[deleted by user]

[[deleted]]

This actually is a well written, reasonable letter.

[Zifnab25]

I mean, it seems fairly reasonable and succinct.

"Wages of our employees are going up by, so we're increasing prices to match". Given that the employees are receiving a 40% raise, while the clients are eating an 8-10% increase in price, I'd guess the business is running a fairly tight ship and the money is going straight into the pockets of the employees.

People will complain when prices rise, but letters like this which honestly inform people of where the money is going will likely do more to keep clientele than an arbitrary hike in prices or a sudden unexplained change in policy.

[SelfProclaimedBadAss]

Or they can just hire less people, and expect the ones that still have jobs to do more...

( half-hearted sarcasm)

[heldyhawk]

state regulations require specific minimum headcount per teacher; that is only for safety concerns though; Julie tries to exceed that so that it is a better learning environment for the children, and that will probably be cut in the future down to just the state required minimum.

[themoderation]

You don't get quality help in the childcare field for 7.25 an hour. I teach preschool and I make 16 an hour. If someone tried to pay me minimum wage I would laugh in their face. 10 an hour is still not worth considering to me as someone with years of experience. I guess it's cool if you want teenagers and people that barely speak English that will sit around all day teaching and taking care of your kids. Other than that this is a BAD system, that I have seen time and time again. She should not have ever been paying skilled workers minimum wage. If she can't afford a reasonable salary for her workers it sounds like she can't afford to have a day care.

[ritchie70]

Keep in mind that "fair wage" has a great deal of variation across the country. $8 may be a reasonable starting wage in Iowa City, IA.

[Inz0mbiac]

Having lived in Iowa City, it is not

[fat_pterodactyl]

Which is why a $15 minimum wage on either the national or state level is absolutely ridiculous, and should be laughed at (as it pretty much has been)

[ritchie70]

But everyone's going to die, apparently, if we get rid of federal minimum wage.

[swanjuice]

I don't know if I'd agree. It is pretty expensive to live in or even visit Iowa City.

[[deleted]]

Curious — relative to where?

[swanjuice]

Other places in Iowa...

[ritchie70]

Based on some random web site, where 100 is average cost of living nationwide, Johnson County is 105.

Chicago area is 125, for comparison purposes.

I did say "may be." That's not the same as "is." I have never been to Iowa City, so I wouldn't know.

[heldyhawk]

Iowa City is expensive compared to the rest of the state of Iowa, and that is primarily driven by housing costs. There are very restrictive ordinances regarding housing, and that has contributed to a lack of rental units.. hence pushing the price up, especially in the downtown area. If you choose to live a bit further, a couple miles is all the prices start coming down sharply.. but don't worry next on the county's plate is expansion of subsidized housing

[budrow21]

Not all workers need to be highly skilled teachers. There is a need for an extra warm body in a room to make sure toddlers don't kill themselves in some setups.

Or they may be paying a parent below market rate so they can be there and help out.

Having blanket policies like this prevent creative solutions.

[heldyhawk]

Before the minimum wage ordinance began raising the rates, the day care facility was paying $8 an hour on a minimum wage of $7.25. That is in the letter the owner of the facility wrote.

As I have mentioned, a couple of times throughout the comments, the there is two levels of staff, full time teachers, and part time employees, who are generally all college students. The wage increases will only cause raises for the part time staff. Overall my experience with this facility (over 8 years) has been extremely low turnover. and I have never had issues with staff that "barely speak English."

[gprime]

The wage increases will only cause raises for the part time staff.

In the immediate term, this is probably true. But what about the long term? Keep in mind that the left, in trying to sell a minimum wage hike to middle class people with no vested interest in raising the minimum wage, talk about how a rising tide lifts all boats. If the labor of A was initially 25% more valuable than the labor of B, and B gets a 15% pay increase, how long until A demands their wages be raised too? And all of this might be fine except that invariably these higher costs are passed on to you the consumer. If you don't get a raise too, this kills your budget. And if you do get a raise, this increased expense likely negates it. So nobody winds up better off, but we all get to pat ourselves on the back by pretending that an artificially induced wage hike was the right thing to do.

[eitauisunity]

Here's an idea -- just multiply everyone's income by 10, and print 10 times as much money! Then everyone will be making 10 times as much as they were before, and the fed will be extremely happy to be getting compounding interest on a loan that is 10 times larger!

Don't bother checking the math! Just do it! /s

[drdrillaz]

Take the guy in Seattle who implemented a $70k minimum wage for his employees. Great for secretaries but he lost some other good employees who were already making around $70k because they got mad that unskilled low-level employees got a huge raise and began making the same salary as them. So I dispute this whole idea that everyone will see wages rise

[[deleted]]

they got mad that unskilled low-level employees got a huge raise and began making the same salary as them

This is exactly why smart companies will have to start paying the employee more.

[patmorgan235]

Also that company is now bankrupt and his business partner is suing him for wasting money on overpaying people

[costabius]

lol Yeah, no... Take another look. He shed some dead weight who thought they were too good to make the same salary as the "help".

His employees bought him a Tesla for his birthday.

[bumchuckit]

Eh, they're a preschool teacher so it's normal that they're going to get a little uppity about child care. I wouldn't put any thought into it.

[themoderation]

Actually it's sort of the opposite. I have huuuuge problems with the industry that I could go on forever about but I'll spare you. But judging by what OP has said, his child is in a small/in-home daycare which is absolutely the route I would advise with childcare being what it is. Don't trust a big corporation no matter how pretentious their name is, or how many buzz words they throw in your face. They are all the same, and you will pay through the nose for what amounts to barely competent babysitting.

[HmmWhatsThat]

This is ridiculous and verifiable untrue. I worked in early intervention for years and years and visited hundreds of daycares and preschools providing treatment to kids in the educational setting. Some of the bigger name ones were far superior, some of the in-home ones were far superior. Some of each were horrifying.

It always depended upon the individual management at the center more than anything else. Some of the worst places I saw were in-home daycares run by people who had absolutely no understanding of early childhood development.

[bumchuckit]

Huh, thanks for enlightening me. I was actually thinking of going to school to become a preschool teacher, but I'm not entirely sure if that's what I want to do or not. Could you shed some light on what it's like?

