The "New" Minimum Wage - $70k

[iluvatar5150]

Still incorrect. You said "According to the article, his salary had previously been consuming nearly $1 million/yr of those profits". There was no information on previous year's profits, if any. There was only the forecasted $2.2 million for this year stated.

I don't even know what you're arguing about. If doesn't matter how much their previous profits were, $1M of it was still going into his pocket.

And technically, the money paid out to him as salary wouldn't be considered "profit," but that's beside the point.

I only partially disagree with your calculations. The other "chunk" will come from 75-80% of the $2.2 million projection. At 75% of that ($1.65 million) split 70 ways is $23,571.43 each. But that's not what the article says. It doesn't say all the extra money will be split evenly amongst the 70, only that those who are making less than $70k will now make that as a minimum. We don't know how it will be split up and I would think that those who are above the $70k will still keep there current salary.

You're making up arguments where there aren't any. I didn't say that they raises would be split up evenly. I was giving an average.

As for rates, debit cards are at a lower rate than credit cards. And AMEX fees are higher than Visa, MasterCard, and Discover fees. Also, depends on the contract if it is a flat per transaction fee (say $.25 per swipe) or a % of sales fee (2% +/-). Since their fee rates are propriety, a 2% average is probably not accurate, but works for purposes of discussion.

Yes, I know. I used to work in e-retail and dealt with order processing.

 

[essentialsaltes]

That idea only works if his company is the only one to raise it to that level. The whole reason $70k is a good salary is because the minimum wage is much lower than that.

If minimum wage, across the board, was $70k, then that $70k wouldn't be so special after the prices of goods and services adjusted accordingly...

If the pay raise came entirely from cutting his own salary, then his company would not need to raise prices to 'pay for' the wage hike. If all companies did likewise, with CEOs and other executives lowering their own salary to raise the salaries of the average worker, then there would be no need to adjust prices.

 

[NightHawkeye]

Well it looks like good ol' liberal Seattle is at it again on the minimum wage front lines. First the $15/hr MW, now this:

http://www.nytimes.com/2015/04/14/b...-setting-a-new-minimum-wage-70000-a-year.html

Interesting idea, but realistically I wonder how long that will last when so much profit is eaten up by salaries? It's his company, his money.

I support his decision ... though I doubt it will work more generally.

My predictions are:
1) His company will have the most productive workers that money can buy.
2) Job functions which don't warrant the $70k salary will be discontinued.

 

[USCGrad90]

I support his decision ... though I doubt it will work more generally.

My predictions are:
1) His company will have the most productive workers that money can buy.
2) Job functions which don't warrant the $70k salary will be discontinued.

Private company - his decision - very generous pay compared to the market.
For employees going from a $48K salary to $70K, if they keep the same lifestyle and use the extra money to pay down debt and build savings, then they should come out OK. If they change their lifestyle to match the pay increase, then that could cause problems if the company ever folds and they have to find a job somewhere else. This is not the time to go out and buy a new house or car - which is what I predict some will do.
Productivity is debateable - the increase in salary appears to be offered with no intended expectations of change in responsibility or increased performance. If demands are conciously or unconciously increased and personnel eliminated, the employees may become disgruntled if they feel that the raises came with a catch that they weren't aware of.

 

[ChristsSoldier115]

I don't know if this guy is Christian or not,but he is an example of Christian contentment. Something that hardly gets showcased among American Christian business owners anymore.

 

[BigDaddy4]

Private company - his decision - very generous pay compared to the market.
For employees going from a $48K salary to $70K, if they keep the same lifestyle and use the extra money to pay down debt and build savings, then they should come out OK. If they change their lifestyle to match the pay increase, then that could cause problems if the company ever folds and they have to find a job somewhere else. This is not the time to go out and buy a new house or car - which is what I predict some will do.
Productivity is debateable - the increase in salary appears to be offered with no intended expectations of change in responsibility or increased performance. If demands are conciously or unconciously increased and personnel eliminated, the employees may become disgruntled if they feel that the raises came with a catch that they weren't aware of.

