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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/2

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.
    - toyg 2y ago
      > people want less of a thing when it costs more. This is a basic fact of life And still, Apple got to be the biggest company in the world by charging more, constantly and systematically. Maybe there are more things in heaven and earth than are dreamt in your philosophy.
      - nosefurhairdo 2y ago
        Huh, perhaps Samsung should double Apple's prices. By your logic, that should make them wildly successful, no? A better example of quantity demanded paradoxically increasing with price is in the designer hand bag market. The value of luxury goods is in part due to the signal they send that the owner can afford such an expensive item. However, that is just an exception proving the rule. Your point about Apple makes no sense because they've also increased the quality of the goods they ship in conjunction with their price. Unless you're suggesting that minimum wage laws somehow enhance the laborers' productive capacities.
        toyg 2y ago
        > minimum wage laws somehow enhance the laborers' productive capacities It's even in TFA: higher wages means lower rotation, which means less constant re-training from scratch, which means higher output quality.
        nosefurhairdo 2y ago
        If the increased productivity from wage increases offset the price, why would you need the price control in the first place? You could start a business and have a competitive edge by offering low-skilled workers relatively high wages.
        toyg 2y ago
        Because businessmen are men, and men are greedy and scared before they are rational. Most people will invest 5 to get 10, instead of 10 to get 30.
- EliRivers 2y ago
  If your claim disagrees with reality, should I believe reality or you?
- lowbloodsugar 2y ago
  Or math. Or reality. Magical thinking is just making claims like you did with no evidence. Simple models made by the servants of the rich don’t predict real world outcomes. It’s no different than when politicians pass a law that the police union doesn’t like, and crime goes up. Look! Proof that the law was bad. It’s remarkable that anyone would say otherwise. Of course it has nothing to do with the fact that the police just stop doing their job until they get the law changed.
  - mmooss 2y ago
    > the police just stop doing their job Is there evidence of that, that you know of?
    - mint2 2y ago
      California and in particular SF, there’s been substantial reporting on police inaction. It’s been improving but for a while there were regular stories or police watching people do felonies and not bothering to do a single thing.
      - derektank 2y ago
        I can't speak for every situation but it's worth keeping in mind that police inaction can be a result of specific policies placed on police departments by the city or state. For example, up until recently, San Francisco only allowed officers to engage in vehicle pursuits in the case of violent felonies and Governor Newsom is still asking Oakland to amend their own No Chase restrictions. If elected officials tell cops not to engage in certain policing actions, I would hope that law enforcement officers would hew to those rules pretty closely
    - lazyasciiart 2y ago
      Yes, lots https://www.themarshallproject.org/records/1571-police-slowdown https://www.themarshallproject.org/records/1571-police-slowd...
- mmooss 2y ago
  The price is only one factor among many. People eat at restaurants other than McDonalds, even though McDonalds has a lower price.
  - nosefurhairdo 2y ago
    Correct. Generally in economics we discuss individual effects while holding other effects equal (ceteris paribus). To illustrate, if a McDonald's location can sell 1000 big macs a day at $2 per burger, do you expect they'll sell more (or even as many) if they raise the price to $3? Of course not. This intuition is obvious to everyone until policy gets involved. It would not make sense for employers to want just as much labor when the price goes up. This would imply a perfectly inelastic demand for labor.
    - TeMPOraL 2y ago
      > Generally in economics we discuss individual effects while holding other effects equal (ceteris paribus). Ceteris paribus is Latin for "holding a cat by its paws to look under its tail", named so because it tells you how long you can "hold other effects equal" before you'll be made to regret the attempt. This is to say, the economy is a system of tight feedback loops, not independently random effects. This is the part I rarely see emphasized wrt. "ceteris paribus". You're trying to hold constant the very effects that will react to change under discussion, which both severely limits the range of a single forecasting step, and should invite conversation about those other effects.
      - nosefurhairdo 2y ago
        I don't disagree. I brought it up specifically as a constructive criticism of the original McDonald's argument of choosing other restaurants. It's easier to illustrate economic concepts when only one parameter is changing (e.g. price of big mac) vs multiple (e.g. inexpensive McD's vs more expensive alternatives). As you've pointed out, any economic policy proposal should consider 2nd/3rd/ith order effects.
    - lazyasciiart 2y ago
- plantwallshoe 2y ago
  This would be true in a perfect market, but in real life things aren’t priced perfectly and people don’t make 100% economically rational decisions. These imperfections means there’s sometimes lots of room to change the price of things before affecting demand in a meaningful way.
- deleted 2y ago
  [deleted]
- BriggyDwiggs42 2y ago
  This won’t apply when quantity demanded is fixed. Fast food restaurants need a certain quantity of labor hours to function, and they probably already push right down to the limit to save money.
- janalsncm 2y ago
  It depends on how critical the labor is. If there’s a guy whose job it is to push the “make me $100/hour profit after expenses” button, I will gladly pay him $1 more even if it reduces my profit $1 if I have no alternative. To say it another way, if businesses could reduce labor, they would have already done it. They don’t have fixed labor budgets to use up. Their ideal labor spend is $0. So in some sense it doesn’t matter what the labor cost is as long as the business isn’t losing money.
mmooss 2y ago
Reason is a straight advocacy publication for (libertarianism?), and I think they would be proud to tell you that.
- potato3732842 2y ago
  I think that makes them a fairly decent source if your goal is a counter point to whatever the Atlantic's take on the issue is.
  - mmooss 2y ago
    I don't understand. If you are trying to express something about the Atlantic, then just say it.

