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[Zeus Molecules]

Evidence and Compassion are two things that have never stopped a republican from campaigning against something

 

[Deepwater]

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.

you're going to have to explain what exactly is faulty with the methodology or what exactly other factors they're leaving out. It's not a long report, It's only 10 pages. The authors both have post graduate degrees from reputable institutions (although, one of them has a degree from New School University)

I'm not saying that there isn't any bias, but at what point is the bias muddy the actual analysis, and in what ways?

 

[Condom]

The study may be shit but so is the original claim that minimum wage hikes always lead to a loss of jobs.

That's only the case if they are disproportionate to the rest of the rest of the economy.

 

[MisterShine]

Here's the Congressional Budget Office's report on potential minimum wage increases.

http://www.cbo.gov/sites/default/files/cbofiles/attachments/44995-MinimumWage.pdf

Basically there's trade-offs to each level, but to debunk the article from OP:

"Under the $10.10 scenario, there would likely be a reduction of about 500,000 workers across the labor market, as businesses shed jobs, but about 16.5 million low-wage workers would see substantial gains in their earnings in an average week. Under the $9.00 scenario, the labor force would see a reduction of 100,000 jobs, but an estimated 7.6 million low-wage workers would see a boost in their weekly earnings."

 

[Sidewinder]

Yeah I'm sure it's better to just lower the wages of the poor, so that they actually can't buy any products they build/sell/transport etc., this will make them get an engineer degree or start coding in their garage!!1

 

[kirblar]

you're going to have to explain what exactly is faulty with the methodology or what exactly other factors they're leaving out. It's not a long report, It's only 10 pages. The authors both have post graduate degrees from reputable institutions (although, one of them has a degree from New School University)

I'm not saying that there isn't any bias, but at what point is the bias muddy the actual analysis, and in what ways?

a) The group that did the paper is a labor advocacy group. To make it clear why this is a problem- labor groups are the ones bankrolling the "Fight for $15" campaign that's pushing for minimum wage hikes in cities. It's like trusting a BP-sponsored paper on Climate Change or whoever makes Oxycontin-sponsored paper on Opoioid addiction.

b) The "analysis" doesn't say anything worthwhile. With this sort of analysis you're normally taking a deep dive into specific markets/regions on a local level to see how they're affected. All they've done here is looked at a wage hike, then looked at the following year to see if employment went up or down. That's not any type of rigorous analysis that tries to control for as many factors as possible- that's just literally looking for correlation without even attempting to go any deeper.

Here's the Congressional Budget Office's report on potential minimum wage increases.

http://www.cbo.gov/sites/default/files/cbofiles/attachments/44995-MinimumWage.pdf

Basically there's trade-offs to each level, but to debunk the article from OP:

"Under the $10.10 scenario, there would likely be a reduction of about 500,000 workers across the labor market, as businesses shed jobs, but about 16.5 million low-wage workers would see substantial gains in their earnings in an average week. Under the $9.00 scenario, the labor force would see a reduction of 100,000 jobs, but an estimated 7.6 million low-wage workers would see a boost in their weekly earnings."

Thanks for this. (The CBO is nonpartisan and generally are very good at their jobs.) There will never be "no" tradeoffs- you can never escape unintended consequences, it's a question of whether or not those tradeoffs are worth it. And the degree of the change matters immensely in making that calculation.

 

[humansarehorses]

you're going to have to explain what exactly is faulty with the methodology or what exactly other factors they're leaving out. It's not a long report, It's only 10 pages. The authors both have post graduate degrees from reputable institutions (although, one of them has a degree from New School University)

I'm not saying that there isn't any bias, but at what point is the bias muddy the actual analysis, and in what ways?

Take the title. The title refers to a causal impact -- raising the minimum wage does not decrease the overall number of jobs.

The number of jobs is a function of many variables, yes? Like it's a function of monetary policy. Monetary policy stances change over time, just as wage floors change over time. To infer a causal impact of any variable, you want to account anything else that could affect the outcome variable. You want to use controls -- you want to establish a counterfactual.

There are no controls in a trend analysis. There is no counterfactual.

