Economic roundtable effects of a fifteen dollar an hour minimum simple ways to make money wage in the city of los angeles

America has lost ground on the intent declared by congress simple ways to make money when the fair labor standards act was enacted in 1938, that workers will receive wages sufficient to maintain “the minimum standard of living necessary for health, efficiency, and general well-being.” the federal minimum wage had the greatest value in 1968. Set at $1.60 an hour, it had a value of $10.51 in 2012 dollars. The current federal minimum wage of $7.25 is worth 31 percent less. This wage attrition is part of most people’s every day experience:

• the low-wage workers who receive the pay increase are likely to simple ways to make money spend all of the money – households with incomes in the $30,000 to $39,999 range spend 106 percent of their pre-tax income. In contrast, households with incomes of $70,000 and higher, which include most stockholders, spend only 63 percent of their pre-tax income. More spending and economic stimulus occurs when money is in simple ways to make money the pockets of lower-income workers than when it is in the pockets of simple ways to make money higher income stockholders.

A living wage is conservatively defined as $15 an hour, based on the criteria set in the fair labor standards simple ways to make money act of a wage sufficient to support the “minimum standard of living necessary for health, efficiency, and general well-being.” the census bureau defines full-time employment as 35 or more hours of work a simple ways to make money week for 50 or more weeks a year. Thus, a full-time worker with a $15 per hour wage would be paid at least $26,250 a year.

Los angeles workers would receive $7.6 billion more a year in pay with a $15 minimum wage. The average full-time, low-wage worker, now working 2,150 hours a year and paid $9.55 an hour, would receive $11,729 more in annual pay. The average part-time, low-wage worker, now working 1,031 hours a year and paid $8.89 an hour, would receive $6,297 more in annual pay. The wage increase would benefit 811,000 workers, 454,000 of them full-time and 357,000 of them part-time. Industry impacts

• businesses will benefit from having a higher-paid labor force that is more stably housed, reducing employee turnover and the associated costs for recruiting and simple ways to make money training new employees. It costs an estimated 30 percent of a worker’s annual salary to replace that worker, so reducing the frequency of worker turnover results in significant simple ways to make money cost savings for employers.

Most full-time, low-wage (less than $15 an hour) employees are working in retail and service industries that serve simple ways to make money los angeles-area residents. Only 22 percent of low-wage workers are employed by industries like manufacturing, wholesale trade or information (movies, internet and publishing) that send products outside of the los angeles region. Thus, four out of five low-wage workers are doing things that serve other los angeles simple ways to make money residents, without receiving enough pay to live decently.

Increases in payroll costs would be greater in low-wage, labor-intensive industries. Restaurants, hotels and personal service establishments would need to reallocate 14 simple ways to make money percent of their revenue to raise employee wages. The next highest impacts would be in the nonprofit social simple ways to make money assistance sector and administrative support services such as janitorial and simple ways to make money security services and temp agencies, where increased labor costs would be equivalent to 13 percent simple ways to make money of revenue. High-wage industries such as professional and technical services, information, finance, and utilities would have nominal impacts on the order of simple ways to make money 1 percent of revenue. Economic stimulus

When workers’ households receive additional income, their increased spending stimulates growth in the local economy. Their increased purchases of groceries, clothes, meals out, health care, car repair services, and rental housing stimulates added purchases in the local supply simple ways to make money chain. Jobs would be created in the same industries where workers simple ways to make money would receive wage increases, including restaurants and retail stores. The increased buying power of workers would make these industries simple ways to make money direct beneficiaries of the higher wages they would be paying.

Looking just at the stimulus effects, the added income that workers would receive from a $15 minimum wage would generate an estimated $9.2 billion in annual sales in los angeles county, and these increased sales would in turn create an estimated simple ways to make money 64,700 new jobs in the county to meet the increased simple ways to make money demand for goods and services. Government and social service benefits

An estimated 15 percent of this general public revenue would simple ways to make money return to the city of los angeles, some through the city’s formula share of sales tax revenue, but the preponderance through state and federal budget allocations that simple ways to make money return funds to the city. This share of public revenue would bring an estimated $152 million a year to the city. Pro and con economic debate

The fair labor standards act of 1938 establishes a benchmark simple ways to make money for increasing the minimum wage – it should not substantially reduce employment or increase inflation. The economic debate over increasing the minimum wage is now simple ways to make money largely about whether modest increases in the minimum wage reduce simple ways to make money the rate of job growth (rather than actually reducing employment), have little or no effect on employment, or stimulate job growth.

Why it is that transferring money from businesses to low-wage workers does not disrupt the economy? A review of economic studies since 2000 on the effects simple ways to make money of the minimum wage and the ways in which businesses simple ways to make money adjust to wage increases found that the most important channels simple ways to make money of adjustment are reductions in labor turnover; improvements in organizational efficiency; and small price increases. Given the relatively small cost to employers of modest increases simple ways to make money in the minimum wage, these adjustment mechanisms appear to be more than sufficient to simple ways to make money avoid employment losses, even for employers with a large share of low-wage workers.

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