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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

#201
I think there's another explanation than the one given in the source article. And that's assuming the base claim is true (that the expected unemployment hasn't taken place). And that's a big assumption because I don't know much about this site but I see that its founders come from Politico so they might very well have a bias and want to agree with this result.

That being said, let's assume the claim is true. I think there's a bit more to the outcome. A quick thought experiment should illustrate closely enough. If it didn't result in unemployment increasing overall, then why not just raise it more? $25, hell, $50 an hour? You intuitively know the answer - most businesses can't afford that, especially when you consider that everyone above those levels currently will also have to be scaled up as well.

So if we know there is a limit to where the minimum can be raised, what does this mean then? It means the underlying claim being made is really "government is smart enough to determine the acceptable mandatory raise in minimum wages that will not harm the economy."

Taking it a bit further, let's take a rational business person who is looking at hiring someone. What's the mental math they do, roughly? They look at how much monetary value the person could generate for the company and then they look at what they will need to pay that person (including benefits, payroll taxes, and all other fringe costs). If the costs are greater than the value, it's a hard no. If they are roughly equal, then it's a maybe since you still have more paperwork and general nuisance stuff to worry about when managing someone so it's a "is the juice worth the squeeze" scenario". And anything solidly in the green is a go.

So, for example, if you own a janitorial service where corporations hire you to come clean at night and you pay your cleaning staff $12 an hour, benefits are $3 an hour and you bill the companies that hire you $18 an hour, you have about $3 per person per hour to account for any fixed overhead for the business and profit. If your state suddenly says you have to pay them $15 an hour, you have to raise your prices. There's no other option unless you let people go and force the remaining to work harder, faster, or do a worse job and rush through.

If, however, your profit margins were much higher and you were charging $20-$25 an hour to the companies, you could simply absorb that difference and you will just be eating the added cost in the form of lower profits if you have a competitive business.

And I think that is where we're really at with this currently. Many of the big companies paying low wages have revenue per employee numbers that far exceed the cost of the employee and as such the increase can be absorbed for those companies. Or, their business is so large and the volume per employee is so much that the increase is negligible. Think Walmart - how much per item would the prices have to be to meet such raises? 3% maybe? I saw a study done in the farming industry that said they could double the low wages of field workers by increasing the cost only 7% because the labor cost of food is about 7%.

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

#202
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…

> ...from a certain "trickle down" group in politics...

Far as I'm aware, "trickle down" is a pejorative association made by people who disagree that supply-side factors are the primary determinant of economic growth; and not an actual group of actual people.

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

#203

Earlier quoted context omitted.

> "> Cities like New York, Seattle, Chicago and San Francisco have raised local minimum wages" > "> Laws in New York, California, Connecticut, Illinois, Maryland, Massachusetts, and New Jersey will eventually increase minimum wages to $15 per hour." > "I don't find this reasoning very convincing." those are fact statements--what's to argue? > "That's the basic problem with a federal minimum wage." whether a federal m…

He's not arguing with Axios facts. He's saying the fact that Illinois is gradually ramping to a $15 statewide minimum is not evidence that a $15 minimum is nationally appropriate, because the economy of Illinois is not the same as the economy of Kansas or Wyoming. It also obviously factual that the prevailing lowest livable wage in NYC is higher than that of Des Moines; NYC's statutory minimum should be higher than D…

yes, and at the very least something went very wrong with the choice of quoting.

your argument has validity against a single blanket federal minimum wage, but it fails to address the fact that the federal government has a legitimate interest in (living) wage levels (again, because of its jurisdiction over interstate/international trade). states also have an interest in wage levels. the balance being debatable is my point.

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

#204

How many of the people arguing for keeping the minimum wage unchanged were arguing that in good faith? In general, increasing pay into people at the bottom of the ladder has a much bigger economic effect than the opposite. Reasonable increases in the minimum wage, particularly ones that track inflation and cost of living are not going to harm the economy. As many have pointed out, the minimum wage in many places has…

The question is did this raise average wages? There is litle benefit otherwise unless the min wage is way too low

The minimum wage is way too low.

