6 ms·

The California job-killer that wasn't

59 points by RestlessMind 2y ago

crackercrews 2y ago
The article has been updated with several edits. It no longer claims that CA fast food employment rose at a faster rate than the nationwide average. This drastically undercuts the claim that the new law didn't hurt employment. All it shows is that employment continued to go up at a time when it was going up faster in other states. I wonder if they would have run the article had they known these facts all along. It seemed like interesting new perspectives when I first read it. But now it seems very weak compared to the opposing perspectives.
back7co 2y ago
I’ll admit to not reading the entire article, but anecdotally fast food prices are within 10% of some table service restaurants here in Southern California. I don’t know if that’s really for or against the law, but calling the bill a huge success or failure depends on cherry picking stats.
- Elidrake24 2y ago
  Also true in central Wisconsin where there isn't a law such as this, for what it is worth.
- plantwallshoe 2y ago
  The whole point of the article is that you have to cherry pick stats to show it was a failure, but every sound analysis shows that it was a success.
  - gotoeleven 2y ago
    Their own choice of a time interval to look at (Apr - Oct) looks cherry picked. If you include the next month, it goes from a +1000 job gain to -1200 loss. Overall it looks like the effect on employment at least in the short term is about zero. But it definitely increased cost. So the only winners here are I guess the people whose wages were pushed up by this law, and everyone else is a loser. I wouldn't call this a success, I'd call it a classic california left wing economic shell game.
    - Certhas 2y ago
      You claim to refer to choices in the article, yet the content of the article actually bears no resemblance to your post. > Simply comparing each month’s job growth with the same month the previous year, which avoids the problem of picking a start date, reveals that California’s fast-food sector gained jobs in all but one month since September 2023. As for who the losers are, the data is quite clear: Mostly corporate profits. The rational response of a corporation when faced with a law that reduces its profits is to lobby against the law and invest in propaganda that disparages the law. > That doesn’t mean raising the minimum wage had no negative consequences. Reich and his co-author, Denis Sosinsky, found that the higher minimum wage caused menu prices in California fast-food chains to rise by about 3.7 percent. That number is far lower than the “$20 Big Macs” that critics of the law warned of, but it’s still significant at a time when many consumers are deeply upset over the post-pandemic spike in food prices. Even so, Reich points out that this number pales in comparison with the 18 percent raise that the average fast-food worker received because of the new law. (The authors calculated that about 62 percent of the wage increase was absorbed through higher prices, while the rest was likely absorbed by a mix of reduced turnover and, crucially, lower profits for franchisees—hence the massive industry resistance.) Finally, why a shell game? There is nothing hidden here, there is no con. No money is secretly moved around. Workers have more money. Owners and consumers less (the latter very slightly so).
      - gotoeleven 2y ago
        From the article: "choosing a start date of either September 2023 (when the law was signed) or April 2024 (when it took effect) would have shown that the number of jobs had risen." This statement is literally false if you include november. The whole bit about comparing employment numbers to the corresponding month a year prior doesn't make any sense. One reason is that the law has only been in effect since April and another is that the employment trends in 2023 in fast food restaurants match trends in overall employment which you can look at here: https://data.bls.gov/timeseries/SMS06000000000000001?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true https://data.bls.gov/timeseries/SMS06000000000000001?amp%253... I suppose arguing over whether this redistributive scheme constitutes a shell game or simply wise governance isn't very interesting.
