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> But a new paper by the same authors (Sci-Hub mirror) shows that the rising minimum wage generated major increases for the workers who had the most hours, whos

> But a new paper by the same authors (Sci-Hub mirror) shows that the rising minimum wage generated major increases for the workers who had the most hours, whose hours were only cut a little, but still came out ahead thanks to the wage increase; workers with fewer hours saw no financial harm from the rising minimum wage, working fewer hours and bringing home the same sum; and they found some harm to people who had the smallest number of hours) (which may actually reflect stronger demand for workers and fewer workers in this category of very-low-hour work). Is this actually reversing the claim? Or just making a narrower claim that the minimum wage hike increased some workers. Most claims around the negative effects of minimum wage say that workers will lose employment - not that those workers who remain employed will suffer. By restricting the conclusion to "the workers who had the most hours, whose hours were only cut a little" essentially dodges the question of whether the change benefited workers as a whole. Ultimately, though, this is a subjective questions. If you have 10 workers, making $12.50 an hour and if you had the option of making 9 of them get $15.00/hr but one of them gets fired is it a good outcome? The pool of workers are making a greater amount of money (it "breaks even" as other commenters have put it), but does that $2.50 an hour increase for 9 workers offset the negative of one of them getting fired? Maybe getting fired has less tangible effects that make the net increase not worth it. That fired worker may end up on the streets. Is instability of income is a greater problem than low income? I'm not saying there is any right answer here, my whole point is that it's subjective to determine what outcome is better.