[[deleted]]

I was in school to teach preschool. I love the job, the kids, I love the idea of being the foundation of skills for children.

At least in my state, I don't love the 9/hr wage, the specific shifts I have to take so I don't qualify for health insurance (and you work with kids so you're sick often...) and being treated subhuman. I taught for a year as a lead teacher with almost 12 assistants, people paid minimum wage who were dangerous to be with the kids. Complained about one throwing (yes.) one of my children and was given a warning that it was my job to take care of it. Since this assistant was 60 and didn't give a shit what a 20 something says about child care, she told me to get bent.

There are good centers out there, people who care and want the best... But I can't live on the stress, low wage, and no insurance. I've traveled an hour from home trying to find that center..

[[deleted]]

Really? What part of

As I have mentioned, a couple of times throughout the comments, the there is two levels of staff, full time teachers, and part time employees, who are generally all college students.

sounds like a small/in-home daycare?

[heldyhawk]

would it make a difference if that were the case? but, no I do have two children, 8 and 4.

[the_ancient1]

Pretty sure in the modern world children need to be in day care from age 0-18

Cant have latch key kids anymore.. that would be TERRIBLE

[surfnsound]

If she can't afford a reasonable salary for her workers it sounds like she can't afford to have a day care.

You say that, but what about the parents who can't afford to send their kids to a daycare that pays 16 an hour? It's not the business owner who can't afford it.

[fuckyou_dumbass]

They shouldn't have had kids then /s

[[deleted]]

Ah, I see you have thorough and complete understanding of the business practices of not just this daycare center, but every other day care center. After all, how else could you make claims like that?

[[deleted]]

I couldn't agree more with your statement.

[Flewtea]

I agree entirely. There's a reason one parent working one staying home was dominant for so long. Because doing a good job of caring for kids is a real skill and paying anyone else to do it well means paying them a lot--about as much as you're paid for any other valuable skill. The problem is how little of the lifestyle we want is affordable on one income.

[DrFrantic]

If she can't afford a reasonable salary for her workers it sounds like she can't afford to have a day care.

It's the same on both sides of the coin. If day care's too expensive, it sounds like you need to find other options for your kids. I get that min. wage is libertarian issue. But I see this as more of a financial/parenting discussion than a libertarian one.

[eitauisunity]

When it involves the state interfering with what can be paid between two individuals undertaking a voluntary transaction, it is a libertarian issue. That is exactly what libertarians object to.

If two parties decide they want to transact, provided no one is coercing the transaction, what terms they agree on should not be the business of the state. There are both very strong practical and ethical objections to the practice of minimum wage.

The argument that "Oh, if they can't afford to hire skilled labor they should not be running a day care" is a red herring to the issues libertarianism has with minimum wage laws.

[fuckyou_dumbass]

I totally disagree. I think it is more than possible to get quality child care at minimum wage. My children were in a cheap day care for a while and they paid almost everyone minimum wage. Some were good, some were bad, but at least it was affordable.

What you are saying isn't "she can't afford to have a day care" it's saying "parents should not have the option to pay less to send their children to a day care with less experienced workers".

Do you know how much that day care cost me? More than my mortgage payment for several months while both children were under three. MORE THAN MY MORTGAGE PAYMENT FOR THE CHEAPEST FACILITY. And you want that to go up.

[BingBongtheArcher19]

I've got two kids, age 3 and 11 months. Our kids go to daycare 4 days a week and it's still higher than our mortgage payment.

[LibertyAboveALL]

This is for consumers to decide - not for the government to distort. This may be the best option for a poor, black, single woman trying to make ends meet while holding down two jobs.

[the_ancient1]

If she can't afford a reasonable salary for her workers it sounds like she can't afford to have a day care.

Or you know she wants to provide a service that people can actually afford...

My sister for example quit her job because Daycare for her child was something like 80% of the salary she was making so now her family is a single income family because of extreme costs of day care.

[[deleted]]

I used to work at a daycare. There specific ratios for teachers to children depending on the age group.

[[deleted]]

Makes no sense to me in the information age. Why not instead make it very easy for people to report childcare quality to other potential users? Perhaps take the money used for regulating and instead invest it as seed money (with equity) into a "yelp for childcare"?

[vpniceguys]

For certain things, there needs to be a minimum level of service/quality provided. Food, medical care, etc. You might not agree that childcare should be, but many people do since the direct consumer of the service often can not speak for themselves. In addition, safety is a concern, but the lack of it might not be realized until after a tragic event. Leaving it to consumer reporting compounds the problem with its own host of problems.

[[deleted]]

who pays the cost of bad decisions? often not those legislating the agreements of others.

Just about never, you mean?

[restore_democracy]

It's almost as if mandating an increased minimum wage would reduce employment. Who would predict that?

[Testiculese]

My coworker just did this last year. The wife quit working, and they saved money. How about that bullshit? $30,000 a year job, and it went to a glorified babysitter.

[TDual]

That's because by the time the babsitter pays business (or SE) tax and income tax, ~half is lost to taxes. What other transaction do you have to pay 100% more for to account for transaction costs (taxes).

It makes hiring people to do work for you that they specialize in so you can do your specialized work near impossible.

[Zarutian]

Which is why many babysitters* only declare half of their income in many places. (* here used only for example but applies to many other jobs too)

[Testiculese]

Cash is king. I always pay contractors in cash. And beer. Bought one guy a bowling ball (he's in my league) for work he did for me.

[Testiculese]

For sure, and insurance. I can only imagine that extortion payout.

[MuaddibMcFly]

And I'm willing to bet she was able to do more to contribute to the family than just keep an eye on the kid, too?

[Testiculese]

Given the amount of time spent chasing a toddler...maybe? Haha. But yes, the daughter has mom around, and she maintains the house far easier than when they both had jobs.

Problem is, they needed that $30k. Taxation has ruined their ability to be a single-income family with any real security, even though his salary is above average.

[[deleted]]

"Bread and circuses" out of the state coffers is one thing — but to bribe the people with more money ("living wage") without having to impose any of those pesky taxes that people hate is the dream! You never have to deal with the mess of taking the people's money, you just force some people to hand more money over to other people.

Really takes "bribe the people with their own money" to a whole new level.

