes, lobbies, and politicks to ensure that housing supply is inelastic? The tooth fairy?

All homeowners, not just landlords?

I think it's more about distribution than straight supply. That distribution is largely constrained by employer location (job availability). Lots of cheap housing in Appalachia since manufacturing, coal, and steel has left. There just aren't many jobs, and employers don't want to move there to change that (vicious cycle).

12 months pass, rent goes up.

Rent would be accounted for if they considered inflation.

Rent goes up because of supply and demand. If a rich person moves into an area with a housing shortage, they will displace poor renters and rent will go up. But the problem is the housing shortage, a consequence of many years of terrible housing policy.

If you follow housing policy you might find wealthy benefactors

If you assume that minimum waged employees would spend 100% of their raise on rent then landlords would swallow the surplus but more likely the workers would spread it around. They do have other costs.

I havent seen a study that connects the two. A quick google suggests a fair number of business-centric publications spreading FUD about it though.

This article suggests it was connected to lower business rents: https://anderson-review.ucla.edu/a-15-minimum-wage-may-have-...

(The mechanism being that restaurants pass on the cost of their higher wages to their landlords)

> the researchers present evidence that minimum wage changes led area restaurants to raise prices, change menu items, obtain lower rents in the high wage areas and, in some cases, caused eateries to shut down.

I wonder if the units made empty by closures may have reduced price pressure on the ones that survived.

Yes, maybe. There's a definite tension between:

* Restaurants being unwilling to raise prices (diners are notoriously intolerant, it can kill restaurants).

* Landlords being unwilling to lower rents.

* Restaurants being unwilling to tolerate < 6% profit margins.

* Landlords being unwilling to lose a good, paying tenant if there isnt another around the corner.

The pain has to be distributed somehow though.

>Rent goes up because of supply and demand.

And if people now earn more money they can pay more money to rent a house they want. This would force the people that are already renting there to also pay more, which they can afford because they now earn more money too.

It seems feasible to me that landlords could eat up most of that wage increase.

Exactly. Actually fairly self-evident when you think about it. Rent doesn’t go up because costs go up, it goes up because people’s ability to pay does.

Consider how widely available high-speed broadband through Starlink might change some of these things once that makes living in the interior of the country more desirable. I think we may end up seeing a sort of reverse of the industrial revolution's migration pattern over the coming decades.

Totally possible! I hope we actually see small walkable enclaves throughout the country. Like the little mountain resort towns, but kept afloat by residents rather than tourism. Jobs are a big part of the equation with living in a city, but definitely not the only one. Food, arts, other cultural artifacts that people who live in cities care about are harder to move across the web for sure.

I haven’t raised my tenants rent since 2018 when I bought the rental. I just had him pay what he had been paying.

Maybe you should be a landlord and help break the cycle?

If your tenant moved out and a new one moved in, would you charge more?

Macroeconomic shifts seem like they would be biased towards transient transactions, and resisted by steady-state.

Probably. Though the last time that happened I didn’t. The family had less income, so while I was losing more money now due to property taxes, my income had gone up so it was kind of a wash.

this is an example of "price stickiness." People selling goods tend to let the price stay at whatever level it's currently at longer than is strictly rational. Because prices tend to be sticky, wage-driven inflation tends to result in real gains for wage-earners.

(Temporarily)

Correct, because nothing lasts forever in this fallen world. That said: the amount of time spent in a state of wage-driven inflation -- setting up the situation where temporary moments of price stickiness result in increases of effective demand that in turn hot up the economy as a whole -- is the thing we want to maximize.

Totally! We can also go ahead and tax away all the gains captured by landlords on the unimproved value of their land (definitionally price movement that is not due to them).

found the Georgist!

Becoming a landlord means more buyers for the same houses, thus pushing the housing prices instead, possibly taking them off the market for other's that want to own their own.

There will always be those who have and those who do not, the weak and the strong, the poor and the rich.

The question is, will those with power (money, connections, education) use it to gain more for themselves or to lift up the poor.

The idea that a homeless person’s problem is just, that they can’t afford rent or a mortgage is absurd, and would just prove that you’ve only ever dealt with homeless people at an abstract level.

I never talked about homelessness. I had young renters in mind, wanting to buy but seeing the prices skyrocket away.

Ahh I see. I’d probably consider selling my house cheaper to tenants if they’re good.

Though I guess this is a little bit of the “to he who has more will be given, to he who doesn’t have, even what he does have will be taken from him”

I am a landlord! Breaking the cycle is a farce: why do you think it’s a cycle? It’s self-reinforcing and resilient to small changes (like a few landlords here and there delaying rent increases for a few years).

