2013 Cedar Fair Season pass question

....and now, a word on wages from CostCo CEO Craig Jelinek (who wants the minimum wage raised to over $10/hr.):

http://www.huffingtonpost.com/2013/03/06/costco-ceo-minimum-wage-craig-jelinek_n_2818060.html?ir=Politics&ncid=edlinkusaolp00000009

In the interests of full disclosure, the CostCo CEO "base pay" is under 700K, whereas each of the Wal*Mart heirs would blow their noses on a check that small...

On the other hand, I am fully supportive of Wal*Mart's energy production/conservation efforts. The intent may be to save money, but green energy is beneficial regardless of the motivation.

I agree with the Costco people entirely (seems like everyone in Seattle wants to pay above market), but I'm not sure I agree with raising minimum wage. Just not sure if I view it as protecting workers or market interference.

I don't think a high school kid that just needs money to go out on the weekends and pay car insurance like I did needs to make that much. They don't need a living wage. So I'm not for raising minimum wage a whole lot.

Raising the minimum wage is an excellent way to not only stifle job growth, but likely raise the unemployment rate.

The evidence strongly suggests otherwise - that raising the minimum wage (which is not "just HS kids" anymore) actually stimulates spending and increases growth. The fact that there will be some inflationary effect is undeniable, but inflation actually ends up sending small amounts of money from lenders to borrowers because interest rates typically don't keep up....they lag 12-18 months behind.

edit: This works because "workers" have more money to spend, they buy goods and services - employers need extra staff to keep up with the demand.

multiple-edit fun...a link to "academic" economic analysis: http://www.voxeu.org/article/spending-income-and-debt-responses-minimum-wage-hikes

I think the minimum wage should be zero.

"Go forage for nuts and berries, Clem!"

No wait. I think the minimum wage should be a million dollars per minute.

"Go forage for a Rolls Royce, Clem!"

Meh. Now I don't know what I think. :)

One could also argue that a steady stream of inflation is not sustainable, and results in bubble-like action in the economy.

I personally find this a more comprehensive study on why minimum wage sucks.

Cato Institute?

Jeff said:

One could also argue that a steady stream of inflation is not sustainable, and results in bubble-like action in the economy.

One of the big problems right now in terms of the economy is we move from one government inflatied bubble to the next. When one pops, we look for the next one to inflate. As a long term policy its pretty dumb to me. But too much focus is on the short term.

Tekwardo said:

I don't think a high school kid that just needs money to go out on the weekends and pay car insurance like I did needs to make that much. They don't need a living wage. So I'm not for raising minimum wage a whole lot.

Around half of minimum wage earners are 25 or under. I don't see a percentage that shows how many are under 18, but reason would say that it's probably half of that at best... so a fair estimate would be that around 80% of minimum wage earners are people that are trying to earn a living and not just save up for beer money or Sega Genesis games or crack, or whatever high school kids do these days.

That's not an argument for or against raising the minimum wage, but it's one of the facts that is often ignored.

edit: found it... 23% of minimum wage workers are 19 or under. (Warning: requires doing math.)

Since no one is likely to read the study I linked to...

According to the Bureau of Labor Statistics, 1.8 million paid-hourly employees were paid the federal minimum wage of $7.25 in 2010.

These 1.8 million employees can be broken down into two broad groups:

● Roughly half (49.0 percent) are teenagers or young adults aged 24 or under. A large majority (62.2 percent) of this group live in families with incomes two or more times the official poverty level. Looking just at the families of teenaged minimum wage workers, the average income is almost $70,600, and only 16.8 percent are below the poverty line. Note that the federal minimum wage applies to workers of all ages.

● The other half (51.0 percent) are aged 25 and up. More of these workers live in poor families (29.2 percent) or near the poverty level (46.2 percent had family incomes less than 1.5 times the poverty level). However, even within this half of all minimum wage employees, 24.8 percent voluntarily work part-time, and just 34.3 percent are full-time full-year employees.

Only 20.8 percent of all minimum wage workers are family heads or spouses working full time, 30.8 percent were children, and 32.2 percent are young Americans enrolled in school. The popular belief that minimum wage workers are poor adults (25 years old or older), working full time and trying to raise a family is largely untrue. Just 4.7 percent match that description. Indeed, many minimum wage workers live in families with incomes well above the poverty level.

