Does Minimum Wage Increase Help Or Hurt The Appraisal Business?

[Overimprovement]

it is only in the marginal hierarchy of the lower paid ( those on site who do the actual labor) where increments around min wage matter. If a server makes $7 an hour now and a "station manager" or (or X title )is makes 11.75 an hour, the station manager is not not "dragged down" by the server's min wage going to $9 an hour.

If someone works/trains hard to get that promotion to station manager, that is a 68% increase in pay for being nothing more than a more valuable employee. Perhaps just more reliable. Perhaps having better customer service. Whatever. Raising just the minimum wage to $9 in your example reduces the economic value of being 'better' to a 30% increase. That is a 38% difference in effective pay.

Lets look at it from the appraiser perspective. Most here, including you, would agree that 'better' appraisers deserve better pay. The skippys whose reports have lots of errors, are far less credible, etc, do not deserve the same pay as a well thought out report done by an experienced, ethical appraiser. But your take on all this suggests you would be just as happy giving the skippy a higher rate of pay per hour of slop they put out than the better appraiser.

Let's not forget minimum wage jobs are there for a reason--they are the untrained, the zero to little experienced, etc. Why should any policy benefit them at the expense of those who have worked hard to get to where they are? Where is the social justice in that?

Should all appraisers and teachers and police officers and actors and ball players make about the same amount, regardless of quality of work output?

 

[J Grant]

"Overimprovement, post: 2896285, member: 150668"]If someone works/trains hard to get that promotion to station manager, that is a 68% increase in pay for being nothing more than a more valuable employee. Perhaps just more reliable. Perhaps having better customer service. Whatever. Raising just the minimum wage to $9 in your example reduces the economic value of being 'better' to a 30% increase. That is a 38% difference in effective pay.

A manager gets a raise by their job needing more skill or responsibility etc. But the manager's pay increase does not diminish by those making less getting their own raise . Unless the manager is a e jerk, one hopes they'd ne happy the floor workers went from $7 an hour to $9 an hour. The % increase is a paper comparisons since the floor manager did nto get a pay cut when the workers made more. If a floor manager can make a case for their own pay going up so be it.

Lets look at it from the appraiser perspective. Most here, including you, would agree that 'better' appraisers deserve better pay. The skippys whose reports have lots of errors, are far less credible, etc, do not deserve the same pay as a well thought out report done by an experienced, ethical appraiser. But your take on all this suggests you would be just as happy giving the skippy a higher rate of pay per hour of slop they put out than the better appraiser.

Not an apt comparison because appraiser fees impacted by AMC fee gouging/corrupt selection agenda in assigning work exists in its own sphere, for starters fee appraisrs are not hourly employees ..

Let's not forget minimum wage jobs are there for a reason--they are the untrained, the zero to little experienced, etc. Why should any policy benefit them at the expense of those who have worked hard to get to where they are? Where is the social justice in that?

Besides that many min wage or slightly above are trained/experienced and their labor allows a business to stay open, this is flawed paradigm, that a min wage worker earning more is a the "expense" of those who have worked hard to get where they are. Their pay is not going down because the min wage worker makes a higher per hout and chances are their pay will rise at some point as well. If the only way someone who "worked hard to get where they are" can feel good about that is by having a huge underclass of workers at poverty level that is a sick society( well loo around at our decaying cities and addiction/incaeration they are signs of sickness). Anybody who is not a complete jerk does not need to keep other people in a down position to feel good about what they have achieved or what their pay is. s

Should all appraisers and teachers and police officers and actors and ball players make about the same amount, regardless of quality of work output?

Here it is, RW pundit exhortations of fear, that a min wage rise means an upheaval resulting in...drum roll..Socialism! Venezuela ! Pro ball players will earn the same as teachers!

The USA has had min wage increases historically for decades with none of the above fear mongering came true. The fear mongering is RW paid think tank influence $ at work,

 

[Mr Rex]

Yeah, why not raise the minimum wage for those unwilling to work while we are at it? Life is so unfair, obviously its up to the government to level the playing field. Maybe that's where the idea of a flat earth came from by some enlightened LW idealogues.