Well have you charged less than market rate for rent? I had a place for 10 years that I was charging about 60% market rate on because the lady was old and lived off social security. I had negative cash flow on it.

My other rental has a negative cash flow as well.

I make good money so I can afford it.

If every single person who complained about the plight of the poor actually physically went and helped the poor, their plight would be less, instead you do nothing and go vote for the politicians to do something.

You wanna talk about a farce, how about this one - the politicians care about the poor.

Talking to immigrant Uber drivers in SF, ironically they hate the government there and it reminds them of the corrupt ones in their own country, the one the “caring progressives” keep voting for.

>the one the “caring progressives” keep voting for.

And the alternative is what?

Keep on hoping the oligarchs will share their wealth and it will "trickle down"?

It’s boggles the mind how one can look at the long arc of history and come to the conclusion caring progressives were the problem all along.

You blew right past "It’s self-reinforcing and resilient to small changes". The two underlying problems here are zoning policy and macroeconomic policy (ZIRP), both only changeable through politics. Directly helping other individuals doesn't stop the overall trickle-up economy from doing its thing of skimming wealth upwards. Yes, you personally can alleviate some other individuals' suffering by not turning the screws as hard, and I agree that you should where you can. But it's foolish to think that the systematic problem could be solved by everyone just choosing to go against the gradient.

Also I presume when you say "negative cash flow" you are leaving out the bit about your equity increasing due to mortgage payments and bubble inflation. So you can get off your performative high horse as well - you aren't describing a charity project, but rather an illiquid savings account.

Good for you, but it doesn't seem realistic to expect large numbers of landlords to do this.

Be honest its greed.

Yep! And here in reality, the question cannot be, “how do we eliminate basic human instincts like greed,” and instead, “how do we direct our instincts toward positive outcomes?”

It’s a violation of basic logic to allow greedy people to just indefinitely claim stake of something they had no part in creating (land) so they can indefinitely reap rewards from activity on that land which they have no part in (rent).

I’m a landlord too and this sounds suspiciously like an excuse for bad behavior. You can make a big difference in peoples lives by not being a greedy a*hole. Delaying rent increases for a few years can have huge positive impacts on individual lives.

No it won’t change the system but a bad system shouldn’t be used to justify personal bad behavior.

You don’t have any information whatsoever about my personal behavior.

Even if I hypothetically did raise rent with the market, I don’t find it compelling to say doing so is “bad” behavior. This is what a market is, and prices are very important for allocating resources. “If you’re a landlord, don’t raise rent” is not a society-level solution, let’s not waste too much time on it :)

How have your property taxes and/or insurance changed during that period?

I have a rental (family living in it) where the insurance has changed a few percent in the last 5 years but the property taxes are up 5x. Yes, 5x in 5 years between the rate and appreciation.

What started as a small net loss is getting bigger and bigger so I hope you're not in the same boat.

Property taxes have gone up, about double what they were. I just lose more money on my rentals, and to top it off I pay for private school, so don’t even get the benefit :/

I propose that all landlords start offering two lease agreements. One that is let’s say $2000/month, and another that is $1600/month plus whatever property taxes are, which happen to be $300/month currently.

Then tenants might think twice before voting for higher property taxes since it will directly affect their rent instead of indirectly.

America is 3,531,905.403 square miles large, and the majority of us choose to live in under 100,000 of it. Maybe that too also contributes to these issues. You may fashion yourself to be virtuous enough to not charge more when you so easily can, but we shouldn't assume everyone will be.

Right, we should build enough housing that the market takes care of keeping housing cheap.

Who is the “we” in that sentence that should allocate their money to something with a weak or non-existent promise of seeing a return on that money?

The "we" is everyone who wants to build dense, multi-unit housing based on their own assessments of how it will perform, but can't because of single-family zoning laws.

Expensive housing in many areas is a result of laws that keep would-be developers from increasing the supply, fueled by the toxic NIMBY mindset.

Have you considered that people are more productive when they are working together? This higher productivity is what allows for rent to be high (the land is more productive), but that does not necessarily imply that the increased productivity should go into the hands of people who merely hold land and are not themselves producing anything on it.

It also does not imply the owners of that land - that had to take a risk in allocating their funds to acquire it - do not deserve to benefit from it (given they also very likely pay taxes on that ownership, which is true in the vast majority of the US; and property taxes are a very important government funding source in the US).

"Producing something on it" is a wholly subjective standard. I can just as well proclaim the opposite, that not producing anything on it is the standard that should determine ownership.

Thought experiment: What if that owner hadn’t acquired that land?

Turns out… it’s still right there!

