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A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

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Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#211

Post by joveian »

andrewla wrote: post #140
kevinnk wrote: post #79

Earlier quoted context omitted.

http://www.nber.org/papers/w23532?utm_campaign=ntw&utm_mediu... Total payroll fell, so your explanation is not consistent with the data.

Thanks -- that was enough information to lead me to [1], which is one of the author's PDF of the paper to avoid the paywall. Here's the initial justification for the $19 bucket: > While the preponderance of evidence suggests that a low-wage threshold slightly above the statutory minimum poses little risk of miscoding jobs as lost when they have really been promoted to higher wage levels, in our preferred specificatio…

Thanks for the non-paywall link! It looks like a useful part of a broader analysis (and maybe more states should require the collection of hours worked data).

If it isn't the same people being employed at higher wages, it is still interesting that a sufficiently large pool of more skilled workers exists to take those jobs.

I wish they did the same all wage levels analysis for all workers that they did for the restaurant industry. Without that analysis it isn't clear if the net zero overall effect applies broadly. If it does, that would seem to indicate that wages in general are being held artificially low due to the availability of low wage labor.

Also, since it is a significant increase in a relatively short time, I wonder if the results of the change have stabilized yet. Hopefully they will repeat the analysis in the future.

It is interesting that one of the tests they thought might show a difference ended up failing their falsification test. I wonder what is going on there.

Since housing rental prices have been going up rapidly in Seattle, I wonder if their result could be explained by a sufficient number of low wage workers fleeing the Seattle area and moving to other parts of Washington (or a slower influx of new low wage workers than previously). Maybe something else to look into for someone who knows where to find that kind of data (if it is gathered).

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#212

Post by rsync »

tptacek wrote: post #145
rsync wrote: post #139

Earlier quoted context omitted.

"Why am I meant to feel like my "team" lost something when a study confirms something that most economists have been saying for decades?" Because that "team" did, in fact, lose something - at least in relation to the very cynical (and probably correct) charge that minimum wage increases are vote-buying. Also, I think it's worth considering that the very sound and considerable notion that "a wage price floor causes al…

See, this is exactly what I mean. I'm a liberal. This study is not bad news for me. It does not follow that I somehow support supply-side economics. Literally the first bullet point I chose to wrote in describing myself as a liberal implies directly that I do not believe in supply-side policy. But your comment is written in such a way as to suggest that those are the only two options.

I'm sorry - that's not what I meant.

What I was trying to say was: "people who think (that team) is losing might be having a knee-jerk response to a (mistaken) link in their own minds between wage price floor theories and supply side economic theories".

No, I don't think they are the only two options and further I don't think they are related at all.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#213

Post by vcdimension »

thehardsphere wrote: post #200
vcdimension wrote: post #120

Earlier quoted context omitted.

I think you have more anti-union laws in some US states, such as Michigan and Wisconsin.

Well, OK, but I think Washington is not one of those states. So, again, how is it relevant?

Because if other states which do have anti-union laws are thinking about imposing minimum wage laws to improve the lives of low wage workers they might want to think again. Scandinavia is often upheld as a model for low levels of inequality and high standards of living. I'm sure there are plenty of other things to take into account, but it was just a simple observation.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#214

Post by dragonwriter »

vcdimension wrote: post #213
thehardsphere wrote: post #200

Earlier quoted context omitted.

Well, OK, but I think Washington is not one of those states. So, again, how is it relevant?

Because if other states which do have anti-union laws are thinking about imposing minimum wage laws to improve the lives of low wage workers they might want to think again. Scandinavia is often upheld as a model for low levels of inequality and high standards of living. I'm sure there are plenty of other things to take into account, but it was just a simple observation.

Seattle is not a state; there are reasons to think that local minimum wage increases have different effects than statewide increases, which have different effects than national increases. Each time you increase the size of the jurisdiction, the opportunity for business to simply reroute to a lower cost jurisdiction (or entities not impacted by the smallwr-jurisdiction rule even if located in the jurisdiction) is reduced.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#215

Post by extra88 »

dragonwriter wrote: post #185
coldpie wrote: post #167

Earlier quoted context omitted.

I'm willing to entertain other ideas. If the living wage is X and the minimum wage is Y < X, then someone has to make up the difference. Two methods to make up the gap that make sense to me are taxation and redistribution, or raising the minimum wage. How do you suggest to make up the gap?

> How do you suggest to make up the gap? How about first reducing the gap by reducing taxation of labor income, including employer-side payroll taxes (which both reduces the nominal wage necessary for livable income and makes it less expensive for employees to hire workers at any given nominal wage.)

