$9/h minimum wage

[Nessie]

Help me understand: Which part, exactly, is a strawman?

The part where you want to hire the best manager you can possibly afford?

The part where you want to underpay them, compared to other managers with commensurate skills and experience?

The part where you want them to overpay your workers, compared to other workers with commensurate skills and experience?

The part where you still expect your manager to excel at their work, and lead your company to great success, even though you're going to pay them less than the going rate for good management?

The part where you'll use the savings from the manager's pay cut to offset losses incurred where employees are being paid more than the value they contribute is actually worth?

Because as far as I can tell, all of those are logical consequences of your proposal that management be paid less and labor be paid more.

So to get the best manager I have to overpay and let them walk away with a golden goodbye even if they fail? I have to pay the workforce so little they need benefits to top up their wages, paid for out of increased tax on company profits? See, I can do strawmen as well.

 

[Skeptic Ginger]

Who do you think pays the taxes that fund those subsidies?

If an employer pays 20% over minimum wage, will the taxman pass them by? No? Then why should they pay a single cent above what is required by law?

That's quite the apology, TP.

The point is wealth is redistributed up, not down, when full time workers need tax funded benefits to remain in the workforce.

Regardless of your ideological heartburn.

 

[Skeptic Ginger]

I wasn't claiming anything, I was noting that if you followed the links in the CNN post you'd find what you were looking for, though some of the links had decayed and I found alternate sources.

I found what I was looking for, and cited multiple studies so I don't know what you are talking about.

Imagine the increase is on the order of 75%...

Imagine if we reduced taxes to zero, the government should be rolling in the dough. It's called the Laffer Curve and it was addressed.

At any rate that's not quite what they found. It was a study of two countries that had opposite real (inflation-adjusted) minimum wage movements during that period: the United States didn't increase it, thus it slid in real terms, while France increased it significantly and then assured that it would continue to. Now, however, the United States is behaving more like France did, notably in the Eighties, and is considering increasing the federal minimum wage again after a sizable hike in '07.

This ignoring of a trillion other variables between the US and France makes any conclusions you think you are seeing evidence of quite tenuous.

Incidentally, do you suppose that increase in the minimum wage of ~40% from '07 to '09 might have had anything to do with the (net) jobless recovery we've experienced?

No. All the evidence leans another way. The private sector job recovery is good and it's the public sector jobs, stifled by the ideologues who keep blocking all investment in public services and infrastructure, that are keeping the recovery on its snails pace.

 

[Skeptic Ginger]

The link was embedded in the first words of the post.

The link in your post went to a dead thread link, and you're complaining I didn't find the second hidden link?

Incidentally, I don't happen to think that minor or regionally targeted minimum wage increases have much negative effect, and can in fact have a benign one. However this would be the second significant minimum wage increase in less than a decade and it would be federal and is quite likely to have adverse effects on a number of regions. You apparently think differently, and I did note your allowance that at some level there ought to be a 'Laffer curve' effect, but I'm just curious why you wouldn't expect such a thing from a near-doubling of the minimum wage in roughly eight years?

You are not looking at the 'real' increase, and the overall 'real' decrease over the last 40 years. It's like climate change deniers, they cherry pick a short data set and claim it shows cooling.

If I also recall correctly you didn't think there would likely be any inflationary effect, so where do you think an increase of that level would be seen? Unemployment and price inflation (which is where Card and Kruger found it incidentally) are where one would expect a massive (and going from ~$5.10-~$9.00 in eight years is massive) increase like that to be borne, what effect would you expect?

http://oregonstate.edu/instruct/anth484/minwage.html

Calculated in real 2012 dollars, the 1968 minimum wage was the highest at $10.51. The real dollar minimum wage (red squares) falls during periods Congress does not raise the minimum wage to keep up with inflation. The minimum wage increased in three $0.70 increments--to $5.85 in July, 2007, $6.55 in July, 2008, and to $7.25 in July 2009. The 2012 minimum wage is equal to what was paid in 1960.

