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Employment AND Revenue UP with $15 NYC Min Wage

I’ve said before that the issue of the minimum
wage is a complicated issue. I’ve been asked before, would a $15 minimum
wage nationally be good or bad for the economy? And the truth is that a lot of the answer
depends on where you are measuring, whether it’s good or bad for the economy. And I’ve said this before, um, you know, we
could stick to talking points on this show and do black and white stuff. Like everything is either very good or very
bad. It’s all good or all bad. That’s not the reality. Okay? So when we think about a $15 minimum wage
in lower cost of living places where a $15 minimum wage might be doubling the prevailing
minimum wage, there could be negative effects in some ways in terms of the destabilizing
effect that that could have on the local job market, et cetera. That’s a reality. On the other hand, in high cost of living
places, a $15 minimum wage may not even be enough, number one. And number two is unlikely to hurt the economy
relative to how much it will help people afford their day to day lives and inject more money
into the wallets of workers. So we’ve got to be thoughtful here. There are some who say raising the minimum
wage has no negative impact period. That’s not true. I mean that’s just not true in all cases. Of course, there are people on the other side
who say any increase to the minimum wage causes layoffs, it causes business closures. It will blow up the cost of everything because
businesses will just raise prices in order to account for that. But of course, that also isn’t true today. We have a new case study from New York city. New York city raised the minimum wage to $15
an hour a year ago. The restaurant industry, which is one of the
ones that is often the focus, uh, of minimum wage increases. The restaurant industry is doing really well
in New York city. Despite this, New York city restaurants have
seen increased revenue and they’ve also seen increased employment. Now, the way they’ve done it is that prices
have gone up slightly at New York city restaurants, detractors of the minimum wage will immediately
say, Whoa, Whoa, Whoa. You raise prices. Customers will stop going out to eat. The businesses will fail. They’ll have to fire everybody, and the minimum
wage increase will backfire, hasn’t happened. And you know why? Prices don’t have to go up very much. Imagine that the minimum wage goes up, for
example, 8% uh, and imagine that restaurants account for that by increasing food prices
by 8%. Now more than likely, they wouldn’t because
the labor costs are only part of what it costs to run a restaurant. So an 8% increase in wages would not even
require an 8% increase in prices. But okay, imagine that wages go up 8% food
prices go up 8% a $10 burger becomes a $10 and 80 cents. Now, I’m not going to write that off as nothing,
but for most people, you’re not going to go out to eat a different number of times because
the burger goes from $10 to $10 and 80 cents. This is the reality. I don’t want to be insensitive. I don’t, I’m not ignoring that. 80 cents on a $10 meal can be meaningful to
many people, but the reality is that for the most part, you’re not going to drastically
change your habits if your burger goes from $10 to $10 and 80 cents but on the other side
of the ledger, everybody who works at the restaurant and gets a raise because of that
minimum wage increase now has more money to go out to other restaurants and to patronize
other businesses where they live. That is hugely stimulative to the economy
overall. Now, there’s no question that if the New York
city economy starts to fail, because it’s been a strong economy in New York city for
the last year, if the New York city economy starts to fail, it will be bad for lots of
people. It’ll be bad for restaurants. It’ll be bad for their workers, but in the
economic environment in New York city of the last year, the minimum wage increase has been
a very, very positive thing. Now, there are also trickle up effects to
having better paid workers other than just they have money to spend at local businesses. They are happier, they have a higher standard
of living and thus are providing better service, which is good for the businesses. They may be able to afford living closer to
work because they can afford it, or having a more reliable car to get to work becomes
economically within reach, which makes them more reliable workers and helps the business. So it’s really important to think about these
changes systemically rather than myopically. This is not to pretend that the minimum wage
can be increased endlessly, but no one is proposing that this is a very common red herring
on the right where they’ll say, listen, if $15 an hour is better than 10 why not make
the minimum wage $25 an hour or $100 an hour or $200 an hour? Then everybody will just have tons of money,
right? Liberals will hold on a second. $100 an hour is not an equilibrium wage. $100 an hour is not a wage. That is the logical living wage based on the
cost of living of any particular place in the United States of America. It is a distraction and it’s really important
not to fall for it. So my sort of view on the left discussing
minimum wage increases is number one, don’t let them set the talking points that we have
to argue against with stupid stuff like, uh, make the minimum wage $100 an hour if you
just want people to make more money, that’s stupid that that’s not even worth discussing. But let’s not be the ones that pretend that
there is not another side to the ledger. A minimum wage increases have effects. They have trickle up effects and they have
trickled down effects. We don’t have to pretend that there’s no risk
to a minimum wage increase to be able to justify it as the right policy in many cases and in
many instances. That’s the approach. I think that the left should have and the
more informed we are a about studies case studies like the one we see in New York city,
the better we will be able to defend the policies that we want to see. Let’s take a quick break. Make sure to give the David Pakman show like on Facebook at pattern
show, very quick break and back with much more right afterwards

