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

#271

Post by rndgermandude » Tue, Nov 26, 2019, 1:59 AM UTC

BurningFrog wrote: post #237

pwthornton wrote: post #168

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…

> In general, increasing pay into people at the bottom of the ladder The bottom of the ladder is the unemployed, who make $0/h. The good faith argument for no minimum wage is that those people would have a much bigger chance to find jobs and build job skills.

>The good faith argument for no minimum wage is that those people would have a much bigger chance to find jobs and build job skills.

That isn't a good faith argument at all. That the "nice job you have there, stop asking for a living wage; it would be a shame if anything happened to it" argument.

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

#272

Post by gridlockd » Tue, Nov 26, 2019, 2:02 AM UTC

"The bottom line: Opposition to higher minimum wage laws is increasingly based in ideology and orthodoxy rather than real-world evidence, economists say."

We can't be treating all changes in minimum wages equally. Those quoted in the sources were very minor changes that may simply reflect what the market price for low-end labor already is.

It is common sense that raises in wages must result in either reduced profits or increased prices. Of course profits can be reduced, but not below zero, at least not indefinitely. Naturally, profit margins in industries employing lots of low-end labor are already low. Of course prices can be raised, but that erodes purchasing power and competitiveness.

Unprofitable companies signal wasteful allocation of resources, and higher prices tend to hit those at the bottom the most.

There is a sweet spot where surplus profits can be transferred to the workers through an optimum fixed wage, but that number would be different for every region and every industry.

Absent a safety net for those workers that may be priced out of the market, I concur with the following assessment[1]:

"One can find plenty of economists on the left and right who think that while $15 an hour may make sense for some companies, a one-size-fits-all approach for businesses big and small around the country is a “risk not worth taking,” as former Obama White House economist Alan Krueger has put it."

[1] https://www.aei.org/articles/a-15-minimum-wage-is-great-for-...

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

#273

Post by marcusverus » Tue, Nov 26, 2019, 2:03 AM UTC

pwthornton wrote: post #168

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…

> As many have pointed out, the minimum wage in many places has been eroded for years by inflation, so increasing it is really just making up for a lack of indexing on it.

The last minimum wage hike was in 2009, when the minimum wage was increased to $7.25. Inflation adjusted to 2019 dollars, that would be about $8.70.

In 2016, both main Democrat candidates supported a $15 minimum wage, which would be an increase of around 10X the required inflation adjustment.

What is it that you were saying about arguing in good faith?

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

#274

Post by AlexandrB » Tue, Nov 26, 2019, 2:03 AM UTC

kangnkodos wrote: post #129

boomboomsubban wrote: post #76

Earlier quoted context omitted.

>This creates a scenario where a dollar into the insurance budget yields more than a dollar worth of value Using this same logic, a better use of that dollar would be spending it on taxes as the even larger government can negotiate even better rates with healthcare providers, providing even more value to the employee. Instead, the company fights to keep that dollar so they can spend it as they see fit, and the employ…

"government can negotiate even better rates" Yes. Up to a point. It's true that in general, the government currently pays less than private insurers. What's not clear is what happens if/when the government is the only one paying hospitals to keep their doors open. At the reduced rate, hospitals will have hard choices to make. Only about 20% of hospitals are for-profit. For the other 80%, less money coming in the door…

The same thing will happen as in almost every other developed country: average well-being will go up but some people will have to wait longer for treatment. It’s not like this is some novel, utopian idea. Public heath care is the norm in most western countries with plenty of variations and lessons-learned to choose from.

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

#275

Post by rrrrrrrrrrrryan » Tue, Nov 26, 2019, 2:05 AM UTC

larnmar wrote: post #178

ajross wrote: post #170

Earlier quoted context omitted.

Sorry, can you cite some of the "Some" who would say that? I'm not aware of any serious research showing that minimum wage laws actually hurt "some of the poor" (I mean, like all regulation, they aren't perfectly targetted), but would be curious to see it.

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…

I think you'll find those who support minimum wage laws also support the enforcement of those laws. I'm not sure if you're advocating for deportation, restrictions on immigrant labor, or something else entirely, but given that you're using terms like "illegal aliens," I'm going to assume you're not a fan.

We've already got mechanisms to crack down on black-market labor. Tax-dodging, not paying workers minimum wage, and subjecting employees to unsafe work conditions should be punished as such. In addition to punishing employers who exploit immigrant workers by paying them illegal wages, we should have much larger programs to allow unskilled undocumented immigrants to legally participate in the above-ground economy so the legal citizens aren't undercut. It's the same reason why we don't allow employers to pay teenagers below-minimum wage. Sure, teenagers don't have to support themselves (let alone a family) and might be happy to work for less, but if employers are allowed to pay kids five bucks an hour, they'd only hire kids and the minimum wage would completely fail.