Not so "real massive" depending on how you report the numbers.


Re "any inflation" that's not what I said, I said "significant" inflation and if one looks at what the economy needs right now, it needs an increase on the demand side. Inflation is not the most pressing current problem.

Why not increase it to $12.00/hour, or $15.00? At what point would you expect there to be something indicating (nominal) labor costs may have nearly doubled in less than a decade for some industries? Where does this money come from?

According to the supply side ideology, money comes from 'created wealth'.

I think a full time worker's wage should be at least at the poverty level, and with the current minimum wage rate, it is not.


Oh, and I think it's OK for the government to subsidize the labor cost of an employer if it truly means a person can get a job that employer otherwise would not be able to afford. But when we are surreptitiously subsidizing Walmart and McDonald's labor costs, I don't think that should happen. That's why this problem needs more daylight.

 

[Skeptic Ginger]

In an act which will infuriate the free marketeers here, the Australian Government guarantees redundancy payments, pay in lieu of notice, annual leave and long service leave entitlements when companies go bankrupt. In this way, ordinary workers can recover from the train wreck of a failed business with some dignity. There was no public anger at this policy decision at all.

There are regular reviews of the minimum wage here, and apart from half-hearted bleating by employer associations, the public at large merely shrugs it's collective shoulder.

Just curious, can you still go on the dole at 16 and can you still go to college on the dole?

That surprised me when I was there in '78. Those standard 4 week vacations were also very enticing.

 

[Skeptic Ginger]

We should be so lucky: Aussie unemployment rate.

AUSTRALIA UNEMPLOYMENT RATE

Unemployment Rate in Australia remained unchanged at 5.40 percent in January of 2013 from 5.40 percent in December of 2012. Unemployment Rate in Australia is reported by the Australian Bureau of Statistic. Historically, from 1978 until 2013, Australia Unemployment Rate averaged 6.97 Percent reaching an all time high of 10.90 Percent in December of 1992 and a record low of 4 Percent in February of 2008. In Australia, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force. This page includes a chart with historical data for Australia Unemployment Rate.

You can reset the dates on the graph to see how long unemployment was at 10% (hit "refresh dates" after changing the dates, don't hit the big arrow).

Wow.

 

[lomiller]

Why not increase it to $12.00/hour, or $15.00

You are the one arguing against raising minimum wage, it’s up to you to p0rovide the reasons why it’s should not be raised.

At what point would you expect there to be something indicating (nominal) labor costs may have nearly doubled in less than a decade for some industries? Where does this money come from?

Are you sure you understand how a free market works? The fact that the wages are paid is enough to tell us there is value to the employer in paying wages of this level. Under no circumstances should government be trying to transfer wealth from the wage earners to anyone else, which is what you are suggesting should happen.

 

[Kaosium]

I found what I was looking for, and cited multiple studies so I don't know what you are talking about.

You were asking where the evidence of higher minimum wages having an effect on employment was, and I simply pointed out it was in the CNN article if you followed the links, those led to published papers from reputable economics schools, it wasn't just the guy at at Employment policy Institute, his links were to those papers, some of which had decayed and I posted five in a row before my first quote.

Imagine if we reduced taxes to zero, the government should be rolling in the dough. It's called the Laffer Curve and it was addressed.

No, it wasn't. Arguing that relatively minor changes to a tiny subset of the economy that has little to no noticeable overall detrimental effect (where oftentimes the prevailing entry level wage is at or near the proposed minimum anyway) hardly means that a much larger increase affecting a significantly larger portion of the economy won't have adverse consequences. Handwaving that away with a 'Laffer curve' dismissal doesn't engage the real argument, it's a difference of degree. Much like raising your taxes 3% might be annoying, but raising them 30% might seriously change your lifestyle.

This ignoring of a trillion other variables between the US and France makes any conclusions you think you are seeing evidence of quite tenuous.