ctdonath 8y ago
And your 9 remaining just saw their work demands go up 11% (with no additional hours), to cover the departed's work which still needs doing. Sure, 20% more pay for 11% more work is a deal, but it's still more work than originally signed on for.
- Fjolsvith 8y ago
  Exactly. Still an Employer's market. With less jobs, employees have to compete harder to keep theirs.
  - chillwaves 8y ago
    Where are you getting "less jobs"?
    - Fjolsvith 8y ago
      "For low-wage workers with less experience — a high-school student looking for a summer job, say — the wage increases have led to fewer job opportunities, the researchers found." [1] 1. https://www.seattletimes.com/business/local-business/a-tale-of-two-seattle-job-markets-for-low-wage-workers-in-new-minimum-wage-study/ https://www.seattletimes.com/business/local-business/a-tale-...
- jayd16 8y ago
  That's not how it works. If they could get 9 people to do the work they would. Wage increase or not.
donmcronald 8y ago
Why would you have 10 workers if the job can be done by 9? There wouldn't be 10 workers to start with in your fake scenario.
- AnthonyMouse 8y ago
  > Why would you have 10 workers if the job can be done by 9? Because not all work is the same. If you clean the equipment weekly it breaks down less often than cleaning it monthly. If the cost of an employee increases then the cost of more employees can exceed the cost of more equipment failures, so you cut staff (or hours).
  - jayd16 8y ago
    Sounds like that one guy should look for a job at the equipment factory.
    - AnthonyMouse 8y ago
      Unless the primary cost of the equipment failing is lost business from having to clean it during operating hours, without any profit going to the manufacturer.
- zdragnar 8y ago
  Generally speaking, you should have more employees than the bare minimum required to operate. That way, you have enough staff available to, say, cover when someone calls in sick, gets in an accident and takes short-term leave, goes on vacation, quits unexpectedly, etc. When wages are already close to the marginal value add, increasing the wage floor means needing to cut hours. When wages are not, then increasing the wage floor has little effect on hours or people hired. If there's already sufficient buffer, it might even result in fewer jobs over time as companies attempt to get by with less wiggle room in headcount. Just a thought.
  - Spooky23 8y ago
    You’re also assuming that there is no price elasticity. When all parties see the cost of resources go up, the prices go up or margin goes down. Anyplace with a geographic monopoly demonstrates this. Rest Areas, large institutions and places like airport usually require a cut of the gross sales are part of the lease agreement. I know of one where that cut is 15%, but the restaurant charges a 30% premium since it is also a near monopoly within the institution. People are still buying coffee and burgers.
olliej 8y ago
If you’re concerned about and increase in minimum wage, I’m confused about why you have extra staff. Alternatively you’re saying that the remaining 9 workers are going to be doing an additional 1/9th of the work, so presumably the hours. So all you’ve done is kick someone onto the street (I do love the claim that you are on their side, while fighting against wages rising), while paying the same amount - possibly more due to overtime wages. So yeah, if your business is poorly run you may get a significant impact from a fairly minor wage increase, but mostly because your business was already poorly run.
- XorNot 8y ago
  More importantly you're paying minimum wage: you clearly in no way value the skills any of these people bring to the business, otherwise you'd be inclined to offer more in the first place.
  - _dps 8y ago
    This is a weird claim. At the federal minimum $7.25 and 2000 hours per year that's $14.5k. Overhead on an employee (taxes, insurance, equipment, office space, etc.) is at least another 50% of that, call it $20k total. So just hiring someone merely to break even means you estimate they can generate something worth $20k over the course of a year. That's just about the price of a new mid-size economy sedan.
    - XorNot 8y ago
      It's not a weird claim, it's minimum wage. It means you're operating a business where you are either fine with a long lead time to fill positions (since you're looking for someone who can execute a skilled job of some sort but will work for the absolute bottom-dollar of the market), or it is close to totally unskilled work which anyone can do, and which the moment they have any marketable skills (say, from just doing the job for any length of time) they have every incentive to move to another company. Literally every bit of improvement your employees make in their ability to do the job, implies that they should be paid more because their value per hour proposition, as you put it, is going up.
sinak 8y ago
The study did look at loss of employment as well. The conclusion states: > Evidence indicates that these workers experienced no significant decline in their likelihood of being employed and a modest reduction in their hours worked over the six quarters following the first and second wage increases.
- deleted 8y ago
  [deleted]
- jellicle 8y ago
  Right. You can quit your third job if you're making more from the first two. This is a plus, not a minus.
  - weberc2 8y ago
    Was it the employee or the employer who reduced the employee’s hours? I interpreted it as the latter.
AnthonyMouse 8y ago
> Or just making a narrower claim that the minimum wage hike increased some workers. Not only that, it's a specific type of workers, namely those that work for large bureaucracies that can absorb the cost. It seems like a pretty good argument for having the minimum wage only apply to companies with more than 500 employees.
tonyedgecombe 8y ago
>If you have 10 workers ... That was the argument against the minimum wage being introduced in the UK, it turned out to be false.
cimmanom 8y ago
On the other hand, if that fired worker was working 2 jobs just to afford rent, but keeps their other job and now makes enough per hour to get by doing just one job - and can spend more time with their family or studying or whatever - that isn’t necessarily so bad. Not to mention that more disposable income in the area likely means more people spending more money at your business. Chances are that not only your revenue will go up enough to employ that 10th person, but that the workload will increase enough that you’ll need the extra pair of hands.
Eridrus 8y ago
I think there is a relatively easy calculus here: calculate the amount of government spending required to get to "make everyone whole", subtract any new tax revenue/decreased benefits spending. If you're losing money, then you're probably better off not doing it. The goal with the minimum wage is to provide a baseline. The same goal as general poverty reduction programs, so one should probably look at what is most effective from a government cost perspective. This does shift the burden onto consumers, but this is probably for the best in the long run.
dabbledash 8y ago
People working fewer hours and bringing home the same amount overall also benefited.

ctdonath 8y ago

And your 9 remaining just saw their work demands go up 11% (with no additional hours), to cover the departed's work which still needs doing. Sure, 20% more pay for 11% more work is a deal, but it's still more work than originally signed on for.

Fjolsvith 8y ago
Exactly. Still an Employer's market. With less jobs, employees have to compete harder to keep theirs.
- chillwaves 8y ago
  Where are you getting "less jobs"?
  - Fjolsvith 8y ago
    "For low-wage workers with less experience — a high-school student looking for a summer job, say — the wage increases have led to fewer job opportunities, the researchers found." [1] 1. https://www.seattletimes.com/business/local-business/a-tale-of-two-seattle-job-markets-for-low-wage-workers-in-new-minimum-wage-study/ https://www.seattletimes.com/business/local-business/a-tale-...
jayd16 8y ago
That's not how it works. If they could get 9 people to do the work they would. Wage increase or not.

donmcronald 8y ago

Why would you have 10 workers if the job can be done by 9? There wouldn't be 10 workers to start with in your fake scenario.