Causal impacts are also what policymakers are interested in. Let's say that minimum wage increases actually increase the level of employment, but the majority of data points available on employment for countries are from recessionary periods.

What do you think the trend in employment is going to look like?

 

[LegendofJoe]

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

Eric Garcetti wasn't. Minimum wage increases are being passed in cities all across the country. The reason why is because they actually have the political support to do so. Democrats don't control enough state legislature seats to pass statewide increases. And in red states Republicans are actually passing laws that forbid cities from increasing the minimum wage.

You want wage increases? Vote a lot more Democrats into office. And stop complaining that they're too weak to push these increases when they don't have the power to do anything because it's stupid.

 

[Goldenroad]

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

I'm not proposing it as a solution. I'm just saying, there has clearly been jobs lost over the last 78 years due to automation being a cheaper option than manual labor.

 

[totowhoa]

I believe the counter argument here is something like: of course minimum wage doesn't result in negative employment changes; what it does is dampen growth, which is much harder to test and observe.

Full disclosure: I do believe the minimum wage distorts the market, even if it's small. I personally support the negative income tax as a way to support low wage earners.

 

[HazySaiyan]

Another conservative talking point has been proven to be bullshit, shock horror.

Here's my test for truth in economic policies:

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

I do that but with everything.

 

[Vicetrailia]

I believe the counter argument here is something like: of course minimum wage doesn't result in negative employment changes; what it does is dampen growth, which is much harder to test and observe.

Full disclosure: I do believe the minimum wage distorts the market, even if it's small. I personally support the negative income tax as a way to support low wage earners.

Paying zero tax on $7.25 isn't enough.

 

[kirblar]

Another conservative talking point has been proven to be bullshit, shock horror.

Conservatives completely exaggerate the trade-offs involved w/ increasing it.

That doesn't mean that there aren't trade-offs.

 

[Kai Dracon]

I find it interesting that the invisible hand of the market is supposed to be capable of anything with the sole exception of compensating people for their labor.

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.

One of the traps of poverty is that the amount of money someone might be able to save month-to-month is ultimately trivial compared to an immediate purchase having a lasting impact on quality of life.

A poor person will be chided for buying a "luxury" appliance like a washing machine, rather than putting the money into savings. In reality the $300 for the washer is all they would have been able to save for the year, which amounts to nothing as a safety buffer. But the washer has a large impact on quality of life, especially for people with children.

 

[Deepwater]

Here's the Congressional Budget Office's report on potential minimum wage increases.

http://www.cbo.gov/sites/default/files/cbofiles/attachments/44995-MinimumWage.pdf

Basically there's trade-offs to each level, but to debunk the article from OP:

"Under the $10.10 scenario, there would likely be a reduction of about 500,000 workers across the labor market, as businesses shed jobs, but about 16.5 million low-wage workers would see substantial gains in their earnings in an average week. Under the $9.00 scenario, the labor force would see a reduction of 100,000 jobs, but an estimated 7.6 million low-wage workers would see a boost in their weekly earnings."

The footnote for that estimates that 5% of low wage workers currently work multiple jobs, but that's the only time they mention it in the report. BLS reported in 2016 that 4.3 million people are working full time + part time jobs, and 2.1 are working multiple part time jobs . (USAToday sources the BLS report) I think this is an element that's missing from many minimum wage discussions.

In 2004, they reported that around 60% of these multiple job holders do so in order to meet expenses or pay off debt. And considering average cost of living AND debt has increased since then, I don't think it'd be a stretch to assume that remains a significant factor.

I don't think the CBO report is faulty in its numbers of change of employment/jobs (which they use interchangeably although technically it's different), however I think if you're just saying "500k workers lost" without also taking a deep analysis of how that affects multiple job holders (which, as I'm interpreting it, isn't present in the report).

And I'm not saying this to advocate for $15 federal (I think it'd be great if all states could agree to make the state minimum correspond with cost of living), but just for discussion of raising the minimum in general.

 

[humansarehorses]

I find it interesting that the invisible hand of the market is supposed to be capable of anything with the sole exception of compensating people for their labor.

How many people do you know work without any compensation?

