Job loss predictions over rising minimum wages haven't come true • Hacker News Board

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

#141

Post by jb775 » Mon, Nov 25, 2019, 9:15 PM UTC

I feel like this is a perfect example of people trying to apply a "one size fits all" band-aid to a complex issue because it sounds nice on the surface. Obviously, Johnny French-Fry would be better off making $15/hour, but there's more to it than that.

I don't believe the salient impact here is "job loss", but rather "wage erosion" at other levels within the organization. There is a zero-sum game at play here, and I think both sides of the argument can probably agree that the trickle-up financial impacts won't make it anywhere close to the executive level. I also don't believe that noticeable impacts will make it back to the consumer in the form of higher prices, or that companies would even consider letting it impact their profit margins. The easy-win here is for execs to restrain or chip away at the wages and benefits of employees currently making ~$30-$65 an hour (these employees are typically paid via "yearly salary", but want to keep everything in context). This issue will likely be compounded by employees currently making ~$16-$30 an hour demanding raises since they feel like they "just missed out" on a pay raise (especially since these individuals are typically in closer physical proximity to minimum-wage earners -- imagine how the fast-food manager will feel when Johnny French-Fry is now only making $1 an hour less). Then the same people arguing for a minimum-wage hike turn around and complain about the wage-gap. I agree that wages should be higher, but simply increasing the MINIMUM wage isn't a viable solution. Need to consider the 2nd, 3rd,...(n)th order effects.

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

#142

Post by adventured » Mon, Nov 25, 2019, 9:17 PM UTC

gowld wrote: post #110

helpPeople wrote: post #52

Earlier quoted context omitted.

Not sure your area, but unskilled labor goes for 15$/hr in metro Detroit. You cannot get people to show up for less than that. Source, wife owns a business and that's going rate to answer phones.

Could you expand on the relation of that fact to the topic of minimum wage? Is $15/hr above or below Detroit minimum wage?

Walmart is commonly paying $12-$13/hr to first year employees around the US, Target is at a minimum $13/hr ($15/hr in 2020), Amazon is at $15/hr. Those are, broadly speaking, the new floor in American wages.

In cities, companies almost always have to pay more, so Walmart's wages on average are even higher in Detroit than in the middle of nowhere. They hoover up a lot of labor near or above $15/hr in places like Detroit.

Basically his wife's business is competing with massive labor absorbing machines that will pay at or above $15/hr. They also offer benefits. Small businesses (mom & pop types) that pay low wages and have tight margins often struggle to offer even basic competitive benefits, it's a very large additional cost in a business. So if she wants to take employees away from Walmart in Detroit, she might have to offer $18/hr instead.

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

#143

Post by jayd16 » Mon, Nov 25, 2019, 9:20 PM UTC

pg_bot wrote: post #56

You might not lose your job, but you may see your hours reduced or you might not get the opportunity in the first place. Technically the employment numbers don't change, but you shouldn't think of of minimum wage employees like salaried employees. Minimum wage earners can lose fractional percentages of their jobs unlike salaried employees. Most proponents of raising the minimum wage cite the Card & Krueger paper whic…

> I don't believe there are any situations where people are better off when a third party eliminates economic opportunities for them.

This is just hyperbolic. This would throw out all labor laws, safety laws, worker protections, unemployment benefits, and child labor laws.

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

#144

Post by Pigo » Mon, Nov 25, 2019, 9:20 PM UTC

kuzimoto wrote: post #89

blix wrote: post #46

Earlier quoted context omitted.

> The CEO of Walmart even advised the feds that they should raise the minimum wage. High minimum wages favor larger entities than can leverage economies of scale. Amazon has expressed similar support. I don't think this is entirely altruistic.

Yep, larger companies are probably way better equipped to deal with raising the minimum wage. This will just hurt small/medium business.

Well everyone just wants to buy from three companies anyways, right? Just like everyone only wants to visit 3 websites? And everyone really only wants 1 ISP to choose from. /s

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

#145

Post by andybak » Mon, Nov 25, 2019, 9:20 PM UTC

bb88 wrote: post #127

hinkley wrote: post #60

Earlier quoted context omitted.

I'm old enough to remember this conversation happening three times, and wise enough to know that this conversation happens every ten years or so probably since the first wage was paid in currency instead of goods. A certain pay rate creates supply. Conditions make it hard to switch jobs. And every year you ever so slowly reduce the effective pay to those employees and they slowly give up little luxuries to make ends…

I'm cynical. I think it's frankly worse than that. When we talk about economic and market forces, we don't talk about "greed" as a major economic force. We know it's the creation of capitalism, but economists seem to do everything in their power to ignore it. Standard economic models breaks down when people are powerful enough to create their own supply/demand curves. We've had the term "working poor" for a while. I…

> I suspect that we'll have "working homeless" in the decades to come.

In the UK several BBC documentaries have covered exactly this phenomenon. I don't doubt it is already more common in the US then you suspect.

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

#146

Post by maerF0x0 » Mon, Nov 25, 2019, 9:22 PM UTC

One reason to have minimum wage as a lagging value is during deflationary periods.

During a deflationary period people need to have the legal right to work for less when it's in their best interest.

Additionally, if companies are find paying a higher minimum wage, this article implies that workers should just negotiate higher wages.

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

#147

Post by bassman9000 » Mon, Nov 25, 2019, 9:24 PM UTC

mdszy wrote: post #49

bassman9000 wrote: post #25

Earlier quoted context omitted.

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.

What possible reason could you have for writing it this way and not just saying "Your point seems to be that better paid workers leads to worse paid executives..."

Not being a native speaker, probably not being as fluent as you in English, and not wanting to misunderstand that the OP made more complicated than needed, IMHO.

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

#148

Post by fwip » Mon, Nov 25, 2019, 9:24 PM UTC

akvadrako wrote: post #80

Lavery wrote: post #61

Earlier quoted context omitted.

The countries you cite are able to have a minimum wage of zero because it's coupled with a robust social safety net (sometimes along with other backstops--Norway, for instance, is heavily unionized). This pairing is important, and is absent in the US.

They are unrelated; countries need a social safety net regardless of what the minimum wage is. You might even argue that the higher you make min wage, the more important social services are, because you have taken away the ability of low-skilled workers to support themselves.

On the contrary, places with a robust social service net don't need as strong labor protections, as they're able to decline to sell their labor.

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

#149

Post by asdff » Mon, Nov 25, 2019, 9:25 PM UTC

hinkley wrote: post #104

ambicapter wrote: post #99

Earlier quoted context omitted.

Large US Companies are incentivized to keep healthcare something they solely provide because it ties their employee's health coverage to their employment status, putting pressure on them to keep their job or face paying their hospital bills in full.

Which in almost any other conversation would be called extortion.

It really shows you whose interests a politician is working to advance when they state how much Americans love their private extortion plans.

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

#150

Post by downerending » Mon, Nov 25, 2019, 9:28 PM UTC

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.

Some would say that the debate is whether raising minimum wage even has a net beneficial effect for those at the bottom of society.

The fact that we still have no clarity after looking at this closely for decades suggests that it's probably close to a wash, randomly benefiting some of the poor at the expense of others.