100 Replies to “Employment AND Revenue UP with $15 NYC Min Wage”

  • Let me pose a real question here, how much of the success of the restaurants is from just increasing prices and how much is from the drop in the federal tax rate for businesses? Especially since the tax break worked across the entire supply chain for the restaurant….

  • In my opinion the minimum wage should be set by an independent body that is outside the control of the Government, who set the minimum wage based on the average cost of living (including all bills, rent/mortgage, food, electric, gas, water, tv, internet, cell phones, car, etc) and leave at least a third of disposable income (to be saved or spent on luxury items or a holiday) adjusted by the body only in one direction (it can never go down only up), government can only debate whether factors should be added into the calculation (or removed if no longer relevant)

  • Great argument! I agree that "80 cents isn't nothing" when talking about a price increase, but it is nothing to the people who make a living wage. Who cares most about that increase? The people who now have more money thanks to a minimum wage increase.

  • What is omitted is that hours are being cut , thus people are losing benefits since people are no longer full time. so way to go leftist.

  • FEDERAL MINIMUM WAGE should be $10. Nevertheless, STATES with HIGH COST of LIVING should increase the MINIMUM WAGE accordingly.

  • McD's. says "If you raise the min. wage to $15 we will replace workers with 'Burger making machines".
    Bullshit..!.. If there was a machine that could replace workers, they would already have them.

  • My question is if people will make say $5 an hour more then do the rest of us get a $5 bump as well? I'm great with a higher minimum wage but if if the idea is that everyone deserves better wages won't we ALL be entitled to a similar raise?

  • Ugh.. dear humans. If you wanna live in a consumer based society that requires you to buy shit to keep the world turning.
    Hard to keep the world turning with greed and selfishness bringing it to a haunt…..

  • rentiers will just steal it again/as usual. and the poor are being priced out of major cities.

  • If you get paid minimum wage you need to become more valuable. Look at Amazon they raised it and now only give 32 hours max.

  • It works for retail but for people that needs services like caregiving, like retired seniors who now has to pay caregivers $15/hr out of pocket, its pretty tough. Which brings me to my next point, medicare needs to pay for long term care which should include private caregivers and rcfe.

  • Sure, but also how are ya gonna get private companies to raise the minimum pay rate too ??????? Biotech company’s starting salary is 17-20$/hour for someone with a college degree….kinda feels like you’re going to college and spending $100k+ but only end up making a few bucks more than someone who doesn’t even have a college degree at all😭 which is still not enough to get by🤷🏻‍♀️

  • By the time we get the national wage up to 15 the cost of living will be 20 or 25. It's such a slow bullshit process. Wages need to be higher. If you can't pay your employees a fair wage then your business doesn't deserve to exist. Full stop! I'm a low level supervisor at a popular worldwide chain. This company makes bigtime dollars and they pay their employees shit. Wages need to go up and be tied to inflation. This is nuanced as the cost of living in for example San Francisco is going to be higher than Dayton Ohio, but what we have now are bandaid wages on machine gun wounds.

  • I understand that to some people $15 an hour is a lot of money but it's not in many places in our country I live in Seattle I don't own a house but I'm doing reasonably okay if you make $25 an hour in Seattle you could get by but you're not going to have some type of grand life

  • As an Emergency Medical Technician in CT for 7 years I literally helped save people's lives while making $14/hour to start. Paramedics, the next higher level of care on an ambulance, started at $18/hour. Wages have only minimally gone up since. The person who comes to save you when you overdose or get shot or fly through your windshield on the highway is barely making enough to scrape by paycheck to paycheck.

