minimum wage

[warpus]

warpus must have sources for the job losses, but I thought Commodore was relying on the OP study.

The study appears to be an outlier in terms of the results cited, and there appear to be issues with the study itself, which could explain why it's an outlier:

Yet the study will not put an end to the dispute. Experts cautioned that the effects of the minimum wage may vary according to the industries dominant in the cities where they are implemented along with overall economic conditions in the country as a whole.

And critics of the research pointed out what they saw as serious shortcomings. In particular, to avoid confusing establishments that were subject to the minimum with those that were not, the authors did not include large employers with locations both inside and outside of Seattle in their calculations. Skeptics argued that omission could explain the unusual results.

"Like, whoa, what? Where did you get this?" asked Ben Zipperer, an economist at the left-leaning Economic Policy Institute (EPI) in Washington.

"My view of the research is that it seems to work," he said. "The minimum wage in general seems to do exactly what it’s intended to do, and that’s to raise wages for low-wage workers, with little negative consequence in terms of job loss."

I am trying and failing to imagine what they are, unless you are talking about orange tabbies or calico/tortoiseshell cats, who often have patches or streaks of orange hair (along with black, white, brown, and grey).

They are both alive, contain DNA, have skin, a common ancestor, and both can be found on the planet Earth. Just to name a few. Sure, there's a lot more differences, but that's my point!

 

[metalhead]

Yes, it would replace social security, and yes.

It would operate much the same as income does now. Below a certain threshold, you don't pay taxes. Everyone gets it but if you're gainfully employed then most gets fed back into the system.

It doesn't have to replace social security. In many cases SS pays far more than what a reasonable UBI would be.

 

[Borachio]

They are both alive, contain DNA, have skin, a common ancestor, and both can be found on the planet Earth.

And both can be found in trees.

 

[Perfection]

In the US we have a faulty welfare system. If you're making $10 an hour you lose most of your benefits but still aren't making enough to make ends meet. Minimum wage laws are one way to address the issue.

 

[Commodore]

In the US we have a faulty welfare system. If you're making $10 an hour you lose most of your benefits but still aren't making enough to make ends meet.

Ain't that the truth.

 

[Berzerker]

In the US we have a faulty welfare system. If you're making $10 an hour you lose most of your benefits but still aren't making enough to make ends meet. Minimum wage laws are one way to address the issue.

If you're making $10/hr and the minimum wage jumps to $15/hr, the business is better off dropping you in favor of employees making $15/hr before the minimum wage hike... That was one of the study's findings, people making the least lost jobs to the people making more.

 

[Akka]

If you're making $10/hr and the minimum wage jumps to $15/hr, the business is better off dropping you in favor of employees making $15/hr before the minimum wage hike... That was one of the study's findings, people making the least lost jobs to the people making more.

This suppose there is an endless supply of available people who were making 15$/h before.

 

[onejayhawk]

This suppose there is an endless supply of available people who were making 15$/h before.

It supposes nothing. This is an observational fact. You can attempt to explain it.

J

 

[metalhead]

You don't seem to have a very good grasp of what the word "fact" means.

It is only beneficial to the employer to hire the person previously making $15/hr at $15/hr if that person is going to be equally happy making $15/hr now that it is a minimum wage salary. It should be obvious to anyone that Akka is correct - this is only going to be the case if you have an over-supply of people previously making $15/hr who cannot leverage their prior 1.5 times minimum wage job skills into a job paying more than minimum wage. Otherwise you will be forced to pay higher than minimum wage to attract higher than minimum wage talent and productivity. It's simple economics.

 

[warpus]

I mean, most studies seem to indicate that not much of this happens. One outlier study seems to say that it is an issue. So I wouldn't call it an observational fact.

 

[Farm Boy]

Yes, that would be an explanation of an inflation cycle. Seeing as pricing settles on what people will and can pay for things. So that works, until it needs bumped again to adjust, unless of course there is an outlet that breaks the system. Like labor readily available not bound by the pricing increase or a lower cost technology not fettered yet by mandatory regulatory expenses. Or even a simultaneous increase in top earners resources when it comes to bidding on competitive limited availability product. I'd guess it works semi-well for required-physically-present service industry and significantly less well outside of that bubble, generally.

 

[onejayhawk]

You don't seem to have a very good grasp of what the word "fact" means.

It is only beneficial to the employer to hire the person previously making $15/hr at $15/hr if that person is going to be equally happy making $15/hr now that it is a minimum wage salary. It should be obvious to anyone that Akka is correct - this is only going to be the case if you have an over-supply of people previously making $15/hr who cannot leverage their prior 1.5 times minimum wage job skills into a job paying more than minimum wage. Otherwise you will be forced to pay higher than minimum wage to attract higher than minimum wage talent and productivity. It's simple economics.

So it should be obvious that observations are incorrect because they don't fit the program. That's good.

Barz cited a study. There are a number of ways to attack the credibility of a study, eg faulty methodology, poor sampling, conclusion not following the data, etc. That was none o them. Until you can challenge the study, do not dismiss the conclusions out of hand.

