Does Minimum Wage Increase Help Or Hurt The Appraisal Business?

[J Grant]

The retail apocalypse is the closing of a large number of North American brick-and-mortar retail stores, especially those of large chains, starting in 2010 and continuing onward. Over 12,000 physical stores have been closed, due to factors such as over-expansion of malls, rising rents, bankruptcies of leveraged buyouts, low quarterly profits outside holiday binge spending, delayed effects of the Great Recession, and changes in spending habits. North American consumers have shifted their purchasing habits due to various factors, including experience-spending versus material goods and homes, casual fashion in relaxed dress codes, as well as the rise of e-commerce, mostly in the form of competition from juggernaut companies such as Amazon.com and Walmart.

The retail apocalypse phenomenon is related to the middle-class squeeze, in which consumers experience a decrease in income while costs increase for education, healthcare, and housing. Bloomberg stated that the cause of the retail apocalypse "isn't as simple as Amazon.com Inc. taking market share or twenty-somethings spending more on experiences than things. The root cause is that many of these long-standing chains are overloaded with debt.

https://en.wikipedia.org/wiki/Retail_apocalypse

Middle class squeeze and cheap debt which is now more expensive to refinance and service. All that "free" money from the federal reserve, zero percent interest rates and quantitative easing of $4 trillion is coming home to roost.

After a few months of wild swings, in January US consumer credit normalized rising by $17 billion, in line with expectations, following December's $15.4 billion increase. The continued increase in borrowings saw total credit storm above $4 trillion, and hitting a new all time high of $4.034 trillion on the back of a America's ongoing love affair with auto and student loans, and of course credit cards.

Gee its all about debt and not because min wage is too high who woulda thought...

 

[Randolph Kinney]

Gee its all about debt and not because min wage is too high who woulda thought...

Both corporations and consumers are loaded with debt. The result? Layoffs and store closings. How about raising the minimum wage to help out all those consumers loaded with debt?

 

[J Grant]

Both corporations and consumers are loaded with debt. The result? Layoffs and store closings. How about raising the minimum wage to help out all those consumers loaded with debt?

They can pay down their debt and make enough to live on without resorting to debt such as payday loans and buy here pay here car loans etc. A rise in min wage means they would also spend it locally giving a boost to local businesses which would prevent more retail store closings.

All of America is overloaded with debt but the bottom poor use it for survival rather than just toys- though some of them can fall prey to that as well. Our nation needs different priorities but paying a large segment of people so badly they can not survive on the earnings is not helping is it.

 

[Randolph Kinney]

Workers can lose everything when their employer files for bankruptcy. At least for now.

A pro-labor movement sparked by the employees of Toys “R” Us Inc., and taken up by Sears Holdings Corp., has reached the U.S. Congress.

Representative Alexandria Ocasio-Cortez released a video featuring struggling former Toys “R” Us workers on the first Black Friday since their layoffs. And Senator Elizabeth Warren, another 2020 candidate, publicly challenged former Sears Chairman Eddie Lampert’s “commitment to the company’s employees” in a January letter.

Twenty states, including California, Illinois, New Jersey and New York, raised their minimum wages for 2019, according to the Economic Policy Institute. The hikes range from just a few cents, to adjust for inflation, to $2 an hour in New York City.

But as American workers suddenly enjoy more visibility than they had just a few months ago, U.S. bankruptcy law lumps employees with other creditors whose claims are lower priority. In the beleaguered retail industry, that’s left tens of thousands without recourse.

https://www.msn.com/en-us/news/othe...creditors-in-us-bankruptcy-payouts/ar-BBUogGg

Over 10,000 store closing since 2010 and more to come.

 

[TRESinc]

Remember employees of an establishment the minute they get off work become the consumers for another establishment, so with more income they spend more and put the money back into the economy.

and how exactly do you think the stores are going to compensate for having to pay so much more in wages? even at a current rate of $10 per hour it will be a 50% increase. the employees may have more cash in their pocket at the end of the week but the buying power of that money has been greatly reduced, so they are in the same place they are today with no improvement.

 

[Michigan CG]

-The vast majority of people making minimum wage are under the age of 22.
-Many of the retailers closing their doors had a huge amount of debt that was not sustainable.
-Retail and restaurants work on very slim profit margins. If wages are increased due to government mandate then they have to either raise prices, cut hours or lay off staff. There are no other alternatives.

 

[DTB]

People are not poor because they make too little. They are poor because they spend too much relative to their earnings. Just like government

 

[J Grant]

People are not poor because they make too little. They are poor because they spend too much relative to their earnings. Just like government

If that were true, then everyone would be happy making $7- $10 an hour, since they are not "poor",,, as long as they don;t spend to much relative to their earnings.

The problem is that low wages ,even if one spends frugally and relative to earnings, do not cover basic living expenses. And that means no frills shared or cramped housing which can still take up 40-50% of income, food and medical remaining 50% and that leaves zero left for for transportation, utilities or anything else. The bottom wages simply do not provide enough $ to live on.

Of course anyone can be "poor" including millionaires who go broke fi they spend more than they earn, but the min wage topic is hardly about that

 

[Michigan CG]

The problem is that low wages ,even if one spends frugally and relative to earnings, do not cover basic living expenses.

The vast majority of people making minimum wage are under the age of 22 and don't live on their own or have roommates.

 

[DTB]

If that were true, then everyone would be happy making $7- $10 an hour, since they are not "poor",,, as long as they don;t spend to much relative to their earnings

The vast majority of people making minimum wage are under the age of 22 and don't live on their own or have roommates.

Not everyone making $100 per hour is happy, so what's your point?

The problem is that low wages ,even if one spends frugally and relative to earnings, do not cover basic living expenses. And that means no frills shared or cramped housing which can still take up 40-50% of income, food and medical remaining 50% and that leaves zero left for for transportation, utilities or anything else. The bottom wages simply do not provide enough $ to live on

One would think, foolishly perhaps, that what you describe is a motivating factor to escape the minimum wage world?

Has there ever been a time where remaining at the bottom end of the wage scale (MINIMUM WAGE) would lead to a terrific lifestyle?