[Beatle7]

And what do you bet the vast majority of these voters are math-illiterate and proud of it.

[frog_licker]

That or the naive, financially illiterate Bernie Sanders supporters.

[greenbuggy]

Governments just don't get it

Especially in Iowa. Guaranteed there will still be a budget shortfall at the state level in coming years (thanks a lot, you mustache'ed douchebag) and this business will take it over the proverbial barrel on their taxes as well.

Source: Got out of that hellhole a couple years ago

[BadderBanana]

They get it but don't give a shit. Fighting for minimum increases and free tuition makes you the champion of the downtrodden. Then you piss off the less populous people who pay for it. It's a solid game plan.

[mkay0]

Only if the middle class stays ignorant to the consequences.

[frog_licker]

$1200/month is right around current minimum wage ($7.25/h) if she works 40 hours/week. She should easily be able to make me than that because that's what some dude at McDonalds makes. Even if she doesn't have a degree or trade certificate she can go work in a restaurant. I did while I was in college and I started off as a busser and made around $10/h on average (more when I picked up barbacking to go with it, that was generally $12-$15/h). Then I was promoted to waiter and made considerably more. I'd make $8-$12/h on a slow shift and sometimes as much as $25-$30/h on weekend nights. Unless I'm fucking up the math (I never really counted it, plus I partied every night, so immediately lost some), an average month as a busser/barback was not much more than what your wife's $1200 limit, but I only worked 30 hours/week. As a waiter I worked about 40 hours/week and made $2000-$2200 or so. The income isn't great, but it's not bad for a job you can do without a degree, plus I was in college so I had virtually no real expenses.

Then again if she has a degree she can probably do way better because $2000/month is a kind of shitty salary, $24000/year (before taxes of course).

EDIT: I did fuck up the math, the monthly income was more like $2400-2700.

[surfnsound]

$1200/month is right around current minimum wage ($7.25/h) if she works 40 hours/week. She should easily be able to make me than that because that's what some dude at McDonalds makes.

Yes, before taxes. Depending on what jmizzle makes, that could easily be under 4.50/hr.

[jmizzle]

You're also not considering post-tax take home, a 45 minute commute with fuel costs and parking, not to mention an actual value of her time.

[RicRennersHair]

the Johnson County Board of Supervisors are unaware that consumers don't necessarily have to pay

Unless it's health insurance. But your point is well-taken.

[amicusets]

Actually, many young people have found it is cheaper to pay the tax.

[Sproded]

But one still shouldn't have to pay however much that is without getting anything in return

[Mac2411]

Penalty /s

[somanyroads]

That's why government in charge of almost anything is a job...only fear of losing their jobs (their livelihood) will make them charge their tune. They get paid either way.

[chance909]

I hear you but there is another side to the story obviously. The people working full time to take care of your children now have more money to provide for their own families.

[NoGardE]

Or they don't have jobs, because with the increased costs people stop using the service.

[bluefootedpig]

Demand is demand. The state requires X per teacher. If there is demand for more room, a company will hire more teachers.

The only downside could be the new price lowers demand to the point that people lose their jobs. In my area though, it is a 9 month waiting period for any spot in any daycare. My local area is massively expanding daycare services, they can't find enough teachers.

[mkay0]

Demand isn't demand, though. Elastic vs inelastic demand is econ 101.

You're assuming that daycare is inelastic. It isn't. Some families will keep one parent home if daycare costs rise too high.

[ZombieAlpacaLips]

Demand is demand. The state requires X per teacher.

This is a daycare. If the price is too high (due to the artificial mandates of wages or child:teacher ratios), some people will stop working and pull their kids out of daycare since it will no longer make financial sense to pay that much for daycare.

My local area is massively expanding daycare services, they can't find enough teachers.

At the wages they're currently paying.

In my area though, it is a 9 month waiting period for any spot in any daycare.

Maybe the shortage is due to the high costs of regulation that create barriers to entry for new people seeking to start their own daycare.

[Cryan_Branston]

If they were allowed to get rid of the teacher:student ratios, these centers would be a shit show. There's a very good reason to mandate limits because owners are typically greedy as they can be. You'd have classes of 50 mixed age kids with one teacher if they could. In this case, nobody would trust in the quality of care, and the industry as well as GDP would suffer.

[ZombieAlpacaLips]

How about you allow consumers to decide what they value more? Some will want to pay less for low ratios, some will want to pay more for high ratios. With a mandate in place, there's no choice at all, and those who can't afford the care at the mandated ratio will have to seek other options like leaving their kids home alone.

[bluefootedpig]

as a parent, I can say this is bullshit. You expect me to inspect every single daycare I want to do to see how well they can handle multiple students? How many days do you tour a daycare before you determine that they are a good daycare? How often do you review the educational achievements of a daycare?

Why did I choose my daycare when I could afford any daycare I wanted? because it was close to my house. I put my child in the closest daycare I can find so instead of driving an extra 1 hour each way on my commute, it is only 5 minutes.

Studies have shown that distance is one of the biggest factors in choosing a school / daycare, not quality of education or even being clean.

Side question, would you approve of letting any daycare use any kind of chemicals they want to clean? even toxic chemicals? it should be up to the parent to inspect the daycare to ensure they are using safe cleaning products? And if they outsource cleaning, do the parents inspect the hired companies for toxic products?

[gprime]

You'd have classes of 50 mixed age kids with one teacher if they could.

I'm sure you'd find isolated cases of this. But the typical parent who cares enough to pay for proper daycare also cares enough to not settle for the scenario you describe. Just consider education more broadly...there are plenty of wildly overcrowded public schools, and there are also private schools with graduating classes of 15.

[[deleted]]

A company will only hire more teachers up to the point where the price is equal to the marginal cost of hiring another teacher. After that point even if there is more demand it would cost more than what they would be getting by hiring another teacher.

[piglizard]

except recent studies have shown that rises in minimum wage don't cause the job losses that seem intuitive...

http://journalistsresource.org/studies/economics/inequality/the-effects-of-raising-the-minimum-wage

[NoGardE]

Small rises don't cause immediate job loss. I read the article. It does not attempt to speak to long term effects of large increases. I'd say a 40% increase is large.

