Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Job loss predictions over rising minimum wages haven't come true

axios.com

Post reply on HN
Print view View original

11–20 of 381 posts

Re: Job loss predictions over rising minimum wages haven't come true

#11

Post by davidw »

Ididntdothis wrote: post #6

It seems that a lot of economics as it’s used for political decisions is way oversimplified to the point of being useless or just plain wrong. The minimum wage issue is an example where reality is much more subtle and complex than what a lot of economists in the news say. Same for tax cuts for upper incomes that were supposed to spur investments in new technologies but seem to have done more to drive up asset prices.…

Most real economists go much further than the sound bite types of stuff. I mean, the article itself says:

"A number of peer-reviewed academic studies have found little to no impact on hiring as states and municipalities have raised the minimum wage."

Those are economists doing that research.

Re: Job loss predictions over rising minimum wages haven't come true

#12

Post by nine_zeros »

Ididntdothis wrote: post #6

It seems that a lot of economics as it’s used for political decisions is way oversimplified to the point of being useless or just plain wrong. The minimum wage issue is an example where reality is much more subtle and complex than what a lot of economists in the news say. Same for tax cuts for upper incomes that were supposed to spur investments in new technologies but seem to have done more to drive up asset prices.…

I think typical economists like to think of the world as a perfectly rational system. They look at the world from the lens of some bullshit econ 101 nonsense.

Extraordinary economists figure out that reality is super complicated, often uncontrollable at all. All you can do is experiments.

A real example of this is the Bernanke asset inflation. All he could think about is assets and recovery of banking system. He thought like a middle aged man who just has a few more years to live. It never once occurred to him that his policies could eat up childrens future.

Even if it did occur, future monetary policies never went back to "normal" or equitable. As a result, the vast disparity today is just asset holders vs non-asset holders. This has nothing to do with wages.

I lay blame on monetary policies and politicians with zero knowledge relying solely on monetary policies to define a future. The govt needs more educated people.

Re: Job loss predictions over rising minimum wages haven't come true

#13

Post by nwah1 »

Ididntdothis wrote: post #6

It seems that a lot of economics as it’s used for political decisions is way oversimplified to the point of being useless or just plain wrong. The minimum wage issue is an example where reality is much more subtle and complex than what a lot of economists in the news say. Same for tax cuts for upper incomes that were supposed to spur investments in new technologies but seem to have done more to drive up asset prices.…

"Asset prices" is kind of a codeword for land titles and artificial scarcities. Inflation in general doesn't occur as a result of tax cuts, but rising prices are confined to those particular areas... which is a clue on where to focus policy.

But aside from that, I would generally agree with the consensus economics positions that, all else being equal, lower taxes on production will unlock more production, and lower prices on healthcare will increase demand for healthcare. And that minimum wage will reduce demand for unskilled labor.

Re: Job loss predictions over rising minimum wages haven't come true

#14

Post by RoyTyrell »

gamblor956 wrote: post #7
darawk wrote: post #4

Earlier quoted context omitted.

> This maybe leads to the question of why we should favor any business to continue operating in a space that may be a net negative contribution to our society What does the minimum wage have to do with contribution to society? > Without enforcing minimum wage, and perhaps least minimum full time to part time employment ratios, we face businesses competing on prices by undercutting labor instead of other avenues of im…

The markup on most products is such that US businesses could easily manufacture their products in the US at current minimum wages and still handily profit. They simply choose not to, because that means they have to pay their executives and owners less money and no executive wants to forego their country club membership, each of which is equal to the salary and benefits of 3 or more line workers, or their annual bonus…

> the excess of what their salary is over the value they actually provide to the company (usually just a lit bit over an individual line workers' contribution).

Is that for every CEO at every corporation? How are you measuring and making that determination? Does that hold true for other executive positions?

Re: Job loss predictions over rising minimum wages haven't come true

#15

Post by baron816 »

Ididntdothis wrote: post #6

It seems that a lot of economics as it’s used for political decisions is way oversimplified to the point of being useless or just plain wrong. The minimum wage issue is an example where reality is much more subtle and complex than what a lot of economists in the news say. Same for tax cuts for upper incomes that were supposed to spur investments in new technologies but seem to have done more to drive up asset prices.…

> what a lot of economists in the news say

TV economists are definitely a different breed. Most real labor economists acknowledge that the issue is tricky.

I (not an economist) don’t like the minimum wage since it’s really a poor tool for the job. Society agrees that people should have a minimum standard of living, but then place the burden of providing that standard on a very narrow range of businesses. That burden should just be spread across all of society by way of a negative income tax.

Re: Job loss predictions over rising minimum wages haven't come true

#16

Post by OnlineGladiator »

gamblor956 wrote: post #7
darawk wrote: post #4

Earlier quoted context omitted.

> This maybe leads to the question of why we should favor any business to continue operating in a space that may be a net negative contribution to our society What does the minimum wage have to do with contribution to society? > Without enforcing minimum wage, and perhaps least minimum full time to part time employment ratios, we face businesses competing on prices by undercutting labor instead of other avenues of im…

The markup on most products is such that US businesses could easily manufacture their products in the US at current minimum wages and still handily profit. They simply choose not to, because that means they have to pay their executives and owners less money and no executive wants to forego their country club membership, each of which is equal to the salary and benefits of 3 or more line workers, or their annual bonus…

> The markup on most products is such that US businesses could easily manufacture their products in the US at current minimum wages and still handily profit.

What data are you basing this on?

You're also ignoring the most important part - consumer choice. People buy cheap shit because it's cheaper. It's the foundation of Walmart. So let's say the companies here did manufacture here, but then a foreign competitor offers a significantly cheaper product - how do you reconcile that without going out of business?