> It also does not imply the owners of that land - that had to take a risk in allocating their funds to acquire it - do not deserve to benefit from it (given they also very likely pay taxes on that ownership, which is true in the vast majority of the US; and property taxes are a very important government funding source in the US).

the georgist's view is that the landowner does little to contribute to the area being nice/successful, but reap all the benefits.

> Take now... some hard-headed business man, who has no theories, but knows how to make money. Say to him: "Here is a little village; in ten years it will be a great city—in ten years the railroad will have taken the place of the stage coach, the electric light of the candle; it will abound with all the machinery and improvements that so enormously multiply the effective power of labor. Will in ten years, interest be any higher?" He will tell you, "No!" "Will the wages of the common labor be any higher...?" He will tell you, "No the wages of common labor will not be any higher..." "What, then, will be higher?" "Rent, the value of land. Go, get yourself a piece of ground, and hold possession."

> [...] without doing one stroke of work, without adding one iota of wealth to the community, in ten years you will be rich! In the new city you may have a luxurious mansion, but among its public buildings will be an almshouse.

Is it a choice that a liberal homosexual doesn't want to live in Tennessee but moves to New York or California?

Unless there's a Khmer rouge regime in America that forces the intellectuals to move to the countryside at gun point most of the country will remain empty.

Yes, it is a choice borne of a deeply-seeded prejudice and fear which likely was reasonable once upon a time.

Could you explain? I would assume that only a part of the increase in wages would go to rent. I live in Norway where the minimum salary is high. Rents are too but the average person has to spent less time working to pay for housing.

Do you think the hours a person needs to work to pay for housing would stay the same if the wage increase?

That's just another guy trying to sabotage the working class, ignore the FUD about rents.

I don't believe that's a very good-faith interpretation; what makes you believe that, man?

Rents go up regardless of inflation. I've been renting for decades.

(just a nitpick, but we don't have a general minimum salary / minstelønn in Norway. Unions however, have managed to establish rules binding everyone in certain industries to some minimum)

To add to that: About half the Norwegian workforce is unionised (which is the lowest of the Nordic countries, but higher than all other non-Nordic countries in the OECD than Belgium), and something like 3/4 of all workers are covered by sectoral agreements (tariffavtaler), which is why there's not much demand for minimum wage laws.

Roughly yes. How are we still working 40hrs/week just to put a roof over our head and feed our families when we are equipped with technologies that have exponentially increased the productive output of each individual?

The answer is that land has gotten more expensive, so everything on it has gotten more expensive. The solution is not to avoid wage increases, as this “FUD” accusation assumes, but to raise wages and tax the daylights out of landowners (like myself) so society can recoup the benefits of its productivity!

> How are we still working 40hrs/week just to put a roof over our head and feed our families

Most tech workers earn far more than is necessary for just this. But we also want nice cars, nice vacations, going out to restaurants and buy nice toys. That's what keeps most of us working that much.

Yes the people in what’s likely the most lucrative industry in human history have it good. For now.

Yes, but because prices (including rents) are sticky -- it takes a while for them to adjust upwards to soak up the additional effective demand produced by increased wages. So long as wages are what's driving inflation, working people tend to reap the benefit. Workers only fall behind when prices grow faster than inflation, as in, for example, the oil shock back in the 1970s.

Even the small capitalist class benefits from the heated-up economy, because the increase in wages results in money being siphoned up from the pre-existing stockpiles of the wealthy, which is where money tends to fall when left to its own devices. When money gets siphoned out of stockpiles and up to people who have to spend it to live, the rise in effective demand makes it valuable to invest in providing more supply, instead of just sitting on the money and collecting interest.

The one major downside to wage-driven inflation is that it hits people living on fixed incomes in the shorts, since it makes pensions and government-provided supports less valuable. This is not a reason to support a heated-up, wage-driven-inflation-powered economy -- it's a reason to support government measures to increase funding for the elderly and disabled in order to match the new value of money.

The only way the government can increase benefits is to take more from everybody else.

Fortunately, when there's wage-driven inflation there's enough effective demand in the economy to produce enough supply to provide enough taxation headroom to offset the effects of wage-driven inflation on people with fixed incomes.

That is not how this works. First off prices increasing is the result of inflation not inflation itself. Inflation is an increase in money supply. Wages increasing is part of the process of inflation working its way through the economy.