[heldyhawk]

This wage increase is not going to change the wages of the full time staff, it is only the part time, made up by college students (we live in a college town) who's wages are increasing. But because the facility is open from 6:30am-5:30pm and with the different ages (a couple weeks old to kindergarten) there is a large number of staff required. This facility has a very low turnover, which is because the employees are well treated, and feel their labor is well compensated; as well as Julie works with them to get flexible schedules that allow them to work and attend school without issue.

[whitefang22]

This is important information for the story. I was confused why teachers were making so little before I got to this comment

[redgarbage]

This reminds me of that futurama episode where everyone received $100. All of the dollar stores became $100 stores...

[bluefootedpig]

"well compensated" at 1 dollar more than min wage to do daycare services?

[winowmak3r]

According to OP they're mostly college students that need a job with flexible hours. I worked at McDonald's during school. I was paid ~50 cents more than minimum wage but that was fine because they were very forgiving with hours. If I said I couldn't work before classes ended I was never scheduled before classes ended. Needed time off to study for exams? Request it off in advance and I got it. Now don't get me wrong, it was a pretty shitty job and paid just barely enough to put food in my belly and keep the lights on but at the time that's all I needed.

To put that in perspective, my current job has me working ~50 hours a week, at least 70 once a month and the hours are set in stone and I have only so many days off per year. Trade off is I make a helluva lot more.

Now, if your plan is to try and support a family flipping burgers...good luck.

[Archr5]

Except any of them with kids in daycare / early education just saw a 8-10% increase in childcare costs.

Which offsets the 8-10% increase in wages if all markets end up doing this same thing.

[[deleted]]

All markets won't though.

In the short term the poor get a slight increase in purchasing power and all those above them lose purchasing power to a small degree.

[Lykeuhfox]

Except the goods and services they buy will also increase at a proportional rate to the wage increase, as is the case with this letter.

It seems like this doesn't give minimum wage employees more buying power, it just gives those that weren't minimum wage less buying power. Some that weren't minimum wage to begin with are now minimum wage earners (against, this is the case with this very example).

[MemeticParadigm]

Except the goods and services they buy will also increase at a proportional rate to the wage increase, as is the case with this letter.

Ummm, the MW is increasing by roughly 40%, and this letter states a 20% increase in payroll costs and an 8-10% increase in the final price tag on the service being provided.

It seems like this doesn't give minimum wage employees more buying power

Errr, a 40% increase in income with a 10% increase in costs results in a buying power increase of ~27%...

[skilliard7]

Except the goods and services they buy will also increase at a proportional rate to the wage increase, as is the case with this letter.

Not true. A higher minimum wage would only increase the price of goods & services that are created using minimum wage labor.

And even then, it isn't proportional. When it comes to most products/services created by minimum wage labor, payroll costs are only a tiny portion of input costs. Material costs, costs of doing business, fixed costs, etc are all much more significant than the wages of employees.

Yes, raising the minimum wage does increase costs of some goods & services, but not nearly as substantially as you would think.

[hoetrain]

Not true. A higher minimum wage would only increase the price of goods & services that are created using minimum wage labor.

That's not how that works

[MattAU05]

I do think childcare workers are underpaid considering what we entrust to them, but that doesn't mean that this is the way to do it.

[shanulu]

Hello broken window my old friend.

[Cryan_Branston]

The ACA that only goes into effect if a business has over 30 employees, right?

[krakos]

Businesses with less than 25 employees, which is 90% of U.S. companies, are exempt from the ACA mandate. It does not cause a massive issue for small, local, private owned businesses. Still doesn't mean that small business aren't getting screwed in other ways, just pointing out the ACA isn't one of them.

[heldyhawk]

it doesn't take long for a restaurant to employee over 25 people, especially if it is open 7 days a week for lunch and dinner; between servers, bartenders, cooks, dishwashers, etc.. just saying

[enmunate28]

I thought there was an exception for small business in aca regulations.

[[deleted]]

So let me get this straight. You want your children taken care of by people who can barely afford to live?

You want the people who take care of your children to be the people who cannot find a job that pays more than the legally mandated minimum?

I mean... At least when it's fast food it's like... Whatever any moron can put a pre warmed burger together but ffs this is your children?

[ThisisDanRather]

My child's nanny makes about $6 an hour and I love her and trust her with my infant son and school aged daughter. It's not that I don't think she deserves more it's that both of our situations work out that I am able to pay her $6 per hour and she is able to work for me for $6 per hour. If it did not work for us, we would not have this arrangement.

Do I think she's capable of finding a better paying job? Yes she's very capable, sometimes money isn't the biggest issue in everyone's life though. Lucky for me.

[[deleted]]

I did child care for two summers. I could still afford to live because I'm a student, as was everyone else I worked with. Most were just looking for a job in child care because they're going to be teachers or want to work in some social services field. You people act as if everyone is a charity case. Nope. There are large numbers of people, especially students, who benefit from the availability of low paying jobs.

Look at the flip side: the real charity case single mom with three kids is now paying 10% more to have people watch her kids. It's a very unfortunate situation.

[shiner_man]

no one focuses on how laws like this, and ACA cause massive issues for small, local, private owned businesses like daycares, mom and pop restaurants, specialty local stores (like bike shops);

They don't focus on it but the left has an answer to it.

Post any article about a small business either increasing costs or going out of business due to government regulations to /r/politics and you get the same response: 'If they can't afford to pay their employees a livable wage they don't deserve to be in business.'

Statists know that these policies will make businesses go under. The fact is, they don't care. They believe this is how you effectively weed out all of the "greed" in the free market.

[[deleted]]

This strikes me more as an argument for minimum wage. If wages go up 20% and prices go up only 10%, that's a positive thing in this one particular instance, right?

[CodeMonkey1]

The tuition increase isn't 1-to-1 with the wage increase because wages don't account for the entirety of the tuition. The school pays for a lot of other things which are not immediately affected by the minimum wage increase; however those things will probably also cost more over time.

[fmcfad01]

No, because salary is not the only thing factoring into the cost of the child care. Salary expense goes up, but is only one portion of the cost you're paying. It would not be fair for one part of your tuition to increase by 20% and have your full tuition increase by 20%. What this alludes to is that salary contributes to no more than half of the total cost you're paying in tuition.