Re: Job loss predictions over rising minimum wages haven't come true

#17

Post by Flozzin »

darawk wrote: post #4
dv_dt wrote: post #3

Earlier quoted context omitted.

This maybe leads to the question of why we should favor any business to continue operating in a space that may be a net negative contribution to our society. Without enforcing minimum wage, and perhaps least minimum full time to part time employment ratios, we face businesses competing on prices by undercutting labor instead of other avenues of improving operating efficiency.

> This maybe leads to the question of why we should favor any business to continue operating in a space that may be a net negative contribution to our society What does the minimum wage have to do with contribution to society? > Without enforcing minimum wage, and perhaps least minimum full time to part time employment ratios, we face businesses competing on prices by undercutting labor instead of other avenues of im…

If a business can only exist if you exploit your labor force, then maybe your business shouldn't exist.

The portion of people that work jobs for fun or a little extra income are a minority. There are more examples of people working several minimum wage jobs just trying to survive.

Maybe there is a compromise somewhere though. How about if you pay the minimum wage, then the owners/stake holders cannot make more than the lowest paid person.

The head(s) of a company making good money(so I'm lumping some small businesses in here too), while saying that they just can't afford to pay their workers a decent wage, leave a bad taste in my mouth.

Off topic, but I feel the same way about all the businesses saying we need cheap labor from Mexico or South America for the businesses to survive, since Americans won't do the job. It creates an underclass of people. If you can't find workers due to wage, and you cannot afford to pay more, the solution isn't to find a class of people that have it so bad, that living in poverty in America is a good option.

Re: Job loss predictions over rising minimum wages haven't come true

#18

Post by Cheyana »

Pigo wrote: post #8
atypicality wrote: post #2

Axios cherry picked the Bureau of Labor Statistics data for the 12 states that confirm the writer's bias. They should have analyzed all states with low minimum wages vs high minimum wages for the overall picture. Reports are out there showing while many of the minimum wage earners who have not lost jobs from the hourly increase are reporting weekly scheduled hours being cut back across the board.

I've read reports of Target, and similar companies, cutting back hours of many employees. I take such reports as anecdotal, but I didn't catch them talking about this in the article at all.

I work part-time stocking shelves at a Walmart, and I can say from first-hand experience that while there is talk of cutting hours, the reality is that it won't happen at this time.

Shelves don't stock themselves. Robots are a long way away, no matter what you hear, as the current process is inefficient enough to make it difficult for automation. Robots won't clean poop out of the urinals, or off the floors (yes, people do take a shit where they are not supposed to).

I can also guarantee you that Walmart is not hurting by paying people 11 bucks an hour, and they still won't be hurting if they raise it by a couple of bucks. The CEO of Walmart even advised the feds that they should raise the minimum wage.

Employees are necessary, and will be for a while.

Re: Job loss predictions over rising minimum wages haven't come true

#19

Post by CharlesColeman »

darawk wrote: post #4
dv_dt wrote: post #3

Earlier quoted context omitted.

This maybe leads to the question of why we should favor any business to continue operating in a space that may be a net negative contribution to our society. Without enforcing minimum wage, and perhaps least minimum full time to part time employment ratios, we face businesses competing on prices by undercutting labor instead of other avenues of improving operating efficiency.

> This maybe leads to the question of why we should favor any business to continue operating in a space that may be a net negative contribution to our society What does the minimum wage have to do with contribution to society? > Without enforcing minimum wage, and perhaps least minimum full time to part time employment ratios, we face businesses competing on prices by undercutting labor instead of other avenues of im…

> Some businesses cannot be profitable and therefore will not exist at certain minimum wages, though.

It's also worth noting that some businesses probably can't be profitable without chattel slavery, though it's hard to find examples since the practice has been illegal for so long.

> The US minimum wage is a big part of why manufacturing jobs have moved out of the US, for instance.

No. I'd say the bigger part of the reason was free trade agreements with countries with substantially lower wages, which encouraged job movement for little more than wage arbitrage reasons, minimum wage or no. The average income per capita in Bangladesh is apparently $600/year [1]. Americans would starve and die of exposure on those wages.

[1] https://www.ceicdata.com/en/indicator/bangladesh/annual-hous...

Re: Job loss predictions over rising minimum wages haven't come true

#20

Post by blunte »

This has been a long standing argument from a certain "trickle down" group in politics. And like the groups that promote austerity as a cure for economic woes, they have been proven wrong.

The economy grows when people can afford to spend. (If this spending is based on credit as was largely the case during the Bill Clinton years, then there is a later cost to pay - no doubt.) But the fact remains that when people can afford to buy things, the economy grows.

Better paid workers spend more money. People who cannot afford basic necessities actually do not blow their money on luxuries as is commonly promoted. Instead, they spend their money on housing, car gas and insurance (since there's been a perpetual movement against public transportation), and food. They're not out gambling and buying drugs in general.

What is not in doubt is that better paid workers means not quite as well paid executives. If you look at the US history, executive pay is at or near the highest multiple relative to workers compared to any time.

And while this is my speculation as I have not experienced living on 1 million dollars vs 100 million dollars (per year), I am inclined to believe that the difference in quality of life is not really terrible. Therefore, executive pay levels are not really a valid reason to suppress worker pay.

We have not even ventured into the tax avoidance that has occurred in the last 40 years. Somehow corporations and executives (and workers!) managed to survive quite ok in the 1950s and 60s, even while corporate taxes were effectively much higher.

Post reply on HN