 

[The Warrior Monk]

Let's examine the ND McDonalds example....
For those employees paid $11-$15/hour when minimum wage was approximately $7/hour (over 39%)....
Their buying power went up in comparison to the 39% increase in the price of the value meal they were cooking/bagging/delivering....
And the McDonalds was still making a profit....
And let's be real about this....
That McDonalds probably didn't need to raise prices 39% to cover the wage increase....
Maybe 30% or less was the break even point....
But companies are not in the business of breaking even....

FWIW, labor costs are one of the two largest expenses of any restaurant (the other expense being cost of good sold). A 39% increase hourly salary is just part of the cost; there are other costs such as various income/SS/medicare/etc. taxes that go along with it. The profit of a restaurant is far below the numbers being talked about here.Depending on the source, expect it to be from 0%-15%, average somewhere between 3%-5%. So obviously prices have to go up, and possibly significantly, depending on the restaurant's profits. Obviously that type of increase will kill off a lot of marginal businesses.

 

[J Grant]

Yeah, why not raise the minimum wage for those unwilling to work while we are at it? Life is so unfair, obviously its up to the government to level the playing field. Maybe that's where the idea of a flat earth came from by some enlightened LW idealogues.

Nobody is arguing that there should be a min wage for those unwilling to work. The-min wage is for employed workers .

Fear mongered exaggeration-..raising min wage means govt will "level the playing field"- or throwing labels around "Socialist! Dem ! Liberal! Snowflake! " shows .RW think tank dollars to influence works, because those who do this all parrot the same phrases as if brainwashed.

Can offer your reasoning without the name calling/fear mongering ?

On what basis is it good for a large segment of the workforce to make a below livable wage?

Are thriving/ flourishing areas areas where the majority of residents earn low pay or high pay?

If more workers getting higher pay in a depressed area results in them spending the $ in local areas /patronizing other businesses there, what might that mean for an area?

 

[J Grant]

FWIW, labor costs are one of the two largest expenses of any restaurant (the other expense being cost of good sold). A 39% increase hourly salary is just part of the cost; there are other costs such as various income/SS/medicare/etc. taxes that go along with it. The profit of a restaurant is far below the numbers being talked about here.Depending on the source, expect it to be from 0%-15%, average somewhere between 3%-5%. So obviously prices have to go up, and possibly significantly, depending on the restaurant's profits. Obviously that type of increase will kill off a lot of marginal businesses.

Restaurant workers getting tips are usually exempt from min wage anyway and make far less per hour. Business with slim profit margins may need to raise prices ( or innovate in their menu etc ), but that does not mean a price rise across the board for everything. Imported good made overseas are not subject to USA wage levels, those that own homes their mortgage payment will not go up etc.

A good portion of why some businesses also can not make it is the rents are too high on retail establishments. Maybe landlords will have to become more realist and lower THEIR rates. Why is it always the lowest pay who have to lower their rates to enable a business ? The many dark storefronts remaining that way are not dark beaus of a min wage, they are dark because the rent is not feasible ( and other impacts on retail )

 

[Gobears81]

Yeah, why not raise the minimum wage for those unwilling to work while we are at it? Life is so unfair, obviously its up to the government to level the playing field. Maybe that's where the idea of a flat earth came from by some enlightened LW idealogues.

Must we fall back on the mental crutch of the political party which we align ourselves with? That makes me hesitate to respond to the below, but I'm doing it anyways

A good portion of why some businesses also can not make it is the rents are too high on retail establishments. Maybe landlords will have to become more realist and lower THEIR rates. Why is it always the lowest pay who have to lower their rates to enable a business ? The many dark storefronts remaining that way are not dark beaus of a min wage, they are dark because the rent is not feasible ( and other impacts on retail )

Agreed, rents being too high is a common cause for closure, but what you speak of is a chain-reaction that will cause lower property values. If normal restaurant rents are 7% of sales, but minimum wage is increased to where they would need to be 5% of sales, the property tax base would decline without a commensurate increase in tax rates.
Different sector, but most of the economy tier hotel owners are not big-wigs pulling into the parking lots in their Porches. Rather, many of them live there full time and work 80 hours a week in some cases. There is a fine line between a profitable hotel and one with cash flow that is barely sufficient to pay its mortgage. Some of these owners are hesitant to hiring outside workers, and increasing pay to $15/ hour would undoubtedly result in many in the industry getting laid off because of this, which could set off overall declines in the hotel experience. There was an article in the paper today and a hotel owner was talking about how he would need to increase average rates from $85 to $125 to compensate for the difference in wages - that is a higher tier than economy and he could probably stand to do that if his competitors do also, but the economy hotels are often more price sensitive. This is another sector where commercial real estate would suffer, thus resulting in a decline in values and an increase in the tax base. We've also gone for more than a decade without a recession and attempting to raise the minimum wage in light of a recessionary environment would be an extremely tough sell.

