Does Minimum Wage Increase Help Or Hurt The Appraisal Business?

[Terrel L. Shields]

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

Interesting point. I would argue that the most livable places are places were wages are low, outside a major metro area, and where crime is lower, insurance lower, and taxes lower...i. e. - the Rockies, desert SW and Texas, deep South, Ozarks, upper Midwest...

You are always criticizing Walmart but lots of Dollar General workers quit to go there. And hdq. pays as well or better than most of the vendors selling them goods.

 

[J Grant]

Interesting point. I would argue that the most livable places are places were wages are low, outside a major metro area, and where crime is lower, insurance lowered, and taxes lower...i. e. - the Rockies, desert SW and Texas, deep South, Ozarks, upper Midwest...

You are cherry picking those places and chances are many there own their land or homes and also have good rates of employment . Lower wage places if there is a balance in housing costs or people own land or houses can indeed be pleasant but most low wage areas are riddled with problems and despair/crumbing housing stock lots of transient rentals etc. Anyway it is quite a task to solve all social and economic problems on a bb!

 

[Terrel L. Shields]

but most low wage areas are riddled with problems and despair/crumbing housing stock lots of transient rentals etc.

Their problem is no jobs not low (paying) jobs. And you describe the slums, not what is available. When Hurricane Katrina flooded out NOL, many refugees were taken in NW Arkansas. Many stayed. They found a job, a life, a home. A few returned. One teacher told me that a 7th grade boy cried when he told her his mother was moving back. He didn't want to go. He had made remarkable progress in two years, loved school and dreaded going back to their hell hole in New Orleans. Bad choices is no reason to shower people with unearned money.

 

[The Warrior Monk]

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

People make the mistake of conflating "minimum wage" and "liveable wage."

I worked in fast food for years while I was in college. The employees generally consisted of high-school kids and college students, and mothers earning supplemental income. NOBODY outside of management considered their jobs career, and NOBODY thought they were earning a livable wage. EVERYBODY knew it was spending money on the side or supplemental income. The concept of a minimum wage being a livable wage is a idea that was recently created.

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

My main work area is in an interesting example. It's a high pay area, as the money is coming from Wall Street, investors, etc. Minimum wage isn't even a consideration for anything. Maybe some high school kids at mom and pop shops are being paid that, but nobody else is. Increasing the minimum wage won't really do anything, other than if the wage floor is raised elsewhere, it will also be raised here.

The market dictates the prices. I don't know the only McDonalds in the area is paying now, but they were pay $10 plus benefits 20 years ago, because they could not attract workers for less than that. I wouldn't be surprised if it is nearly double that now, due to the overall pay increases across the board for the overall service industry. But this much higher than minimum wage/significant wage increases hasn't really changed anything. The people at the bottom are still struggling, their purchase power in the area hasn't increased, etc. as expected.

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?

Plenty of examples of that everywhere for all time. Workers make more money, and the prices of everything increase, as expected. I don't every think I've seen an example of simply paying people more money makes them richer; i.e., they have more money, everything else in the market remains static.

 

[J Grant]

Their problem is no jobs not low (paying) jobs. And you describe the slums, not what is available. When Hurricane Katrina flooded out NOL, many refugees were taken in NW Arkansas. Many stayed. They found a job, a life, a home. A few returned. One teacher told me that a 7th grade boy cried when he told her his mother was moving back. He didn't want to go. He had made remarkable progress in two years, loved school and dreaded going back to their hell hole in New Orleans. Bad choices is no reason to shower people with unearned money.

Min wage is earned worker money, not unearned money. Workers earning more $ per hour have more to spend locally and can thus create jobs in a depressed area where jobs are lacking. There are many social issues related or riding along with this and one can point to numerous places, there are rural depressed areas as well as urban slums.

I assume the better faring rural or semi rural you refer to have a high rate of stable home owners even if the homes are modest and small farms with some low wage earners not affected if they own their own home or live in family home or supplement with farm income

 

[J Grant]

David. Workers make more money, and the prices of everything increase, as expected. I don't every think I've seen an example of simply paying people more money makes them richer; i.e., they have more money, everything else in the market remains static.