Do you suppose the basic precepts of supply and demand don't translate to French? Labor is a commodity, raising the price of it significantly in a short period of time is going to have an effect, in French or English, in dollars or Francs.

No. All the evidence leans another way. The private sector job recovery is good and it's the public sector jobs, stifled by the ideologues who keep blocking all investment in public services and infrastructure, that are keeping the recovery on its snails pace.

No, all the evidence doesn't lean the other way, and the evidence you presented was hardly compelling in regards to a proposal to increase the minimum wage to this extent. Did you read it critically? Why do you suppose such limited studies could be extrapolated to this extent?

 

[Kaosium]

The link in your post went to a dead thread link, and you're complaining I didn't find the second hidden link?

That was your post, not my post.

You are not looking at the 'real' increase, and the overall 'real' decrease over the last 40 years. It's like climate change deniers, they cherry pick a short data set and claim it shows cooling.

No. I am arguing that increasing the minimum wage a great deal in a short period of time is quite likely to have a greater adverse effect.

http://oregonstate.edu/instruct/anth484/minwage.htmlNot so "real massive" depending on how you report the numbers.

How does that engage my point?

Re "any inflation" that's not what I said, I said "significant" inflation and if one looks at what the economy needs right now, it needs an increase on the demand side. Inflation is not the most pressing current problem.

Let's not make it a pressing current problem then! A loose money policy and such a huge increase in the minimum wage is one very good way to do it.

According to the supply side ideology, money comes from 'created wealth'.

What do you think 'supply-side ideology' is?

Incidentally that doesn't answer the question of where the money came from/goes when you waved your magic wand.

I think a full time worker's wage should be at least at the poverty level, and with the current minimum wage rate, it is not.

What do you suppose will happen to the poverty level then?

Oh, and I think it's OK for the government to subsidize the labor cost of an employer if it truly means a person can get a job that employer otherwise would not be able to afford. But when we are surreptitiously subsidizing Walmart and McDonald's labor costs, I don't think that should happen. That's why this problem needs more daylight.

This presupposes that health care should be tied to employment, I find that was a poor substitute for a rational national health care policy for numerous reasons, I'd rather we changed that.

I think I got an idea what's going on now from having come across a Paul Krugman controversy on the internet. The sad thing is I thought he came across well on the show, the afterward is embarrassing for him and his blogger and twitter friends. I will leave you in peace, sometimes discretion is the better part of valor, and I know enough to realize this is unlikely to end well for him or his friends and supporters.

 

[Kaosium]

You are the one arguing against raising minimum wage, it’s up to you to p0rovide the reasons why it’s should not be raised.

I strongly suspect this bill will increase prices and increase unemployment.

Are you sure you understand how a free market works? The fact that the wages are paid is enough to tell us there is value to the employer in paying wages of this level. Under no circumstances should government be trying to transfer wealth from the wage earners to anyone else, which is what you are suggesting should happen.

No, that's not what I meant, but nevermind.

 

[Skeptic Ginger]

That was your post, not my post.

You still aren't making sense and I can't find any dead link before the following exchange which I managed to cut off the link before closing the quote.

Originally Posted by Kaosium
You posted the link! his[/i] links, which were to studies from economists from Cornell, American University, Cal-Irvine, MIT, Michigan State and the Federal Reserve. As some of the links went dead, I went and tracked them down for you. Some of those apply to the OP of the thread, whether an increase in the minimum wage would be a boon to the poor, and some to your specific request above: do minimum wage increases (generally) cause unemployment?postid=8999291#post8999291]Try again[/url]. I posted one link with a lot of links ...Then followed through with another post discussing half the links from the link.

And I don't know which links were dead to you but none of the links in the link I opened were.

Which dead links? Because regardless if my link to a past post in this thread was messed up, that was only AFTER you said the highlighted part above.

 

[Kaosium]

You still aren't making sense and I can't find any dead link before the following exchange which I managed to cut off the link before closing the quote.

