5 ms·

If you click on the link to Bloomberg you can read the conclusion: "Some time ago, I suggested that we would eventually learn whether higher minimum wages were

If you click on the link to Bloomberg you can read the conclusion: "Some time ago, I suggested that we would eventually learn whether higher minimum wages were going to kill jobs. The early data is in, and so far it doesn’t look like they do." This seems like an awfully broad conclusion to draw. It is indisputable that minimum wage kills or exports some jobs (I know this is a fact because my company is planning to add fewer low wage employees and contractors in our local area based largely on minimum wage changes). The question is whether the people who benefit from the supply restriction (people in low, but not minimum wage jobs) benefit and then spend enough to cancel out the aggregate cost of the distortion. It may be possible that in Seattle's unique situation this was/is true, but even this conclusion seems like a "politically motivated economic analysis, this was what the [pr]opponents hoped would happen because it fit with way they think world should work." One of the questions that these pieces skirt around is how inefficient is the "unregulated" labor market? Clearly some intervention in the labor market, like banning non-competes, makes is closer to efficient, but the question is what inefficiency is the minimum wage solving, and what is it creating?

NotSammyHagar 10y ago
It is also indisputable that increasing the minimum wage puts more money into the economy, it's a clear stimulation. And our economy to a large extent is dependent on consumer spending. The increase in spending, vs the fewer jobs with higher minimum wags - that's the complicated question.
- BenoitEssiambre 10y ago
  You dispute yourself what you call indisputable in your own comment! Fewer jobs means potentially less money in the economy (and theory says that in most cases, more money is lost from fewer jobs than gained from higher pay).
  - michaelmrose 10y ago
    Employers at burgers Inc hire enough people to make and serve the quantity of burgers they expect to sell. If more people can afford to buy burgers they hire more people not less. The idea that quantity of labor demanded decreases with increased labor costs is oversimplified and ignores reality.
    - brbsix 10y ago
      Or the employers decide it now makes sense to invest in infrastructure or automation so that fewer or perhaps even no workers are required. Elevator attendants are the classic example.
      - michaelmrose 10y ago
        Automation gets progressively cheaper compared to human labor anyway increasing wages barely moves the turn over point where automation is cheaper.
jellicle 10y ago
> > whether higher minimum wages were going to kill jobs. The early data is in, and so far it doesn’t look like they do." > This seems like an awfully broad conclusion to draw. Why? We have mountains of evidence that supports that conclusion, and none to oppose it.
- saosebastiao 10y ago
  None? Are you sure about that?
  - michaelmrose 10y ago
    Why don't you just provide some.
    - saosebastiao 10y ago
      Almost all evidence supports negative employment effects of minimum wage increases. A handful of studies do not. It takes a real head-in-the-sand approach to empiricism to claim that there is no evidence to support negative employment effects. http://www.nber.org/papers/w12663 http://www.nber.org/papers/w12663
      - fnordsensei 10y ago
        A more recent meta study (2013) seems to claim otherwise: > The weight of that evidence points to little or no employment response to modest increases in the minimum wage. > The report reviews evidence on eleven possible adjustments to minimum-wage increases that may help to explain why the measured employment effects are so consistently small. The strongest evidence suggests that the most important channels of adjustment are: reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners ("wage compression"); and small price increases. http://cepr.net/documents/publications/min-wage-2013-02.pdf http://cepr.net/documents/publications/min-wage-2013-02.pdf
        10y ago
pm24601 10y ago
Sounds like your company runs a pretty marginal business. A worker that is making $10/hr ($20K / year ) now makes $15 / hr or $30K /year doesn't add the $10+K in extra value. When I hear about companies that are not "adding jobs because of minimum wage", I go back later and look in the news reports. Invariably: 1. the company was doing badly already and use the minimum wage, tax increases, etc. to excuse their internal business difficulties. 2. the companies competitors are some how immune to the minimum wage increase and those competitors are expanding and hiring, 3. OR the company in question quietly really did hire more people because surprise, surprise, higher pay resulted in more discretionary income to spend and business was up.
- tropo 10y ago
  In a properly functioning free market, the company should be doing badly! They might like to earn a nice fat profit, but that isn't what the rest of us like. Competition should get rid of that. Having business difficulties is the expected norm. So point #1 should normally be true, and any change that makes business more difficult should normally cause business failures and resulting job loss.
__derek__ 10y ago
The direct juxtaposition of this criticism > This seems like an awfully broad conclusion to draw. and this anecdote > It is indisputable that minimum wage kills or exports some jobs (I know this is a fact because my company is planning to add fewer low wage employees and contractors in our local area based largely on minimum wage changes) is excellent. Admittedly early data about a major metropolitan economy? Pfft. A single anecdote? The basis for claiming that an empirical claim is indisputably true.

