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It's not that simple. No one can agree if a given minimum wage increase results in a workforce reduction, and if it does by how much. There is no consensus here

It's not that simple. No one can agree if a given minimum wage increase results in a workforce reduction, and if it does by how much. There is no consensus here, which probably means at the minimum wage increases we've seen, the effect is negligible.

magicalhippo 7y ago
> No one can agree if a given minimum wage increase results in a workforce reduction, and if it does by how much. It's certainly not a nice analytic function, but clearly the higher the minimum wage, the fewer jobs make economic sense. If I could pay someone a couple of bucks a day to open and close my garage door, I could afford that. But the minimum wage is far beyond that, so I got an electric door opener instead.
- learc83 7y ago
  There are 2nd order effects though. Higher minimum wage has a direct impact on the income velocity of money because it tends to move money towards lower income workers, who spend money faster. This effect can actually result in more jobs overall.
  - magicalhippo 7y ago
    If they buy more things, then surely it depends highly on where those things are produced though. Of course it'll mean a bit more jobs in the retail sector, but with most being online, won't the primary increase be at the production end? If it allows more people to buy iPhones then most of the jobs created by that is made in China, which doesn't help local economy much.
    - learc83 7y ago
      Online sales are only projected to account for about 12% of retail in 2020, and retail is only a small percentage of the overall economy. >If it allows more people to buy iPhones then most of the jobs created by that is made in China Only a small part of the value of an iPhone is captured by China. Not much of it goes to the local economy either, but luxury electronics are also a small fraction of the economy. Dining out, groceries, retail, housing, transportation, entertainment, travel, child care, home repair, cell phone repair, medical care etc... the local economy captures a large percentage of all of those.

magicalhippo 7y ago

> No one can agree if a given minimum wage increase results in a workforce reduction, and if it does by how much. It's certainly not a nice analytic function, but clearly the higher the minimum wage, the fewer jobs make economic sense. If I could pay someone a couple of bucks a day to open and close my garage door, I could afford that. But the minimum wage is far beyond that, so I got an electric door opener instead.

learc83 7y ago
There are 2nd order effects though. Higher minimum wage has a direct impact on the income velocity of money because it tends to move money towards lower income workers, who spend money faster. This effect can actually result in more jobs overall.
- magicalhippo 7y ago
  If they buy more things, then surely it depends highly on where those things are produced though. Of course it'll mean a bit more jobs in the retail sector, but with most being online, won't the primary increase be at the production end? If it allows more people to buy iPhones then most of the jobs created by that is made in China, which doesn't help local economy much.
  - learc83 7y ago
    Online sales are only projected to account for about 12% of retail in 2020, and retail is only a small percentage of the overall economy. >If it allows more people to buy iPhones then most of the jobs created by that is made in China Only a small part of the value of an iPhone is captured by China. Not much of it goes to the local economy either, but luxury electronics are also a small fraction of the economy. Dining out, groceries, retail, housing, transportation, entertainment, travel, child care, home repair, cell phone repair, medical care etc... the local economy captures a large percentage of all of those.