  - toyg 2y ago
    The problem is the definition of success. Yes, the sector grew and employees made more; but franchisees felt some pain. In fact, I'm sure someone will argue that they had to expand precisely to try and recoup the profit lost to lower margins. For capital owners, no redistributive policy can ever be a success, by definition.
- ghaff 2y ago
  In fairness, a number of places I occasionally get take-out from are the same price whether take-out or eat-in. I may prefer to take-out--and any alcohol is probably cheaper--but I don't really view take-out as categorically cheaper. But then I rarely eat at McDonalds.
- mjevans 2y ago
  Rent seeking everywhere is strangling the entire US economy.
crackercrews 2y ago
Alternate perspective: https://reason.com/video/2024/12/19/no-californias-20-minimum-wage-for-fast-food-workers-did-not-create-jobs/ https://reason.com/video/2024/12/19/no-californias-20-minimu... Is this an opinion piece or news? It's categorized as "ideas" at the top of the page. I do not know what that means. But the advocacy at the end makes it seem not like straight news.
- Vaslo 2y ago
  Thanks for posting this. I was also trying to find some more recent articles that also contrasted the Atlantic author’s cherry-picked points, and who also appears to lean a bit to the left.
- nosefurhairdo 2y ago
  It's remarkable we even need to say it out loud: increasing the price of labor reduces the quantity demanded of labor. Believing otherwise requires magical thinking.
  - kasey_junk 2y ago
    Yet empirical results don’t find significant impact to employment rates: https://www.nber.org/papers/w32925 https://www.nber.org/papers/w32925 It’s almost magical that simplified, reductionist economic models don’t always play out in the real world.
    - nosefurhairdo 2y ago
      Your source agrees with me. I made no claim as to the significance, only the direction of the effect. Additionally, this research has historically yielded mixed results (likely due to the difficulty of isolating the effect of minimum wage in a highly dynamic marketplace for labor). Here's a good article on the topic from the SF Federal Reserve: https://www.frbsf.org/research-and-insights/publications/economic-letter/2015/12/effects-of-minimum-wage-on-employment/ https://www.frbsf.org/research-and-insights/publications/eco... All that to say, I prefer the simple intuition that people want less of a thing when it costs more. This is a basic fact of life that most everyone seems to accept until policy gets mentioned.
jmugan 2y ago
The thesis seems to be that businesses would pay more if they were smart enough to realize it was in their interests. Since they aren't, raising minimum wage seems to force them to pay more, which actually lowers labor costs because they have less turnover and fewer mistakes by new employees. Maybe. I've always been surprised that more businesses didn't pay more, since a few dollars an hour more would often bring in a much superior employee.
- Certhas 2y ago
  No, the evidence cited is that a significant portion is also absorbed by companies making lower profits (and a small amount by higher prices). So this is simply also a case of lack of bargaining power of workers.
  - jmugan 2y ago
    So you are saying that the pie is not grown by paying more, it's just that the workers are getting a bigger slice. Could be. That didn't seem to be the main point of the article, but that could also be true. I haven't looked at the data carefully.
    - mint2 2y ago
      Not true about the pie not growing. The pie did grow, so it’s a benefit to society. It just didn’t grow enough that giving the employees a larger slice didn’t slightly shrink the owner’s pie. However, The owners pie shrunk less than it would have had the pie not grown due to increased efficiency. I wonder how these studies captures the way the workers have more money that immediately flows back into the economy, benefiting everyone.
      - sbuttgereit 2y ago