 

[Deepwater]

Take the title. The title refers to a causal impact -- raising the minimum wage does not decrease the overall number of jobs.

The number of jobs is a function of many variables, yes? Like it's a function of monetary policy. Monetary policy stances change over time, just as wage floors change over time. To infer a causal impact of any variable, you want to account anything else that could affect the outcome variable. You want to use controls -- you want to establish a counterfactual.

There are no controls in a trend analysis. There is no counterfactual.

Causal impacts are also what policymakers are interested in. Let's say that minimum wage increases actually increase the level of employment, but the majority of data points available on employment for countries are from recessionary periods.

What do you think the trend in employment is going to look like?

no, your analysis is fair, I just felt it was wasteful to say "this methodology sucks" without actually explaining why

 

[Jason's Ultimatum]

Good news to hear. Did the article mention about price of goods increasing due to raising min. wage?

Thanks

 

[Condom]

How many people do you know work without any compensation?

Voluntary work is a big part of most economies (healthcare sector is one to think of). Might be a lot or relatively little depending on the country of course. But free labour in that form is often ignored.

 

[Deepwater]

Good news to hear. Did the article mention about price of goods increasing due to raising min. wage?

Thanks

price of goods are going up regardless...

 

[humansarehorses]

Voluntary work is a big part of most economies.

It's probably not a big part of any economy. I can't imagine volunteers adding much to GDP and being very high skilled (because the opportunity cost would be huge).

But anyway, that there are volunteers doesn't go against the claim that free markets are socially optimal.

 

[kirblar]

The big "voluntary" work sector that's undercounted is stay at home parents, because although they're not working, they're also saving massive amounts of money in childcare costs. But because it's savings/opportunity cost it doesn't show up.

 

[Mr. Blonde]

Nice study, but when was the last time the US doubled the minimum wage?

I think the economy and workers would be better off without a minimum wage, but since that's not going to happen, I think an increase to $10 over the next few years is a lot more reasonable than paying $15.

 

[Skiptastic]

I believe the counter argument here is something like: of course minimum wage doesn't result in negative employment changes; what it does is dampen growth, which is much harder to test and observe.

Full disclosure: I do believe the minimum wage distorts the market, even if it's small. I personally support the negative income tax as a way to support low wage earners.

The article itself states:

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.

So if you believe that leaving the minimum wage where it is increases income inequality, then you should believe the opposite of what you said: minimum wage increases should help improve growth.

 

[Cocaloch]

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

I don't think you understand how deeply unpopular this is with Americans. This is a failure of American political culture more broadly. Democrats running on this in anything but particularly secure seats are quite liable to lose them over this issue.

The article itself states:



So if you believe that leaving the minimum wage where it is increases income inequality, then you should believe the opposite of what you said: minimum wage increases should help improve growth.

That's only if you believe growth is monocausal.

 

[MisterShine]

...

I don't think the CBO report is faulty in its numbers of change of employment/jobs (which they use interchangeably although technically it's different), however I think if you're just saying "500k workers lost" without also taking a deep analysis of how that affects multiple job holders (which, as I'm interpreting it, isn't present in the report).

This is a fair point I hadn't considered, however we can still say that for those who have two jobs would be at a severe hindrance by losing one of their jobs.

The 'point' of my post, other than to relay facts as I have found them for others to consider, is that we must consider facts before we frame our arguments. There are plenty of posts in this thread that are nothing more than "Hurr durr dumb republicans wrong all the time", which when you look at other studies, just makes people arguing for a minimum wage increase, look like ignorant jackasses. I believe in a minimum wage hike, even chaining it to inflation or poverty line or what have you, but the argument needs to be based on fact.

A wage hike will almost certainly cost jobs and economic growth in the short term. But for long term gain, to ease the burden of the lower class and help them move into the middle, to do the moral thing of helping others that are less fortunate: we should raise the minimum wage anyway despite the cost.

 

[kirblar]

I think you fail to understand how deeply unpopular this is with Americans. It's a failure of American political culture.

Yes, how dare we not want to accidentally cause massive rural job losses.

 

[EdibleKnife]

I think you fail to understand how deeply unpopular this is with Americans. It's a failure of American political culture.

