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[AuthenticM]

From Business Insider

From the fear-mongering headlines marking passage of $15 statutes in New York and California, you would think nobody ever dared raise the minimum wage before.

"Raising minimum wage risky," the Lexington (Kentucky) Herald-Leader tersely warned.

"Raising minimum wage hurts low-skill workers," the Detroit News bluntly declared.

"Even left-leaning economists say it's a gamble," Vox solemnly cautioned.

Nonsense. We have been raising the minimum wage for 78 years, and as a new study clearly reveals, 78 years of minimum-wage hikes have produced zero evidence of the "job-killing" consequences these headline writers want us to fear.

In a first-of-its-kind report, researchers at the National Employment Law Project pore over employment data from every federal increase since the minimum wage was first established, making "simple before-and-after comparisons of job-growth trends 12 months after each minimum-wage increase."

What did the researchers find? The paper's title says it all: "Raise Wages, Kill Jobs? Seven Decades of Historical Data Find No Correlation Between Minimum Wage Increases and Employment Levels."

The results were clear. Of the nearly two dozen federal minimum-wage hikes since 1938, total year-over-year employment actually increased 68% of the time.

In those industries most affected by the minimum wage, employment increases were even more common: 73% of the time in the retail sector, 82% in low-wage leisure and hospitality.

"These basic economic indicators show no correlation between federal minimum-wage increases and lower employment levels," the authors write.

In fact, if anything, the data suggest that increases in the federal minimum appeared to encourage job growth and hiring.

Perhaps even more striking, of the only eight times that total or industry-specific employment declined after a minimum-wage increase, the US economy was already in recession (five times), technically just emerging from recession (twice), or about to head into recession (once).

Clearly, this handful of employment downturns would be better explained by the normal business cycle than by the minimum wage.

"As those results mirror the findings of decades of more sophisticated academic research," the authors conclude, "they provide simple confirmation that opponents' perennial predictions of job losses are rooted in ideology, not evidence."

But while there is no evidence that raising the minimum wage is the "risky" "gamble" that doomsayers describe, the devastating economic costs of keeping wages too low are very well documented.

After decades of stagnant wages, 73 million Americans — nearly one quarter of our population — now live in households eligible for the Earned Income Tax Credit, a benefit exclusively available to the working poor.

And according to a 2014 report from the Organization for Economic Cooperation and Development, rising income inequality (and the reduced consumer demand that comes with it) knocked 6% to 9% off US economic growth over the previous two decades.

fire me if old

 

[John Dunbar]

but this time it's different.

 

[Dali]

In fact, if anything, the data suggest that increases in the federal minimum appeared to encourage job growth and hiring.

So you're telling me giving a large portion of the population more money results in more spending resulting in more demand for labor? This sounds like alt facts to me.

 

[Plinko]

Here's my test for truth in economic policies:

If a republican says it, it's likely false.

 

[MonorailCat]

"But I heard the uncle of a friends friend got fired because the wages got too high. So it must be true!"

 

[Amalthea]

Who cares about facts or reality?

 

[Deleted member 231381]

Such a shame so many Democrats are too weak to fight for $15.

 

[ISOM]

So you're telling me giving a large portion of the population more money results in more spending resulting in more demand for labor? This sounds like alt facts to me.

Which is why people who argue against guaranteed basic income are foolish to me. You're basically injecting consumer demand into the economy.

 

[The Kree]

So you're telling me giving a large portion of the population more money results in more spending resulting in more demand for labor? This sounds like alt facts to me.

The wealthy ruling class thinks we'll hoard our income like they do. Always projecting.

 

[jayu26]

So what this article is suggesting is that as wage is increased, people have more money to buy things. People buy things. Demand for products and services increases. More people get hired to make said products and provide services.

There is your trickle down economics.

Wage increase in Ontario was long past overdue. If middle class people can't even afford a house, how are they going to spend money on other things?

 

[psyfi]

Meanwhile, poverty has been killing people since capitalism has existed (if not before)!

 

[Skellig Gra]

Feels like its been 78 years since minimum wage was an actual living wage.

 

[G.ZZZ]

Seems like some garbage alt-left sander-pandering bullshit. Please refrain from posting anything that goes against the dominant political "reasonable" narrative. Something something, economical justice is racism in disguise something something.

 

[BitStyle]

Feels like its been 78 years since minimum wage was an actual living wage.

For real

 

[Fuchsdh]

Which is why people who argue against guaranteed basic income are foolish to me. You're basically injecting consumer demand into the economy.

Except a basic income is a massive expenditure that no one has agreed on how we're gonna' pay for it.