 

[The Warrior Monk]

Restaurant workers getting tips are usually exempt from min wage anyway and make far less per hour.

I'm discussion the issue in terms of the the original post; i.e., not jobs exempt from minimum wage.

A good portion of why some businesses also can not make it is the rents are too high on retail establishments.

Areas with high rents charge much higher prices for food.

The many dark storefronts remaining that way are not dark beaus of a min wage, they are dark because the rent is not feasible ( and other impacts on retail )

This statement just supports the effect that the minimum wage will have on cost and business viability. Rent is not one of the two highest costs of a restaurant business, outside of very specific very expensive locations, such as in various places in Manhattan. Labor is a larger cost than rent.

 

[J Grant]

Must we fall back on the mental crutch of the political party which we align ourselves with? That makes me hesitate to respond to the below, but I'm doing it anyways
Agreed, rents being too high is a common cause for closure, but what you speak of is a chain-reaction that will cause lower property values. If normal restaurant rents are 7% of sales, but minimum wage is increased to where they would need to be 5% of sales, the property tax base would decline without a commensurate increase in tax rates.
Different sector, but most of the economy tier hotel owners are not big-wigs pulling into the parking lots in their Porches. Rather, many of them live there full time and work 80 hours a week in some cases. There is a fine line between a profitable hotel and one with cash flow that is barely sufficient to pay its mortgage. Some of these owners are hesitant to hiring outside workers, and increasing pay to $15/ hour would undoubtedly result in many in the industry getting laid off because of this, which could set off overall declines in the hotel experience. There was an article in the paper today and a hotel owner was talking about how he would need to increase average rates from $85 to $125 to compensate for the difference in wages - that is a higher tier than economy and he could probably stand to do that if his competitors do also, but the economy hotels are often more price sensitive. This is another sector where commercial real estate would suffer, thus resulting in a decline in values and an increase in the tax base. We've also gone for more than a decade without a recession and attempting to raise the minimum wage in light of a recessionary environment would be an extremely tough sell.

Different viewpoints make the board interesting (and need not devolve to name calling ) We also need to appreciate the differences between looking at issues philosophically and ethically, or their impact on society vs the political.

Philosophically, the argument might be who bears the brunt of "lower"? We agree many retail rents are too high, meaning landlords need to lower them, and may even lower more if min wages rise. So, who should bear the brunt of "lower" ,,,min wage workers kept in a marginal existence , or a landlords making 880k a year from building portfolio vs a million a year? Which group is more numerous in spending power and will support local businesses ?

If property values get lower, that may be a price correction needed, since as noted stores and buildings going dark reflect over rent charges.

Aka marginal profit business, yes some of them might be hurt. But others might be helped, and new ones open up in an area as the increased $ workers earn are put back into the economy. If more workers spend more and boost economy that is the opposite of a recession...but the increase would have to take place and then as some say, watch the market adapt.

We know what keeping min wage low has resulted in and that is a sluggish economy whose only means of goth becomes stimulus, such as lowering mortgage rates or a tax cut for business- both of which are short term and ultimately run dry. A large segment of people under earning at all levels not just min wage (but it starts there) under earning at all levels means money not being put back into the local economy and the many local economies becomes the national economy , which stagnates until it gets another artificial stimulus, which is often tacked on to the deficit

 

[J Grant]

There was an article in the paper today and a hotel owner was talking about how he would need to increase average rates from $85 to $125 to compensate for the difference in wages - that is a higher tier than economy and he could probably stand to do that if his competitors do also, but the economy hotels are often more price sensitive.

This is an example where businesses might have to innovate - such as in many cities now very small hotel rooms are popular, they can divide a segment of larger rooms into smaller econ price rooms, also try short term hourly or day rates (not for nefarious use but travelers between flights etc ) or offer a meal service etc.