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

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

#31

Post by jandrese »

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.

They aren't cutting hours with the labor market this tight. That's scaremongering.

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

#32

Post by JMTQp8lwXL »

mullingitover wrote: post #9

Minimum wage isn't just flat for a decade, it's not being adjusted for inflation. This means minimum wage workers have been getting a pay cut over time. The debate isn't just whether we should raise minimum wage, it's whether we should be cutting it. By allowing it to remain stagnant we're making the default decision to cut.

We inflation-adjust social security benefits annually, we could also do the same for minimum wage.

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

#33

Post by scarejunba »

jjoonathan wrote: post #5

The inverted funnel plot of Doucouliagos and Stanley is especially useful once discussions about elasticity at the low end of the labor market reach the "you're biased -- no you're biased!" stage: https://www.ctdol.state.ct.us/lweab/Doucougliagos%20&%20Stan...

Would you mind quickly summarizing what that plot is telling us? I looked at it but it looks like I've got to read more of the paper before I understand it.

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

#34

Post by FabHK »

d357r0y3r wrote: post #24
blunte wrote: post #20

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…

> And like the groups that promote austerity as a cure for economic woes, they have been proven wrong. This is a strawman. Austerity isn't a cure, it's a consequence. If you spend too much and have too much debt, you can't borrow more to make the problem go away; you're just delaying the inevitable.

No, it's not a straw man. Austerity has very much been promoted as a cure; it was not an inevitable consequence of the economic situation.

The debate is maybe best exemplified by the debate between Krugman ("against austerity") and Reinhart/Rogoff ("pro austerity").

> Nobel laureate Paul Krugman refused to back down in a dispute with Harvard University economists Carmen Reinhart and Kenneth Rogoff over a 2010 paper they wrote that’s been used to justify austerity in the U.S. and Europe.

https://www.bloomberg.com/news/articles/2013-05-28/krugman-f...

https://www.theguardian.com/business/ng-interactive/2015/apr...

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

#35

Post by scarejunba »

bassman9000 wrote: post #25
blunte wrote: post #20

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…

What is not in doubt is that better paid workers means not quite as well paid executives. Something to back this, other than personal experience/opinion, would be nice. A = better paid workers B = better paid executives Your point seems to be that A => ¬B. Which, even if statistically accurate, seems a bit weird as a causation.

True. It comes from a zero-sum game view of the company. But there are true inefficiencies that may be solved by A that make B actually more likely. For instance, if A causes lower attrition and therefore training costs, it _may_ cause sufficient higher productivity across the board for every organization as a worker gets skilled and stays in his job for longer. And that increased productivity may manifest as better company performance. It is plausible that we could have A & B.

I didn't even consider the time-axis myself (implicitly assuming zero-sum) so that's a good objection.

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

#36

Post by commandlinefan »

buboard wrote: post #26

That doesn't prove the wage rises were needed, though.

All it seems to prove is that the hikes haven't caused problems yet. And we'd better all hope that they don't, because it actually is impossible to lower the minimum wage, no matter what.

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

#37

Post by kp98 »

I think part of this is linked to not being at market equilibrium in low skill jobs. For example there are over 6 million jobs not filled in America most of which are low skill, some of which are due to structural unemployment like server staff turnover after the busy season.

The minimum wage right now is lower than it needs to be, which artificially create more businesses on the low end of the spectrum. If the minimum wage went up I think you’d see fewer small businesses with fewer openings, but the remaining workers would get a pay raise and the market could handle it.

For example perhaps instead of 6.5mm open jobs and $10 min wage on average and 3% unemployment you’d see 2mm open jobs and $15 min wage with marginal change in unemployment.

Just an illustration to explain my thought

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

#38

Post by Eric_WVGG »

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…

> > 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?

Seven years ago, the McDonalds corporation issued memos to employees instructing on how to file for SNAP (food stamps). Rather than paying employees what they need to survive, McDonalds was effectively shifting that cost onto taxpayers. https://www.theatlantic.com/business/archive/2013/10/instead...

A system where jobs provide money to consumers who participate in the economy, pay into social security, etc. is one that makes a "positive contribution" to societal balance sheet. One that hoards its income and doesn't pay into the system costs society money, hence "a net negative".

"Some businesses cannot be profitable and therefore will not exist at certain minimum wages, though." Right, but some businesses can pay minimum-wage-or-higher and be profitable, but the CEOs figured out that they can just keep that money for themselves and shift it onto the welfare system.

This is why a lot of critics of modern capitalism claim that we already have socialism, we're just not doing it efficiently.

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

#39

Post by jonhendry18 »

jerf wrote: post #27

What is the time frame for these claims? The last few years when the new minimum wages are coming in are also times of dropping unemployment. The area I live in has not been raising minimum wages any, and the local "minimum wage" has nevertheless become a de facto 11-12$/hour for zero-skill jobs just due to a tight labor market. If you happen to time your raising of the minimum wage to when the market was tightening…

The point I think is that the anti-increase people would have predicted that raising the minimum wage would be such a dire threat to business that it would decrease employment regardless of the wider economy.

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

#40

Post by FabHK »

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.…

> a lot of economics as it’s used for political decisions is way oversimplified to the point of being useless or just plain wrong.

Absolutely. A point well made by James Kwak in his book Economism: Bad Economics and the Rise of Inequality, where he complains about this caricature of Economics 101 that is often used to justify laissez-faire policies.

https://economism.net

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