The basic issue is that economics is not an empirical discipline but rather a deductive one. You cannot test anything in isolation because you cannot have a control. All economists can say is "If you do X when nothing else changes Y will result". It is basic economics that when the government mandates a price floor then anyone who cannot sell their goods for anything below that floor will not be able to sell their goods. Thus it will hurt those it's trying to help. No studies are going to disprove that. It's elementary logic.
Economists agree: Raising the minimum wage reduces poverty
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Re: Economists agree: Raising the minimum wage reduces poverty
#12Note that this is an opinion column, not a news report or a newspaper-sponsored analysis done by a reporter.
Also the author does not do justice to the subject, implying much more agreement than actually exists. I didn't want to go into the political mess of this, however, simply point out that I was a bit confused as to what I was reading.
Re: Economists agree: Raising the minimum wage reduces poverty
#13Well, the research studies only tell you: Raising a very little bit of the minimum wage reduces a very little bit of poverty in the short run, without discussing any negative impacts to the society (in the short run or in the long run). It is very different from "raising the minimum wage reduces poverty".
and all those who advocate for raising the minimum wage are only asking it to be raised relative to inflation and not much more. its also why the strawman (that's been used twice in these posts already) of 'why dont we raise it to $100 then?' is silly and doesn't help the discussion.
Re: Economists agree: Raising the minimum wage reduces poverty
#14I'm pretty sure I can find economists who don't agree.
Re: Economists agree: Raising the minimum wage reduces poverty
#15I'm pretty sure I can find economists who don't agree.
Yep, and I'm willing to bet ten bucks that in the next 48 hours at least one of them will write a rebuttal.
Re: Economists agree: Raising the minimum wage reduces poverty
#16Perhaps, rather than theorize about improving the American minimum wage, look to other countries that have higher minimum wage and evaluate their level of poverty (or lack thereof). Look at Australia and Norway, for example.
Granted, the lack of poverty in those countries is not solely caused by a humane minimum wage - but it's a huge factor, and a positive indicator.
I lived in the US for 7 years and could never fathom how the country as a whole could tolerate such a system.
Re: Economists agree: Raising the minimum wage reduces poverty
#17If I recall, economists tend to point out that the causation between minimum wage and poverty is actually reversed from its "intuitive" position. What actually tends to happen, is that first , a city/county/state/country's economy improves to the point that everyone is making a certain wage, just because of competition for workers. And then , policy-makers notice this, realize that there's an upside (better civic ima…
Not quite. What actually happens is that by raising the minimum wage, you lift minimum wage earners from a state where they barely survive to make ends meet to one where they consume the stuff that society at large is producing. There's a virtuous circle in there. It's that thing Ford showed in its early days: paying workers extra so they can buy the cars they produce yields more economic activity for the benefit of everyone -- they also bought fridges and what not.
The trouble is stopping just short of the level at which (by minimum wage earner standards) they begin to live in opulence. That meaning, in this case, not so much when they're able to afford a yatch, but when they begin to consider putting on more debt than they can actually afford -- debt that won't get repaid. In that case, a vicious circle creeps in, because the ups and downs in excess debt levels contribute to inordinately sized booms and busts, e.g. like we have now.
So the real conclusion should be, since most people in developed countries earn barely more than the minimum wage itself: having a large consumer class benefits everyone in the economy provided that it is solvent.
Re: Economists agree: Raising the minimum wage reduces poverty
#18Just think how prosperous we would be if the minimum wage was $100 an hour! ;-)
Just because things don't work asymptotically doesn't mean they don't work.
Re: Economists agree: Raising the minimum wage reduces poverty
#19If I recall, economists tend to point out that the causation between minimum wage and poverty is actually reversed from its "intuitive" position. What actually tends to happen, is that first , a city/county/state/country's economy improves to the point that everyone is making a certain wage, just because of competition for workers. And then , policy-makers notice this, realize that there's an upside (better civic ima…
Not quite. What actually happens is that by raising the minimum wage, you lift minimum wage earners from a state where they barely survive to make ends meet to one where they consume the stuff that society at large is producing. There's a virtuous circle in there. It's that thing Ford showed in its early days: paying workers extra so they can buy the cars they produce yields more economic activity for the benefit of…
Ford and a lot of other thinkers thought this way but a basic understanding of how things are actually produced and paid for would tell us that high wages are not what causes prosperity but rather high wages are a sign of prosperity. In a world without continual non-stop inflation higher wages aren't necessary to raise your standard living because falling prices would do it.
Re: Economists agree: Raising the minimum wage reduces poverty
#20Perhaps, rather than theorize about improving the American minimum wage, look to other countries that have higher minimum wage and evaluate their level of poverty (or lack thereof). Look at Australia and Norway, for example. Granted, the lack of poverty in those countries is not solely caused by a humane minimum wage - but it's a huge factor, and a positive indicator. I lived in the US for 7 years and could never fat…
> but it's a huge factor
[credible citation needed]