When you see calls for an increase in the minimum wage, be very skeptical.

Not so long ago, the minimum wage in Ohio was under $6/hour. But the only way you could get a minimum wage job was to be a student in a work study job, or go to work for a non-profit or certain other exceptions. The effective wage floor was in the mid $7's and fast food joints were starting people at $8-$10.

So why, then, was there any need to raise the minimum wage in this state? And when the minimum went to $7.25, why did a bunch of service jobs disappear, and the wage floor drop...almost literally on the day the minimum went up?

Apparently, there are a number of public and private labor contracts that are indexed to the minimum wage. Why anybody would do such a thing, I do not understand.

--Dave Althoff, Jr.

A quote from the article linked by Vater (which I did read btw-- thanks, I saved a copy of it): Milton Friedman: "The real tragedy of minimum wage laws is that they are supported by well-meaning groups who want to reduce poverty. But the people who are hurt most by higher minimums are the most poverty stricken."

Sega Genesis games? How old are you? ;)

Costco gets it. None of the minimum wage debate really gets at the heart of the issue, that wages are held artificially low because it makes earnings reports look better. Turning a healthy profit isn't enough for a publicly traded company, they're under ridiculous pressure from the market to constantly turn bigger and bigger profits (something that will never be infinitely sustainable). There's simply no room in there to give your employees anything more than you have to. Costco is bucking the trend, and as the article I linked to a few pages ago said, they're under enormous pressure from their shareholders to cut employee pay down to the level of their competitors, so shareholders can make more for themselves.

Take away minimum wage, and who knows how low wages will go. It won't have the "floor dropping out effect," but gradually over time one large chain will cut wages 50 cents, then all their competitors will cut wages 75 cents, and so on. There won't really be any incentive to pay more than what anyone else does, as they're already all drawing from the same labor pool.

CP Chris said:

Take away minimum wage, and who knows how low wages will go. It won't have the "floor dropping out effect," but gradually over time one large chain will cut wages 50 cents, then all their competitors will cut wages 75 cents, and so on. There won't really be any incentive to pay more than what anyone else does, as they're already all drawing from the same labor pool.

But you act as if the employer holds all of the cards.

Don't work for crap pay.

And it's easy to think, "Well, I have to make living." But the companies need employees.

If you're dumb enough to set your worth at $3.75 an hour, whose fault is that?

I tend to believe that the market could settle at a true skill value.

Whether or not it's a good thing is a debate and I'm sure the fine nerds of CoasterBuzz will bust out some report or study full of numbers that backs their beliefs.

All the minimum wage does now is say the most basic of skills is worth X dollars per hour. Sometimes I think people forget that employers don't give you money so that you can live a nice happy life, they pay you for skills you bring to the table to help their business succeed. Bring minimum skills and you deserve minimum compensation. The government forces an employer to pay you at least $7.25 no matter how little you bring to the game.

The way I see it, it has nothing to do with living wages or economy stimulation or whatever. You're putting cans of corn on a shelf so that other people can take them home and eat them. Is that really worth more than $7.25 to anyone? Hell, is it even worth the $7.25?

I think my point more or less was that the same people who now, for whatever the reason, can't do better than a minimum wage position will be the people "forced" (not the right word, but you get the picture) to accept whatever is offered if every entry level job in town is paying $3.75.

Once those jobs have no value, it's not hard to believe the "skilled" labor positions will soon follow the same downward trend. Again, not immediately, but over a decade or so, a steady creep downwards. The market dictates that employers get their labor for as cheaply as possible, no matter what the skill set. Without some sort of uniform bottom, there's nothing to prevent all job types from following the same slow, downward spiral. Although I suspect executives have nothing to worry about...

Lord Gonchar said:
The government forces an employer to pay you at least $7.25 no matter how little you bring to the game.

There you go. Aside from the negative effects minimum wage has, this is the fundamental problem I have with it. Federal interference in the capitalist system.

Vater said:

...this is the fundamental problem I have with it. Federal interference in the capitalist system.

While I generally agree with Gonch's quote about employee value, having such a myopic, black-and-white opinion of something so complex (i.e. that capitalism is fine when left to its own devices) is dangerous.

It's easy to argue that pure capitalism is not economically sustainable, as it tends to create an oligopoly.