Minimum Wage to Increase in 18 States – Here’s How a Rise Could Hurt Workers

What’s going on?

The minimum wage is set to increase in 18 states and around 20 cities and counties for the new year, CNNMoney reported.

Does a mandated minimum wage help workers?

That’s up for debate. On today’s show, Doc talked about how increasing minimum wage ends up hitting workers in the long term when employers have to reduce their hours, work them harder in less time or turn to automation instead of human employees.

“You think randomly you can just mandate $15 without knowing any of these individual companies’ profit margins and what the books are?” Doc asked. “You think they’re making enough to cover that? What if they’re not?”

Companies can’t just magically pay more, and they’re dealing with profit margin expectations and stockholders.

“This is a failure across the board,” Doc said.

Which states are raising hourly minimum wage?

  • Alaska: $9.84
  • Arizona: $10.50
  • California: $10.50 or $11, depending on if the business has more than 25 employees
  • Colorado: $10.20
  • Florida: $8.25
  • Hawaii: $10.10
  • Maine: $10
  • Michigan: $9.25
  • Minnesota: $7.87, rising to $9.65 for businesses passing a threshold of an annual gross revenue of $500,000 or more
  • Missouri: $7.85
  • Montana: $8.30
  • New Jersey: $8.60
  • New York: varies depending on location and company size; learn more here
  • Ohio: $8.30
  • Rhode Island: $10.10
  • South Dakota: $8.85
  • Vermont: $10.50
  • Washington state: $11.50

Do you think an increased minimum wage will help or hurt workers? Let us know in the comment section below

This article provided courtesy of TheBlaze.

DOC: New law going into effect across the country as of Monday. Lots of states have new minimum wage laws going into effect. Federal minimum wage, 7.25 right now. A bunch of states have said we want to hire minimum wage.

Minimum wages are a scam. It's a bad idea. They do not have their intended effect.

But to the extent that we are going to have minimum wages, of course, states should be able to pass a minimum wage. In fact, the federal government should leave it on states. Make it whatever you want, states. The federal government doesn't need involved in this.

Eighteen states are going to have a new minimum wage beginning Monday. Eight states are inflation-adjusted, where they're going up because of previous laws that tie into inflation.

New Jersey, Ohio, Florida, Alaska, Montana, South Dakota, Minnesota, and Missouri. All inflation adjusted. Other states are seeing an increase because of specific legislation.

Colorado and Hawaii, New York and Vermont, all had higher -- or will have higher minimum wages because of the legislature.

Rhode Island, Arizona, California, Washington, and Michigan, all going up.

Minimum wages are a bad idea. The idea is, a minimum wage to, what? What's the point of a minimum wage? You're not taken advantage of? Well, here's the thing, if you feel like you're being taken advantage of, don't work for the company.

But, Doc, without it, they could pay nothing. Great. Then don't work for them. If enough people said, I'm not going to work for them because it's too low, they would be forced to, if they wanted to hire people, raise the salary. Races the hourly wage. That's how it works.

History has proven that. As evident by the fact that, does everybody on the planet -- let's just go to America. Does everybody in America only make the minimum wage?

KAL: Obviously not.

DOC: No. They make more than that. So if companies were just out to screw people, they only pay them the minimum, they pay them more.

For example, after they passed the new tax bill, multiple companies came out, Wells Fargo, AT&T, somebody else -- I think Fifth-Third Bank. Multiple companies came out and said, we are raising our in-house minimum wage to I think $15 an hour. Significantly higher than whatever their state or federal minimum wage is.

Why would they do that? We're talking for hourly employees at the lower end who would be the ones most likely to have a minimum wage-type salary, income.

They're willing to do that. Walmart, who gets a bum rap for, you know, such I low wages and so on and so forth. Walmart, for years, has had less than one or 2 percent of all of their employees making minimum wage. And they made a commitment a year or two ago, that by right about now probably, that no employee would make minimum wage, they would all be over minimum wage.

That's pretty good. Why don't they just pay a minimum wage, how much they would save?

KAL: Legally, they don't have to.

DOC: Exactly. So there's the fallacy number one, that it wouldn't happen without the law. But, again, minimum wage for, what? So people make more.

