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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

#221

Post by roenxi »

apcragg wrote: post #92
pge wrote: post #64

Earlier quoted context omitted.

The plot is showing that there is a negative selection bias in the reporting of stories about minimum wage. That is, that stories suggesting that increasing minimum wage has negative effects (increases unemployment, etc) are overreported relative to stories showing a positive effect from an increase in minimum wage. I am only repeating what the paper says; I don't claim to have validated their methodology or sources.

That is an incomplete summary. Their conclusion is that despite this larger than normal selection bias, the minimum wage appears to have no impact on unemployment. The paper's abstract, discussion, and summary all mention this as part of the central thesis - why leave it out?

The obvious starting position is that raising minimum wages has a negative effect on the number of low wage employees hired; because the money from higher wages has to come from somewhere and might not be available - leading to reduced business activity. This is also the classic economics position. With that in mind, there is going to be a bias towards publishing the 'surprising' results that there is no impact/a positive impact from minimum wages. The bias that this paper is identifying is surely a real thing, but it might potentially be a bais against, eg, poorly run studies that pick up spurious effects.

So the conclusions the paper draws w.r.t. elasticity aren't that interesting; we'd need to know why the bias exists before it is particularly useful. I'm a bit suspicious of using 'meta-analysis' at all because that just means that the faction that repeats themselves the most with low-quality research gets to pick what the elasticity is.

In theory we shouldn't need 200 studies to make a claim, we should need 1 or maybe a small suite (like, 5) of very high quality studies that intellectually honest economists struggle to rebut.

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

#222

Post by tptacek »

microcolonel wrote: post #199
rhino369 wrote: post #138

Earlier quoted context omitted.

>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. Plus, its not even $15 dollars yet. It's $8.25 right now. You can't even get illegal immigrants to work for that under the table in rural Illinois. But I have doubts whether the entire stat…

> A lot of Illinois is poorer than Des Moines. I think they hope the poors and the rurals will move out to seek employment, at least, that's the impression I get from some Illinoisans.

I don't know what this even means and have never heard anyone in Illinois refer to "the poors" or "the rurals".

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

#223

Post by take_a_breath »

Izkata wrote: post #214
take_a_breath wrote: post #206

Earlier quoted context omitted.

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 20…

Indeed; it's certainly possible the people making that argument are misinformed about the ramp-up, or maybe they really don't think it's slow enough. And that's assuming they're wrong, maybe we just haven't seen the effects yet because we're not yet in 2025. But misinformed isn't bad-faith. I was pointing out that, yes, actually listening to the other side does reveal real good-faith arguments against the increase.

I see your point and it’s true and reasonable. I would just add that at some point calling something unreasonable without educating yourself (or refusing to educate yourself) on the proposal is a form of bad-faith argument.

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

#224

Post by sjg007 »

ajross wrote: post #181
larnmar wrote: post #178

Earlier quoted context omitted.

In the US, for instance, you have a massive (and very deliberately created) population of illegal aliens who can’t legally work anyway, so are unaffected by minimum wage laws. Raising minimum wage has the effect of making legal employees even less competitive with illegal ones, and since the authorities have no interest in enforcing their own laws, legal employment at the unskilled end is a sucker’s game. This, I sus…

Right, but what's the evidence for that? I get the argument you're making (and the nativist agenda behind it), but... it's literally disputed by the linked article. I mean, at some point one has to give up and just admit that maybe the analysis was wrong, right? Political facts still have to be facts in the real world, eventually, and thus subject to reason, right?

A lot of farm labor (aka fruit pickers) and food processors.

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

#225

Post by tptacek »

clairity wrote: post #203
tptacek wrote: post #123

Earlier quoted context omitted.

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 p…

The single blanket federal minimum wage is the whole argument on this thread. It's not my argument, it's Rayiner's. I mean, it's a lot of people's, it's a very well-known argument, but he's the one who introduced it to this thread.

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

#226

Post by Sohcahtoa82 »

aianus wrote: post #211
krnlpnc wrote: post #208

Earlier quoted context omitted.

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…

That’s nuts, I lived a luxurious life in college on less than that. It’s certainly enough money for a room and food and a car and savings left over in nearly every US municipality.

In what year?

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

#227

Post by btilly »

monocasa wrote: post #216
undersuit wrote: post #215

Earlier quoted context omitted.

>The best solution appears to be to raise the minimum wage to a level that can support a person without government assistance and index it for inflation. Which person? I contend that the person should be a 4 person family(so that I can throw out the oft proposed $15/hr rate fitting pretty closely with the US federal poverty rate of a similar family after taxes.) Other people say minimum wage is only for teenagers ent…

Well, luckliy FDR himself discussed the concept in a speech as he signed one of the base laws to allow a federal minimum wage. > In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By "business" I mean…

It is worth noting that the rise of wealth in our society means that "decent living" by the standards of the 1930s means "extreme poverty" by today's standards.

More precisely the real value of median income tripled from the 1930s to the 1980s. Lower income brackets did likewise.

So it is historically incorrect to hear FDR say "decent living" and map it onto current notions of a decent living. Separately, we have many decades of experience with the program that FDR didn't, and therefore our opinions today can be better informed than his way. Therefore there is no particular reason that we today should feel bound to agree with his original views.

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

#228

Post by Sohcahtoa82 »

SideburnsOfDoom wrote: post #154
bb88 wrote: post #127

Earlier quoted context omitted.

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. "A 2010 longitudinal study of homeless men conducted in Birmingham, Alabama, found that most earned an average of ninety dollars per week while working an average of thirty hours per week[192]" https://en.m.wikipedia.org/wiki/Homelessness_in_the_United_S... "Employees at Amazon's base in Dunfermline, Fife, were apparently so worried they’d lose th…

And it's highly disturbing to me that people will defend these situations on this site. An alarming amount of HN commenters seem to believe that the cost of labor is a function of the money created by the labor. In other words, a job will only pay $X/hr because it creates $Y/hr in revenue where Y > X + some margin. They pretend that if Y goes up, then it brings X up and if X is low, then it means Y MUST be low as well. It has nothing to do with the greed of shareholders.

This line of thinking is what leads to managers firing the entire IT team because they don't generate revenue, and then panicking when the email server crashes.

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

#229

Post by danmaz74 »

Alex3917 wrote: post #217
ScottBurson wrote: post #213

Earlier quoted context omitted.

> The reality for us every-day workers is that either the minimum wage is increased or we'll have to make up for it in taxes that support programs to compensate for the lack of a liveable wage. Exactly. Too low a minimum wage actually becomes a subsidy to employers.

Higher minimum wage is a subsidy for tech companies though. A better policy would be UBI rather than higher minimum wage.

> Higher minimum wage is a subsidy for tech companies though

By which mechanism?

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

#230

Post by Alex3917 »

danmaz74 wrote: post #229
Alex3917 wrote: post #217

Earlier quoted context omitted.

Higher minimum wage is a subsidy for tech companies though. A better policy would be UBI rather than higher minimum wage.

> Higher minimum wage is a subsidy for tech companies though By which mechanism?

When you raise the minimum wage, it makes automation more effective in comparison. Which is why in NYC when they raised the minimum wage for fast food workers, most of the people at McDonald's who used to take orders just got replaced with kiosks. This is in effect a subsidy for the tech companies that automate labor, like the company that makes the McDonald's kiosks.
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