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Its actually pretty reasonable to posit that raising the minimum wage will have no effect on employment. Take a look at S&P 500 profits over the last few years

by jbooth 14y ago

Its actually pretty reasonable to posit that raising the minimum wage will have no effect on employment. Take a look at S&P 500 profits over the last few years. Then look at real household income. If you want to get crazy, look at productivity measures. Profits are going up while income is falling in real terms. It stands to reason that there's a buck to spare there.

lifeisstillgood 14y ago
Oddly enough it may not be true - the share of GDP captured is roughly 40% for corporations - and has dropped for wages. That is whilst the share of GDP for companies has remained roughly same for past few decades, wages share has dropped. This means that the share of wealth going to wage earners and working stiffs is dropping - but is not being captured by company profits. Where is it going? To self employed dividend earners - basically there are more one person bands now, freelancers etc. Some will be tax efficient schemes for bankers, but most are, well, us on HN. I cannot find the link - will see in the morning.
- jbooth 14y ago
  I was talking about the last 5 years, as opposed to the last 30. Although household income has been declining in real terms for the last 30. I'd be interested to see your link. I was under the impression that most growth has been captured by larger corporations rather than free-lancers, and if they refer to 'self-employed dividend earners' that could easily be people collecting dividends and capital gains on stock. But that's all speculation -- hit me up with the link if you get a chance.
- zeroonetwothree 14y ago
  It's actually been remarkably similar over the past 50 years. http://en.wikipedia.org/wiki/Wage_share http://en.wikipedia.org/wiki/Wage_share
argonaut 14y ago
This is terrible reasoning. A million different variables go into real household income, productivity, and corporate profits. Just because corporations are making profits does not necessarily mean a significant number of people making minimum wage won't be fired when the minimum wage is raised. It's not like you have managers sitting around saying, "Well, we're making money... so we can afford to pay a worker $9/hour even though their output is only worth $8/hour." If it does not make economic sense to retain a worker, a company will fire that worker.

by jbooth 14y ago

lifeisstillgood 14y ago

Oddly enough it may not be true - the share of GDP captured is roughly 40% for corporations - and has dropped for wages. That is whilst the share of GDP for companies has remained roughly same for past few decades, wages share has dropped. This means that the share of wealth going to wage earners and working stiffs is dropping - but is not being captured by company profits. Where is it going? To self employed dividend earners - basically there are more one person bands now, freelancers etc. Some will be tax efficient schemes for bankers, but most are, well, us on HN. I cannot find the link - will see in the morning.

jbooth 14y ago
I was talking about the last 5 years, as opposed to the last 30. Although household income has been declining in real terms for the last 30. I'd be interested to see your link. I was under the impression that most growth has been captured by larger corporations rather than free-lancers, and if they refer to 'self-employed dividend earners' that could easily be people collecting dividends and capital gains on stock. But that's all speculation -- hit me up with the link if you get a chance.
zeroonetwothree 14y ago
It's actually been remarkably similar over the past 50 years. http://en.wikipedia.org/wiki/Wage_share http://en.wikipedia.org/wiki/Wage_share

argonaut 14y ago

This is terrible reasoning. A million different variables go into real household income, productivity, and corporate profits. Just because corporations are making profits does not necessarily mean a significant number of people making minimum wage won't be fired when the minimum wage is raised. It's not like you have managers sitting around saying, "Well, we're making money... so we can afford to pay a worker $9/hour even though their output is only worth $8/hour." If it does not make economic sense to retain a worker, a company will fire that worker.