He said he picked the $70k number because "he recently read an article that suggested extra money makes a big difference in the happiness of people who make less than $70,000." I wonder how much research, if any, he did to validate the article's conclusion. Seems kind of a shaky reason to make such a bold move.

No expectation of improved productivity, although I guess one could argue that if the article is true and his workers will be happier, they would also be more productive.

 

[iluvatar5150]

He said he picked the $70k number because "he recently read an article that suggested extra money makes a big difference in the happiness of people who make less than $70,000." I wonder how much research, if any, he did to validate the article's conclusion. Seems kind of a shaky reason to make such a bold move.

If it's the study I'm thinking of, the general premise was that happiness improves along with rising income up until a certain standard of living is achieved. IIRC, that standard of living covered things like an average level of food, shelter, transportation, and medical care, along with the ability to save money and afford some modest niceties like going on a vacation every year. In the US, that standard of living costs around $70k/yr (I don't remember if that figure included employer-sponsored insurance premiums or not). The study found that, below this level, people were more anxious about being able to afford necessities, and above this level, extra money didn't provide additional happiness, because the basic issues of security had already been met.

 

[Glass*Soul]

If it's the study I'm thinking of, the general premise was that happiness improves along with rising income up until a certain standard of living is achieved. IIRC, that standard of living covered things like an average level of food, shelter, transportation, and medical care, along with the ability to save money and afford some modest niceties like going on a vacation every year. In the US, that standard of living costs around $70k/yr (I don't remember if that figure included employer-sponsored insurance premiums or not). The study found that, below this level, people were more anxious about being able to afford necessities, and above this level, extra money didn't provide additional happiness, because the basic issues of security had already been met.

Interesting. So, if this study is correct, the employees stand to have their happiness improved to optimal levels by receiving these raises, while the boss will continue at his present level of optimal happiness. Previously, only the boss had optimal happiness.

 

[BigDaddy4]

If it's the study I'm thinking of, the general premise was that happiness improves along with rising income up until a certain standard of living is achieved. IIRC, that standard of living covered things like an average level of food, shelter, transportation, and medical care, along with the ability to save money and afford some modest niceties like going on a vacation every year. In the US, that standard of living costs around $70k/yr (I don't remember if that figure included employer-sponsored insurance premiums or not). The study found that, below this level, people were more anxious about being able to afford necessities, and above this level, extra money didn't provide additional happiness, because the basic issues of security had already been met.

I have not read or heard of such a study so I wouldn't know. But with the cost of living variances in urban, suburban, and rural areas, I'm curious what factors were considered that would lead to such a conclusion. $70k in the cities of Seattle, New York, Chicago, etc wouldn't go as far as $70k in Poedunk or Timbuktu (or insert any smaller suburban or rural city). Then there are household factors like single vs. dual income, kids/no kids, etc.

Too many variables for me to see how it makes sense to make such a decision based on an article. To each their own, I guess.

 

[iluvatar5150]

I have not read or heard of such a study so I wouldn't know.

I think this is the one I read a while ago:
Study: Money Buys Happiness When Income Is $75,000 - TIME

But a quick google search suggests that a number of other people have looked at the subject and come to somewhat similar conclusions.

But with the cost of living variances in urban, suburban, and rural areas, I'm curious what factors were considered that would lead to such a conclusion. $70k in the cities of Seattle, New York, Chicago, etc wouldn't go as far as $70k in Poedunk or Timbuktu (or insert any smaller suburban or rural city). Then there are household factors like single vs. dual income, kids/no kids, etc.

Sure, but even though housing is way more expensive in some places, a lot of things like clothing and transportation cost the same everywhere. I think that's part of why you see way more import cars in bigger cities: wages scale up to match the housing prices, but that also leaves more disposable income, allowing people to afford fancier cars.

Too many variables for me to see how it makes sense to make such a decision based on an article. To each their own, I guess.

Sure, but this guy is in Seattle, which is definitely on the more expensive end of the spectrum.

 

[BigDaddy4]

I think this is the one I read a while ago:
Study: Money Buys Happiness When Income Is $75,000 - TIME

But a quick google search suggests that a number of other people have looked at the subject and come to somewhat similar conclusions.

