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Raising the minimum wage in Seattle was shown to help the local economy. The economy doesn't grow if people don't have money to spend. The marginal dollar made

Raising the minimum wage in Seattle was shown to help the local economy. The economy doesn't grow if people don't have money to spend. The marginal dollar made going to a worker making 15 dollars and hour or less is better for everyone than if that marginal dollar made goes to a capital owner of the company because the worker will have a higher utility from that marginal dollar and they will spend it in their local economy, which causes local economic growth. If the marginal dollar instead went to a capital owner of a large corporation or franchise owner, the dollar has left the local economy, and the economy has shrunk. Obviously there is a limit to this, you can't set the minimum wage at 200 dollars/hour, but the balance of evidence we have shows that increasing the miminum wage will increase the US GDP because those dollars go to things like hair cuts and groceries, not savings accounts. You need to spend money to grow.

usaar333 6y ago
How does this compare to UBI?
ChrisLomont 6y ago
It seems academic literature shows the Seattle min wage had the opposite effect of your claims. It hurt workers and drove up prices, as expected. Here’s two representative papers; you can find more using Google scholar. [1] https://www.nber.org/papers/w23532 https://www.nber.org/papers/w23532 [2] https://journals.sagepub.com/doi/abs/10.1177/1078087418787667 https://journals.sagepub.com/doi/abs/10.1177/107808741878766...
- Jweb_Guru 6y ago
  For your first paper, the same team published a study a year later that complicated their initial results: https://www.nber.org/papers/w25182 https://www.nber.org/papers/w25182. And "workers in low wage jobs earned less money" does not necessarily imply that workers are earning less money overall in any case. The second study is a survey of what employers say they were doing. It is not terribly surprising that they feel raising the minimum wage was bad. I'm not saying raising the minimum wage was a slam dunk in Seattle or anything, but if we want to have an actual evidence-based discussion, let's not cherrypick papers. It's also worth noting that employers simply "taking their business elsewhere" is much easier if the minimum wage increase is highly local as it was in Seattle, which isn't the proposal most people are talking about.
  - ChrisLomont 6y ago
    >the same team published a study a year later And from that paper: "We attribute significant hourly wage increases and hours reductions to the policy." and "Approximately one-quarter of the earnings gains can be attributed to experienced workers making up for lost hours in Seattle with work outside the city limits." Read the paper. It does not appear that the min wage of Seattle was a net positive for the workers or the city. >The second study is a survey of what employers say they were doing. It is not terribly surprising that they feel raising the minimum wage was bad. It's also not surprising that an increase in labor costs results in less labor being hired and an increase in prices. Feel free to post papers that contradict the findings. >let's not cherrypick papers Agreed. Post papers if you think these were cherry picked and not representative of the outcome of Seattle min wage. You don't like the results I posted, which I think are representative (I've followed the academic lit on min wage for a long, long time), yet you don't post supporting evidence for your claims. Simply type seattle minimum wage into Google scholar and look at the papers. I've found many with results similar to these, and none with the opposite claims. For those following, the Seattle min wage seems consistent with what you'd expect from price floors: benefits for a smaller pool of workers at the cost of other workers priced out of work, increased prices, a decrease in labor hours, and some workers having to go outside the price floor (here, working outside Seattle) to make up the lost money.
wonder_er 6y ago
What about this line of the parent's comment: > We should repeal every minimum wage law, yes. They were created a century ago with racist intentions, their effects are still racist and yet today they are defended as being "anti-racist." Were the laws racist, or at least written by racists, possibly with racist intent? If so, I feel like the conversation might shift.
- svrb 6y ago
  > Were ... If so, I feel like the conversation might shift. This is a bizarre way of looking at the world. The question is about the state of the world decades ago (were the laws written to further racist goals?). Yet you posit that the answer to this question might have some effect in the future. It's an excellent way to deflect from facing facts; suggesting that somehow we couldn't have known about what happened. We can, though. It's trivial to look up the history of minimum wage (without even checking Wikipedia, though, I'm sure it has a censored version of the history so you'll have to look elsewhere). Why do we get to deflect the consequences of the past to the future, to a "might", to a mere "shift"? Minimum wage is and always has been a way to keep minorities from getting jobs by carefully drawing a line - and redrawing it, so the whole racist enterprise has surely been up and running this whole time - to be just above where it's worthwhile to hire people with poor job history (a proxy for minorities, just redlining with wages). As the economy improves of course this line has to be drawn higher and higher because it becomes more and more economically viable to make risky hires.

usaar333 6y ago

How does this compare to UBI?