        > I wonder how these studies captures the way the workers have more money that immediately flows back into the economy, benefiting everyone. I think you left out the part about, "and at what point that creates inflationary pressure."
gotoeleven 2y ago
Their own link to the seasonally adjusted california low-service restaurant workers employment numbers shows it dropping from April 2024 to Nov 2024, albeit by a fairly small amount (~1200 people) though using the articles preferred time interval (April to October) shows a gain of about 1000 people. This is out of a total number of people of about 750,000. So this all looks like noise to me. Clearly there's demand for fast food, still, and restaurants adapted by raising prices. The article claims the law caused only a 3.7% price increase but that is on top of all the other inflation that has happened.
butterlettuce 2y ago
Increasing the minimum wage is cool and all but I really don’t appreciate my Big Mac costing $7 and the smallest sized Starbucks Americano $4. I guess the silver lining is that this law made me go grocery shopping more often and as a result I eat healthier.
- toomuchtodo 2y ago
  Minimum wage increases raised prices by only tens of cents per unit. The rest is corporate profits. McDonald’s and Starbucks quarterly and annual profit figures are readily available with a quick search. They can afford to pay labor more. https://investor.starbucks.com/news/financial-releases/default.aspx https://investor.starbucks.com/news/financial-releases/defau... https://www.mcdonalds.com/corpmcd/investors/financial-information.html https://www.mcdonalds.com/corpmcd/investors/financial-inform...
  - danans 2y ago
    > They can afford to pay labor more. Only if they decide to pay shareholders less. And shareholders are not going to accept getting paid less in order to pay labor more. That's a quick way for CEOs get fired.
    - toomuchtodo 2y ago
      Indeed! Which is why minimum wage laws and unions are so important. The evidence shows they can afford it and they wouldn’t pay it voluntarily, so keep pushing the minimum wage up.
      - danans 2y ago
        Yeah. The idea that corporations are going to raise wages on their own even for the general well being of society has been debunked many times over. These things work according to power and leverage, and nothing less.
        deleted 2y ago
api 2y ago
California real estate rises without bound, making other attempts to shore up wages moot. It all goes to property owners. The state is one giant property owners cartel. Cartel is explicit— Cali homeowners do a lot to try to limit production to keep prices high. It’s one reason I no longer live there. The only rational move is to leave.
- selimthegrim 2y ago
  For a second I read that as Calí and was wondering when the drug barons had diversified into homebuilding.
tonymet 2y ago
The title is a bit more conclusive than the article content. The author does a reasonable job covering the many indicators and trends surrounding fast food employment (seasonality, for example), and the short term results. It's too early and too narrow an observation to draw conclusions. The article is better summarized as "minimum wage doesn't lead to the short term drop in employment and exploding inflation as expected". Companies can shift around inventory, hiring, funds and more to address labor inflation in the short term. we won't see the real consequences of this policy for a year or two until the industry runs out of other tools. Comparing In n Out (high wages, low marketing costs) to McDonalds/Carls/Burger King etc (low wages, high marketing & product development costs) -- companies can deliver a better service at a low price point if they are managed well. I don't expect minimum wage to turn McDonalds into In n Out though.
deleted 2y ago
[deleted]
jsheroes 2y ago
[dead]
shrubble 2y ago
California has a lot of structural problems that other states don't, and, a few big industries that pay a lot of taxes that allow them to paper over issues. As an indicator for what other states should or shouldn't do, California's unique situation simply doesn't matter .
trimethylpurine 2y ago