Thanks. I have not Googled it, but your article is interesting, even if that is $5k over this guys' article. I imagine it would have similar reasons and conclusions.

Sure, but even though housing is way more expensive in some places, a lot of things like clothing and transportation cost the same everywhere. I think that's part of why you see way more import cars in bigger cities: wages scale up to match the housing prices, but that also leaves more disposable income, allowing people to afford fancier cars.



Sure, but this guy is in Seattle, which is definitely on the more expensive end of the spectrum.

Well, the company is in multiple locations and there is much economic diversity amongst those cities.

Seattle • Tacoma • Portland • Los Angeles • Honolulu • Kona-Kailua • San Diego • Maui • Spokane • St. Louis • Phoenix • Bellingham • Boise • Oklahoma City • Tulsa

Let's Talk - Gravity Payments

Interesting that there's 120 employees for 15 locations. An average of 8 per, although the headquarters probably has more than 8 employees.

 

[St. Paul]

Well it looks like good ol' liberal Seattle is at it again on the minimum wage front lines. First the $15/hr MW, now this:

http://www.nytimes.com/2015/04/14/b...-setting-a-new-minimum-wage-70000-a-year.html





Interesting idea, but realistically I wonder how long that will last when so much profit is eaten up by salaries? It's his company, his money.

Uhhh, why would you hate people having more money? How about more love and less hate please. Why do you care how much money other people make? I take it, it would be ok for you to make more money. Why do so-called Christians hate others so much?

 

[Fenny the Fox]

Something also interesting to note. They claim around 70 employees will see an increase. That means the other 50 or so people already make at least $70K, with some likely making more. He is not only putting himself at the same level as those with the lowest pay in his company, while raising those members' pay, BUT he is also likely putting himself at a LOWER pay rate than some employees. That is pretty bold, to be honest. I'll be waiting to see how this goes for them.

 

[HonestTruth]

higher minimum wages = more jobs created

 

[AphroditeGoneAwry]

I claimed 12K last year, and that was plenty for me to live on, have a vacation, eat out, pay my bills, tithe, make offerings, and buy some stuff.

It's no surprise we are the among the most entitled richest nations in the world, if 70K is considered minimum wage.

 

[Glass*Soul]

I claimed 12K last year, and that was plenty for me to live on, have a vacation, eat out, pay my bills, tithe, make offerings, and buy some stuff.

It's no surprise we are the among the most entitled richest nations in the world, if 70K is considered minimum wage.

Calling the 70K a "minimum wage" is a bit tongue-in-cheek. It is the new lowest wage for employees at one particular company due to the generosity of the owner. This is not what people generally mean when they refer to "minimum wage."

 

[AphroditeGoneAwry]

Being poor in money as I have been the last couple of years has given me insight into just how privileged and rich we are as Americans. We consider 50 or 60K the minimum we can live on. It's really more that we need to reconsider what our standard of living is, and should be.

 

[Armoured]

Well it looks like good ol' liberal Seattle is at it again on the minimum wage front lines. First the $15/hr MW, now this:

http://www.nytimes.com/2015/04/14/b...-setting-a-new-minimum-wage-70000-a-year.html





Interesting idea, but realistically I wonder how long that will last when so much profit is eaten up by salaries? It's his company, his money.

His company, his money, good for him.

 

[Skaloop]

I claimed 12K last year, and that was plenty for me to live on, have a vacation, eat out, pay my bills, tithe, make offerings, and buy some stuff.

It's no surprise we are the among the most entitled richest nations in the world, if 70K is considered minimum wage.

OK, but where do you live; what's the cost of living there? How much are your rent/mortgage payments? Do you have a roommate/boyfriend/spouse or anything that allows you to split costs? Do you have kids or pets or a car? What is your job?

Plus, $70K isn't considered minimum wage. It's what this one guy has decided to pay his employees.

 

[keith99]

I'll see your 70K and Raise you 365K!

https://www.spotrac.com/blog/nfl-minimum-salaries-for-2015-and-the-veteran-cap-benefit-rule/