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Are there alternative economic models which correctly predicted this? How high do they think that we can make the minimum wage without affecting employment?
by OscarCunningham 8y ago
Are there alternative economic models which correctly predicted this? How high do they think that we can make the minimum wage without affecting employment?
- Eridrus 8y agoI don't think this an indictment of the typical supply & demand model. The model is pretty flexible since the shape of the various curves will dramatically change what happens. The real argument isn't about the model, but rather the shape of the demand curve for low skill labor. I think taking the two versions of this study as separate analysis is interesting, since it shows a shift in employment from individual restaurants to chains. Which itself is a real impact from the rising minimum wage, but one not (itself) impacting labor.
- neolefty 8y agoThe article says just a decent model would help — it claims there was a glaring flaw in the models that predicted disaster: > Much of the hand-wringing was based upon a deeply flawed University of Washington study. As we noted in 2017, the study’s fatal flaw was that its analysis excluded large multistate businesses with more than one location. When thinking about the impact of raising minimum wages, one can’t simply omit most of the biggest minimum-wage employers in the region, such as McDonald’s and other fast-food chains, or Wal-Mart and other major retailers. These are the very employers that were the main target of the minimum-wage law; indeed, the law established an even higher minimum wage of $15.45 an hour for companies with 500 or more employees.