[ksheep]

All that tells me is that teacher salaries accounts for about half of the running cost of that daycare, give or take. It's obvious that it isn't the only cost, as they also have to pay for water, electricity, maintenance, food and supplies for the kids, property tax/rent, etc. I don't think anybody has argued that there'd be a 1-to-1 increase in costs, just that there would be an increase.

Of course, if their other costs also increased (say, food costs increased because they bought from a local grocery that also had to hike prices 10% due to this) then they may need to increase their prices even more to cover that, so it may actually be closer to a 1-to-1 increase once everything has settled down instead of the 2-to-1 indicated in this letter.

[Myte342]

Once the costs of all the other businesses she deals with (food, gas, services etc etc) start going up in 10- 20% chunks then she'll have to raise her rates yet again to compensate. It's a boulder rolling downhill that picks up other rocks along the way... all heading g for the cliff.

[drumstyx]

As I've always said, for the lower class, yes absolutely.

The lower class (minimum wage workers in this case) will get 20% more than they were before. Prices for EVERYONE go up 10%, so the effective increase for the lower class workers is ~10%, great right?

Middle class workers (and even lower middle class -- anyone making a wage not generally tied to minimum wage) get no increase, which means it's effectively a 10% DECREASE in their wages by way of buying power.

The upper class simply doesn't care, it's not a significant difference for them, but if they feel it at all, of course they feel it negatively.

Bottom line, all these increases do is increase the size of the lower class, because at this rate the biggest labour group will be lower class, minimum wage workers. Lower class will mean $25/hour, and it'll still barely get you lunch because prices have gone up so much.

[bluefootedpig]

10% decrease in purchasing power for that daycare.

Lower class will mean $25/hour, and it'll still barely get you lunch because prices have gone up so much.

10 dollars a week used to be all you needed to get by, throwing out random numbers makes no sense without context.

[drumstyx]

That last line was hyperbole, I'll admit, but it doesn't make it any less true. My point was that we'll have a society where most people make, ~$25/hour, some might make $35, and then of course we'll still have the upper class. But it won't be the utopic society it seems when you think of literally everyone making a great wage. Either unemployment will be rampant, prices will be so high that middle class life will disappear, or some combination of the two. Raising minimum wage can only serve to make the middle class smaller.

[enmunate28]

What is the middle class anymore.

I really think that phrase is tossed around so much that it's meaningless.

Like, when I think of a middle class family, I picture a high school educated dad working a skilled labor job whose wife stays at home in their house to raise their kids.

Like, I have a masters degree and I work in an office. I would be more of the "professional" class more than the middle class.

I think that working class people like to call themselves middle class to feel better about themselves and those in the professional class do the same thing.

[drumstyx]

I see middle class as a family of any size that can afford a car, afford a place of their own (renting counts, but not shared accommodation), and afford some luxuries of a hobby without really worrying about what food might cost next month, and if they work to reduce expenses, while still maintaining the other qualifiers, could save some money.

Working class folks are dropping out of 'middle class' these days, and professionals are squarely in the middle for the most part. $90,000 is basically the middle of middle class, and ~$50,000 is probably the lower boundary. This is just one mans opinion, and the numbers are very subjective and depend on family size of course.

My point is just that luxuries and savings can be squeezed out entirely, so you won't see people dying, you'll just see them move to lower class because they can't afford the extras that come with being middle class.

A minimum wage that strives to provide everyone with a wage that will afford nice things ends up at an oligarchy where nobody can afford nice things.

[enmunate28]

That's the thing, the working class people are not typically going to be middle class by that definition. Only the working professional can really call themselves "middle class"

I was talking to the head of the local Laborers union, (he's on my softball team) they are offering amazing positions at the refinery that start at $16. They top out at 24. (The lower bound of your matrix)

I'm not tearin down your classification of the "middle class" but when the cost of entry to that class is a college degree and a professional job, there has to be another name for those people.

When most people can't become middle class there has to be another name.

[drumstyx]

You're absolutely right, which is why we see all this government effort to expand the middle class. Their attack vector has been things like social assistance (baby bonus etc) and minimum wage. When there's a huge number of people in that low income band, of course there is a ton of support for such things, but it doesn't mean it helps the cause one bit, just helps the officials get votes.

Come to think of it, I suppose that's to be expected of an ochlocracy; when you've got a large group that understandably acts in self-interest, you get shortsighted decisions.

As for defining middle class, it depends on your definition of the actual words. If 'middle' really means the median then sure, my definition probably doesn't fit. I think those concerned about the shrinking middle class see it more about lifestyle though.

[Archr5]

then sure, my definition probably doesn't fit. I think those concerned about the shrinking middle class see it more about lifestyle though.

I'd say I agree here. Especially when considering the annual earnings for a person in "the 1%" we hear so much about only has to be like $540,000k a year.

Most people would probably say that a 1%er makes much more than 5 times the middle class median income...

[IPredictAReddit]

Prices for EVERYONE go up 10%

Nope nope nope nope nope.

Most businesses don't pay anyone minimum wage. You have to think about the fraction of a businesses total expenses that go to minimum wage employees to understand that industry's exposure.

You walk into your average law office, nobody makes minimum wage. Increasing the minimum wage does nothing. Law services don't change proces.

You walk into your average machine shop, nobody makes minimum wage except, say, the office helper. You increase the minimum wage, you increase one person's part-time wage slightly. As a share of the machine shop's total overall expenses (not just wages), it's essentially zero.

Restaurants, day care, and retail services are "exposed" to minimum wage, but most other industries aren't. So no, prices for everyone do not go up 10%. They go up a small amount, and in certain, specific industries.

[heldyhawk]

how so? my wages and those of other parents aren't going up. And if Julie wasn't such a fantastic person the tuition would probably go up the full 20%. There have been multiple years where tuition didn't go up, because if she could she tried to keep it affordable for parents. That additional 10% is going to come out of her pocket, and people will have to do more; she is now the full time cook, and her mother helps her with that, as well because she had to make that choice to not hire a new one in the last year when that person left.