 

[Skiptastic]

The wealthy ruling class thinks we'll hoard our income like they do. Always projecting.

The article even kind of hints at this at the end of that quote. Income inequality leads to reduced consumer demand because rich folks don't spend their money like poor folks do.

 

[Fuchsdh]

The article even kind of hints at this at the end of that quote. Income inequality leads to reduced consumer demand because rich folks don't spend their money like poor folks do.

This is partially depressing though in that it speaks to the fact that poor folks (and middle class people too) should be saving instead of spending everything.

 

[sphagnum]

Such a shame so many Democrats are too weak to fight for $15.

but rural workers will get too much...!

 

[SlickShoesRUCrazy]

Republicans are lying sacks of shit? You don't say.

 

[Vicetrailia]

This is partially depressing though in that it speaks to the fact that poor folks (and middle class people too) should be saving instead of spending everything.

They'd save more if they were making more money.

 

[Greedings]

but this time it's different.

While your point is valid, don't you think that as automation and potential for automation for minimum wage jobs increases, it is different to 80 years ago.

 

[King Tubby]

It would seem that governmental measures to combat rampant wealth inequality can have overall positive effects for the economy.

 

[azyless]

Here's my test for truth in economic policies:

If a republican says it, it's likely false.

That's not even limited to economic policy, frankly.

 

[MagnaderAlpha]

So you're telling me giving a large portion of the population more money results in more spending resulting in more demand for labor? This sounds like alt facts to me.

That's the kicker regarding Republicans and Democrats and the rich vs the poor. Rich want it all and want to keep the poor down because it makes them feel more special that they are rich. They pass laws that ensures the rich get richer, BUT, if the poor were given more opportunities to make money, maybe rise a class or so and become stabilized instead of scraping together whatever they can, the more money they get, the more they will spend, and the more the rich (who own a lot of the companies that sell things) would get, well, RICHER. The more wealth going round, the more people will spend on things, things produced by companies owned by wealthy people. At the end, I don't think it is as much about money and rather about the rich loving the gap between them and the poor. Makes 'em feel "exclusive".

 

[YuriLowell]

Such a shame so many Democrats are too weak to fight for $15.

They still want wealthy corporate donors so this won't happen.

 

[smisk]

I'm in favor of a $15 minimum wage, but I do worry about some small businesses. I wonder if places like my local comic shop could afford to pay their workers that much, I know the margins are pretty small in that business.

 

[Mr.Shrugglesツ]

In fact, if anything, the data suggest that increases in the federal minimum appeared to encourage job growth and hiring.

Shocking.

 

[TheLaughingStock]

Many of the folks that whine and scream about the minimum wage are mostly young parrots who aren't aware the minimum wage has been around far longer than they've been alive, modern day sophists trying to dupe people out of doing what will help them out, despise the little man for reasons unknown, or are ignorant to the history of why minimum wages were introduced to begin with.

 

[Goldenroad]

I'm in favor of a $15 minimum wage, but I do worry about some small businesses. I wonder if places like my local comic shop could afford to pay their workers that much, I know the margins are pretty small in that business.

Exactly. It will have zero impact on the hiring abilities of multi-billion dollar corporations like Walmart, Costco, Apple, etc, but it is how a local hardware store is forced to shut down when competition from Home Depot rolls into town. Regardless, I don't see how anyone can argue that higher wages hasn't led to further automation of jobs. To say that jobs haven't been lost to automation (due to it being cheaper) over the last 78 years does not seem rooted in fact.

 

[Vanillalite]

I believe in this study.

That being said during this study the wage increased as it should have over time.

The issue now is wages have stagnated for so many years you have to go to warp speed so to speak to catch up.

Granted most wage increase bills have them phasing in. Still gonna be a larger shock to the system.

 

[plagiarize]

I'm in favor of a $15 minimum wage, but I do worry about some small businesses. I wonder if places like my local comic shop could afford to pay their workers that much, I know the margins are pretty small in that business.

If a business can't operate without paying people shit wages, then yeah, that business might go under. But maybe it should. Small businesses are great. Small businesses that are only profitable because they pay people shitty minimum wages?

I'm not so sure that they are also great.

 

[Earthstrike]

Jobs in the retail sector increased? It's almost as if aggregate demand increased. Wow. Facts and reasoning.

 

[kirblar]

The minimum wage has never gone above $12 in the states on a national level. The argument isn't that raises are bad, it's the degree of raises. One of the benefits of having a federal system is that you can have granularity w local areas passing a higher minimum. The federal needs to be your lowest common denominator because otherwise you're going to just shed jobs in rural areas even faster than you already are.