Is that a livable wage? Because the fight for 15 people say, we need a livable wage. Fifteen dollars an hour. Minimum wage. Fifteen dollars -- so $15 an hour is a livable wage?

KAL: No.

DOC: I don't know where you're living. Lots of these people that say that are living in places like New York City. Fifteen dollars an hour. Even if you're working 40 hours a week, that's $600 a week.

KAL: That's before taxes.

DOC: Right.

That's before taxes. You're making $31,000 a year. That's what that would be?

Fifteen dollars an hour, times 40 hours a week, times 52 weeks out of the year. Thirty-one thousand, that's a livable wage?

KAL: I don't know if you noticed, the average rent in New York is probably about 2,000, maybe 2500 a month.

DOC: Right. Really, really high. So obviously -- and remember, 15, they were saying was the livable wage.

At the minimum wage, at the federal level, it's, what is that? $14,000 a year, if you work 40 hours a week. So it's obviously not a livable wage.

What is a minimum wage then? It's not livable. It's not needed. What is it?

It's just a way for progressives to say, you've got to pay more. And then every day, they constantly say, it's not enough. We got to amp that up. Amp that up. Make it higher. Make it higher. Make it higher.

And if minimum wage was such a good idea, where it finally helps people because they cannot live making less than this -- it's an insult. Then why don't we just make the minimum wage $1,000 an hour?

KAL: Because now you're just being unrealistic, Doc.

DOC: Ah, that's what I heard from others when I suggest this. Okay. How about $100 an hour?

KAL: Still, just unrealistic.

DOC: Well, why?

KAL: Who is going to pay $100 an hour for a burger flipper?

DOC: So you realize at some point the company can't afford that.

KAL: Yeah.

DOC: But you think randomly, you can just mandate 15 without knowing any of these individual company's profit margins, what the books are? You can just go in and say, you must pay 15, because you think they're making enough to pay for that. What if they're not? So they just go out of business and you don't care? Here's what happens, companies don't just pay more and say, well, we're going to make less. They have bills they have to pay. And stockholders to answer to and profit margins, and all kinds of things. So they have to try to maintain that same profit margin. They simply say, you the employees are going to work fewer hours. And the work that we need done, that won't get done because you're working fewer hours. We're now going to say, Kal must do double the work.

We expect more from you in the same amount of time. They cut hours. They cut full-time employees --

KAL: Or they find automation solutions.

DOC: Or they find automation they have to cut. So this is a failure across-the-board. If it's a good idea at 7.25 an hour, based on their logic, then why not pay everybody a million dollars an hour? And guess what, just after a few weeks, everybody is rich, and all of our problems are solved.

KAL: No.

DOC: They know it won't work that way. But somehow they believe they can do it a little bit on the other end.

I have an example from an obvious progressive how this is a failure.

Over the week, last week, a bunch of people reporting on the new minimum wage. And somebody sent me a story from Yahoo finance. Ah, the great financial brain trust that is Yahoo.

Okay. So they have their little reporters there. And the story is reported. Then they're all talking about it. And they have a couple of chicks there. And some dude. And they're talking about this.

And the main reporter, the reporter, she's giving a bunch of the facts and the figures. And this is like, a 30, 40-second clip I want you to hear. Then they go to Rick Newman. He is also a reporter, writer there. Whatever. Yahoo finance.

He starts defending the idea of a minimum wage and challenges the woman on her suggestion that AT&T and these other companies said they're going to pay more and give bonuses now because of the new tax law.

But I think you'll realize that he talks squarely out of his backside and contradicts himself multiple times.

Listen to his arguments based on minimum wage, and then you'll realize, wait. But wait a minute. Then your other argument doesn't necessarily make sense or mean anything.

This is Rick Newman from Yahoo Finance.

VOICE: The states are taking control of this issue, which used to be kind of a federal issue.

VOICE: Yes, exactly.

VOICE: There used to be a federal minimum wage. But it's so low. It's $7.25. Right?

VOICE: Yep.

VOICE: And that hasn't gone up years.

VOICE: Since 2009.

VOICE: President Obama wanted to raise it up to 9 or 9.50. He couldn't get that. And Republicans don't seem likely to raise it at all. So states and cities are kind of saying what --

DOC: So hang on. Pause right there for a second. So to the states' rights points, he sounds like he's glad. States are going to -- local communities.