American social and political culture more like. The American bootstrap pulling ideal was baked into the foundation of this country and it's a struggle to get rid of the idea that honest hard work is always rewarded with equal compensation. People don't want to believe that a single mother can only have less than 10-20 hours of not working in a week and still only barely be able to survive while riches can come to incompetent, lazy and arrogant imbeciles.

 

[Condom]

It's probably not a big part of any economy. I can't imagine volunteers adding much to GDP and being very high skilled (because the opportunity cost would be huge).

But anyway, that there are volunteers doesn't go against the claim that free markets are socially optimal.

Just answering your question and the calculated value is in the billions, at least according to Dutch research. I don't have US numbers.

The claim free markets are socially optimal is a big one and needs to be proven, why do you think they are?

 

[Cocaloch]

Yes, how dare we not want to accidentally cause massive rural job losses.

Oh come on. Regardless of the actual effects of implementing the policy, the idea of the $15 dollar minimum is deeply deeply unpopular, and you know it. Every economist could spontaneously come to the conclusion that it's a great idea, and that wouldn't change the broader cultural attitude.

American social and political culture more like. The American bootstrap pulling ideal was baked into the foundation of this country and it's a struggle to get rid of the idea that honest hard work is always rewarded with equal compensation. People don't want to believe that a single mother can only have less than 10-20 hours of not working in a week and still only barely be able to survive while riches can come to incompetent, lazy and arrogant imbeciles.

I don't agree with the bolded. As a British derived culture, America has always had a pretty positive outlook on work, but that doesn't mean there was an understanding of work as leading to fair compensation. In the early colonial period it was understood that your work was part of your lot in life and place in the hierarchy. Enlightenment, both in the colonies and metro pole, led individuals to challenge hierarchies more broadly without challenging the idea of the centrality of work. Which is to say people were fine with working, but wanted to be compensated in a way they thought was culturally fair. Thus you have over the long 19th century a labor movement agitating for more rights, admittedly weaker in the US than Britain, that's very different than the kind of bootstrap culture you're talking about. It's only fairly recently that such a culture, and the acultural, asocial, ahistorical economic outlook it relies upon, has really become established, though it has drawn from other narratives deeply embedded within American culture.

The big "voluntary" work sector that's undercounted is stay at home parents, because although they're not working, they're also saving massive amounts of money in childcare costs. But because it's savings/opportunity cost it doesn't show up.

There is a lot more to Z goods than child rearing.

 

[Deepwater]

This is a fair point I hadn't considered, however we can still say that for those who have two jobs would be at a severe hindrance by losing one of their jobs.

The 'point' of my post, other than to relay facts as I have found them for others to consider, is that we must consider facts before we frame our arguments. There are plenty of posts in this thread that are nothing more than "Hurr durr dumb republicans wrong all the time", which when you look at other studies, just makes people arguing for a minimum wage increase, look like ignorant jackasses. I believe in a minimum wage hike, even chaining it to inflation or poverty line or what have you, but the argument needs to be based on fact.

A wage hike will almost certainly cost jobs and economic growth in the short term. But for long term gain, to ease the burden of the lower class and help them move into the middle, to do the moral thing of helping others that are less fortunate: we should raise the minimum wage anyway despite the cost.

I agree, it's definitely not just a simple political split between left and right because you have tons of "liberals" who are against minimum wage increases.

Personally, I believe that (1)You cant separate economic policy from social policy , and (2)There does need to be significant risk/cost analysis in terms of implementing it, even at a municipal level (where we have most of the data for min wage increases above $10/$11)

I also don't think that it's the singular and conclusive solution to combating poverty and wage/income inequality. Yes, min wage needs to go up basically everywhere, but all other factors staying the same, inflation is going to catch up again in 10-20-30 years and we'll be in the same predicament.

Slight tangential, but this whole economic system is unsustainable IMO. We have, at any given time, multiple economic bubbles ready to burst (the next one, I'm thinking, will be student loans). Not to mention the vast economic and societal shocks that will occur when the eastern seaboard sinks underwater in 50-75 years. Just a whole lot of shit, man. And it bugs me the country can't collectively get its shit together.