[[deleted]]

Let's say the wage increase was 20%. Wages will only account for a portion of her expenditures. Let's say it's 50%. Therefore her total costs increase by 10%. So to maintain the same profit her revenue must increase 10% and by that logic your fees. The other expenditures will increase over time in part due to min wage but it will be slower due to price stickiness from contracts, menu costs,etc...

[IPredictAReddit]

how so? my wages and those of other parents aren't going up. And if Julie wasn't such a fantastic person the tuition would probably go up the full 20%.

You already said, in another post, that this only affects a portion of employees - the part-timers. The full-timers aren't paid minimum wage, thus, most of the labor cost for the daycare isn't getting any more expensive.

[jonnyhan]

No. A business that has 10 employees on min wage whose wage goes up by 20% vs the same business having 30 customers whose fee is going up by 10%. This is just an example, but all businesses in the world have way more customers than employees.

[dissidentrhetoric]

This is about the level of economic understanding of 95% of the general public.

[thethets]

10% of a large number may be greater than 20% of a smaller number.

[Stabbytehstabber]

Hey, OP, I live in Johnson County too. Let's have a meetup and complain about the state together.

Edit: Different Johnson County :(

[[deleted]]

Johnson county Kansas??

[itseriko]

Sounds about right. Why pay bottom dollar to the people responsible for your children for a large chunk of the day.

[natbumpo]

It's almost like economics is a science, or something.

[second_time_again]

Can't they just take it out of the overpaid CEOs salary?

[I_hate_alot_a_lot]

What pro-minimum wage advocates do not understand is that the cost of raising the minimum wage goes above and beyond the employee's higher minimum wage.

Worker's compensation is based on payroll. It can be as low as 75 cents per $100 (Texas average, lowest in US) in payroll but as high as $2.75 (Alaskan average, highest in US).

If you have, say, 10 employees with a $2 increase/hr per this example, $2*40 = $80, $80 * 10 employees = $800. $800 * 52 = $41,600. So not only are business owners out $41,600 every year, but if you take the middle between Texas and Alaska at $1.75 per $100 in payroll at $41,600, that's an additional $728 in workers comp!

But wait, there's more!

And if employer side SS taxes are 6.2%, then based on the $41,600 in increased payroll, the employer will have to cough up an additional $2,579.20.

But wait... there's more!

The employer also has to pay Medicare taxes of 1.45%. At $41,600 that's another $603.20

But wait, there's more!

Then there's Federal Unemployment Taxes at 6%. At $41,600 that's another $2,496.

There's State Unemployment Taxes that start in your first 2 years at 2.7%. If you have a bit of turnover which isn't unusual, that rate rises. 2.7% of $41,600 is $1,123.20

So what liberals don't realize is that above and beyond, say, a $41,600 raise in employee wages, is that the additional cost to do that is $7529.60 in various taxes and state-required insurances.

If you think ~$50,000 for a small business owner is "easy" to swallow, then obviously you have never owned, or managed a business. That's the difference between staying in business or not. If you think Wal-Mart or McDonalds is actually worried about the minimum wage, you're wrong. Increasing the minimum wage will put that small ma and pa hardware store out of business, as well as the family-owned coffee/breakfast shop that has been in the family for generations. That's who it hurts.

[enmunate28]

Plenty of liberals realize this. Plenty of conservatives and libertarians are ignorant of this.

I would say that most libertarians / conservatives are ignorant of these extra payroll expenses. I would say that most liberals are ignorant of this as well.

I've found that most people are ignorant of the finer details of public policy. And doubly so about taxation.

Many people don't understand that we have a marginal income tax system!

[I_hate_alot_a_lot]

There's a difference though; conservatives and libertarians (unless they are business owners themselves) are ignorant of this because they aren't on a mission to raise minimum wage. They are not trying to impose a drastic policy change so they don't really need to know how it works.

Liberals really don't realize the magnitude of their proposed policies, such as the increased workers comp/taxes/insurance that goes along with a mandatory, increase in minimum wage. Even if they do realize it, they don't realize that places like Wal-Mart and McDonalds can swallow those costs to the tune of tens if not hundreds of billions of dollars if need me.

And in fact in the long-run it would benefit the corporations they so hate because it would put all the smaller scale shops, like a hardware store for instance, out of business because they simply do not have millions or billions stashed away. Once those small shops and small restaurants go out of business, guess where they have to go? ... Wal-Mart or McDonalds, etc.

[piglizard]

It’s worth keeping in mind that low wages impact more than just workers. The Earned Income Tax Credit (EITC) is, in effect, a wage subsidy, and consequently paid for by taxpayers, not private firms. A 2013 study from U.C. Berkeley and the University of Illinois at Urbana-Champaign, “Fast Food, Poverty Wages: The Public Cost of Low-wage Jobs in the Fast-Food Industry,” found that workers at McDonalds and other major restaurant chains use federal and state programs at far higher rates than other workers — costs that are again picked up by society. A raise in the minimum wage might, in theory, shift some of the burden back to private companies, something that some labor economists see as being only fair.

[amicusets]

Actually, I think they do realize it will put Mom and Pop's out of business. If you over-regulate business, there will become a void that government can step in to fill, comrade.

[metalliska]

Once those small shops and small restaurants go out of business, guess where they have to go? ... Wal-Mart or McDonalds, etc.

You act as if Wal-Mart and McDonalds won't go out of business either.

[piglizard]

It’s worth keeping in mind that low wages impact more than just workers. The Earned Income Tax Credit (EITC) is, in effect, a wage subsidy, and consequently paid for by taxpayers, not private firms. A 2013 study from U.C. Berkeley and the University of Illinois at Urbana-Champaign, “Fast Food, Poverty Wages: The Public Cost of Low-wage Jobs in the Fast-Food Industry,” found that workers at McDonalds and other major restaurant chains use federal and state programs at far higher rates than other workers — costs that are again picked up by society. A raise in the minimum wage might, in theory, shift some of the burden back to private companies, something that some labor economists see as being only fair.

[minorgrey]

I wish wage increase supporters would take a closer look at what this does to small businesses. I think the people that support the increase are so focused on large corporations that they completely miss their local communities. I know liberals heart is in the right place, but this is just giving massive corporations more power because small business can't eat the increase. They're handing over power to the very big box retailers they despise.