I mean, most studies seem to indicate that not much of this happens. One outlier study seems to say that it is an issue. So I wouldn't call it an observational fact.

This is much better. Still, you assume the studies are aligned, which is not a given. The experience in Seattle is for a much larger raise in minimum wage than in almost any other situation. You would need to carefully show comparability.

J

 

[metalhead]

The outlier, non-peer-reviewed study doesn't need me to debunk it to offer simple economic theory as to why your "fact" was actually an alternative fact.

 

[warpus]

Barz cited a study. There are a number of ways to attack the credibility of a study, eg faulty methodology, poor sampling, conclusion not following the data, etc. That was none o them.

I mean, the article says that this is exactly why the study is being questioned by some economists and might explain why it's an outlier.

 

[metalhead]

The article also points out that the study excludes large employers, which are a major source of jobs for lower paid, less skilled workers.

 

[Berzerker]

This suppose there is an endless supply of available people who were making 15$/h before.

It supposes employees with >1 year of experience are more valuable to the company than less skilled newcomers in need of training. The hike in the rate from 10 to 15 an hour forces owners to choose between those two groups. So, if you own a business and your 10/hr employee is now getting the same $15 experienced employees get, who will you fire if you cant afford everyone? The one lacking experience and skills, the one who was supposed to be helped by the raise.

It is only beneficial to the employer to hire the person previously making $15/hr at $15/hr if that person is going to be equally happy making $15/hr now that it is a minimum wage salary.

They're gonna be happy they still have a job... What do you think will happen if they want $22.50 an hour? Same thing that happened to the people making the $10 minimum, they'll be forced into a competition with higher paid employees - and they're gonna lose.

It should be obvious to anyone that Akka is correct - this is only going to be the case if you have an over-supply of people previously making $15/hr who cannot leverage their prior 1.5 times minimum wage job skills into a job paying more than minimum wage. Otherwise you will be forced to pay higher than minimum wage to attract higher than minimum wage talent and productivity. It's simple economics.

Raising the minimum wage from $10 to $15 an hour puts all those people at $10 in competition with everyone slightly above it, even people getting a raise. That means inexperienced unskilled people are being forced to compete with more experienced people. Businesses want the latter, not the former. So there's gonna be an over supply of people earning more than the minimum and they're more qualified.

 

[Bamspeedy]

Companies that were paying $5 above the minimum will lose many workers if suddenly they are now paying $0 above the minimum. Most large companies that hire 'menial labor' and advertise 'competitive wages' were paying 50 cents to a dollar above the minimum wage in the 90's are today paying 50 cents to a dollar above the minimum wage.

I think it's funny when anyone says "But such a small percentage of people earn the minimum". Yeah, but there is a much larger group of people whose wages are affected by the minumum because they earn $0.25-$5 above it.

I would go back to delivering pizzas if it paid as much as what I do now.

 

[warpus]

Companies that were paying $5 above the minimum will lose many workers if suddenly they are now paying $0 above the minimum.

But most of the case studies of the minimum wage going up indicate that this effect is very minor. It obviously happens to some extent, but from what I've read in the long-term, it's usually a very minor effect compared to the much larger effect of more people having disposable income and as a result shopping at all of these businesses and so on

 

[Bamspeedy]

Previous minimum wage hikes in a year were $0.70/hour (2007, 2008, 2009). $2.10 over three years. Minimal. Sure, 70 cents is one factor in considering a job change, but it's not the only factor. Not all companies are going to adjust their wages instantly, or at the same time as others. Not all workers are going to decide to pursue other jobs at the same time as others. But they will all get there (as in my example, a decade later the same jobs are paying the same amount above the minimum).

What is suggested is a $7.75/hour increase. (7.25 to 15.00)

There is this company around here that was paying $18-$21/hour. It lost 50 people in a month because the top manager insulted them (a very poorly thought out joke). Most of those that quit are not going to find a job that pays anywhere close to that well. If there were many other jobs that paid close to it (virtually all jobs if minimum wage was now $15/hour) the company would have lost 100, maybe 200 people or more in that same month.

 

[warpus]

That does seem like a big increase. Has the minimum wage not kept up with inflation for the last couple decades or something?

Here in Ontario the minimum wage is going up by 24%, from $11.40 to $15. This is the reasoning:

Ontario's economy has outperformed all G7 countries in real GDP growth over the past three years, and unemployment is at a 16-year low. But the nature of work is also changing. People are working longer, jobs are less secure and benefits are not the same as they used to be. Many employees are working long hours and still struggling to support their families on the current minimum wage of $11.40.

So basically the companies here have been benefitting from the economy doing well and the nature of work is changing. Plus inflation.

Maybe in your state (or whichever state is increasing it from $7.25 to $15 or whatever) the employees have been exploited for decades and nobody's ever done anything about it. If not, then it does seem rather extreme to double the minimum wage, I agree.