 

[WMBT27]

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

The issue with this approach is that it is non-reciprocal. Yes, if I'm the CFO of a company I'm going to want to see a productivity increase with any wage increase to avoid a decrease in profitability. The issue is I would MUCH rather force an increase in productivity AND keep wages level.

The rise of Six Sigma and other process improvement methodologies in areas other than manufacturing in this country (along with and as a sponsor of automation) has pushed companies to create more with less. That additional production is not reciprocated in wages to the workers that remain. It increases profits to owners/shareholders. An additional 20% in per worker production is an expectation, not a cause for that worker to be additional compensated.

That creates wealth disparity by eliminating front line payroll expense and generating executive (or board/shareholder) income. It also creates a feedback loop wherein Wage Push at the employee controlled level (essentially pay me what I want or I quit cause I have three other offers) is difficult to achieve because productivity/headcount ratio is so much lower.

 

[Cocaloch]

you're going to have to explain what exactly is faulty with the methodology or what exactly other factors they're leaving out. It's not a long report, It's only 10 pages. The authors both have post graduate degrees from reputable institutions (although, one of them has a degree from New School University)

I'm not saying that there isn't any bias, but at what point is the bias muddy the actual analysis, and in what ways?

What's wrong with the New School?

Causal impacts are also what policymakers are interested in.

This is probably generally untrue.

Eric Garcetti wasn't. Minimum wage increases are being passed in cities all across the country. The reason why is because they actually have the political support to do so. Democrats don't control enough state legislature seats to pass statewide increases. And in red states Republicans are actually passing laws that forbid cities from increasing the minimum wage.

You want wage increases? Vote a lot more Democrats into office. And stop complaining that they're too weak to push these increases when they don't have the power to do anything because it's stupid.

Crab is Welsh, and none of this is an argument against dems doing anything at the federal level anyway.

 

[wutwutwut]

You need both a negative income tax/UBI and a reasonable minimum wage. They have different purposes: NIT/UBI to provide a basic standard of living and minimum wage to counter monopsony power.

 

[Deepwater]

What's wrong with the New School?

in the context of bias, just acknowledging they're associated with a lot of left-leaning/progressive policy & research. At least from what I could gleam from their wikipedia page (as it was the only school in the author bio I didn't recognize).

I could be wrong about that assertion, though.

 

[badcrumble]

Their methodology's a complete joke.

bad empiricism is still better than the outright anti-empiricism of austrian school economics tbh

 

[Beartruck]

Makes sense. Look at the places with the lowest minimum wages: Economically dead. It turns out, if you don't want to pay people they'll try to go somewhere they will get paid.

 

[Cocaloch]

It's probably not a big part of any economy

Define big. Certainly under even the least liberal definition it has at least historically been true, so it is certainly true for some socities, including advanced Capitalist ones.

But anyway, that there are volunteers doesn't go against the claim that free markets are socially optimal.

It actually does damage to ideaological claims about the free market on a number of levels. The most obvious being, if the market is optimal without qualification, an absurd premise, why do many Z goods, obviously with some exceptions, still exist? The only answers to this demand a qualified statement about the utility of markets.

in the context of bias, just acknowledging they're associated with a lot of left-leaning/progressive policy & research. At least from what I could gleam from their wikipedia page (as it was the only school in the author bio I didn't recognize).

I could be wrong about that assertion, though.

The New School is quite respected, and probably isn't really that much more left leaning than other top universities.

minimum wage to counter monopsony power.

wut

bad empiricism is still better than the outright anti-empiricism of austrian school economics tbh

As much as I disagree with the study, I also can't agree with this. Bad empiricism is bad. Good rationalism can at least be rational.

Makes sense. Look at the places with the lowest minimum wages: Economically dead. It turns out, if you don't want to pay people they'll try to go somewhere they will get paid.

You're probably getting that backwards.

 

[kirblar]

Oh come on. Regardless of the actual effects of implementing the policy, the idea of the $15 dollar minimum is deeply deeply unpopular, and you know it. Every economist could spontaneously come to the conclusion that it's a great idea, and that wouldn't change the broader cultural attitude.

