Minimum wage: $15 NOW!; or 15... eventually

[xoxoxoBruce]

So when states have some unique industry like fishing, which runs into unique problems like government limits/empty nets, driving the unemployment rate for that state higher than it's neighbors, that's an effect caused by minimum wage? I don't think so. There are too many factors contributing to the state rate to be saying it's cause and effect.

...restaurant servers, from the current $2.63 per hour to $3.75 per hour, a 31 percent increase and the first since 1999,

$2.63? $3.61? Before taxes.

[DanaC]

But can they be sure it was the minimum wage and not other economic factors working in parallel?

I was trying to find, but couldnt - there was an article about a month ago which seemed to show evidence to the contrary.

The thing is - a 1.48 % increase in unemployment to me seems less damaging overall than huge swathes of employed people not being able to afford food.

Also worth considering - is that a permanent increase in unemployment? Or is it a temporary rise immediately following introduction of the requirement that then settles back down as the minimum wage becomes accepted as the norm?

[DanaC]

Not an unbiased source, but it brings together lots of studies (including a 2013 study by the University of Chicago:

Today, the most rigorous research shows little evidence of job reductions from a higher minimum wage. Indicative is a 2013 survey by the University of Chicago’s Booth School of Business in which leading economists agreed by a nearly 4 to 1 margin that the benefits of raising and indexing the minimum wage outweigh the costs.

Paul Krugman, Princeton University, February 2013: “Now, you might argue that even if the current minimum wage seems low, raising it would cost jobs. But there’s evidence on that question — lots and lots of evidence, because the minimum wage is one of the most studied issues in all of economics. U.S. experience, it turns out, offers many ‘natural experiments’ here, in which one state raises its minimum wage while others do not. And while there are dissenters, as there always are, the great preponderance of the evidence from these natural experiments points to little if any negative effect of minimum wage increases on employment.”

In Focus: Two Leading Studies on Minimum Wage and Job Growth

Study: Do Minimum Wages Really Reduce Teen Employment? (2011)

Summary: Examines every minimum wage increase in the United States over the past two decades—including increases that took place during protracted periods of high unemployment—and finds that raising the wage floor boosted incomes without reducing employment or slowing job creation. The research demonstrates how a body of previous research—one frequently relied on by business lobbyists who oppose minimum wage increases—inaccurately attributes declines in employment to increases in the minimum wage by failing to sufficiently account for critical economic factors. [NELP Summary]

Study: Minimum Wage Effects Across State Borders (2010)

Summary: Provides the most sophisticated study to date of the effects of increases in the minimum wage on job growth in the United States. Taking advantage of the fact that a record number of states raised their minimum wages during the 1990s and 2000s – creating scores of differing minimum wage rates across the country – the study compares employment levels among every pair of neighboring U.S. counties that had differing minimum wage levels at any time between 1990 and 2006 and finds that higher minimum wages did not reduce employment. [NELP summary]

Lawrence Katz, Harvard University, April 2011: “This is one of the best and most convincing minimum wage papers in recent years.” (Source)

David Autor, Massachusetts Institute of Technology, April 2011: “The paper presents a fairly irrefutable case that state minimum wage laws do raise earnings in low wage jobs but do not reduce employment to any meaningful degree. Beyond this substantive contribution, the paper presents careful and compelling reanalysis of earlier work in this literature, showing that it appears biased by spatial correlation in employment trends.” (Source)

http://www.raisetheminimumwage.com/pages/job-loss

[Undertoad]

Very few companies are unable to hire the staff they need because they have to pay a couple of dollars more per hour. It just means they have to find their savings elsewhere. As long as there is no minimum wage and no benefits to speak of, then there is no incentive to look at less palatable savings - it is always easiest to skimp on the workforce.

Let's get it out of the way -- I think there should be a minimum wage set by government. I think it's society sending a signal to the markets that workers should not be taken advantage of, which is always a danger, and here is a level we have kind of agreed on, below which we think you're kinda sorta taking advantage.

Also, I brotherylove you D, don't ever change.

~ with that outta the way ~

I agree that the new labor situation will put pressure on things other than workers. Everything is connected. Perhaps in our mythical business, the owners will not buy the new oven this year. Maybe they will take a lower wage themselves. Maybe they will raise the price of their burgers. Maybe they will do with one less cook. Maybe they will cook more hours themselves. Maybe they will have customers with more money who will absorb the price increase. Maybe with that new money they will hire more workers at the new wage.