Which dead links? Because regardless if my link to a past post in this thread was messed up, that was only AFTER you said the highlighted part above.

You had to follow through (your CNN link) to the Saltsman piece from the Employment Policy Institute, which has been locked in eternal struggle with the Economic Policy Institute like those two black/white opposite dudes on Classic Star Trek for decades now!

In that piece he links a number of papers, some of which have gone dead and I re-linked them (all in a row--like five) in my first post for convenience sake. That was where (some of) the evidence you were asking for was.

 

[thaiboxerken]

Conservatives keep saying that raising the minimum wages has some dire, negative consequences. We've raised it in the past plenty. Where is the evidence of those negative consequences?
The evidence points towards a positive consequence.

 

[Skeptic Ginger]

You had to follow through (your CNN link) to the Saltsman piece from the Employment Policy Institute, which has been locked in eternal struggle with the Economic Policy Institute like those two black/white opposite dudes on Classic Star Trek for decades now!

In that piece he links a number of papers, some of which have gone dead and I re-linked them (all in a row--like five) in my first post for convenience sake. That was where (some of) the evidence you were asking for was.

Can you not just say the post number?!!! It's like pulling teeth.

Never mind, finally:The impact of a $9 minimum wage
So your gripe is there's a dead link in that link? Oh for pity's sake. I posted plenty besides that CNN Money article.

 

[Skeptic Ginger]

You had to follow through (your CNN link) to the Saltsman piece from the Employment Policy Institute, which has been locked in eternal struggle with the Economic Policy Institute like those two black/white opposite dudes on Classic Star Trek for decades now!

In that piece he links a number of papers, some of which have gone dead and I re-linked them (all in a row--like five) in my first post for convenience sake. That was where (some of) the evidence you were asking for was.

Let's start with the "Employment Policies Institute

The Employment Policies Institute (EPI) is one of several front groups created by Berman & Co., a Washington, DC public affairs firm owned by Rick Berman, who lobbies for the restaurant, hotel, alcoholic beverage and tobacco industries. While most commonly referred to as EPI, it is registered as a 501(c)(3) tax-exempt organization under the name of "Employment Policies Institute Foundation." In its annual Internal Revenue Service return, EPI states that it "shares office space with Berman & Company on a cost pass through basis". [1]

Against raising the minimum wage

Rick Berman created EPI in 1991 to "argue the importance of minimum wage jobs for the poor and uneducated."[3]
EPI has has been widely quoted in news stories regarding minimum wage issues, and although a few of those stories have correctly described it as a "think tank financed by business," most stories fail to provide any identification that would enable readers to identify the vested interests behind its pronouncements. Instead, it is usually described exactly the way it describes itself, as a "non-profit research organization dedicated to studying public policy issues surrounding employment growth" that "focuses on issues that affect entry-level employment." In reality, EPI's mission is to keep the minimum wage low so Berman's clients can continue to pay their workers as little as possible.
EPI also owns the internet domain names to MinimumWage.com and LivingWage.com, a website that attempts to portray the idea of a living wage for workers as some kind of insidious conspiracy. "Living wage activists want nothing less than a national livingwage," it warns (as though there is something wrong with paying employees enough that they can afford to eat and pay rent).

While I do believe that someone representing a position can publish valid research, this group along with a whole slew of these front groups was established specifically to create doubt surrounding the valid science.

While "Merchants of Doubt" does not address this particular topic, it can give one a good idea of how these tactics work. The name says it all, create doubt about the valid science.

 

[Kaosium]

Conservatives keep saying that raising the minimum wages has some dire, negative consequences. We've raised it in the past plenty. Where is the evidence of those negative consequences?
The evidence points towards a positive consequence.

Some of it does, there's certainly ways it can be used to nudge wages upward (they get sticky you see--inside joke ) and eliminate real exploitation.