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

#206
post #183

How many of the people arguing for keeping the minimum wage unchanged were arguing that in good faith? In general, increasing pay into people at the bottom of the ladder has a much bigger economic effect than the opposite. Reasonable increases in the minimum wage, particularly ones that track inflation and cost of living are not going to harm the economy. As many have pointed out, the minimum wage in many places has…

> How many of the people arguing for keeping the minimum wage unchanged were arguing that in good faith? > Reasonable increases in the minimum wage, particularly ones that track inflation and cost of living are not going to harm the economy. My understanding is that plenty of the arguments against it are from people concerned about the areas of the country still near the federal minimum. It's absolutely a good-faith…

How do you define “reasonable”? The bill that passed the House wouldn’t get to $15/hr until 2025. That would be a 4.6% annual increase (CAGR) going back to 2009 when the $7.25 rate was implemented. That might be a little higher than you’d like, but is it “unreasonable”? Maybe a compromise could include a longer ramp or a ramp to $13 or $14, but I haven’t heard that argument presented.

If we tracked inflation since 2009, the $7.25 would be around $8.65. Some might consider a stagnant rate as unreasonable in the face of annual inflation.

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

#207

How many of the people arguing for keeping the minimum wage unchanged were arguing that in good faith? In general, increasing pay into people at the bottom of the ladder has a much bigger economic effect than the opposite. Reasonable increases in the minimum wage, particularly ones that track inflation and cost of living are not going to harm the economy. As many have pointed out, the minimum wage in many places has…

This is true, but people who argue for it most vocally refuse to acknowledge the fact that it’s not economically feasible to reward the lowest paid people with a MUCH MORE than comfortable lifestyle. The minimum wage is for two things: To prevent the exploitation of workers at a certain level, and to allow workers to support themselves. Some people also fail to realize that there will always be poor people. The only…

"Some people also fail to realize that there will always be poor people" and "If they really wanted to get out, they would. I did" are interesting beliefs to share at the same time.

The connecting thread is "some people are satisfied being poor" but it's pretty tenuous. If those people stopped being satisfied, what happens?

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

#208

How many of the people arguing for keeping the minimum wage unchanged were arguing that in good faith? In general, increasing pay into people at the bottom of the ladder has a much bigger economic effect than the opposite. Reasonable increases in the minimum wage, particularly ones that track inflation and cost of living are not going to harm the economy. As many have pointed out, the minimum wage in many places has…

This is true, but people who argue for it most vocally refuse to acknowledge the fact that it’s not economically feasible to reward the lowest paid people with a MUCH MORE than comfortable lifestyle. The minimum wage is for two things: To prevent the exploitation of workers at a certain level, and to allow workers to support themselves. Some people also fail to realize that there will always be poor people. The only…

Minimum wage works out to about $2500/mo before taxes where I live. That’s not enough to pay for rent, utilities, food and incidentals. Not to mention insurance(s). Not to mention a car if your commute requires it. Not to mention family/dependents. Not to mention emergency savings. Not to mention retirement. The list goes on.

It’s not about a “much more than comfortable lifestyle”. It’s about establishing a baseline where full time work pays enough to live without government subsidy and/or crippling debt. And addressing the stigma that surrounds minimum wage jobs.

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

#209
post #55

Earlier quoted context omitted.

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

Would that defeat the point of inflation?

inflation is used to drive economic activity by keeping people from sitting on money (because it devalues over time). so do you think putting more money in the hands of minimum-wage workers will cause them to hoard money? what do you think is the point of inflation?

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

#210

How many of the people arguing for keeping the minimum wage unchanged were arguing that in good faith? In general, increasing pay into people at the bottom of the ladder has a much bigger economic effect than the opposite. Reasonable increases in the minimum wage, particularly ones that track inflation and cost of living are not going to harm the economy. As many have pointed out, the minimum wage in many places has…

Who is to say what is the best wage? Should the government decide what people's wages should be? Should the government come to you and tell you specifically that your salary is not what you got from the exchange of labor with your employer and change it unilaterally?

Minimum wage debates in economics aside, there is a core ideological issue where some people really do like the idea of controlling other people, and some people prefer to keep those relationships nimble and organice.

As someone clearly on one side of the ideological debate, I would much prefer that government employees are banned from consuming any product or service produced by workers that earned wages below minimum wage, just to put skin in the game, and let the rest roam free.

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