Half the counties in the country have a median wage that's 20 an hour or lower.

 

[wutwutwut]

wut

Smaller towns especially have very few large employers. Without a minimum wage those employers could get away with paying as little as possible.

A NIT doesn't solve this problem.

 

[Cocaloch]

Half the counties in the country have a median wage that's 20 an hour or lower.

Your point? I know people that work for 12 bucks an hour that cannot stand the idea of increasing minimum wage.

Smaller towns especially have very few large employers. Without a minimum wage those employers could get away with paying as little as possible.

A NIT doesn't solve this problem.

It can. If they won't pay people enough for it to be worth their time, then people won't work. UBI actually makes the free market function better because the need to reproduce and subsist is no longer relevant to working, and people can make decisions about the price to sell their labor that aren't based on necessity.

 

[JP_]

Here's the Congressional Budget Office's report on potential minimum wage increases.

http://www.cbo.gov/sites/default/files/cbofiles/attachments/44995-MinimumWage.pdf

Basically there's trade-offs to each level, but to debunk the article from OP:

"Under the $10.10 scenario, there would likely be a reduction of about 500,000 workers across the labor market, as businesses shed jobs, but about 16.5 million low-wage workers would see substantial gains in their earnings in an average week. Under the $9.00 scenario, the labor force would see a reduction of 100,000 jobs, but an estimated 7.6 million low-wage workers would see a boost in their weekly earnings."

The CBO is generally good at estimating the effects of policy because those policies are usually novel and there isn't a lot of precedent to look at, so logical assumptions are the best tool available. But for something like minimum wage, I'd trust studies using empirical evidence over these sorts of estimates.

The idea that we'll have fewer jobs if we raise the minimum wage makes complete logical sense, but the empirical evidence has shown that those job losses don't always materialize. This demonstrates that our logical assumptions about minimum wage are incomplete and/or over-simplistic.

It reminds me of a particular example where a shopping mall happened to exist on the border of two towns -- when one town raised their minimum wage, it split the mall in two halves: http://www.npr.org/sections/money/2014/08/28/343430393/a-mall-with-two-minimum-wages

It's an interesting example because you can assume that both sides of the mall are otherwise equal, which is generally the problem when studying minimum wage effects for different states or countries (hard to separate other factors).

So what happened?

The Westfield Valley Fair Mall straddles two cities. One side of the mall is in Santa Clara, but walk a few feet down the mall, and you're in San Jose. In 2012, San Jose voters agreed to raise the city's minimum wage from $8 to $10 an hour.

Philip Sandigo manages a shoe store on the $8-an-hour side. When San Jose raised the minimum wage, he lost about half his staff.

They went to the stores on the side of the mall that paid $2 an hour more.

Sandigo asked the owners of the shoe store if he could raise wages, but they said no. Almost two years later, it's still a struggle to hire new employees.

"We get the bottom of the barrel here," Sandigo says. "Not really focused. ... One guy came in high the other day."

On the $10-an-hour side of the mall, stores like Wetzel's Pretzels have different problems. Suddenly, the shop had to pay the lowest-wage workers more — 25 percent more. That was great for the employees, but a challenge for the owner, Yvonne Ryzak.

Ryzak had a few options. One was to sell more pretzels. She did the math and it came out to selling 250 or 300 more every two weeks. But she didn't start selling more pretzels just because the minimum wage went up in San Jose.

Another way to deal with the wage hike was to cut staff. But Ryzak figured that would lead to long lines and lost sales.

She could also raise her prices. But the other pretzel shop on the lower-wage side of the mall made that difficult.

In the end, Ryzak raised her prices a little bit and made up the rest by cutting into her profits.

Ryzak says she's fine with raising the minimum wage. She just wishes it was the same everywhere — across the mall, California, and the entire country.