Increasing the number of dollars floating around does not give more tax headroom. Taxes are strictly a percentage of the quantity of dollars pie. Making the pie bigger means everybody gets a bigger piece and everything increases in cost to match. Wages that do not increase result in the earner getting a smaller piece of the pie. So, the cost of labor increases as people refuse to work for an amount that doesn't pay the bills anymore. But, the percentage of the slices are exactly the same after the lag period of 12-18 months. The lag period is how long it takes an increase in money supply(inflation) to be reflected in the markets of goods and labor.

https://www.johnlocke.org/the-myth-of-wage-push-inflation/

https://www.lancaster.ac.uk/staff/ecajt/inflation%20lags%20m...

I don't think it's as obvious or causal as you imply. If every wage increase resulted in a corresponding increase in rent to force people back into poverty it would never make sense to increase minimum wage, or even wages at all.

But that's not the case is it? Wages stagnate, increase or decrease all the time without changes in rent. Rent goes up without changes in wages all the time.

Sure, a local across the board increase in wages might drive up demand and might cause some portion of rent increase, but it's also just as likely to drive up housing prices as people get out of the rental market.

Throwing up your hands and saying "we can't pay them more because landlords will take it all" is disingenuous.

I’m saying we should pay them more and tax the daylights out of landowners so they don’t capture upside they had literally nothing to do with.

My solution: All rental contracts are illegal unless they include a 1% ownership transfer per year. That way if you rent for 25 years you own 25% of the property.

A reductive take. Where is the evidence that rent increase = wage increase?

I'm claiming the opposite. Wage increases yield rent increases. Evidence: Where is rent high? Whoa! Right there were wages are high.

What happens when you add a high-paying employer to a region (e.g. Amazon HQ2)? Whoa! Rent goes up and prices the people who live there out.

Obviously the reverse is not true. Increasing rent would not make more capital available for wages, it just puts enterprise out of business and individuals out of their homes.

But does rent go up because the tenants have more money, it did it go up because the cost of everything goes up?

When wages increase, the costs of the landlord also goes up. Repairs costs increase, labor in the front office, and the landlord's personal costs increase.

Of course! So all the skyrocketing rents across the country have been caused by all the minimum wage increases! Like when that last increase in the federal minimum happened… when was that again?

To be fair, the myriad of other effects are unknown, and to some extent unknowable.

Sky is blue. Details at 11.

It's an advocacy piece. It's meant to push a certain point - not to educate the reader on anything.

I do not agree. It is very few words (maybe one page's worth?) with high information density. There is no rumination or explication whatsoever. It would be very difficult to make this article any shorter without removing information.

You can download and read the actual paper here:

https://www.nber.org/system/files/working_papers/w29425/w294...

The researchers collected data from millions of job ads and employee surveys to estimate the spillover effects of Amazon's minimum wage increase to $15/hour, back in October 2018, (a) on other retailers with a physical presence in the same commuting zone, including Walmart, Target, CVS, and Costco, and (b) on the zone's unemployment rate.

The main findings are that (1) retailers with a physical presence in the same commuting zone significantly increased their minimum wages, following Amazon's lead; (2) the zone experienced only a very small but quantifiable increase in unemployment; and (3) the authors cannot explain the direction and magnitude of these changes as a function of standard competitive pressures.

“Utilizing data from approximately 7 million online job postings between February 2014 and February 2020, the researchers find that a 10 percent rise in average Amazon wages is associated with an increase of 2.3 percent in the average advertised wage at non-Amazon firms in the same labor market.”

Correlation does not equal causation.

But it does like to wink suggestively.

When people get paid more, the prices of everything go up, including other people's wages. Inflation is often a self-reinforcing cycle.

This assumes that the company can't absorb the raises.

As an example, average restaurant profit margins are between 2% and 6%. They cannot absorb labor rate increases without raising prices or going bankrupt. Margins tend to be similarly low for many other industries as well. Tech is a massive outlier in its ability to absorb large wage increases.

Their landlords can though.

Evidence from LA suggests that this has happened as restaurants negotiated cheaper rents in response: https://anderson-review.ucla.edu/a-15-minimum-wage-may-have-...

Restaurants do also have a tendency to be run out of business and replaced by other restaurants when the minimum wage gets hiked though. Restaurant owners take hikes extremely personally. The market can be an unkind mistress.

McDonalds, Dollar General, Chick-fil-a, and many others are really in the real estate/property space. They just have an affiliated model that supports their (real estate) investments and reduces their risk (of holding vacant commercial property).

They go backrupt landlord rents space at lower value cycle repeats. Place does well rent goes up. Wages are a small part of a larger process.

What's the cost of not being willing to pay employees enough to care about doing a good job and hiring enough people to enable good work? I know plenty of people who've stopped eating out or order less because overworked and underpaid employees keep making mistakes.

Truth is they need to either renegotiate their lease or buy commercial real-estate instead and profit on the new restaurant owners coming to town.