AnthonyMouse 8y ago
> Why would you have 10 workers if the job can be done by 9? Because not all work is the same. If you clean the equipment weekly it breaks down less often than cleaning it monthly. If the cost of an employee increases then the cost of more employees can exceed the cost of more equipment failures, so you cut staff (or hours).
- jayd16 8y ago
  Sounds like that one guy should look for a job at the equipment factory.
  - AnthonyMouse 8y ago
    Unless the primary cost of the equipment failing is lost business from having to clean it during operating hours, without any profit going to the manufacturer.
zdragnar 8y ago
Generally speaking, you should have more employees than the bare minimum required to operate. That way, you have enough staff available to, say, cover when someone calls in sick, gets in an accident and takes short-term leave, goes on vacation, quits unexpectedly, etc. When wages are already close to the marginal value add, increasing the wage floor means needing to cut hours. When wages are not, then increasing the wage floor has little effect on hours or people hired. If there's already sufficient buffer, it might even result in fewer jobs over time as companies attempt to get by with less wiggle room in headcount. Just a thought.
- Spooky23 8y ago
  You’re also assuming that there is no price elasticity. When all parties see the cost of resources go up, the prices go up or margin goes down. Anyplace with a geographic monopoly demonstrates this. Rest Areas, large institutions and places like airport usually require a cut of the gross sales are part of the lease agreement. I know of one where that cut is 15%, but the restaurant charges a 30% premium since it is also a near monopoly within the institution. People are still buying coffee and burgers.

olliej 8y ago

If you’re concerned about and increase in minimum wage, I’m confused about why you have extra staff. Alternatively you’re saying that the remaining 9 workers are going to be doing an additional 1/9th of the work, so presumably the hours. So all you’ve done is kick someone onto the street (I do love the claim that you are on their side, while fighting against wages rising), while paying the same amount - possibly more due to overtime wages. So yeah, if your business is poorly run you may get a significant impact from a fairly minor wage increase, but mostly because your business was already poorly run.

XorNot 8y ago
More importantly you're paying minimum wage: you clearly in no way value the skills any of these people bring to the business, otherwise you'd be inclined to offer more in the first place.
- _dps 8y ago
  This is a weird claim. At the federal minimum $7.25 and 2000 hours per year that's $14.5k. Overhead on an employee (taxes, insurance, equipment, office space, etc.) is at least another 50% of that, call it $20k total. So just hiring someone merely to break even means you estimate they can generate something worth $20k over the course of a year. That's just about the price of a new mid-size economy sedan.
  - XorNot 8y ago
    It's not a weird claim, it's minimum wage. It means you're operating a business where you are either fine with a long lead time to fill positions (since you're looking for someone who can execute a skilled job of some sort but will work for the absolute bottom-dollar of the market), or it is close to totally unskilled work which anyone can do, and which the moment they have any marketable skills (say, from just doing the job for any length of time) they have every incentive to move to another company. Literally every bit of improvement your employees make in their ability to do the job, implies that they should be paid more because their value per hour proposition, as you put it, is going up.

sinak 8y ago

The study did look at loss of employment as well. The conclusion states: > Evidence indicates that these workers experienced no significant decline in their likelihood of being employed and a modest reduction in their hours worked over the six quarters following the first and second wage increases.

deleted 8y ago
[deleted]
jellicle 8y ago
Right. You can quit your third job if you're making more from the first two. This is a plus, not a minus.
- weberc2 8y ago
  Was it the employee or the employer who reduced the employee’s hours? I interpreted it as the latter.

AnthonyMouse 8y ago

> Or just making a narrower claim that the minimum wage hike increased some workers. Not only that, it's a specific type of workers, namely those that work for large bureaucracies that can absorb the cost. It seems like a pretty good argument for having the minimum wage only apply to companies with more than 500 employees.

tonyedgecombe 8y ago

>If you have 10 workers ... That was the argument against the minimum wage being introduced in the UK, it turned out to be false.

cimmanom 8y ago

On the other hand, if that fired worker was working 2 jobs just to afford rent, but keeps their other job and now makes enough per hour to get by doing just one job - and can spend more time with their family or studying or whatever - that isn’t necessarily so bad. Not to mention that more disposable income in the area likely means more people spending more money at your business. Chances are that not only your revenue will go up enough to employ that 10th person, but that the workload will increase enough that you’ll need the extra pair of hands.

Eridrus 8y ago

I think there is a relatively easy calculus here: calculate the amount of government spending required to get to "make everyone whole", subtract any new tax revenue/decreased benefits spending. If you're losing money, then you're probably better off not doing it. The goal with the minimum wage is to provide a baseline. The same goal as general poverty reduction programs, so one should probably look at what is most effective from a government cost perspective. This does shift the burden onto consumers, but this is probably for the best in the long run.

dabbledash 8y ago

People working fewer hours and bringing home the same amount overall also benefited.