Tuesday, February 16, 2016

Oregon Minimum Wage

In the news last week, Oregon's senate decided to raise the minimum wage, over the next six years. Portland, the biggest city, gets $14.75. Major counties get $13.50, while everywhere else gets $12.50. The idea is that the people in Eastern Oregon don't need as much money, because it's cheaper to live there.

People are arguing a lot about the decision. Some people

The pizza company that I work for has a spreadsheet on the topic. With their business model, 20% of all the money goes to food costs, 20% goes to wages, and the rest goes to taxes, profit, building maintenance, advertisement, etc. In order to maintain the ideal of "20% of all profits go to wages", prices are set based on the minimum wage. Which more or less means that pizzas cost a dollar extra in the Seattle area, and they cost two dollars extra in the San Francisco area.

Or something like that. Obviously, I don't have the exact numbers memorized. To be honest, when I saw the spreadsheet, I was more focused on the fact that the pizza selling price is about five times as much as the cost to make the pizzas. I wonder if we would have more sales, if we only charged three times as much.

I expect that, when the minimum wage goes up, a LOT of places will increase prices, to offset the cost of paying employees. Which, in turn, makes the higher paycheck less valuable.

The higher minimum wage is also bad news for me, because I make YouTube money. 2013 was the glorious year where YouTube paid me more money than full-time minimum wage. Since then, the rates have been steadily going down. Couple that with fewer total views, and now I need a second job, just to break even. If the minimum wage goes up, odds are that my YouTube wages will be even less valuable. Then again, maybe the rising tide will affect all boats, and YouTube will start paying more. That'd be nice.


Anonymous said...

for a business the percent of profits going to payroll should be around 30-38%, 20% is really low and greedy, but maybe they think you make tips?

Michael Gray said...

Yes, everyone makes tips. In fact, the company keeps records of everyone's tips. The weird thing is that the company doesn't report tips on paychecks or tax forms; they pretend that nobody gave us any tips, ever. What's the point of them keeping track of everyone's tips, if they don't report it at any point?

Now I have to file a separate tax form, just to cover the tip money I made, and it's a pain, because they easily could have prevented this problem.