Not all of it does though, and one shouldn't expect a dire negative consequence from a small increase, why would there be? That wouldn't make any sense, if for example the minimum wage were to increase 18% over a three year period for the lowest 1% or whatever of the workforce, it's hard to see how it could have 'dire negative consequences.' Any 'loss' in employment or increase in prices might well be dwarfed by confounding factors or subsumed by economic growth and the typical 2-3% inflation and people would never notice, except the ones who benefited.

 

[Skeptic Ginger]

...You had to follow through to the Saltman piece and then follow his links, which were to studies from economists from Cornell, American University, Cal-Irvine, MIT, Michigan State and the Federal Reserve. As some of the links went dead, I went and tracked them down http://www.nber.org/papers/w7519.pdf for you. Some of those apply to the OP of the thread, whether an increase in the minimum wage would be a boon to the poor, and some to your specific request above: do minimum wage increases (generally) cause unemployment?

OK, so going back to the cited studies in this obtuse post,


Raising minimum wage won't lower poverty

Editor's note: Michael Saltsman is the research fellow at the Employment Policies Institute in Washington, a nonprofit that studies public policy issues surrounding employment growth.

He's a paid shill. I'm not impressed.



Minimum Wages and Poverty: Will a $9.50 Federal Minimum Wage Really Help the Working Poor?
Are they serious? The poor don't need a raise, they won't benefit from it? I'll try to read it later.



Minimum Wages and Employment

A sizable majority of the studies surveyed in this monograph give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages.

This was referred to in one of the links I posted. The authors admit their findings were not significant yet they use them to draw a conclusion? I'll also take a closer look later at the studies that did show a significant negative effect on employment.

MINIMUM WAGES AND EMPLOYMENT: A REVIEW OF EVIDENCE FROM THE NEW MINIMUM WAGE RESEARCH Same authors as the above link.

In the end, our view is that the weight of the empirical evidence is generally consistent with the view of traditional economists that the low-wage labor market can be reasonably approximated by the neoclassical competitive model. As a result, we also believe that raising the minimum wage leads to economic distortions and often has unintended adverse consequences for the employment opportunities of low-skilled workers. Of course, as we have argued elsewhere, the effects of the minimum wage on employment represents only one piece of the analysis necessary to assess whether minimum wages are a useful policy tool for improving the economic position of those at the bottom of the income distribution—which we believe is the ultimate goal of minimum wage policy. In particular, a more comprehensive review that includes the implications of the minimum wage for the levels and distributions of wages, employment, incomes, and human capital accumulation, as well as consideration of alternative policies, is ultimately needed to assess whether raising the minimum wage is good economic policy.

Of course, if minimum wages do not generate disemployment effects among low-skilled workers, it is far more likely that they have beneficial effects at the bottom of the income distribution. But given that the weight of the evidence points to disemployment effects, the wisdom of pursuing higher minimum wages hinges in potentially complex ways on the tradeoffs between the effects of minimum wages on different workers and other economic agents, and whether other policies present more favorable tradeoffs.

The language they use "market distortions" suggests a Libertarian leaning ideology, but at least this paper is a scientific paper and not a think tank creation. I conclude from the paper that while their conclusion is minimum wage increases might decrease job numbers, they did not find a particularly significant effect. IOW, a relatively few people may lose a job opportunity but the benefits might be a net positive for other reasons.



THE EFFECTS OF MINIMUM WAGES THROUGHOUT THE WAGE DISTRIBUTION

The Effect of New Jersey's Minimum Wage Increase on Fast-Food Employment: A Re-Evaluation Using Payroll Records