  • Try this in a small town or a smaller city. NYC has tourism and high salaries to sustain growth. One of the wealthiest cities in the country is not even close to being a good representation of the rest of the country. According to the National Bureau of Economic Research, Seattle which implemented the $15 min in 2014 saw an overall loss in hours and entry level job growth started to lose pace to the state average since the change by 10%. Places where a $15 min would not result in negative consequences are rare to say the least. Just go a mile above NYC and you'll see what I mean. There is a reason why the state min for NY is $11/hr not $15/hr.

  • ur probably the only honest progressive out there, finally someone at least admits that an increase in minimum wage on a low cost of livng state would be detrimental, thats why it should be done state by state, a federal 15 min wage is a really bad idea cause not all states have the same cost of living.

  • I wonder if the optimal wage isn't at the point where people start working fewer hours. I've heard a lot of talk around the Andrew Yang campaign about whether the Freedom Dividend would disincentivize work. Disencentivizing work isn't a completely bad thing. There would be a lot of benefits to a 35 or even 30-hour workweek. In the past, people thought that the workweek would continue to decrease. Of course, Yang's FD is another possibly compelling piece of getting there.

  • This is an issue that need to be resolved by each state. Federally, it doesnt make sense to have a blanket rate for the whole country. $15 in LA isnt the same as $15 in NY or Miami where i am, for example. Let each state handle what the minimum should be. Here in south florida, i think a $10/hour should be the minimum rather than $15 in my humble opinion

  • The most effective stimulus is not a tax cut for the rich or anyone else. A raise in the minimum wage is.
    For a decade I have noticed that minimum wage workers are paid just enough to show up but not enough to care.

  • #AndrewYang2020

    Minimum wage is senseless if people are being let go from their jobs due to automation.

    Forcing employer to pay minimum wage will just push them sooner to automation.

    Minimum wage does nothing for caregivers, old people, disabled people, stay at home mom's.

    Freedom Dividend, Universal basic income, give the people the actual increase in livelihood. EVERY ONE OF THEM.

  • Even David is misrepresenting the effects of minimum wage increases. Prices go up with MW increases in direct correlation with the amount of human labor involved in producing any good or service. Prices of milk, eggs, cheese, etc.. require much less human capital than does something like a massage. So a 100% increase in minimum wage doesn't necessarily correlate to a cheeseburger costing 100% more.

  • By you saying that $15 minimum wage is good in some places while bad in others, straight up answers your question whether NATIONAL $15 minimum is good or bad! You have just proved that it is bad on the national level! Stop pretending to be nuanced when you are too intellectually lazy to think through your arguments.

  • Most people live in high cost of living areas like the northeast or southwest so I’d say a higher minimum wage is a net gain for society

  • Back when the minimum wage was implemented, it was designed to be enough money for just 1 man to live off of AND support a family

  • If an 80 cent increase on a burger causes you to change your habits due to financial considerations you probably shouldn't be eating out anyways. Cook at home.

  • Of course decent wages are practical. But the key to a liveable paycheck is universal trade unionism. That makes many first-world citizens very happy. Sweden doesn't even have a minimum wage law. You pay union scale or you don't do business.

  • The thing to keep in mind is that store managers have X number of dollars to spend on wages per week. If they go over that budget, they get into trouble. To pay workers a higher wage, they would have to either cut hours, cut the number of workers, or get an increase to that budget. It’s simple math.

  • prices go up rather routinely even without wage increases food packaging hides prices increases in some cases: 12 slices of cheese say can be 12 thinner slices in a new package and the prices goes up along with that packaging…my point is an argument that increasing the minimum wage is deleterious overall is just over reaching capitalism

  • With $15 cocktails… minimum wage in NYC should be atleast $15. And guess what, more ppl can afford a drink. No shit the nyc economy is doing better

  • 3:39 Seems to me it doesn't make a difference in how many times David Pakman would eat out at an increased cost of $1 for a meal. For the majority of Americans (who are poor) that is meaningful.

  • Make more you spend more, that's common sense. If my regular meal at my favorite restaurant went up 50ct I'm still getting it.. I mean come on..