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.
  - toyg 2y ago
    > people want less of a thing when it costs more. This is a basic fact of life And still, Apple got to be the biggest company in the world by charging more, constantly and systematically. Maybe there are more things in heaven and earth than are dreamt in your philosophy.
    - nosefurhairdo 2y ago
      Huh, perhaps Samsung should double Apple's prices. By your logic, that should make them wildly successful, no? A better example of quantity demanded paradoxically increasing with price is in the designer hand bag market. The value of luxury goods is in part due to the signal they send that the owner can afford such an expensive item. However, that is just an exception proving the rule. Your point about Apple makes no sense because they've also increased the quality of the goods they ship in conjunction with their price. Unless you're suggesting that minimum wage laws somehow enhance the laborers' productive capacities.
      - toyg 2y ago
        > minimum wage laws somehow enhance the laborers' productive capacities It's even in TFA: higher wages means lower rotation, which means less constant re-training from scratch, which means higher output quality.
        nosefurhairdo 2y ago
        If the increased productivity from wage increases offset the price, why would you need the price control in the first place? You could start a business and have a competitive edge by offering low-skilled workers relatively high wages.
        toyg 2y ago
        Because businessmen are men, and men are greedy and scared before they are rational. Most people will invest 5 to get 10, instead of 10 to get 30.
EliRivers 2y ago
If your claim disagrees with reality, should I believe reality or you?
lowbloodsugar 2y ago
Or math. Or reality. Magical thinking is just making claims like you did with no evidence. Simple models made by the servants of the rich don’t predict real world outcomes. It’s no different than when politicians pass a law that the police union doesn’t like, and crime goes up. Look! Proof that the law was bad. It’s remarkable that anyone would say otherwise. Of course it has nothing to do with the fact that the police just stop doing their job until they get the law changed.
- mmooss 2y ago
  > the police just stop doing their job Is there evidence of that, that you know of?
  - mint2 2y ago
    California and in particular SF, there’s been substantial reporting on police inaction. It’s been improving but for a while there were regular stories or police watching people do felonies and not bothering to do a single thing.
    - derektank 2y ago
      I can't speak for every situation but it's worth keeping in mind that police inaction can be a result of specific policies placed on police departments by the city or state. For example, up until recently, San Francisco only allowed officers to engage in vehicle pursuits in the case of violent felonies and Governor Newsom is still asking Oakland to amend their own No Chase restrictions. If elected officials tell cops not to engage in certain policing actions, I would hope that law enforcement officers would hew to those rules pretty closely
  - lazyasciiart 2y ago
    Yes, lots https://www.themarshallproject.org/records/1571-police-slowdown https://www.themarshallproject.org/records/1571-police-slowd...
mmooss 2y ago
The price is only one factor among many. People eat at restaurants other than McDonalds, even though McDonalds has a lower price.
- nosefurhairdo 2y ago
  Correct. Generally in economics we discuss individual effects while holding other effects equal (ceteris paribus). To illustrate, if a McDonald's location can sell 1000 big macs a day at $2 per burger, do you expect they'll sell more (or even as many) if they raise the price to $3? Of course not. This intuition is obvious to everyone until policy gets involved. It would not make sense for employers to want just as much labor when the price goes up. This would imply a perfectly inelastic demand for labor.
  - TeMPOraL 2y ago
    > Generally in economics we discuss individual effects while holding other effects equal (ceteris paribus). Ceteris paribus is Latin for "holding a cat by its paws to look under its tail", named so because it tells you how long you can "hold other effects equal" before you'll be made to regret the attempt. This is to say, the economy is a system of tight feedback loops, not independently random effects. This is the part I rarely see emphasized wrt. "ceteris paribus". You're trying to hold constant the very effects that will react to change under discussion, which both severely limits the range of a single forecasting step, and should invite conversation about those other effects.
    - nosefurhairdo 2y ago
      I don't disagree. I brought it up specifically as a constructive criticism of the original McDonald's argument of choosing other restaurants. It's easier to illustrate economic concepts when only one parameter is changing (e.g. price of big mac) vs multiple (e.g. inexpensive McD's vs more expensive alternatives). As you've pointed out, any economic policy proposal should consider 2nd/3rd/ith order effects.
  - lazyasciiart 2y ago
plantwallshoe 2y ago
This would be true in a perfect market, but in real life things aren’t priced perfectly and people don’t make 100% economically rational decisions. These imperfections means there’s sometimes lots of room to change the price of things before affecting demand in a meaningful way.
deleted 2y ago
[deleted]
BriggyDwiggs42 2y ago
This won’t apply when quantity demanded is fixed. Fast food restaurants need a certain quantity of labor hours to function, and they probably already push right down to the limit to save money.
janalsncm 2y ago
It depends on how critical the labor is. If there’s a guy whose job it is to push the “make me $100/hour profit after expenses” button, I will gladly pay him $1 more even if it reduces my profit $1 if I have no alternative. To say it another way, if businesses could reduce labor, they would have already done it. They don’t have fixed labor budgets to use up. Their ideal labor spend is $0. So in some sense it doesn’t matter what the labor cost is as long as the business isn’t losing money.

mmooss 2y ago

Reason is a straight advocacy publication for (libertarianism?), and I think they would be proud to tell you that.

potato3732842 2y ago
I think that makes them a fairly decent source if your goal is a counter point to whatever the Atlantic's take on the issue is.
- mmooss 2y ago
  I don't understand. If you are trying to express something about the Atlantic, then just say it.