In short - the only way to reduce black and gray markets is to punish the exploiters and decriminalize the exploited. Punish the pimps instead of the prostitutes, the drug-lords instead of the addicts, and the business-owners who skirt sensible labor regulations instead of the immigrant workers.

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

#276

Post by AlexandrB » Tue, Nov 26, 2019, 2:11 AM UTC

nostromo wrote: post #116

One reason could be because almost nobody makes minimum wage. In 2017 just over 2% of workers made the minimum wage. When you only look at full time employees, it's less than 1%. When you include only people over 25 it's even less. https://www.bls.gov/opub/reports/minimum-wage/2017/home.htm It's interesting how few people know this. When you ask people to guess what percent of people make the minimum wage, you'll lik…

When I started my first job flipping burgers I was paid “over minimum wage” ($6.50/hr at the time). My pay? $6.51/hr.

So yes, I’m sure there are not that many people “on minimum wage”. I think a more relevant metric might be: what % of people saw their pay increase when minimum wage went up.

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

#277

Post by reissbaker » Tue, Nov 26, 2019, 2:11 AM UTC

marcusverus wrote: post #273

pwthornton wrote: post #168

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…

> As many have pointed out, the minimum wage in many places has been eroded for years by inflation, so increasing it is really just making up for a lack of indexing on it. The last minimum wage hike was in 2009, when the minimum wage was increased to $7.25. Inflation adjusted to 2019 dollars, that would be about $8.70. In 2016, both main Democrat candidates supported a $15 minimum wage, which would be an increase of…

Even in 2009 the adjustment wasn't sufficient to bring minimum wage back to 1970 levels, adjusted for inflation. Picking the last rate change isn't a good way to measure minimum wage.

In inflation-adjusted dollars, in 1970 the minimum wage was $10.66. So it is very accurate to say that the minimum wage has eroded due to inflation; currently it is $7.25, which is significantly lower.

Some Democrats propose raising it even higher than it was in 1970, but that doesn't refute the claim that modern, current minimum wage has been eroded — it has, significantly.

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

#278

Post by marcusverus » Tue, Nov 26, 2019, 2:15 AM UTC

Ericson2314 wrote: post #239

btilly wrote: post #227

Earlier quoted context omitted.

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 man…

If you measure it in calories or other form of nutrition, did it triple? If you define poverty not by an absolute standard of living but the poverty trap (the range where the rest of society trivially exploits you, intentionally or not, and you cannot advance as they do), does it triple?

In what way are the poor exploited?

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

#279

Post by aianus » Tue, Nov 26, 2019, 2:19 AM UTC

Sohcahtoa82 wrote: post #226

aianus wrote: post #211

Earlier quoted context omitted.

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?

2010

565 room (5 ppl in one apt but in separate rooms)

800 car all in (I drove a bmw, wasteful luxury)

600 food (ate out all the time, wasteful luxury)

50 utilities (gas and internet were included in rent)

100 entertainment (not much time)

That’s about 2400 in 2019 dollars and if I had gotten a cheaper car or taken public transit like most students there would have been plenty of savings.

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

#280

Post by marcusverus » Tue, Nov 26, 2019, 2:21 AM UTC

reissbaker wrote: post #277

marcusverus wrote: post #273

Earlier quoted context omitted.

> As many have pointed out, the minimum wage in many places has been eroded for years by inflation, so increasing it is really just making up for a lack of indexing on it. The last minimum wage hike was in 2009, when the minimum wage was increased to $7.25. Inflation adjusted to 2019 dollars, that would be about $8.70. In 2016, both main Democrat candidates supported a $15 minimum wage, which would be an increase of…

Even in 2009 the adjustment wasn't sufficient to bring minimum wage back to 1970 levels, adjusted for inflation. Picking the last rate change isn't a good way to measure minimum wage. In inflation-adjusted dollars, in 1970 the minimum wage was $10.66. So it is very accurate to say that the minimum wage has eroded due to inflation; currently it is $7.25, which is significantly lower. Some Democrats propose raising it…

You've cherry-picked the highest (adjusted) minimum wage over an ~80 year period. The average is closer to $8 in current dollars, which is actually below the inflation-adjusted 2009 figure of $8.70.