  • There is always an increase in costs not only with minimum wage increases but often times with just the mention of them. As soon as big market areas McDonald's called for a $15 minimum wage our McDonald's started raising prices and yet the minimum wage never increased and McDonald's posts record profits.

  • UBI solves this problem and then some….. Why do you make it so hard people? UBI is like an 8 dollars a hour raise after tax. Consumers with more money spending power should generate more business. Then the business might give you a raise, if they don't you have a foundation to stand on to leave, go back to school, or if you get sick.

  • Its simple just get rid of income tax and end the FED. Going back to the gold standard so the banks can't deflate the value of the dollar which is why everyone is fucked now.

  • I am going to give you an Australian experience where high wages for fast food workers it’s not helping as the costs of wages is high and it has a flow on effect to 401 k and hiring younger

    Prices reach a point and customers go to
    Maccas rather than cafes

    So it’s a race to the bottom and you want to make business owners wealthier so they can employ more

    In Australia I am telling you it sounds good in theory in reality it’s not working

  • Trickle up is like water it only trickles down so start with the owners who are struggling and can’t pass on wages increase

    Trickle up is a fallacy

  • We have much better computers and access to data. Just divide the revenue of a company based on role. Half to the very large number of workers, and half to the smaller group executive management. So everyone has incentive to make the best choices to make money at every level. A fixed value isn't the right answer as it isn't based on the success of a business. Meaning if you move up the ladder your choices matter more and success is rewarded across the company. It may take significant efforts, but it's not like they aren't already doing all this math every quarter already. Sure everyone's pay will be based on the last quarter. But the result will be fair to each level of employee. I'm not going to tell the management layers how to slice that, I think it will need to depend on the nature of the business.

  • Adjust for inflation from the 1980s the minimum wage should be 12 per hour. The 15 dollar minimum wage is proposed for 2025 meaning slightly increased until that year giving companies time to adjust

  • Well according to the local newspaper where I live to be able to afford the cheapest apartment in my city I need to make at least $18 an hour, 15$ is a good start but It doesn’t do much for a lot of people honestly.

  • Henry Ford has the right idea.I pay my workers a decent wage so they can buy my cars.If people had a decent wage more money would flow into the economy.

  • You don't account for the fact that when you force companies like Walmart to raise their minimum wage they have more insensitive to push for Automation and $15 an hour isn't going to solve the problem if you are replaced by kiosks and other robots.

  • The UK has a minimum wage, London has a living wage. If $15 is not enough NYC could have a living wage. And there is nowhere in the US where you can afford to live on the minimum wage, even in $8 wage states.

  • Economics works at a local level. If people in the area have money to spend then they spend locally Amazon being i California doesn’t exactly effect my income in texas. And if u get rid of corporations like walmart in some areas than it leaves room for local economies to grow on their own terms with their own workers providing services locally. Its simple in concept. Thisbis the problem with big corporations having tax breaks. Thwy move in cause local businesses to fail and everyone who used to have a business and living income now makes 10$ hour workin at walmart. But WALMART N CNN N FOX WILL SAL 0% unemployment the economy is booming. No it isnt. Everyone makin 10$ hr and local coats are riaing because they are covering for the taxes that walmart isnt paying. See how it works

  • Our $10 burgers would have their prices hike well over eighty cents in states where the state minimum wage is less than the federal. It would cost restaurants over double to pay for their server staff and some of the kitchen staff.

  • He should really mention the three way business increase the value of their companies.
    Investing in their employees, investing in automation and insider trading

  • Raise the CEO/Executive pay by millions.. no one says a fucking word. Raise workers pay and everyone thinks the sky will fall and the world will collapse onto itself.

  • What's so impractical about it to people?
    Why do so many low-paid people care about the overall profits of companies like this?
    Why aren't people more concerned with living wages, even if they're already making living wages themselves?

    You want to know why millennials and younger aren't going to be able to live lives similar to their parents? Because we have debt, prices are inflated, and people are concerned about paying employees too much money…

    For me, a $15 minimum is a $1 raise, and that wouldn't be making all that much of a difference realistically… student debt, credit card debt, rent, utilities, food, raising a kid… a $15 minimum would be fantastic for me, but it wouldn't be life altering.
    I still want it.