NotSammyHagar 10y ago

It is also indisputable that increasing the minimum wage puts more money into the economy, it's a clear stimulation. And our economy to a large extent is dependent on consumer spending. The increase in spending, vs the fewer jobs with higher minimum wags - that's the complicated question.

BenoitEssiambre 10y ago
You dispute yourself what you call indisputable in your own comment! Fewer jobs means potentially less money in the economy (and theory says that in most cases, more money is lost from fewer jobs than gained from higher pay).
- michaelmrose 10y ago
  Employers at burgers Inc hire enough people to make and serve the quantity of burgers they expect to sell. If more people can afford to buy burgers they hire more people not less. The idea that quantity of labor demanded decreases with increased labor costs is oversimplified and ignores reality.
  - brbsix 10y ago
    Or the employers decide it now makes sense to invest in infrastructure or automation so that fewer or perhaps even no workers are required. Elevator attendants are the classic example.
    - michaelmrose 10y ago
      Automation gets progressively cheaper compared to human labor anyway increasing wages barely moves the turn over point where automation is cheaper.

jellicle 10y ago

> > whether higher minimum wages were going to kill jobs. The early data is in, and so far it doesn’t look like they do." > This seems like an awfully broad conclusion to draw. Why? We have mountains of evidence that supports that conclusion, and none to oppose it.

saosebastiao 10y ago
None? Are you sure about that?
- michaelmrose 10y ago
  Why don't you just provide some.
  - saosebastiao 10y ago
    Almost all evidence supports negative employment effects of minimum wage increases. A handful of studies do not. It takes a real head-in-the-sand approach to empiricism to claim that there is no evidence to support negative employment effects. http://www.nber.org/papers/w12663 http://www.nber.org/papers/w12663
    - fnordsensei 10y ago
      A more recent meta study (2013) seems to claim otherwise: > The weight of that evidence points to little or no employment response to modest increases in the minimum wage. > The report reviews evidence on eleven possible adjustments to minimum-wage increases that may help to explain why the measured employment effects are so consistently small. The strongest evidence suggests that the most important channels of adjustment are: reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners ("wage compression"); and small price increases. http://cepr.net/documents/publications/min-wage-2013-02.pdf http://cepr.net/documents/publications/min-wage-2013-02.pdf
      - 10y ago

pm24601 10y ago

Sounds like your company runs a pretty marginal business. A worker that is making $10/hr ($20K / year ) now makes $15 / hr or $30K /year doesn't add the $10+K in extra value. When I hear about companies that are not "adding jobs because of minimum wage", I go back later and look in the news reports. Invariably: 1. the company was doing badly already and use the minimum wage, tax increases, etc. to excuse their internal business difficulties. 2. the companies competitors are some how immune to the minimum wage increase and those competitors are expanding and hiring, 3. OR the company in question quietly really did hire more people because surprise, surprise, higher pay resulted in more discretionary income to spend and business was up.

tropo 10y ago
In a properly functioning free market, the company should be doing badly! They might like to earn a nice fat profit, but that isn't what the rest of us like. Competition should get rid of that. Having business difficulties is the expected norm. So point #1 should normally be true, and any change that makes business more difficult should normally cause business failures and resulting job loss.

__derek__ 10y ago

The direct juxtaposition of this criticism > This seems like an awfully broad conclusion to draw. and this anecdote > It is indisputable that minimum wage kills or exports some jobs (I know this is a fact because my company is planning to add fewer low wage employees and contractors in our local area based largely on minimum wage changes) is excellent. Admittedly early data about a major metropolitan economy? Pfft. A single anecdote? The basis for claiming that an empirical claim is indisputably true.