There's a reason most new restaurant close after 1-5 year. [0]

[0] https://www.cnbc.com/2016/01/20/heres-the-real-reason-why-mo...

lots of smaller ones can't in fact.

this also gives rise to ununionized outfits as well. as theyre able to keep wages lower and bid more competitively.

Only one in fifteen private sector jobs in the US is unionized, you do not "give rise to ununionized outfits", that is the standard.

Ford has been unionized since before World War II. Actually the opposite happened in its case, unionizing GM and Chrysler made unionized Ford easier.

Companies raise prices to what the customers are willing to pay. It's not related to costs unless the cost exceeds price.

This is the "common sense" view of inflation. It was disproven by Milton Friedman and others over 50 years ago.

“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

In 2021, "the quantity of money" is a much harder concept to measure than it was, but the basic insight stands.

Can you actually prove things in economics? Or is it more like detailed analysis of history?

In Macroeconomics, it's often very hard, because once you've understood something, the various actors can adapt to the new knowledge, and then you have a new and different world economy.

That is, if you publish your findings. I assume there are unpublished insights people use to get rich off.

I think Friedman's analysis was mostly historical. At least that what I got from reading his book. I've certainly not read any academic papers.

In Microeconomics, people can and do prove things based on models that are quite good at approximating reality.

Wrong dead economist: https://www.khanacademy.org/economics-finance-domain/macroec...

The interest/unemployment mechanism for controlling inflation has worked really well, and is why most of the Western world can hit its 2% inflation targets.

Sure, but are those increases proportional?

I don't mind playing an extra 50 cents for a big mac if it means the person serving it to me makes enough at the end of the day to support themselves.

In my understanding Amazon is actually the poster child for how e-commerce has weakened this relationship.

> the researchers find that a 10 percent rise in average Amazon wages is associated with an increase of 2.3 percent in the average advertised wage at non-Amazon firms in the same labor market.

> When large retailers raise minimum wages, there are also small drops in employment. The estimates range from a 0.4 percent to a 1.3 percent decline in employment

If I read correctly then it's a net gain for employees even with worst case drop in employment. I think it's interesting because drop of employment is a usual complaint against raising the minimum wage

Nothing much in this article is groundbreaking, when large employers raise wages, smaller employers of people with similar skillsets are forced to raise wages as well. What is very interesting was the fact that unemployment in the region is only affected by .4 to 1.3 percent. This is not the doomsday scenario pushed by people claiming that raising minimum wage would result in large scale elimination of existing jobs as businesses are forced to fire people just to survive the parasitic employees demanding a living wage.

Reminds me of a recent email I got from a CTO community commenting on the "crazy salary inflation" that's occurring in the tech industry.

I was a little confused by the title. A "minimum wage" usually refers to the minimum amount set by government that an employer is required to pay by law. This article refers to private employer's voluntary wage floor, more appropriately called, "a starting wage".

This paper is a good rebuttal to talking points like this tweet that crop up from time to time: https://i.redd.it/b57t1w5jllb61.jpg

(I was trying to look up a similarly awful article referencing EMTs earning $minwage + $2 I saw a while back but googlefu is failing me)

I must be missing something because to me that's literally the point - the minimum wage should cause other, more complex work wages to rise?

Yes, the tweet above presumes that they wouldnt and that it would be somehow unfair if a minimum wake hike meant that a teacher got paid minimum wage.

Most arguments against raising the minimum wage are bullshit but they all get trotted out regularly because profits are at stake.

If all wages rise (and in turn, cost of living rises accordingly, because now people can afford to pay more rent), nothing will have changed.

Until you start capturing that increased rent via meaningful land value taxes, perhaps distributed as a UBI

Right, of course

"No it does not. Raise teachers' salaries."

Yeah, what's the deal with this crabs in a bucket mindset that underlies memes like that? It's like the creator wants to perpetuate stagnant wages.

It's shocking how little we pay the people that spend so much time with our kids.

It’s a big problem. When we moved to NC my girlfriend started working at my son’s school (preschool). The $17/hr she gets is considered the top end of the pay range for her job… $17/hr! She’s got a college degree!

> She’s got a college degree!

Is that significant? The preschool I send my child to's child care provider has a boat. Neither factor into my purchasing decision.

Everyone is going to have hobbies of some sort outside of work. How much I will pay isn't going to change depending on what hobbies they have chosen.

Yeah that makes no sense. I would prefer my child is taught by someone who is at least accredited by the state. Of which a college degree is typically required. My point though was that she attended college and earns a shit wage, whereas I didn’t graduate high school but fell in to tech.