It doesn't seem like you can make a claim one way or the other. Other restaurants may absorb lost labor, and the negative impact may not be immediately visible. If you are not cooking at home, and McDonald's is the same price as table service, then table service is the better value. It has been for me, anecdotally. We'd not see those choices reflected in overall employment stats, because another restaurant will need to hire, a seemingly net zero change in employment rates. But, it's very likely that fast food chains, including privately owned fast food franchisees like many McDonald's locations will have lost market share. Those locations may reduce their workforce, forcing people to change jobs. In the interim while the workforce is shuffled about, the losses would be invisible except in unemployment claims. And without being able to tie those claims to any profession, since those claimants aren't skilled in one, we can't make any conclusion about whether or not those claimants are the result of a higher wage requirement. The eventuality I might expect would be a loss of competition in the fast food sector, if the above is true. Of course, that's all hypothetical.
neonate 2y ago
https://archive.ph/8zN87 https://archive.ph/8zN87
chriscrisby 2y ago
The source that lead the original claim: https://irle.berkeley.edu/wp-content/uploads/2024/09/Sectoral-Wage-Setting-in-California-09-30-2024.pdf https://irle.berkeley.edu/wp-content/uploads/2024/09/Sectora... Nowhere does it say minimum wage jobs increased or that minimum wage workers earned more per year
jmpman 2y ago
I’ve always expected that the slumlords are the ultimate recipients for minimum wage hikes. Would be interested in seeing the correlation between minimum wage and studio apartment rents. When the housing markets are constrained, the landlords are able to extract every penny from the workers.
- jerlam 2y ago
  Landlords in Silicon Valley have been doing this for decades in the tech sector.
LorenPechtel 2y ago
The fundamental problem here is that the job loss from minimum wage mostly shows up when things are tight and minimum wage increases generally happen when times are good. This makes them out of sync and makes it very hard to figure out what relationship if any exists.
refurb 2y ago
The minimum wage was effective in April. The latest data is November. That's 7 months of data. Maybe a bit early to make any claims?
janalsncm 2y ago
One interesting corollary of minimum wage that I don’t hear much about is something you might call the “minimum job”. In other words, I might pay someone $1 to do some menial ancillary task, but the cash register is really what needs to be done. If minimum wage is raised, I can either pay more for the same tasks or decide they’re not worth doing at all. Where this really hits home is trash. So many US cities just have litter everywhere, even in well-trafficked areas. One solution is an army of people to clean up the garbage. What matters more than the minimum wage amount is the cost of living overall. This is something CA is finding out the hard way. You can raise minimum wage to $30 an hour, even with regular hours (usually minimum wage restaurant workers have different hours every day) it won’t make housing affordable in the Bay Area. On the flip side if real estate is cheap it means rent is cheap for workers (willing to accept lower wages) and businesses (willing to hire more).
- seanmcdirmid 2y ago
  Elevating the minimum job in theory forces productivity upward, so for your trash example, the job still must be done with more special equipment so the same labor used is reduced (since it now costs more). Land value taxes do something similar in forcing a certain level of productive land use to cover yearly taxes. The idea is that over time people and resources should be used more efficiently, and there should be some pressure from society in that regard. An HCOL city provides a different kind of pressure (you need to make more money to live comfortably in one), while a LCOL provides some opportunity to explore and experiment with less risk (since rent is cheaper, starving artists can survive).
- int_19h 2y ago
  These are exactly the kinds of tedious soul-sucking jobs that ought to be automated ASAP, so an economic policy that encourages that is a net benefit.