ChrisLomont 6y ago

It seems academic literature shows the Seattle min wage had the opposite effect of your claims. It hurt workers and drove up prices, as expected. Here’s two representative papers; you can find more using Google scholar. [1] https://www.nber.org/papers/w23532 https://www.nber.org/papers/w23532 [2] https://journals.sagepub.com/doi/abs/10.1177/1078087418787667 https://journals.sagepub.com/doi/abs/10.1177/107808741878766...

Jweb_Guru 6y ago
For your first paper, the same team published a study a year later that complicated their initial results: https://www.nber.org/papers/w25182 https://www.nber.org/papers/w25182. And "workers in low wage jobs earned less money" does not necessarily imply that workers are earning less money overall in any case. The second study is a survey of what employers say they were doing. It is not terribly surprising that they feel raising the minimum wage was bad. I'm not saying raising the minimum wage was a slam dunk in Seattle or anything, but if we want to have an actual evidence-based discussion, let's not cherrypick papers. It's also worth noting that employers simply "taking their business elsewhere" is much easier if the minimum wage increase is highly local as it was in Seattle, which isn't the proposal most people are talking about.
- ChrisLomont 6y ago
  >the same team published a study a year later And from that paper: "We attribute significant hourly wage increases and hours reductions to the policy." and "Approximately one-quarter of the earnings gains can be attributed to experienced workers making up for lost hours in Seattle with work outside the city limits." Read the paper. It does not appear that the min wage of Seattle was a net positive for the workers or the city. >The second study is a survey of what employers say they were doing. It is not terribly surprising that they feel raising the minimum wage was bad. It's also not surprising that an increase in labor costs results in less labor being hired and an increase in prices. Feel free to post papers that contradict the findings. >let's not cherrypick papers Agreed. Post papers if you think these were cherry picked and not representative of the outcome of Seattle min wage. You don't like the results I posted, which I think are representative (I've followed the academic lit on min wage for a long, long time), yet you don't post supporting evidence for your claims. Simply type seattle minimum wage into Google scholar and look at the papers. I've found many with results similar to these, and none with the opposite claims. For those following, the Seattle min wage seems consistent with what you'd expect from price floors: benefits for a smaller pool of workers at the cost of other workers priced out of work, increased prices, a decrease in labor hours, and some workers having to go outside the price floor (here, working outside Seattle) to make up the lost money.

wonder_er 6y ago

What about this line of the parent's comment: > We should repeal every minimum wage law, yes. They were created a century ago with racist intentions, their effects are still racist and yet today they are defended as being "anti-racist." Were the laws racist, or at least written by racists, possibly with racist intent? If so, I feel like the conversation might shift.

svrb 6y ago
> Were ... If so, I feel like the conversation might shift. This is a bizarre way of looking at the world. The question is about the state of the world decades ago (were the laws written to further racist goals?). Yet you posit that the answer to this question might have some effect in the future. It's an excellent way to deflect from facing facts; suggesting that somehow we couldn't have known about what happened. We can, though. It's trivial to look up the history of minimum wage (without even checking Wikipedia, though, I'm sure it has a censored version of the history so you'll have to look elsewhere). Why do we get to deflect the consequences of the past to the future, to a "might", to a mere "shift"? Minimum wage is and always has been a way to keep minorities from getting jobs by carefully drawing a line - and redrawing it, so the whole racist enterprise has surely been up and running this whole time - to be just above where it's worthwhile to hire people with poor job history (a proxy for minorities, just redlining with wages). As the economy improves of course this line has to be drawn higher and higher because it becomes more and more economically viable to make risky hires.