Most tech jobs provide absolutely no value to the planet, mine included, compared to the value a teacher provides children.

> My point though was that she attended college

Your point is unclear. What difference does this make? She could have once travelled to the moon, but that wouldn't make her participation in the same job worth more. The buyers of services pay for the work being done, not for what you may have done in the past. They do not care about your hobbies.

Do you think people are paying less for the software you help create because you didn't graduate from high school? Of course not. They couldn't care less. They are only concerned about what the software can do for them.

> Most tech jobs provide absolutely no value to the planet, mine included, compared to the value a teacher provides children.

Problem is that childcare doesn't scale very well. A single person can only care for so many children, especially when they are young. This means that the cost can only be distributed across so many parents. If the cost to the parents is too high, the parents will stay home and provide that care themselves.

In contrast, a 99¢ app across many millions of customers provides very nice scalability and a fortune for those involved in it. Per customer, the childcare provider is paid substantially more, but is limited to how many customers they can have.

Perhaps someone with a college degree should be using their experience to solve for the scalability issues, but a hobby one had in the past is no indication that they have interest in continuing with that hobby, so it is unrealistic to place that expectation on anyone.

There's no free lunch.

Most of school budget comes from the property taxes inside school districts. To pay teachers more money, the voters simply need to go through whatever are the steps to increase the property taxes to accommodate the budget increase. Until that is done, all of this is just talk.

>The $17/hr she gets is considered the top end of the pay range for her job… $17/hr! She’s got a college degree!

is $17/hr supposed to be outrageously low? According to[1], the median wage in NC is $35,750/year, or $17.19/hr. Someone with a college degree making median wage, in a job that pays below median wage[2] doesn't seem too outrageous.

[1] https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ...

[2] https://www.bls.gov/oes/2020/may/oes_nat.htm, comparing "Preschool Teachers, Except Special Education" $15.35 median hourly wage, against "all occupations" with $20.17 median hourly wage.

This is one of the main reasons why I left the field before even graduating (elementary education, left halfway through the degree). The amount of bullshit you have to deal with on top of the terrible compensation and how little people seem to value the profession despite its importance played a big part.

I'm not even 5 years out of school as a dev (and not even as a college level graduate), I already make way more than I would have been 15 years into my teaching career (max salary!), my schedule and quality of life are orders of magnitude better. I don't regret my decision other than the impact having a man teacher can have on some of those kids.

You can still volunteer with the kiddos, maker spaces!

Yeah, I did scouts for a couple of years. I'd like to do some dev coaching at some point, maybe. COVID put a brake to some of my plans, but I'm having a lot of fun teaching my 4yo son in the meantime haha.

"The amount of bullshit you have to deal with"

This. My state pays well. I have friend who earned his teaching cert but never used it because of how terrible student teaching was, including child behavior and school policies.

You should consider you've only been a dev in a massive bull market for software engineers. Teachers don't get laid off or face the types of uncertainty other types of careers do.

You'll always make more money in private industry but you will probably work more and have less time off. Teachers get a lot of time off and work about 35 hours per week during the school year. And then of course the summers. It's an especially good career if you have kids yourself as you are home when they are.

> Teachers don't get laid off or face the types of uncertainty other types of careers do.

Sure they do, although I think most places call it a RIF.

Wait until you live in an area with stagnant or declining enrollment due to demographic changes (even if your city is still growing).

EDIT - please remember that >50% of US counties faced population decline in the 2020 census!

Have you ever actually been a teacher?

Unless you're one of those that scrapes by doing the bare minimum, teachers frequently work about 60-80 hours per week during the school year, and 20-40 during the summer to prepare.

There are lessons to plan, classwork/homework/papers/tests to grade, extracurriculars to coach/lead, students needing extra help to work with...

This. It's really not a 35h/week job. 35h in class doesn't equate to 35h of work.

It's most definitely not how you're describing it in terms of time. There's tons of extracurricular work, outside of work meetings, prep work, grading, etc. The vacations are shorter than they look, a short month, maybe.

Teachers don't get laid off, they just rot for decades in a society that doesn't value their work in increasingly difficult teaching conditions (increasingly large groups, larger numbers of behavioral issues, etc) for poorer and poorer pay that doesn't follow cost of life increases.

I do know I'm in a bull market where I have the bigger end of the stick. I also have the ability to put way more money aside and be prepared if the market shifts and I have to, too. I don't have issues with W/L balance.

I think it might be out of date. I just looked up the salary scale for the Texas school district my kids went to and a new teacher starts at $50,900 for ten months of work. That doesn't seem too bad to me.

https://drive.google.com/file/d/1RrA-OUnfVui8ACFEusfDSzRzL4w...