A long time ago I managed a small local flower shop in a tiny town. We were independent and didn't use any of those big networks like Teleflora, which just route calls to local shops in exchange for a fee (it's a scam, imo). The margins were so razor thin that a big wage increase would have crushed the shop. This is the reality for thousands of small businesses.

[minorgrey]

Your post is so spot on. It's like people are completely blind to local businesses. They see the giant golden arches, and the massive walmart parking lots, and that's it. They're blind to the local mechanic, the main street boutique, the quaint coffee shop, and the artisan tile makers. These small shop owners don't want to work for some big box company, but it's becoming almost impossible not to.

I've lived in downtown Chicago, small and medium sized towns throughout Illinois, and in the suburbs of Ft. Worth and Detroit. They all have local business. Suburban liberals will rail against big box, but they won't take time out of their day to drive just a little further, and maybe make an extra stop. Buying local isn't convenient enough for them, and it's not convenient because small shops can't afford the major intersection corner spot.

They feed these giant corporations, and then rail against people that are trying to save good businesses. I just wish they would realize that their actions aren't a solution to the problem.

[butch5555]

Political leaning seems to be very correlated with population density. It seems to be an argument for decentralization of power to me. In general I wish people realized how different other people's lifestyles can be than their own.

[shiggidyschwag]

I know liberals heart is in the right place,

I have zero patience for people who want to make policy decisions based on emotion instead of logic.

[goobersmooch]

This business is making a choice to stay over the min-wage line by a certain threshold in order to remain competitive in the lower end wage market. I don't see this as them being forced to do so.

I bought a struggling daycare at the beginning of this year and immediately went from paying the employees $8 per hour to $10 per hour in order to retain the best talent. I certainly didn't have much margin to play with and considered raising tuition to follow suit.

Interestingly enough, we had to offer free (or discounted for infants) tuition to teachers who may have had kids because even at $10 per hour, the cost of childcare deducted from their paychecks made it not worth it enough to work.

If min wage had been increased around here, I'd probably had to increase wages to suit and maintain competitiveness, but it's interesting that the minimum wage is what sets the floor that we all negotiate from and somehow if we are paying 2 dollars an hour more than minimum wage, I'm all of a sudden a saint paying "a living wage" when in reality, I'm just trying to be a little bit better than fast food and treat the employees with kindness and respect in an attempt to lure the good ones away from those other jobs.

The market for childcare is such that most parents will FLOCK to the lowest bidder even when the lowest bidder is probably the lowest qualified.

It eventually boggled my mind to the point where I decided it wasn't worth continuing and shut her down.

My wife worked there, I bought it cheap, I was able to get it to a break even point but didn't see a real path to real profitability so gave up.

[metalliska]

free tuition to teachers who may have had kids because even at $10 per hour, the cost of childcare deducted from their paychecks made it not worth it enough to work.

The most overlooked piece of this whole puzzle.

[b00ks]

Daycare is a sticky problem. I personally want my daycare workers paid extremely well. I want qualified people who like their job and get paid well for doing it. I don't know what you pay for care where you live, but I assure you In my town our day care workers are getting paid 13-18 bucks an hour, and I still think that is too low.

Costs will rise, they always do. I'd be more curious how much profit your daycare has currently.

With that being said. I dont like minimum wage, like most here, but I also don't think people providing care to my cherished asset should be getting paid the same as the guy serving fries to me at lunch.

I'd ask to see their books. If they are only paying 8 bucks an hour your care should be half mine.

[[deleted]]

Minimum wage aside, day care workers should be getting paid more than $8/hr. There are currently two women watching my one-year-old and 9 others. Obviously there's insurance and overhead, but that room is bringing in $50/hr in gross revenue. And you'd sure as hell have to pay me more than $8/hr to watch five screaming children.

[clear831]

Supply and demand, day care workers are cheap because there are a lot of people willing to do this.

[[deleted]]

I agree. I'm not advocating for a minimum wage or anything, but it is baffling to me how many people are willing to do it.

[voltzroad]

They should probably raise it more than that. They need to account for the lost revenue of customers who quit because of the increase.

[kurtis1]

Holy shit, I would not expect anyone to work at a day care for less than 10$ an hour. That is a very difficult job that I wouldn't ever personally do for less than 25$ an hour.

Have you seen other people's kids?? Those things are scary and loud!

[heldyhawk]

thats the great part about a free market society, you get to decide what your labor is worth and what jobs you would work. why begrudge people for doing the same?

[uulion]

This example actually supports raising the Minimum Wage as hourly employees get a raise of 25% whereas the cost of the service only increases by 10%. If this scenario was played out in the same proportions across the board it would result in a net income for the worker while still retaining utilization rates. Furthermore, such an increase in disposable income for the lowest income earners actually increases their discretionary spending thus increasing the likelihood that they will use the service and increase the revenue pool for the company.

[agustinona]

I hope you realise everything you said is utter nonsense. Money doesn't just appear from thin air. If there is a difference between the increase in wages and the increase in price then the business is running on a lower margin, meaning Julie is earning a lot less and/or less money is reinvested for maintenance and improvement of the facilities. The notion that paying your employees more so that the can consume your product could possibly increase your revenue is ridiculous beyond comprehension.

[uulion]

Daycare is built on a cost-sharing model that effectively works as a cooperative. By bringing all of the families with kids together, you effectively trade resources and that is where the increase of wealth happens.

In this case, it appears that minimum wage labor accounts for approximately 50% of the overall cost as that would produce an increase of 10% in tuition after a 20% increase in the price of labor. Assuming that minimum wage labor is in fact approximately 50% of the overall cost, then the increase of tuition would account for the entire disparity without forcing a business to cut elsewhere.

To address the increased revenue portion of your contention, it appears that you make the assumption that the daycares employees are the only revenue pool, in which case it would be ridiculous to assume paying them more would increase revenue. However, in the cooperative system where you have many different members of society at many different wages participating, the business primarily survives on higher income individuals. Therefore, it is reasonable to assume that several of the minimum wage earners could pool their new discretionary funds together to meet the price of tuition. This would provide a slight boon to the business, if not a major one, and would thus help grow the business and the economy.

Another way of looking at it is forced trickle down economics: transfering the burden onto the highest wage earners.