The last two papers are from the National Bureau of Economic Research

"But reporter Leonhardt 'does' have some interesting things to say about Harvard University:
"Still, Ec10, as it is known at Harvard, is hardly neutral -- in its readings or its lectures -- and its point of view contributes a good deal to his importance. Over the last two decades, thousands of Harvard undergraduates have received a decidedly anti-tax, free-market-leaning introduction to economics.
"And there's this gem about Feldstein's partisanship and his crappy economic analysis, 'driven' by partisanship:
"For his part, Mr. Feldstein has shown little taste since the 1980's for straying from the Republican Party line. In 1992, he predicted that the Clinton administration's tax increase would stifle economic growth and do little to erase the deficit...In 2001, when President Bush was forming his cabinet, Mr. Feldstein and his wife began a Boston Globe article by writing, 'Paul O'Neill was an inspired choice for secretary of the Treasury.' Mr. Feldstein is also on the board of Eli Lilly, the pharmaceutical company with strong Republican ties.
"And the next time you hear someone refer to Feldstein as from Harvard, remember that, according to Feldstein,
"I have a Harvard office, but I hardly ever use it..."

Another front group with a specific agenda.


I myself posted a link to a webpage that was titled, "Raise the Minimum Wage". The difference, they weren't attempting to hide their position. There was no attempt to label any of the science they posted as coming from some front group called a 'think tank'.

The oddity is that even if there was no adverse effect on employment raising the minimum wage, it just so happens that most of the people working near or at the minimum wage don't actually come from poor households. They're often second and third jobs for households, with a disproportionate percentage of teenagers, and thus generally significantly above the poverty line already:

I'll look at this claim in the next post.

 

[Kaosium]

Can you not just say the post number?!!! It's like pulling teeth.

Are you on a phone or something? I'm on a laptop, it's a matter of a quick scroll or just clicking on the links.

Never mind, finally:The impact of a $9 minimum wage
So your gripe is there's a dead link in that link? Oh for pity's sake. I posted plenty besides that CNN Money article.

No, I was trying to help actually, show you where it was and that I wasn't saying you didn't post evidence!

 

[Kaosium]

Let's start with the "Employment Policies InstituteWhile I do believe that someone representing a position can publish valid research, this group along with a whole slew of these front groups was established specifically to create doubt surrounding the valid science.

That's because the (original) paper, Card/Krueger '95 was considered quite doubtful. What would you think if an economist set up a phone bank and called a bunch of people at stores and then published saying a well established and evidenced position had been completely turned around and the opposite effect was true, not just for that study but in a universal sense?

Might you go looking for harder data than telephone surveys, evaluate it, and then publish? What would that process be called?

So Card and Krueger went back and found even more and harder data, the Bureau of Labor Statistics, and then revised their findings, as they could no longer contend that the positive effect was likely but that they thought any negative effect was negligible, which kicked off the whole debate anew.

Circa 1995 I heard John Prescott, then the deputy leader of the Labour party say something to the effect of 'Of course the minimum wage causes unemployment, no one doubts that.' Technically of course that's still true, the mere existence of a minimum wage is going to retard employment some, for one thing if it didn't there would be little reason to have it. However that doesn't mean that every increase of a minimum wage or imposition of one on an economy will have a negative overall effect, at least a discernible one.

While "Merchants of Doubt" does not address this particular topic, it can give one a good idea of how these tactics work. The name says it all, create doubt about the valid science.

I will know you are serious about it being 'valid science' when you find or can think of a legitimate answer for why we don't increase the minimum wage to $12.00 or $15.00 instead. There has to be a reason that question isn't answered, doesn't there? What might happen were we to do it? The answer to that is found in unemployment and price inflation, and there's evidence of the latter to be found in Card/Krueger itself.

So were economics to adopt the Naomi Orestes model then there never would have been any challenge whatsoever to the tenet that minimum wages increases always have negative effects, all the studies you've been posting would be considered 'creating doubt about the valid science.'

That's not the scientific method I was taught, and Naomi Orestes strikes me as the poster child for putting one's political beliefs ahead of one's rationality and assuming everyone else does too. If it's science it doesn't need Naomi Orestes in the slightest.

 

[Tsukasa Buddha]

I'm looking forward to it, I already learned a lot from this thread.

It has been a surprisingly long day... but I haven't forgotten !