To me, this is a striking example. On the side that didn't lower the minimum wage, they saw that it was hard to compete with the other side of the mall to keep talent. They still assume that they can't raise their own employee wages to compete for talent. This is a common assumption from people that are against minimum wage increase -- they assume what they're paying now is already optimized for the market. But this demonstrates that their assumptions are likely wrong. The other side didn't get any help to afford the wage hikes, so there was nothing that made it easier for them to raise their wages -- they were simply forced to. There's nothing stopping the other side from voluntarily raising wages to compete other than their own assumptions.

And what was the outcome on the side that did raise the minimum wage? Basically, it accomplished the exact goal set out. Lower level employees simply got a bigger share of the company's profit, reducing inequality.

This basically backs up two assumptions held by the pro-minimum wage side:

• Cutting your workforce generally lowers output, which lowers revenue, which lowers profit. When companies are forced to raise wages, either because of minimum wage or because of competition for talent, they'll do so as long as there's still a profit margin.
• At least right now, markets aren't optimized for workers -- employees do not have enough leverage to fight for the wages they're actually worth. The minimum wage hike essentially acted as a forced collective bargaining. Just because companies pay people minimum wage doesn't mean that's what those employees are worth and they can't afford to pay them more.

And I'd just like to mention, this doesn't mean all minimum wage hikes would have the same effect. Nobody is seriously arguing that we could raise the minimum wage to $1000/h -- that's just a lazy strawman created by the anti-minimum wage side that tries to oversimplify things. The point is this -- there's a balance, and sometimes the free market doesn't do a good job optimizing itself for that balance and needs a little nudge to set things right.

 

[kirblar]

Your point? I know people that work for 12 bucks an hour that cannot stand the idea of increasing minimum wage.

You don't see how people wouldn't be fans of doubling the minimum wage when a large proportion of the population they live in would be seeing gigantic increases, with the legitimate fear that it could spillover and affect their job security?

 

[Cocaloch]

You don't see how people wouldn't be fans of doubling the minimum wage when a large proportion of the population they live in would be seeing gigantic increases, with the legitimate fear that it could spillover and affect their job security?

Oh, I was confused because I was trying to figure out how what you said was relevant to what you were quoting.

Like I was getting at, we can remove any actual economic impact from the equation when we talk about how Americans feel about this issue, or generally how publics perceive any policy.

 

[Vanillalite]

The problem is conservatives fucked everyone by not keeping up in terms for minimum wage.

The problem is now we are fucked cause the rate at which the minimum should be is such a drastic change that it creates a ton of other problems getting it to where it should be.

We are also moving towards a point where IMO things like UBI and national healthcare are a better answer, but those things aren't gonna be enacted either due to conservative fuck you I got mine attitudes.

 

[NervousXtian]

I don't think the quotes used in the OP are answered by just talking about job growth. Of course min-wage jobs are still needed to be filled, that's not really ending.

What we've seen though is the elimination of management positions, and those jobs replaced by low-wage jobs.

This isn't the same time as almost 80 years ago, let alone 20 years ago.

If someone says that raising min. wage hurts job growth, it's false.. that's proven. Yet, what's the effect on overall income growth for lower-middle class or middle-class families. My industry, and the industries we serve have seen a huge shift in structure. Less tiers of management, less growth potential and upward mobility, and what we pay for the starting position continues to rise, it's being cut considerably in other areas to pay for it. We need that bottom tier to make money, but then everyone above is asked to deliver more for less. Wage freezes are the new norm, people are lucky to get cost-of-living let alone a real pay increases. Entire living wage depts get cut, and the burden falls on everyone else to pick up the slack.

So yes, it DOES help people on the bottom as they bring in more, but I would like to see the data on how it is overall impacting upward mobility and future earning potential.

$11.25 is the new min in Portland in a month, in a few years it'll be $14.75. You can't really live off either those well in Portland. Everyone who was above that rate isn't seeing adjustments to offset it, so it's just balancing everyone out.

It's not the rich paying for min wage increases, it's the middle-class.

 

[NervousXtian]

The CBO is generally good at estimating the effects of policy because those policies are usually novel and there isn't a lot of precedent to look at, so logical assumptions are the best tool available. But for something like minimum wage, I'd trust studies using empirical evidence over these sorts of estimates.