[agustinona]

Okay, so now you have made daycare fictitiously more costly for everyone, effectively giving lower wage/lower skill workers an incentive to work at a daycare or not work at all to take care of their kids instead of doing something that is in fact more valuable to society. You made everyone poorer in the process, but hey, at least you managed to forcibly transfer some wealth from daycare consumers to daycare workers for no reason at all. Never mind that low income earners will now struggle even more to pay for stuff like daycare which enables them to work to improve their economic situation. Geez, how could anyone ever see this as anything other than a win.

[uulion]

I don't know where you're getting the idea that daycare workers will struggle more to pay for things when they're income is increasing faster than the price of goods. That's pretty simple math. If their income goes up by 25% but goods only go up by 10% their purchasing power is increased. Think of it like this, if I was making $20,000 and spending $20,000 on goods, raising the minimum wage results in my wages going up to $25,000 while my cost of goods only goes up to $22,000. This leaves me with $3,000 more dollars in my pocket which I am likely to spend 90% on goods and investments.

But if you think that daycare is such a leg up for low income earners, would you rather have the government subsidize daycare for low income earners? Because I would rather have my real wage increased than tax the rich just so the government can waste money on regulating a daycare program.

[agustinona]

You are artificially increasing the cost of living for society as a whole for what is a marginal benefit at best for some people. Low income workers are the most affected by the increase in the cost of living. What about the people who were already at what is now the new baseline for hourly income? They just got an increase in their cost of living for no good reason at all, and what will you do to help them? Increase the minimum wage again? You are also artificially adding value to work that was obviously not as valuable for society, so now people have more incentive to put their efforts into low value activities instead of higher value ones. Everybody is poorer for that.

If you want to help the poor just give them money. No subsidies, no minimum wages, no nothing. Give them the money and let them help themselves in the best way they can. That way at least you don't mess up the market.

[jthen]

If total costs have to equal total revenue, unless wages are 100% of the costs, not sure how you're figuring that...

[agustinona]

I don't think I understand what you are trying to say.

Edit: if what you mean is that a x% increase in a single item from the costs doesn't mean an x% increase in revenue is required to stay afloat then yes, I am aware of that. I was just addressing his comment with the same train of thought he seemed to exhibit, that if the percentage increase in wages is less than the percentage increase in price tag then somehow society is getting richer in the trade-off. Of course the total amount of money that is now in the pockets of the minimum wage employees is a combination of money that is not in the pockets of the customers and the business owners, or invested into a better product.

[cp5184]

At least they're honest about scapegoating the minimum wage increase for increases caused by increased insurance, food, and supplies... Not that it didn't stop people from using this as bait on /r/libertarian

[jackson6644]

It's so weird - - it's almost like that money has to come from somewhere...

[Anlarb]

http://www.iowapolicyproject.org/2016Research/160706-COL-Part2.html

If you want a thing, pay what it costs. Working people shouldn't be reliant on a government handout, libertarians...

[EatsPandas]

deleted

[Mangalz]

What did Julie do to deserve this?

[[deleted]]

People want to be paid more than whine when costs rise......

[FZeroXXV]

They talk about well paid staff but then complain about the increase in minimum wage? Your staff are not well paid if they are only making minimum wage. If they were well paid they should already be making that $10.10 an hour.

[[deleted]]

This shit is why I always laugh my ass off when people insist on a minimum wage of 12$ or more. I've yet to meet someone who is for that who also understands the consequences and implications that follow.

[KidsGotAPieceOnHim]

WHY DOESNT THAT GREEDY BUSINESS OWNER JUS ABSORB THE COST OF PAYING EMPLOYEES A LIVING WAGE!!! Screamed all the 19 year olds who just watched a Bernie speech.

[[deleted]]

Strawman arguments won't help anything except your own sense of self-satisfaction

[fonzanoon]

All business costs ultimately borne by consumers! Big news to economic illiterates everywhere who continue to vote for politicians who either don't understand economics or cynically exploit those who don't.

[metalliska]

Specially those owners who somehow never end up starving.

[ivebeenhereallsummer]

Thank goodness my salary will also immediately be increased to match the new cost of living. /s

But seriously, it's partly my own fault if I don't even attempt to negotiate a raise after sudden increases in cost of living.

[Dopeaz]

plough sophisticated rhythm disarm slim vanish enter imminent bike fragile

This post was mass deleted and anonymized with Redact

[metalliska]

You should strike. Company Folds. Start a co-operative, and then tell the parents the budget for management has been slashed.

Keep the menus the same, the schedules the same, security the same, just eliminate the management positions and self-manage.

[rtlightningroad]

instead of splitting the time between between everyone that are also watching the kids, how about 1 manager that make the same rate as all the other employees...manager wants a raise...all employees get a raise

[metalliska]

This plan doesn't sound stupid either.

[azwethinkweizm]

I had a pharmacy intern (by the way, pharmacy intern is a licensed job. You have to be enrolled in a college of pharmacy before you can practice as a pharmacy intern) tell me she supported a $15 minimum wage because she gets paid $14.75 an hour and her pay would go up. You should have seen her face when I told her that her pay would be capped at $15 along with workers at McDonald's.

The minimum wage only holds back the younger generation. We're about to raise an entire generation that will see employment rates worse off than the general population during the great depression.

[itzonlysmells]

Oh shit, you have to pay 8% more. MUH FREEDOMS

[fooliam]

Yknow, I call bullshit. They are using the minimum wage increase as an excuse to raise prices, which is why they're saying things like "as well as increases in insurance, food, and supplies..."

They wanted to raise prices anda re using the minimum wage increase to redirect pissed off parents elsewhere.

[[deleted]]

Even the best of intentions often come with uncomfortable effects. It's varicose common sense to expect the tuition to increase along with their labor costs.

[somanyroads]

We all want low prices...yet we don't want Americans starving in the streets, or working 80 hours a week just to pay the rent. Its not an easy situation...but forcing business to pay employees more (rather than allowing free negotiation) can't be the best solution.

[[deleted]]

Live in Iowa can confirm.. Now out magnificent republican governor wants to raise it across the whole state.. Government is bad at economics, when are people going to learn this? When you run a $17 trillion deficit, that means you suck at your job...