So we all have choices to make, and some people choose to become teachers. Now there are a lot of reasons that people make that choice, but I am sure that money is not one of them. So what happens once they get there that makes them decide they are underpaid? Maybe the problem isn't the money but how they are treated by parents and administration.

The teachers I know are all very "soft" (in a good way, kind, empathic), in it for the kids, they don't complain, and have lot of passion. Anyone from my industry forced into a teachers job would raise hell or leave at these conditions and this pay. Maybe teachers feel stuck? It's normal for them? Idk, it's a complex situation.

They work fewer hours than most people, which is another attractive part. On average about 35 hours a week when the school year is in session and then of course nearly no time at all in June, July, and August.

They also get weeks of breaks during the school year around Christmas and in the spring.

Being a teacher won't get you rich but it's a pretty sweet job for people that don't want to work much/do the corporate ladder thing, only work when their own kids are at school (big benefit!), and want generally good benefits, etc.

People who pay a significant amount of taxes don't often send their kids to public schools where staff is paid poorly. Many communities choose to have a low property tax rate and give minimum funding to the schools and the parents can then use the money they saved and spend it on private education. People without kids enjoy this scheme as well as they aren't paying for other people's kids.

For example, you could live in a community where the public school offers a low salary to teachers but you don't send your kids there. Instead you send them to a prep school where you pay $30k-$60k per year. The classes are small and the best teachers are attracted to the school as the student body is more enjoyable to teach and the pay is better too.

Unfortunately those working in fields like education and healthcare have too much empathy. They don't go on strike or have a 9 to 5 mentality.

Capitalism favours the narcissistic and the psychopath.

I read that comment to be implying that teachers are underpaid. Are you sure it's meant the other way?

This is one of the worst arguments one could ever make. Literally the same as telling someone your salary and they go "wow, you're so overpaid, I make less than half that!". No motherfucker, you should be making more money. It's insane that instead of advocating for higher salaries people will attempt to drag each other down.

Pretty much every argument against raising the minimum wage is disingenous in some way, but a lot of profits are at stake so we will get to hear them all eventually.

But this is the goal, and it works. The people who own the media don't want wages to go up. Lobbyists, anti-union groups, etc...it's much easier to get 2 lower income people mad at each other than to justify their own income to them. Outrage and anger is an easy sell and unfortunately that's what the 24/7 for-profit news cycle is.

But what is the end game here? Salaries are also the prices we pay for services/products. If everyone has higher salaries than everyone has to pay more => Inflation. And we are back to square 1.

The price we pay for services and products also depends on the cost of energy, raw materials, real estate, etc., required for those services and products, the price of which is fairly independent of minimum wage and is determined by supply & demand.

This is a terrible rebuttal. It essentially says because society has decided to underpay the people that look after our kids for 8 hours a day, that no one else should be able to make money either. The correct take should be teachers are woefully underpaid for the work they do which includes looking after our kids in the event of a school shooter. Strange to me that so many people rally to keep their fellow citizens down. Not the good rebuttal you think it is.

Teachers in my state make a good living. I know some that make more than I (dev, MSIS, 10yrs exp.) do. Granted we're in the top 10 states for teacher pay. Some other states are woefully underpaid, but it's not universal.

> in the event of a school shooter.

The probability of this happening at any given school is so incredibly low it's really not worth factoring into any decision-making at all.

Statistically true but tell that to every school district that forces the teachers to lead live shooter drills every month. With that said though, shooters happen and teachers are in charge of ensuring the safety of their class when it does. Whether it happens or not its part of the job description. How would it play if there was a real school shooting and the teacher just ran away abandoning her class?

This seems to be missing some details. Are they comparing to only other large retailers, or non-Amazon employers across industries? Are they only comparing wage increases for minimum wage?

The reason I ask is that the increases could be diluted by including non-minimum wage jobs, or jobs in other industries. A .6-1% increase is way less than inflation. I suppose it's better than 0%, but still not a good thing. It seems many workers don't realize (or have no power to change) that they are being paid less if their pay doesn't rise as fast or faster than inflation.

Perhaps part of the reason for inflation is the rising minimum wages.

Maybe a part, at historical levels. Right now it seems to be driven moslty by monetary policy, supply issues (reduction in competition, increased demand), and labor supply issues (plays into minimum wage in so far that more employers are paying above it).

That's why you also need to take money out of the top to counteract this.

A wage crush is ideal, not a wage raise.

What do you mean by wage crush? I can't find any definition.

It's a term I use myself. It's pushing down on higher wages while pushing up on lower wages in effort to concentrate people into middle class.

