Does Minimum Wage Increase Help Or Hurt The Appraisal Business?

[Randolph Kinney]

I've seen this happen in practice. I was a salaried employee out of college. The minimum wage for the employees was raised, and as expected and not surprisingly, everyone pay went up proportionately. Zero sum game.

Sure, there is wage compression that occurs up the pay scale when minimum wages increase. Not everyone benefits because as wages increase, so does inflation. Employers have to either increase prices or automate or lay people off. It is not zero sum for the people that lose their jobs.

 

[The Warrior Monk]

I don't know if this was referenced yet:

https://thenycalliance.org/assets/documents/informationitems/021Ib.pdf

 

[Michigan CG]

The irony is many the lowest appraisal fees paid by AMC 's are in California and other high cost of living areas . Note that private, VA, and direct lenders pay good fees in those same areas, so it is not simply supply and demand, rather the manipulation of supply and demand afforded AMC's from their subsidized market share

Why are the lowest fees paid in California and other areas? Because the supply is higher than the demand. Appraisers trained their competition back in the day and are still paying for it.

How is it possible for AMCs to manipulate supply and demand? Quick answer is they can't.

Between the lines you are calling appraisers stupid.

If Fred can keep himself busy with $400 fees then why would he ever take a $300 assignment? He wouldn't because it would cost him $100 each time he did it. The AMC can't convince Fred to take work at a lower fee if he doesn't need the work. Your argument about supply and demand is again false.

 

[Randolph Kinney]

I don't know if this was referenced yet:

https://thenycalliance.org/assets/documents/informationitems/021Ib.pdf

●76.50% of respondents report reducing employee hours, and 36.30% eliminated jobs in 2018 in response to mandated wage
increases.
●74.50% of respondents report that they will reduce employee hours; and 47.10% will eliminate jobs in 2019 as a result of
mandated wage increases that took effect on December 31, 2018.
●87.30% of respondents report that they will increase menu prices in 2019 as a result of mandated wage increases, compared to
90.20% in 2018.
●60.80% of respondents will rework food & beverage menu offerings in 2019 to reduce costs in response to mandated wage
increases.
●34.40% of respondents report that their repeat customers dined at their restaurants less frequently after they raised menu
prices in 2018.
●40.20% respondents report employing fewer people in 2018 than 2017, but their payroll stayed about the same.

 

[J Grant]

Why are the lowest fees paid in California and other areas? Because the supply is higher than the demand. Appraisers trained their competition back in the day and are still paying for it.

How is it possible for AMCs to manipulate supply and demand? Quick answer is they can't.

Between the lines you are calling appraisers stupid.

If Fred can keep himself busy with $400 fees then why would he ever take a $300 assignment? He wouldn't because it would cost him $100 each time he did it. The AMC can't convince Fred to take work at a lower fee if he doesn't need the work. Your argument about supply and demand is again false.

Of course AMC;s can manipulate supply and demand in their segment of the business, since we see in the exact same city, town,/ regional area direct lenders paying higher/ distinct different set of fees than the AMC's , where direct lenders have access to the exact same # of appraisers ( supply) . How do you explain that dichotomy ?

I will address the rest later in a separate post, but please answer the above question as asked.

 

[Meandering]

A federal minimum wage increase wouldn’t necessarily be a widespread cash infusion for teens working starter jobs, new research says.

Millennials and Generation Xers would, by far, be the biggest beneficiaries of a proposed federal minimum wage hike to $15 an hour, the Economic Policy Institute said as it determined who across America could stand to gain from a wage increase.

The left-leaning think tank looked at the potential impact of a proposed law that would bring the federal minimum wage to $15 an hour by 2024 from its current $7.25 rate, which proponents say would only keep the minimum wage apace with rising costs.

A mere 9% of the 39.7 million workers who would directly and indirectly benefit from the raise were 19 and younger.

More than half of workers, 53%, who would benefit were between the ages of 25 and 54. Workers aged 55 and above accounted for the remaining 14.6% of estimated beneficiaries.

The millennial generation runs from 22 to 38 and members of Generation X are aged 39 to 54, according to the Pew Research Center.

https://www.marketwatch.com/story/t...ge-hike-might-not-be-who-you-think-2019-02-28

This article indirectly says something about the quality of jobs remaining in the economy or were created during the last 10 years.

Just wondering if raising the Federal minimum wage, will also create that inflation the Fed is keeps saying we don't have, and if so, how much more price inflation will it create?

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[Meandering]

Actually, every employee benefits, because all wages will be increased.

I've seen this happen in practice. I was a salaried employee out of college. The minimum wage for the employees was raised, and as expected and not surprisingly, everyone pay went up proportionately. Zero sum game.

I saw the opposite when the Federal minimum wage was increased, only those making below it got a pay raise, no one else in the companies I worked with got any pay raise, which annoyed those that had worked their way above minimum wage, and were then receiving the same pay as a newbie.

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[Eli]

Of course AMC;s can manipulate supply and demand in their segment of the business, since we see in the exact same city, town,/ regional area direct lenders paying higher/ distinct different set of fees than the AMC's , where direct lenders have access to the exact same # of appraisers ( supply) . How do you explain that dichotomy ?

I will address the rest later in a separate post, but please answer the above question as asked.

Yes, but the opposite is what will get them in trouble with antitrust. It will be higher on the HUD-1 settlement statements. The discovery stage is still occurring. And regulation by states is just now occurring.

Notice many are for separation of fees. They know it's coming. Should have known it from the beginning.

Note that little block on the 1004 " AMC vs No AMC". Easy correlations between 1004 and HUD-1 fees broken down by small geographical areas and large areas. Like stupid on the their part to lobby for commingling of fees.

FTC would not even be involved likely if they would have lobbied the other way.

 

[Amy Perkins]

I saw the opposite when the Federal minimum wage was increased, only those making below it got a pay raise, no one else in the companies I worked with got any pay raise, which annoyed those that had worked their way above minimum wage, and were then receiving the same pay as a newbie.

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That's too bad and probably an exception. I think that increasing the minimum wage does increase wages overall. What decreases wages is paying people below minimum wage. Those willing to work below minimum wage are a problem. Whether minimum wage is 7.25 or 15 an hour a gallon of milk is still going to cost a similar amount. Places like California where rents are sky high is where the inequity exists. The cost of living is very high compared to wages. It would be one thing if wages were higher and costs were higher, but as time marches on the ratio between the cost of living and paid wages gets worse. Our governments keep restricting the development of land for housing and it is becoming more scarce while our population keeps growing.

 

[Amy Perkins]

Yes, but the opposite is what will get them in trouble with antitrust. It will be higher on the HUD-1 settlement statements. The discovery stage is still occurring. And regulation by states is just now occurring.

Notice many are for separation of fees. They know it's coming. Should have known it from the beginning.

Note that little block on the 1004 " AMC vs No AMC". Easy correlations between 1004 and HUD-1 fees broken down by small geographical areas and large areas. Like stupid on the their part to lobby for commingling of fees.

FTC would not even be involved likely if they would have lobbied the other way.

Banks are still dictating how much they give an AMC, how many times have you heard... we only have approval for ... amount and would need to contact the lender for an additional fee request. Lets face it, banks are still dictating the market.