The idea that we'll have fewer jobs if we raise the minimum wage makes complete logical sense, but the empirical evidence has shown that those job losses don't always materialize. This demonstrates that our logical assumptions about minimum wage are incomplete and/or over-simplistic.

It reminds me of a particular example where a shopping mall happened to exist on the border of two towns -- when one town raised their minimum wage, it split the mall in two halves: http://www.npr.org/sections/money/2014/08/28/343430393/a-mall-with-two-minimum-wages

It's an interesting example because you can assume that both sides of the mall are otherwise equal, which is generally the problem when studying minimum wage effects for different states or countries (hard to separate other factors).

So what happened?



To me, this is a striking example. On the side that didn't lower the minimum wage, they saw that it was hard to compete with the other side of the mall to keep talent. They still assume that they can't raise their own employee wages to compete for talent. This is a common assumption from people that are against minimum wage increase -- they assume what they're paying now is already optimized for the market. But this demonstrates that their assumptions are likely wrong. The other side didn't get any help to afford the wage hikes, so there was nothing that made it easier for them to raise their wages -- they were simply forced to. There's nothing stopping the other side from voluntarily raising wages to compete other than their own assumptions.

And what was the outcome on the side that did raise the minimum wage? Basically, it accomplished the exact goal set out. Lower level employees simply got a bigger share of the company's profit, reducing inequality.

This basically backs up two assumptions held by the pro-minimum wage side:

• Cutting your workforce generally lowers output, which lowers revenue, which lowers profit. When companies are forced to raise wages, either because of minimum wage or because of competition for talent, they'll do so as long as there's still a profit margin.
• At least right now, markets aren't optimized for workers -- employees do not have enough leverage to fight for the wages they're actually worth. The minimum wage hike essentially acted as a forced collective bargaining. Just because companies pay people minimum wage doesn't mean that's what those employees are worth and they can't afford to pay them more.

And I'd just like to mention, this doesn't mean all minimum wage hikes would have the same effect. Nobody is seriously arguing that we could raise the minimum wage to $1000/h -- that's just a lazy strawman created by the anti-minimum wage side that tries to oversimplify things. The point is this -- there's a balance, and sometimes the free market doesn't do a good job optimizing itself for that balance and needs a little nudge to set things right.

The mall thing is interesting, but it shows greatly what part of the problem is. The one side still refusing to raise pay, so the managers struggle as they don't get to set the wage. There is millions of people in this same boat, they don't get to control that. The other side that was forced either eats it out of their own profit, in the case of a franchise owner, or is having their feet held to the fire to deliver upon the bottom line. If you own the place, that can be tough as it cuts your salary, but a lot of people will make do. If you don't own it, your life just got real fucking rough. You probably lose money in bonuses as well, because you can't put up the same NP numbers you put up before, so either you work longer hours, push people harder, or just give up for the next schmuck willing to try and fail.

 

[humansarehorses]

Define big. Certainly under even the least liberal definition it has at least historically been true, so it is certainly true for some socities, including advanced Capitalist ones.

Go with rankings.

https://www.bea.gov/iTable/iTable.cfm?ReqID=51&step=1#reqid=51&step=51&isuri=1&5114=q&5102=15

Look at the contributions of those industries. Do you really think that volunteering adds much to the economy (an unaccounted activity but still) compared to say, the FIRE industry?

Again, volunteering is largely low skilled.

It actually does damage to ideaological claims about the free market on a number of levels. The most obvious being, if the market is optimal without qualification, an absurd premise, why do many Z goods, obviously with some exceptions, still exist? The only answers to this demand a qualified statement about the utility of markets.

This is garbage. "Why do many Z goods exist", whatever the hell Z goods are, does not go against any claim that free markets are socially optimal. The obvious explanation is that those goods are produced because consumers and firms are pursuing their best interests.

The New School is quite respected, and probably isn't really that much more left leaning than other top universities.

They're not respected. They're not even mainstream.

 

[smokeandmirrors]

I see the standard neoliberals have made their appearance here.

I expected nothing less.

 

[humansarehorses]

I see the standard neoliberals have made their appearance here.

I expected nothing less.

Yeah, who cares if a study is absolutely shit as long as the conclusion supports with your political position?