This would also mean that many people who are not even remotely close to "the billionaire class" would get pushed down, so it's not really popular with high-earning coastal liberals, and probably many people here.

But what mechanism would that use? Things like taxes would likely make a limited impact due to raising wages to offset the tax until the point that off-shore is more competitive. Legislative restrictions have been struck down in the past (the $1M CEO restriction of the 80s?).

I honestly don't know. I tend to be in favor of using gentle nudges to leverage natural market forces to institute change. Fortunately/unfortunately capitalism is designed to be self reinforcing. Catching more fish enables you to build bigger nets and protect fishing methods. But there isn't really any natural mechanism for incentivizing a reversing of that.

Someone smarter than me will have to come up with something. Right now though it's a runaway feedback loop that's going to eventually destroy itself by "doing everything right".

Raising lower end wages coupled with inflation would have the same effect, wouldn't it?

At least in my experience, the higher end people understand inflation and would demand higher pay to match or beat inflation. Especially at the executive level.

And yet the inflation outdates and outpaces the rise of the minimum wage, even prior to covid [1]

If it was to match inflation it would be more than $15 [2] And if it was to match productivity, it would be even more [2][3]

[1]https://www.epi.org/publication/labor-day-2019-minimum-wage/

[2]https://edition.cnn.com/2021/02/21/politics/minimum-wage-inf...

[3]https://cepr.net/this-is-what-minimum-wage-would-be-if-it-ke...

> If it was to match inflation it would be more than $15

Neither of your sources support that claim:

> Even worse is that federal-minimum-wage-earning workers today are paid 31% less than the $10.54 an hour they would have been paid in 1968, when the minimum wage reached its highest (inflation-adjusted) value. [1]

> The wage hit its peak in inflation-adjusted terms in 1968 at just over $12 [2]

The productivity argument is silly, and your third source says as much. Minimum wage has not kept pace with average productivity because minimum wage jobs themselves have not kept up with average productivity. CEPR makes the argument that doctors and software engineers just make too much money, and this somehow hurts the minimum wage earners. Which is a wild bit of mental gymnastics to claim that minimum wage earners should profit from high-skilled productivity, but the high-skilled workers should not.

Tying minimum wage to productivity never made sense to me. Obviously as technology progresses, productivity would increase. There wouldn't be an incentive to invest in productivity-increasing tech if it was directly offset by wage increases.

Tying it to inflation though is a no-brainer. We do it for social security payments, congress salaries, etc. There's no justifiable reason for not doing this.

>could be diluted by including non-minimum wage jobs

Wouldn't there be a stair-step effect eventually? For example, licensed vocational nurses are typically in the next tier up, with ~$20/hour entry level pay. But it's hard work. If you aren't paying more than the jobs that used to be minimum wage, but now aren't, you won't be able to hire anyone.

Then rinse and repeat that for the 3rd tier.

Yes, that is called inflation.

That's a little simplistic, isn't it? Inflation isn't solely driven by wage increases followed by higher product and service prices. There's "Wage Push" inflation, which is just one of many types.

I'm not even sure it's really "inflation" if the wage increases aren't exceeding cost of living increases.

Sure, inflation isn't solely driven by wage increases. And wage increases aren't solely driven by minimum wage legislation.

But a bump in minimum wage which results in higher wages for everyone and a devaluation of the currency is inflation. I don't think that's any more simplistic than your premise of all the "tiers" of jobs getting a raise. What you described is inflation.

I'd agree if wages (especially minimum wage) had kept pace with cost of goods and services over the years. It hasn't. There was an 11 year period where it didn't change, for example.

Inflation is never the exact same across industries and across time. Electronics prices have inflated less than the economy average, and even deflated depending on how you measure it. But if changing market conditions meant that electronics prices explode over the next decade, like housing and medical costs have, that would still be inflation.

Stagnating prices in recent history does not make something immune to inflation. Labor is no different.

The article links to the actual paper, which would be a good place to look for these details. For example...

""" We calculate the bite of the large retailer’s minimum wage as the fraction of job ads by other employers with pre-period wages below the announced minimum wage, within detailed occupation, employer, and commuting zone (“CZ”) categories. This approach mirrors that of papers estimating the causal effect of the federal minimum wage using state-level variation in the portion of the state’s wage distribution under the new higher minimum wage (Card, 1992; Bailey et al., 2021). Here, however, we are able to exploit variation in bite at a much finer level, across tens of thousands of employers and hundreds of occupations and commuting zones. This level of variation allows us to precisely estimate effects and conduct several robustness checks to rule out alternative explanations for wage increases. """

Thanks

I, for one, am shocked /s

But for real, it's great to have actual data on this.

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