Really? Since every working and professional person from low to high strives to be paid more in order to become richer.! Being paid more is what makes people richer ( along with saving or investing a portion of it. )

There is a difference as you say min wage or living wage, at Lower rung either one is not so much about richer but about survival without dependence on food stamps or living in a roach motel...prices don't rise across the board overnight thus people paid more still come out ahead, otherwise nobody would want to be paid more and everybody wants that at all levels of accomplishment

 

[Terrel L. Shields]

assume the better faring rural or semi rural you refer to have a high rate of stable home owners even if the homes are modest and smal

I work all over the state of OK and AR. Jobs are often scarce or specialized in very rural areas. So oilfield workers make good money. School teachers are not paid well but you can live on it. In rural areas many teachers cannot find jobs unless science or math. So a waiting list of teachers exist. But turnover is low, rents are low, and jobs comparatively relaxed. Chronic issue for farm men is the lack of women especially in W. Oklahoma. Many women get a degree and move to a large city. You have a lot of single men and some have resorted to mail order brides. Someone told me they married a woman from the Philippines but many liked Russian or Ukrainian brides because they often came from rural areas.

 

[Overimprovement]

People go to school, get extra training, work hard at providing good service, etc mostly in an attempt to earn more money. The thought is that the economic rewards of that extra school/training will outweigh the economic costs. When an individual (however they come to this conclusion) decide that this is no longer the case, they are being dis-incented from pursuing additional avenues of economic betterment. They will simply stay put. The greater the % of individuals do this, the weaker this country becomes.

I alluded in my first post that a high ($15/hr has been bandied about) minimum wage may actually HELP appraisers. Why? For this exact reason.
If a high school graduate can stumble out of bed and go make $15/hr with bennys somewhere, why on earth would they want to make LESS than that for the next 3-5 years getting the needed experience/education to become certified? So this will disincent quite a lot of people from entering this field.
Also, the hybrid/bifur model that has so passionately been discussed in other threads takes a hit, because now that very cheap labor is not available. No one is going to do these things for $30-$50, because after gas/vehicle costs, they will be making less/hr than just working at Walmart, again with full bennys to boot. So this would possibly benefit appraisers too, because it either makes the hybrid model unviable (the lower the cost savings, the less attractive it becomes), and/or makes the going rate high enough so that appraisers may find it something to consider after all.

Any of us who doing mortgage appraisals are competing with skippys and form-fillers. They are getting paid the same as us for many assignments. How does that make us feel?

Lets not point to the AMC model as the culprit either. The AMC is NOT the client, deciding the acceptable quality level. It is the lenders.

Is is nothing but hypocritical to criticize those against a large minimum wage increase, while over on other threads decrying that we are getting paid less than we deserve as appraisers. Its the same economic principles at work! Comparing two people, the quality/quantity of their work, and the amount they are getting paid. Nothing more, nothing less.

 

[The Warrior Monk]

Really? Since every working and professional person from low to high strives to be paid more in order to become richer.! Being paid more is what makes people richer ( along with saving or investing a portion of it. )

There is a difference between simply being paid more money, and actually earning money. If there is no valued added by simply paying people more, than nothing chances. Simply paying people more with not value added is simply inflation, and a zero-sum game.

There is a difference as you say min wage or living wage, at Lower rung either one is not so much about richer but about survival without dependence on food stamps or living in a roach motel...prices don't rise across the board overnight thus people paid more still come out ahead, otherwise nobody would want to be paid more and everybody wants that at all levels of accomplishment

I can't speak for all areas, but as far as social programs go here, they actually discourage people from working. Just housing and health insurance for a family alone is going to cost $50K, and that's before you spend on a dime on everything else. Raise the minimum wage to $25 an hour and there is still no reason to go back to work.

 

[ucbruin]

If you asked the average paid Americans if they would work 5 hours for $300, I'd guess the majority would say yes....

Except for AF member appraisers....