59 points by RestlessMind 2y ago

The article has been updated with several edits. It no longer claims that CA fast food employment rose at a faster rate than the nationwide average. This drastically undercuts the claim that the new law didn't hurt employment. All it shows is that employment continued to go up at a time when it was going up faster in other states. I wonder if they would have run the article had they known these facts all along. It seemed like interesting new perspectives when I first read it. But now it seems very weak compared to the opposing perspectives.

back7co 2y ago

I’ll admit to not reading the entire article, but anecdotally fast food prices are within 10% of some table service restaurants here in Southern California. I don’t know if that’s really for or against the law, but calling the bill a huge success or failure depends on cherry picking stats.

Elidrake24 2y ago
Also true in central Wisconsin where there isn't a law such as this, for what it is worth.
plantwallshoe 2y ago
The whole point of the article is that you have to cherry pick stats to show it was a failure, but every sound analysis shows that it was a success.
- gotoeleven 2y ago
  Their own choice of a time interval to look at (Apr - Oct) looks cherry picked. If you include the next month, it goes from a +1000 job gain to -1200 loss. Overall it looks like the effect on employment at least in the short term is about zero. But it definitely increased cost. So the only winners here are I guess the people whose wages were pushed up by this law, and everyone else is a loser. I wouldn't call this a success, I'd call it a classic california left wing economic shell game.
  - Certhas 2y ago
    You claim to refer to choices in the article, yet the content of the article actually bears no resemblance to your post. > Simply comparing each month’s job growth with the same month the previous year, which avoids the problem of picking a start date, reveals that California’s fast-food sector gained jobs in all but one month since September 2023. As for who the losers are, the data is quite clear: Mostly corporate profits. The rational response of a corporation when faced with a law that reduces its profits is to lobby against the law and invest in propaganda that disparages the law. > That doesn’t mean raising the minimum wage had no negative consequences. Reich and his co-author, Denis Sosinsky, found that the higher minimum wage caused menu prices in California fast-food chains to rise by about 3.7 percent. That number is far lower than the “$20 Big Macs” that critics of the law warned of, but it’s still significant at a time when many consumers are deeply upset over the post-pandemic spike in food prices. Even so, Reich points out that this number pales in comparison with the 18 percent raise that the average fast-food worker received because of the new law. (The authors calculated that about 62 percent of the wage increase was absorbed through higher prices, while the rest was likely absorbed by a mix of reduced turnover and, crucially, lower profits for franchisees—hence the massive industry resistance.) Finally, why a shell game? There is nothing hidden here, there is no con. No money is secretly moved around. Workers have more money. Owners and consumers less (the latter very slightly so).
    - gotoeleven 2y ago
      From the article: "choosing a start date of either September 2023 (when the law was signed) or April 2024 (when it took effect) would have shown that the number of jobs had risen." This statement is literally false if you include november. The whole bit about comparing employment numbers to the corresponding month a year prior doesn't make any sense. One reason is that the law has only been in effect since April and another is that the employment trends in 2023 in fast food restaurants match trends in overall employment which you can look at here: https://data.bls.gov/timeseries/SMS06000000000000001?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true https://data.bls.gov/timeseries/SMS06000000000000001?amp%253... I suppose arguing over whether this redistributive scheme constitutes a shell game or simply wise governance isn't very interesting.
- toyg 2y ago
  The problem is the definition of success. Yes, the sector grew and employees made more; but franchisees felt some pain. In fact, I'm sure someone will argue that they had to expand precisely to try and recoup the profit lost to lower margins. For capital owners, no redistributive policy can ever be a success, by definition.
ghaff 2y ago
In fairness, a number of places I occasionally get take-out from are the same price whether take-out or eat-in. I may prefer to take-out--and any alcohol is probably cheaper--but I don't really view take-out as categorically cheaper. But then I rarely eat at McDonalds.
mjevans 2y ago
Rent seeking everywhere is strangling the entire US economy.

crackercrews 2y ago

Alternate perspective: https://reason.com/video/2024/12/19/no-californias-20-minimum-wage-for-fast-food-workers-did-not-create-jobs/ https://reason.com/video/2024/12/19/no-californias-20-minimu... Is this an opinion piece or news? It's categorized as "ideas" at the top of the page. I do not know what that means. But the advocacy at the end makes it seem not like straight news.

Vaslo 2y ago
Thanks for posting this. I was also trying to find some more recent articles that also contrasted the Atlantic author’s cherry-picked points, and who also appears to lean a bit to the left.
nosefurhairdo 2y ago
It's remarkable we even need to say it out loud: increasing the price of labor reduces the quantity demanded of labor. Believing otherwise requires magical thinking.
- kasey_junk 2y ago
  Yet empirical results don’t find significant impact to employment rates: https://www.nber.org/papers/w32925 https://www.nber.org/papers/w32925 It’s almost magical that simplified, reductionist economic models don’t always play out in the real world.
  - nosefurhairdo 2y ago
    Your source agrees with me. I made no claim as to the significance, only the direction of the effect. Additionally, this research has historically yielded mixed results (likely due to the difficulty of isolating the effect of minimum wage in a highly dynamic marketplace for labor). Here's a good article on the topic from the SF Federal Reserve: https://www.frbsf.org/research-and-insights/publications/economic-letter/2015/12/effects-of-minimum-wage-on-employment/ https://www.frbsf.org/research-and-insights/publications/eco... All that to say, I prefer the simple intuition that people want less of a thing when it costs more. This is a basic fact of life that most everyone seems to accept until policy gets mentioned.

jmugan 2y ago

The thesis seems to be that businesses would pay more if they were smart enough to realize it was in their interests. Since they aren't, raising minimum wage seems to force them to pay more, which actually lowers labor costs because they have less turnover and fewer mistakes by new employees. Maybe. I've always been surprised that more businesses didn't pay more, since a few dollars an hour more would often bring in a much superior employee.