> reducing taxation of labor income, including employer-side payroll taxes

How do you replace the funding those taxes provide, especially FICA which funds Social Security and Medicare?

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#216

Post by vcdimension »

dragonwriter wrote: post #214
vcdimension wrote: post #213

Earlier quoted context omitted.

Because if other states which do have anti-union laws are thinking about imposing minimum wage laws to improve the lives of low wage workers they might want to think again. Scandinavia is often upheld as a model for low levels of inequality and high standards of living. I'm sure there are plenty of other things to take into account, but it was just a simple observation.

Seattle is not a state; there are reasons to think that local minimum wage increases have different effects than statewide increases, which have different effects than national increases. Each time you increase the size of the jurisdiction, the opportunity for business to simply reroute to a lower cost jurisdiction (or entities not impacted by the smallwr-jurisdiction rule even if located in the jurisdiction) is redu…

Yes, and as with all previous statistical studies on minimum wage there are other caveats aswell. I think the main one is the fact that the minimum wage is so much higher in Seattle than elsewhere: https://fivethirtyeight.com/features/seattles-minimum-wage-h... However, this appears to be the best study so far.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#217

Post by joveian »

runako wrote: post #5

>> to avoid confusing establishments that were subject to the minimum with those that were not, the authors did not include large employers with locations both inside and outside of Seattle in their calculations. I read this to mean that the study therefore would exclude employers such as Seattle-based Starbucks, Seattle-based Amazon, Seattle-based Costco, Seattle-based Nordstrom, McDonald's, etc. Based on that readi…

Multi-site businesses can choose to report on a per-site basis (and it sounds like many businesses actually do this) or on an overall basis and the analysis includes those that report on a per site basis. So it may or may not include those particular businesses.

In addition: "we exclude observations with calculated wages below $9 or above $500 in 2015 dollars. We also exclude observations reporting under 10 or over 1,000 hours worked in a calendar quarter. These restrictions exclude 6.7% of all job/quarter observations."

Overall, as others mentioned in this thread already, they included 89.2% of firms and 62.1% of employees.

They mention survey data that suggests that the businesses they exclude are more likely to reduce jobs in Seattle than the ones that they include.

From the study via non-paywalled link posted by andrewla below: https://evans.uw.edu/sites/default/files/NBER%20Working%20Pa...

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#218

Post by taw55 »

greggyb wrote: post #107
taw55 wrote: post #60

Earlier quoted context omitted.

And very ideologically biased...

And yet presents a framework of analysis that is objective and a case study in the application of bias to an objective technique. The lesson of the book is more than the ideology of its author. It is hubris or naivete in the extreme to assume that someone you disagree with has nothing valuable to say.

Austrian economics is not "objective".

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#219

Post by atemerev »

taw55 wrote: post #218
greggyb wrote: post #107

Earlier quoted context omitted.

And yet presents a framework of analysis that is objective and a case study in the application of bias to an objective technique. The lesson of the book is more than the ideology of its author. It is hubris or naivete in the extreme to assume that someone you disagree with has nothing valuable to say.

Austrian economics is not "objective".

What subjectivity is in it?

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#220

Post by greggyb »

taw55 wrote: post #218
greggyb wrote: post #107

Earlier quoted context omitted.

And yet presents a framework of analysis that is objective and a case study in the application of bias to an objective technique. The lesson of the book is more than the ideology of its author. It is hubris or naivete in the extreme to assume that someone you disagree with has nothing valuable to say.

Austrian economics is not "objective".

> > It is hubris or naivete in the extreme to assume that someone you disagree with has nothing valuable to say.

You think you disagree with me, and you clearly disagree with Austrian economics. Yet, with less than one page's worth of reading, you can identify the core lesson of the book, excerpted below. That the author then applies this lesson in ways you find objectionable is no judgment on the lesson itself.

Chapter 1, Paragraph 1:

    While  certain  public  policies  would  in  the  long
    run benefit everybody, other policies would benefit one
    group only at the expense  of  all  other  groups. The
    group  that  would  benefit  by  such policies, having
    such a direct interest in them, will argue for them
    plausibly and persistently.
Chapter 1, Paragraph 2:

    there is a second main factor that spawns new economic
    fallacies every day. This is the persistent tendency of
    men to see only the immediate effects of a given policy,
    or its effects only on a special group, and to neglect
    to inquire what the long-run effects of that policy will
    be not only on that special group but on all groups. It
    is the fallacy of overlooking secondary consequences.
In case you feel any desire to actually engage with the ideas of the book, it can be read for free, in full, here: https://www.mises.org/library/economics-one-lesson
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