The actual minimum wage is also higher than it appears due to businesses needing to provide health insurance to full time employees. (On the flip side, you make less when you're self employed because of this.) To make it clear: this is a really really bad thing and a really important reason we need a universal health care system.

 

[Vanillalite]

If a business can't operate without paying people shit wages, then yeah, that business might go under. But maybe it should. Small businesses are great. Small businesses that are only profitable because they pay people shitty minimum wages?

I'm not so sure that they are also great.

The problem is we didn't raise enough as we went along. We should already be at like 12 an hour for federal minimum with local areas being higher where needed.

So now we have to jump to where we naturally shoulda been over the last 17 years in just a couple. That's not gonna be or feel normal.

 

[King Tubby]

I'm in favor of a $15 minimum wage, but I do worry about some small businesses. I wonder if places like my local comic shop could afford to pay their workers that much, I know the margins are pretty small in that business.

The answer to that question depends on how many more customers you think they would have if the local population were actually making a liveable wage.

 

[humansarehorses]

In a first-of-its-kind report, researchers at the National Employment Law Project pore over employment data from every federal increase since the minimum wage was first established, making "simple before-and-after comparisons of job-growth trends 12 months after each minimum-wage increase."

Their methodology's a complete joke.

 

[Renekton]

How about productivity? I remember my teacher drilling into us about wage hike needing corresponding productivity improvements.

 

[kirblar]

Their methodology's a complete joke.

There's a reason this is a "first of its kind report", no one who takes this seriously would actually try to analyze it like that. They're an advocacy group, not an academic one.

 

[AdventureRacing]

This is partially depressing though in that it speaks to the fact that poor folks (and middle class people too) should be saving instead of spending everything.

That's pretty misleading. Poor people don't spend the extra money they get just because they're making bad decisions. When you're poor you can't have everything you want or need, so when you get a bit of extra money you're likely to spend it on things you otherwise weren't able to get.

Wih rich people they've already got all the money they need to buy what they want so naturally the money just builds up.

It's not as easy to just save when you're poor.

 

[sans_pants]

Exactly. It will have zero impact on the hiring abilities of multi-billion dollar corporations like Walmart, Costco, Apple, etc, but it is how a local hardware store is forced to shut down when competition from Home Depot rolls into town. Regardless, I don't see how anyone can argue that higher wages hasn't led to further automation of jobs. To say that jobs haven't been lost to automation (due to it being cheaper) over the last 78 years does not seem rooted in fact.

Keeping wages down for the sake of jobs is also a terrible solution

 

[McBryBry]

"Higher minimum wage? How about they get a real job!"

 

[Deepwater]

This is partially depressing though in that it speaks to the fact that poor folks (and middle class people too) should be saving instead of spending everything.

How the hell do you save money when people are living paycheck to paycheck.

 

[kirblar]

Keeping wages down for the sake of jobs is also a terrible solution

Cost of living is way lower in rural areas. This has nothing to do w the minimum wage and everything to do w urban/rural economic differences. The wages are lower there because a single dollar goes further there.

 

[Shake Appeal]

But muh-muh-muh ideology??

 

[Deepwater]

How about productivity? I remember my teacher drilling into us about wage hike needing corresponding productivity improvements.

It's literally just a vehicle for a redistribution of wealth, productivity has nothing to do with it.

 

[kirblar]

But muh-muh-muh ideology??

The group who produced the study is a labor advocacy group. Not the source you want for something like this.

 

[Snowman Prophet of Doom]

This is not the only study on the matter, but I do suspect it is correct.

 

[smisk]

The answer to that question depends on how many more customers you think they would have if the local population were actually making a liveable wage.

That's a good point. I live in Northern VA, where the minimum wage is still $7.25 yet cost of living is pretty high. It definitely needs to go up here.

 

[kirblar]

That's a good point. I live in Northern VA, where the minimum wage is still $7.25 yet cost of living is pretty high. It definitely needs to go up here.

If you walk into a Sheetz, they have a Now Hiring sign that's advertising $12 an hour for new employees. (At least out here in the western part, there are help wanted signs plastered on virtually every storefront.) Wages naturally will rise in areas like NOVA simply because they have to, especially in a tight market like we have right now- they're not really the ones minimum wage legislation is going to affect the most.

 

[humansarehorses]

There's a reason this is a "first of its kind report", no one who takes this seriously would actually try to analyze it like that. They're an advocacy group, not an academic one.

It's embarrassing that the study cited a paper Dube co-authored when he wrote a blog post specifically admonishing trend analyses.

But muh-muh-muh ideology??

If anything, people who use this garbage of a study as support for a minimum wage hike are ideological.