Certhas 2y ago
No, the evidence cited is that a significant portion is also absorbed by companies making lower profits (and a small amount by higher prices). So this is simply also a case of lack of bargaining power of workers.
- jmugan 2y ago
  So you are saying that the pie is not grown by paying more, it's just that the workers are getting a bigger slice. Could be. That didn't seem to be the main point of the article, but that could also be true. I haven't looked at the data carefully.
  - mint2 2y ago
    Not true about the pie not growing. The pie did grow, so it’s a benefit to society. It just didn’t grow enough that giving the employees a larger slice didn’t slightly shrink the owner’s pie. However, The owners pie shrunk less than it would have had the pie not grown due to increased efficiency. I wonder how these studies captures the way the workers have more money that immediately flows back into the economy, benefiting everyone.
    - sbuttgereit 2y ago
      > I wonder how these studies captures the way the workers have more money that immediately flows back into the economy, benefiting everyone. I think you left out the part about, "and at what point that creates inflationary pressure."

gotoeleven 2y ago

Their own link to the seasonally adjusted california low-service restaurant workers employment numbers shows it dropping from April 2024 to Nov 2024, albeit by a fairly small amount (~1200 people) though using the articles preferred time interval (April to October) shows a gain of about 1000 people. This is out of a total number of people of about 750,000. So this all looks like noise to me. Clearly there's demand for fast food, still, and restaurants adapted by raising prices. The article claims the law caused only a 3.7% price increase but that is on top of all the other inflation that has happened.

butterlettuce 2y ago

Increasing the minimum wage is cool and all but I really don’t appreciate my Big Mac costing $7 and the smallest sized Starbucks Americano $4. I guess the silver lining is that this law made me go grocery shopping more often and as a result I eat healthier.

toomuchtodo 2y ago
Minimum wage increases raised prices by only tens of cents per unit. The rest is corporate profits. McDonald’s and Starbucks quarterly and annual profit figures are readily available with a quick search. They can afford to pay labor more. https://investor.starbucks.com/news/financial-releases/default.aspx https://investor.starbucks.com/news/financial-releases/defau... https://www.mcdonalds.com/corpmcd/investors/financial-information.html https://www.mcdonalds.com/corpmcd/investors/financial-inform...
- danans 2y ago
  > They can afford to pay labor more. Only if they decide to pay shareholders less. And shareholders are not going to accept getting paid less in order to pay labor more. That's a quick way for CEOs get fired.
  - toomuchtodo 2y ago
    Indeed! Which is why minimum wage laws and unions are so important. The evidence shows they can afford it and they wouldn’t pay it voluntarily, so keep pushing the minimum wage up.
    - danans 2y ago
      Yeah. The idea that corporations are going to raise wages on their own even for the general well being of society has been debunked many times over. These things work according to power and leverage, and nothing less.
      - deleted 2y ago

api 2y ago

California real estate rises without bound, making other attempts to shore up wages moot. It all goes to property owners. The state is one giant property owners cartel. Cartel is explicit— Cali homeowners do a lot to try to limit production to keep prices high. It’s one reason I no longer live there. The only rational move is to leave.

selimthegrim 2y ago
For a second I read that as Calí and was wondering when the drug barons had diversified into homebuilding.

tonymet 2y ago

The title is a bit more conclusive than the article content. The author does a reasonable job covering the many indicators and trends surrounding fast food employment (seasonality, for example), and the short term results. It's too early and too narrow an observation to draw conclusions. The article is better summarized as "minimum wage doesn't lead to the short term drop in employment and exploding inflation as expected". Companies can shift around inventory, hiring, funds and more to address labor inflation in the short term. we won't see the real consequences of this policy for a year or two until the industry runs out of other tools. Comparing In n Out (high wages, low marketing costs) to McDonalds/Carls/Burger King etc (low wages, high marketing & product development costs) -- companies can deliver a better service at a low price point if they are managed well. I don't expect minimum wage to turn McDonalds into In n Out though.