Stop, all the possible outcomes are overwhelming!

Everything is connected. When you say "It just means they have to find their savings elsewhere" you have personalized a model business that jibes with how you want and expect it to work.

We like to imagine that business, because these models that appeal to us. And they do help us to think about what's involved.

But there are hundreds of thousands of business models out there, each one making hundreds of decisions every day. How do we know if our model business has anything to do with reality?

Here's another model: imagine one person in an office in a major city, running a very large Excel spreadsheet, and saying wow: if we automate the drinks machine we pay $25000 per store, but we save $11000 in labor each year, and using the present value calculation with low inflation we will turn a profit in first quarter 2018.

But even that is a cartoon of the economy, and a model that jibes blah blah blah.

Ugh, I'm an hour into this, let me just post and walk away.

[DanaC]

Awww Tony, ya know I sisterylove you too :P

One thing to bear in mind though - is that according to those studies I linked to ; three quarters of those on minimum wage work for large companies, not small businesses. Small businesses are more likely to pay a fair wage than large corporations (small indy burger bar rather than McDs)

[Pico and ME]

And its those big corporations that are paying its CEO's billions off the backs of those minimum wage employees...reducing them to nothing more than wage slaves.

[xoxoxoBruce]

How else do you keep the rabble in their place. As soon as they're making a living wage they have extra time to start thinking, and we all know what happens when the rabble start thinking. Boston Tea Party? Ft Sumter? Alamo?

[xoxoxoBruce]

North Dakota is not thinking minimum wage.

[busterb]

Yeah. But, but They'er only hiring only 3 people. Rest is self check out lanes.

[glatt]

Sounds like amazing pay, but you can't live on those wages in ND because there is almost no housing.

You'd need to tow a camper with some nice insulation for the winter months and find a place to park it and let you hook it up.

[Undertoad]

find a place to park it and let you hook it u

I imagine Walmart might be interested in such an arrangement

[classicman]

Boosting the federal minimum wage would be great news for the workers who’d receive a higher paycheck. Not so much for those who’d be out of a job. That anxiety sums up much of the debate around increasing the minimum wage.

Fueling angst on the right, the Congressional Budget Office reported last year that raising the federal minimum to $10.10 would cost about 500,000 jobs. Even liberal restaurant owners, like the ones NewsHour’s Paul Solman spoke to in Seattle last spring, worried that paying their workers more would doom their businesses, while nonprofit organizations feared having to cut their staff and services.

PBS Article

[Happy Monkey]

Heh. The article is making the opposite claim, and the quoted paragraph was provided as counterpoint to the subject of the article.

[Lamplighter]

I don't buy the bullet points pushed by pundits when "raising the minimum wage" is discussed.

One of the current hallmarks of today's economy is "high productivity"

I think that just means that employers are getting more product out of every employee.
But it also probably means they are paying the least amount of wages they can,
and their employees are working about as hard as they can.

If such is the case, employers are not as likely to lay off the workers they have now.
If they did, there were be fewer products and lower profits.

Consider a restaurant, if they laid off waiters/waitresses or cooks,
fewer meals would be served, and profits would go down

Instead, I think they will just pay the new minimum wages, and move on.

[Spexxvet]

Originally Posted by Lamplighter

I don't buy the bullet points pushed by pundits when "raising the minimum wage" is discussed.

One of the current hallmarks of today's economy is "high productivity"

I think that just means that employers are getting more product out of every employee.

Not "employee", but "payroll dollar". There's no such thing as people to The Man, only numbers.

Originally Posted by Lamplighter

But it also probably means they are paying the least amount of wages they can,
and their employees are working about as hard as they can.

If such is the case, employers are not as likely to lay off the workers they have now.
If they did, there were be fewer products and lower profits.

Consider a restaurant, if they laid off waiters/waitresses or cooks,
fewer meals would be served, and profits would go down

In the short term, profits would go up. Fewer meals wouldn't be served, right off the bat, they'd just take longer to get to the table, people would have to wait to order, etc. When customers stopped coming for those reasons is when fewer meals would be served and profits would drop.

Originally Posted by Lamplighter

Instead, I think they will just pay the new minimum wages, and move on.

I doubt it. American business isn't like Japanese business - they don't think long term. They see the short term improvement and think it will just continue. Six months later, they fold.