Does Minimum Wage Increase Help Or Hurt The Appraisal Business?

[George Hatch]

The idea that "money is no object" is a cruel hoax that's perpetuated by the medical miracle-of-the-week dramas they play on prime time TV. IRL money does matter, costs are a barrier to getting everything we want, and people do compete with each other in order to improve their quality of life.

Agree.. However, people compete with each other within their own economic sphere and their own profession,, they don't compete with people outside it. I compete with other appraisers and so do you. Neither you nor I compete with heart surgeons making a million a year and we don't compete with a fast food server making 18k a year. We can compare ourselves to them but we do not compete with them.

In the apartment example I used (2 applicants for an apartment) the competition I was referring to was not between co-workers. It was between two consumers, one having more purchasing power than the other. Competition does not occur solely on the supply side; it also occurs on the demand side.

The minimum wage in my state has increased by an average of 3.2% per year between 1998-2017 (which is the most recent years reported for median incomes in Calif). That was nearly .4% more *per year* than the 2.82% average rate of increase in median household incomes during that same time frame. And the minimum wage has further increased another 14% since 2017. I don't know what the median household incomes in Calif for 2019 will be but I think its safe to say it won't be 14% higher than it was in 2017.

Meaning, MOST incomes in my state have not been keeping pace with the increases in the minimum wage.

 

[The Warrior Monk]

Not aware of any minimum wage jobs that provide health insurance.

That's because minimum wage isn't supposed to be a living wage.

Yes, healthcare is a cost of employment but it is getting rarer and rarer.

And the reason is that it is WAY too expensive; the trajectory of health care costs is out of line with other expenses, and all but the largest companies can't absorb it. So the costs are supplemented elsewhere.

 

[Pittsburgh Pete]

That's because minimum wage isn't supposed to be a living wage.



And the reason is that it is WAY too expensive; the trajectory of health care costs is out of line with other expenses, and all but the largest companies can't absorb it. So the costs are supplemented elsewhere.

It is expensive but if it were "WAY too expensive" I wouldn't have provided it for the past 30+ years.

 

[Carnivore]

Not aware of any minimum wage jobs that provide health insurance. Yes, healthcare is a cost of employment but it is getting rarer and rarer.

I don't know of any fast food or other min. wage employers either EXCEPT one, that Fast Food offers Group Health Insurance to employee that can participate in at the group rate but paid by the employee. Thats not to bad all things considered. The Anecdotal evidence I have is I know a lady who works fast food just for the health care group rate plan because her husband does not have that benefit where he works. It does not surprise me how important health care coverage is to people at the lower income rungs of society. How do I know! Because in my youth, my family was near the bottom of the rungs, My father was never unemployed, he never would accept dot gov help, called it prideful, call it what you want, that was just him. He was a farm boy in his youth in western PA.

otherwise I agree with you, because your a small business owner(I presume) Large Corp's use the Group Cadillac plans to attract and retain talent. Plus since they are a large purchaser they get a good group discount, especially since the Corp Pays the premium not the individual, OTOH many medium/small Corp's don't offer Health Insurance below a certain pay scale. Never understood that thinking.

 

[Terrel L. Shields]

Labor competes with labor saving devices. When labor becomes too expensive, it is replaced with a machine. The job disappears. And one skilled person to run the machine in place of many unskilled workers, even cheap illegal labor, and that skilled labor is paid more. What cannot be replaced is judgment and wisdom.

 

[The Warrior Monk]

It is expensive but if it were "WAY too expensive" I wouldn't have provided it for the past 30+ years.

This is too non-specific to mean anything. It's like saying I provide rocks to my employees. Well, is that rock a piece of coal that feel or a truck or a diamond?

I do know appraisers that provide insurance to employees of their firms. Per conversations with them, many still offer coverage, but have cut back on the amount of coverage due to cost.

 

[J Grant]

In the apartment example I used (2 applicants for an apartment) the competition I was referring to was not between co-workers. It was between two consumers, one having more purchasing power than the other. Competition does not occur solely on the supply side; it also occurs on the demand side.

The minimum wage in my state has increased by an average of 3.2% per year between 1998-2017 (which is the most recent years reported for median incomes in Calif). That was nearly .4% more *per year* than the 2.82% average rate of increase in median household incomes during that same time frame. And the minimum wage has further increased another 14% since 2017. I don't know what the median household incomes in Calif for 2019 will be but I think its safe to say it won't be 14% higher than it was in 2017.

Meaning, MOST incomes in my state have not been keeping pace with the increases in the minimum wage.

The base floor of min wage is so low that a percentage "raise " of it is still not a comparison (imo)$.

Regarding consumers competing with each other, I do not conceive of it as any broad competition because those with more purchasing power typically do not shop for or choose the cheaper products and services the lower earners are buying, and the lower earners can not afford more expensive goods or services. A person earning 100k a year looking to rent a luxury apartment is not competing with the person earning 30k a year looking to rent a modest half duplex unit.

Meaning that it still comes down to competition between similar income earners rather than disparate ones.

 

[George Hatch]

Going back to the apartment example, if a minimum wage earner and their higher-paid co-worker are competing for the same apartment, the higher paid employee has an advantage in the form of more income with which to achieve their desire. More "leverage" in the market.

I don't know why you're going to such lengths to dispute the obvious.

And just as the principle of substitution has us bracketing our subject with alternatives at both ends, the lowest do compete with the highest even if it is on the oh-so-indirect basis. If there really was NO connection in the competition for resources in the market there would be no basis upon which to complain about the evils of income inequality and the 1%.

 

[The Warrior Monk]

Regarding consumers competing with each other, I do not conceive of it as any broad competition because those with more purchasing power typically do not shop for or choose the cheaper products and services the lower earners are buying, and the lower earners can not afford more expensive goods or services. A person earning 100k a year looking to rent a luxury apartment is not competing with the person earning 30k a year looking to rent a modest half duplex unit.

Meaning that it still comes down to competition between similar income earners rather than disparate ones.

What you are discussing is only true if everybody across the board gets a similar pay increase. Which of course doesn't change anything, because it's just straight-up inflation.

Do you have real world examples of countries becoming prosperous simply because the raised the minimum wage?

 

[Peter LeQuire]

Labor competes with labor saving devices. When labor becomes too expensive, it is replaced with a machine. The job disappears. And one skilled person to run the machine in place of many unskilled workers, even cheap illegal labor, and that skilled labor is paid more. What cannot be replaced is judgment and wisdom.

Like the kiosks in fast food restaurants where you can "manage" your order without having to interact with a minimum wage employee - unless you're paying with cash.