Because cities -- some cities have higher minimum wages too. That he's happy they're doing this. Hey, they didn't get it done at the federal level.

Republicans aren't going to do it. Obama wanted it, and they wouldn't let him. So good, they're taking it on their own.

Do you say the same thing about states' rights when it comes to other issues? Probably not.

KAL: No.

DOC: But okay. He's happy they're doing it.

VOICE: Kind of saying, well, we'll just take care of it in our own states. And that's what's happening.

VOICE: And do you think that's right? Do you think it should be a state issue? I mean, we know that depending on where you live, the cost of living could be astronomically higher if you're in the northeast compared to say, someone somewhere in the Midwest.

DOC: I mean, I think the shift here is that the federal government is becoming a backstop in -- and if there's enough political motivation in the states to do it, and in cities -- cities can do this too. Let's keep in mind.

Then they're doing it. Of course, the way you want people to get ahead is not by earning minimum wage.

The way you want people to get ahead is to have more skills so they actually demand --

DOC: Hold it. Hold it. Hold it right there.

So you want people -- minimum wage is not going to get them ahead. So why are you advocating this?

You want them to have more than that? Okay. Got you. All right.

VOICE: By earning minimum wage. The way you want people to get ahead is to have more skills so they can actually demand -- get out of the minimum wage. That's kind of an problem, which is a different problem.

But this is a backstop.

VOICE: Yeah. And it's interesting to see the corporations that are now taking a stand as well. So it's getting more and more micro.

Wells Fargo just announced that it will be raising its minimum wage to $15 for its employees. So companies are taking it into their own hands. And many of them are crediting the tax bill, saying that because we are saving money, we're going to be giving it back to their employees, which is a big question that we are wondering.

VOICE: Yeah, I don't buy that.

DOC: Hold it right there.

So the companies have announced that. Right? Back that up about 10 seconds, Kal. The companies have announced, that's why they're doing it.

And he questions, no, they're not.

Okay. They've told you this is what they're doing. But you don't believe it still. Okay. Listen.

VOICE: That are now taking a stand as well. So it's getting more and more micro. Wells Fargo just announced that it will be raising its minimum wage to $15 an hour for its employees. So companies are taking it into their own hands. And many of them are crediting the tax bill, saying, because we're saving money, we will be giving it back to the employees. Which is a big question that we're wondering --

VOICE: I don't buy that, sorry.

VOICE: I'm not sure I translate --

VOICE: Yeah

VOICE: The reason they're doing it is for the right reason economically, which is they have to raise pay to get the workers they need. That's what you want to happen.

DOC: Wait. Wait. What?

They're doing it to get better workers. They're raising it. He doesn't -- won't give any credit to the Republicans and the tax bill. They didn't do it for that.

No, it's not that.

KAL: No.

DOC: No.

They're doing it because that's how you get better workers.

So they're doing it to get -- they're just taking it on their own to get better workers. Doesn't that then show you that you don't need a minimum wage?

KAL: Kind of proves a point.

DOC: Right. He just talked himself around and goes exactly against why we need a minimum wage.

From his perspective, I mean. Okay. A little more.

VOICE: I'm not sure if it will translate.

VOICE: The reason they're doing it is for the right reason economically, which is, they have to raise pay to get the workers they need. That's what you want to happen. And, you know, we're basically getting into a labor shortage in some parts of the country. That's great news. Because then workers get raises for the right reason, because the economy is really humming.

VOICE: Yep.

VOICE: But there will still be some people left out.

DOC: Did you catch it at the end?

KAL: There will still be some people left.

DOC: He talked himself into a corner and realized he was being an outright hypocrite. And was going to be called because -- like, but there will still be some people left behind.

Why would they be left behind? You just said --

KAL: The economy is humming.

DOC: It's humming. We got a labor shortage. And this is going to get it done. They're doing it for the right reasons.

Some people will be left behind.

And what? You believe 7.25 is enough for them? Right?

Oh, it's not. Is 15 enough? Okay. Well, if 15 is good, isn't a million better?

Dude, it doesn't work. It absolutely doesn't work.

You're just an overemotional, illogical, hand-wringing progressive that will not let free markets go because you're ultimately about control.

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