  • $15 minimum in NY is not a great example. Easier to do there since going out to eat is very frequent throughout the week vs a small town in midwestern states where going out to eat can only happen 2-4 times per month. $15/hour can be devastating for a small mom & pop operation

  • The Amazons and Walmarts of this country love the $15/hr deal, they can afford it
    – no problem. You know who can't? They're competitors! This will solidify their monopoly, Bernie!! Not only that, they just cut hours! Bernie couldn't see this coming?!!

  • This guy obviously has no clue how a business is operated. If minimum wage goes, wages is not going to be the only expense increase to employers. He forgets payroll tax contributions, workman’s comp, and supplies/inventory will all go up because expenses will also increase for vendors. A 10 dollar burger will probably cost about 12 dollars. Some will survive but mom and pops and a lot of small businesses will become extinct. It will take more than one year to see the demise.

  • David's basically saying argue nuance and know what you're talking about. This is great for people who care about facts or logic, but there's at least 30% of America that doesn't.

  • Lol..really..? Try living on $15 an hour and tell me how that works out for you. The minimum wage should have been $15 an hour fifteen years ago.

  • #yang2020 consumption VAT/Freedom dividend doesn't put the burden on the business, pulls the money out of the largest tech companies striking it rich on automation instead and is essentially almost a 6 dollar per hour raise for everyone in America!

  • I am 50 and seen the lie they spewed in the 1990s min wage was 3.25 in 1990 you could buy a burger at mc donalds for 99 cent now the min wage in 8.50 and i still can buy a burger at mc donalds for 99 cent now if it is raised to 15 will it still be 99 cent idk and dont care becuase i dont eat at mc donalds but i have seen the bill boards driving home to cook my own burger

  • In a vacuum of course $15 min wage is good, but when UBI plan like Yangs could be an option, i would take UBI with current min wage. Anyone making $15.01 an hour or more will not be helped by a $15 min wage. Anyone making around $9 an hour or more will be helped more by Yangs plan when looking at take home pay (1k a month is around $6 an hour). No one should work full time and be struggling to survive

  • I usted to live in a small county in alabama with a few small towns in it. There are no Jobs around except a couple of factories that barely pay you 11 dollars an hour and lots of fast food and retail stores, most ppl I know that still live there they work out of town or out the state even. I dont know how the 2 factories would fair with the increase but in general the whole county would benefit tremendously it'll change the life of the whole place.

  • A business that requires an un-livable minimum wage isnt a sustainable business model.

    It's labor theft.

    The wealthy (including upper middle)need slave labor to maintain more than they need.

    Billionaires have them on leashes,in fear of taxes,
    they can all afford.

  • It's very easy to debunk the "$100 minimum wage" nonsense. Theoretically, of course it would be possible to do that, it would just turn the US dollar into the Iraqi Dinar. Moderate increases of the minimum wage will not lead to drastic levels of inflation which would substantially reduce the value of the dollar. Simple as that. Think about the minimum wage like water or medicine: it's a good thing and everyone needs it to survive, but at some point an obscenely high amount of it will cause more detrimental effects than positive ones.

  • Raising the minimum wage is plain retarded. If you studied the most basic economics you would know that when the minimum wage goes up amount of workers in that company goes down basically meaning that it doesn't affect large corporations but effects working people. Also when you increase minimum wage it short hands small businesses basically forcing to close so you're just left with less local businesses.

  • In Washington I remember the results were more mixed, while in New York it is more positive. Here in New Jersey it will take until 2024 before min wage increases to $15, but we are doing it across the whole state and not in a major city. My general stance is that there National Min wage should be $10.50, the State min wage should be $12, and the local min wage should be $15. However, as we are entering uncharted territory, then I'm willing to change my stance when we get new information.

  • It's working really well here in Seattle. Even made going out to cafes and diners a little better. A lot of them don't take tips now.

  • it's just a start, this minimum wage needs to be adjusted 1 or 2 years to keep up with inflation.
    In NZ, it is constantly reviewed and adjusted by the department of labor regardless of who is in political power.

    Before you cry out, 'it's bad for companies', let me explain;
    This will make companies to assess expenses much easier because it is based on a formula, not by election.
    Also, it will future proof income inequality when $15 per hr is no longer sustainable.
    This is dead horse by this point but here it goes; workers are costumers too-if they have more money to spend, more money company makes.

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