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A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

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Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#101

Post by thehardsphere »

dragonwriter wrote: post #65
Stanleyc23 wrote: post #50

Earlier quoted context omitted.

can you elaborate on this capital gains tax loophole?

Long-term capital gains are taxed lower than normal generic income (at rates lower than the same person would pay in income tax) which in turn taxed lower than labor income (which is, in addition to regular income tax, subject to payroll tax.) Closing the capital gains tax loophole is, presumably, a reference to stopping some or all of this favorable treatment.

1. That's not a "loophole", it's a deliberate feature of tax law.

2. Changing that would not do anything to solve this problem (even if you think it should be solved through more government spending, it wouldn't raise much money)

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#102

Post by JumpCrisscross »

clavalle wrote: post #82
lend000 wrote: post #42

The problem I have with the minimum wage is that it transfers wealth from the very poorest to the mid-working class/lower middle class. Who am I to tell a homeless person that she is legally forbidden to engage in a voluntary, hourly employment contract for less than $15/hr? I would effectively be guaranteeing that she stays unemployed/homeless. Regardless of practical effects (which are ambiguous at best), it's wron…

When a person is desperate, 'voluntary' starts to lose all meaning. If you are dead broke and half starved and I offered you a take it or leave it offer to work carrying rocks for $2 an hour so you can get a sandwich and you agree, is that really voluntary? I do agree with you about teenagers and other people that don't need the money in order to live. For dependents and people that agree not to get public assistance…

> When a person is desperate, 'voluntary' starts to lose all meaning

An honest assessment of the tradeoff is that we eliminated cheap labour OP's homeless person might have done to remove pricing pressure from the restaurant worker. That is, the homeless person might have done Task A at $2/hour and the restaurant worker Task B at $6/hour. By setting the minimum wage at $7/hour, the restaurant worker gets a bump and the rock-carrying job is eliminated.

Without the minimum wage, someone hiring for Task B could threaten the restaurant worker with unemployment under the bogeyman of the homeless person taking their job at $5/hour. The bogeyman is not real. The homeless person, we assume here, could not be trained to do Task B. But expecting the restaurant worker to know that, and negotiate competently on it, is not a responsibility we ask workers to bear, and with good reason.

TL; DR people doing Task B vote while people who could do Task A don't, or at least not in an organized, politically-coherent fashion.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#103

Post by surfmike »

Joe-Z wrote: post #93
surfmike wrote: post #61

Earlier quoted context omitted.

Your commment implies they were cherry-picking the data, which isn't true. They only included data that could definitively be marked as within Seattle vs outside Seattle.

Thanks for clearing that up! I wasn't trying to insinuate that they were cherry-picking data. But doing a study on the Seattle labour market and excluding these major companies completely seems to be overdoing it.

Hopefully they do a follow up study if they can get better data sets from the big companies. But they estimate based on Washington-wide stats that they cover ~63% of workers with their data.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#104

Post by WalterBright »

dragonwriter wrote: post #65
Stanleyc23 wrote: post #50

Earlier quoted context omitted.

can you elaborate on this capital gains tax loophole?

Long-term capital gains are taxed lower than normal generic income (at rates lower than the same person would pay in income tax) which in turn taxed lower than labor income (which is, in addition to regular income tax, subject to payroll tax.) Closing the capital gains tax loophole is, presumably, a reference to stopping some or all of this favorable treatment.

It's less of a loophole than one might think, because much of long term capital gains is illusory due to inflation.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#105

Post by thehardsphere »

davidw wrote: post #77
thehardsphere wrote: post #38

Earlier quoted context omitted.

Don't take away the only entry point to employment in the economy that those people have until we actually have a good answer to that question.

Part of my point is that some people very loudly point out the flaws of minimum wages - and they have some valid arguments - but them seem to hem and haw a lot about finding better solutions for that subset of people who are in real trouble.

And my point is that, it is fine to want to help people, but doing something that clearly hurts them is not the right way to do that.

Maybe those better solutions have the same dynamics. Economics is all about trade-offs; many of them are hard to evaluate and some of them are not worth making. Minimum Wage increases to $15/hour seem more and more to be not worth making.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#106

Post by hirundo »

SomeStupidPoint wrote: post #80
hirundo wrote: post #53

Opponents of a minimum wage need only believe that increasing the price of a thing tends to proportionally decrease the demand for that thing. This is simply a statement of the law of supply and demand, which is (though weaker) the economic equivalent of physics' F=MA. Proponents of a minimum wage need to believe that in this particular case, raising a price does not proportionally decrease demand. While this may be…

Except that there are numerous cases where raising price doesn't proportionally drop demand (it can even raise demand), and very well understood reasons for that. Pretending that it's a "law" of economics we can blindly apply to any situation is absurd.

I used scare quotes to indicate that it isn't an actual law, which is also why I said that it's weaker than something like F=MA and that economics ain't physics. Then you chose to ignore all of that to accuse me of pretending otherwise.

I don't deny that there are exceptions, I just claim that they _are_ exceptions, and that therefore the burden of proof is on the one arguing that a particular case is exceptional.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#107

Post by greggyb »

taw55 wrote: post #60
atemerev wrote: post #54

There is an excellent free (and very short) book, "Economics in one lesson" by Henry Hazlitt, which explains very logically why minimum wage, rent controls and other "band-aid" economical measures always end badly: https://mises.org/system/tdf/Henry%20Hazlitt%20Economics%20i... It is like 2-hour reading, but very enlightening.

And very ideologically biased...

And yet presents a framework of analysis that is objective and a case study in the application of bias to an objective technique.

The lesson of the book is more than the ideology of its author.

It is hubris or naivete in the extreme to assume that someone you disagree with has nothing valuable to say.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#108

Post by atemerev »

taw55 wrote: post #60
atemerev wrote: post #54

There is an excellent free (and very short) book, "Economics in one lesson" by Henry Hazlitt, which explains very logically why minimum wage, rent controls and other "band-aid" economical measures always end badly: https://mises.org/system/tdf/Henry%20Hazlitt%20Economics%20i... It is like 2-hour reading, but very enlightening.

And very ideologically biased...

Logic is not ideologically biased.

Universal basic income is also ideologically biased (in the other direction); however, it has this fine distinction that it is actually technically impossible. Even retirement schemes are falling all over the world; UBI is 10-20 times more expensive.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#109

Post by Veelox »

dragonwriter wrote: post #65
Stanleyc23 wrote: post #50

Earlier quoted context omitted.

can you elaborate on this capital gains tax loophole?

Long-term capital gains are taxed lower than normal generic income (at rates lower than the same person would pay in income tax) which in turn taxed lower than labor income (which is, in addition to regular income tax, subject to payroll tax.) Closing the capital gains tax loophole is, presumably, a reference to stopping some or all of this favorable treatment.

Just to make sure I understand you, you are advocating counting long-term capital gains as ordinary income?

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#110

Post by WalterBright »

rayiner wrote: post #4
blacksqr wrote: post #2

"employment overall did not change" "The number of workers making over $19 an hour increased abruptly" This is the bad news.

No, this is the bad news: > The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city.

> were commissioned by the city.

We'll see if the city ever commissions them again!

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