deleted 2y ago

[deleted]

jsheroes 2y ago

[dead]

shrubble 2y ago

California has a lot of structural problems that other states don't, and, a few big industries that pay a lot of taxes that allow them to paper over issues. As an indicator for what other states should or shouldn't do, California's unique situation simply doesn't matter .

trimethylpurine 2y ago

It doesn't seem like you can make a claim one way or the other. Other restaurants may absorb lost labor, and the negative impact may not be immediately visible. If you are not cooking at home, and McDonald's is the same price as table service, then table service is the better value. It has been for me, anecdotally. We'd not see those choices reflected in overall employment stats, because another restaurant will need to hire, a seemingly net zero change in employment rates. But, it's very likely that fast food chains, including privately owned fast food franchisees like many McDonald's locations will have lost market share. Those locations may reduce their workforce, forcing people to change jobs. In the interim while the workforce is shuffled about, the losses would be invisible except in unemployment claims. And without being able to tie those claims to any profession, since those claimants aren't skilled in one, we can't make any conclusion about whether or not those claimants are the result of a higher wage requirement. The eventuality I might expect would be a loss of competition in the fast food sector, if the above is true. Of course, that's all hypothetical.

neonate 2y ago

https://archive.ph/8zN87 https://archive.ph/8zN87

chriscrisby 2y ago

The source that lead the original claim: https://irle.berkeley.edu/wp-content/uploads/2024/09/Sectoral-Wage-Setting-in-California-09-30-2024.pdf https://irle.berkeley.edu/wp-content/uploads/2024/09/Sectora... Nowhere does it say minimum wage jobs increased or that minimum wage workers earned more per year

jmpman 2y ago

I’ve always expected that the slumlords are the ultimate recipients for minimum wage hikes. Would be interested in seeing the correlation between minimum wage and studio apartment rents. When the housing markets are constrained, the landlords are able to extract every penny from the workers.

jerlam 2y ago
Landlords in Silicon Valley have been doing this for decades in the tech sector.

LorenPechtel 2y ago

The fundamental problem here is that the job loss from minimum wage mostly shows up when things are tight and minimum wage increases generally happen when times are good. This makes them out of sync and makes it very hard to figure out what relationship if any exists.

refurb 2y ago

The minimum wage was effective in April. The latest data is November. That's 7 months of data. Maybe a bit early to make any claims?

janalsncm 2y ago

One interesting corollary of minimum wage that I don’t hear much about is something you might call the “minimum job”. In other words, I might pay someone $1 to do some menial ancillary task, but the cash register is really what needs to be done. If minimum wage is raised, I can either pay more for the same tasks or decide they’re not worth doing at all. Where this really hits home is trash. So many US cities just have litter everywhere, even in well-trafficked areas. One solution is an army of people to clean up the garbage. What matters more than the minimum wage amount is the cost of living overall. This is something CA is finding out the hard way. You can raise minimum wage to $30 an hour, even with regular hours (usually minimum wage restaurant workers have different hours every day) it won’t make housing affordable in the Bay Area. On the flip side if real estate is cheap it means rent is cheap for workers (willing to accept lower wages) and businesses (willing to hire more).

seanmcdirmid 2y ago
Elevating the minimum job in theory forces productivity upward, so for your trash example, the job still must be done with more special equipment so the same labor used is reduced (since it now costs more). Land value taxes do something similar in forcing a certain level of productive land use to cover yearly taxes. The idea is that over time people and resources should be used more efficiently, and there should be some pressure from society in that regard. An HCOL city provides a different kind of pressure (you need to make more money to live comfortably in one), while a LCOL provides some opportunity to explore and experiment with less risk (since rent is cheaper, starving artists can survive).
int_19h 2y ago
These are exactly the kinds of tedious soul-sucking jobs that ought to be automated ASAP, so an economic policy that encourages that is a net benefit.