Minimum wage hike shows different results than everyone says

[hannahbanana]

So I don't know TOO much about this, but I still found the article interesting, especially since I see a lot of people touting the positive effects of the minimum wage raise in Seattle. I'll also be keeping an eye out in future years, since the article mentions that the change will happen between 2 to 7 years (it's been about a year now). So even though changes right now are relatively small, there is definitely an opportunity for them to become more apparent.

 

http://www.forbes.com/sites/timworstall/2015/03/16/we-are-seeing-the-effects-of-seattles-15-an-hour-minimum-wage/

[bootoo]

if paying someone $15 means you have to go out of business, you should go out of business, your business is clearly not doing anything for anyone.

 

Either people want to do the work because it needs to be done, and it doesnt matter what you pay

 

OR the work is valuable enough that you can afford to pay the human cost, health care, education, healthy diet/environment, social time with family/community etc

 

Dont support businesses that fuck people over or outsource these things to tax payers, most of these types of businesses are providing things you can do yourself, cheaper, and better quality

[Tservitive]

That article was a good find. Thanks for sharing it with the community! 

[LovePrevails]

you can't measure how many jobs didn't get created or how much money didn't get put into capital investments that created jjobs over the long term

[GRosado]

A minimum wage increase actually has small negative effects on the level of employment because the labor demand is inelastic. However it does have larger negative effects on employment growth.

[WasatchMan]

if paying someone $15 means you have to go out of business, you should go out of business, your business is clearly not doing anything for anyone.

 

Either people want to do the work because it needs to be done, and it doesnt matter what you pay

 

OR the work is valuable enough that you can afford to pay the human cost, health care, education, healthy diet/environment, social time with family/community etc

 

Dont support businesses that fuck people over or outsource these things to tax payers, most of these types of businesses are providing things you can do yourself, cheaper, and better quality

 

If what they do does not earn $15, then paying them $15 will mean operating at a loss and you will go out of business. 

 

If nobody is willing to do the work for under $15, then you will go out of business because the demand for what you are producing does not meet the cost of supply.

 

There is no should in payment except the voluntary exchange of goods and services.

[shirgall]

You pay for people to earn money for you in excess of their costs to you. In entry-level retail, with such high turnover, you don't bank on lifetime of progressively greater earnings, like you do in other professions. It has to be about the here and now, because they will leave if anything better comes along... and as soon as they have a few months of experience, their opportunities increase dramatically.

 

Raising the minimum wage just makes it harder to get a start in earning and proving you can be valuable. Of course, the people that push minimum wage can wage far more power from coddling unvalued people than pressuring people that understand their value.

[bootoo]

If what they do does not earn $15, then paying them $15 will mean operating at a loss and you will go out of business. 

 

If nobody is willing to do the work for under $15, then you will go out of business because the demand for what you are producing does not meet the cost of supply.

 

There is no should in payment except the voluntary exchange of goods and services.

 

What does it take to get people to be willing to work for $15 an hour? Besides the kids who just want to make extra money to blow at the weekend...you need massive under employment or unemployment - a large section of the workforce living under the poverty line - and no safety net

 

I am not suggesting we take taxes at gun point and give it away, im suggesting you personally as a free individual do not support businesses that rely on or contribute to a shit society

[doodydota]

Many jobs that you can see in old american movies have been exterminated. A lost of business went self sercive due to minimum wage laws. For example, I don't think you can come across a youngster cleaning your windscreen at a gas station anymore. Instead of earning experience and work ethics the yougster is raoming the street with his thug friends. As a result you get even more government social programs to help those yougeters. Of course payed for by the gas station owner's taxes. 

[WasatchMan]

What does it take to get people to be willing to work for $15 an hour? Besides the kids who just want to make extra money to blow at the weekend...you need massive under employment or unemployment - a large section of the workforce living under the poverty line - and no safety net

 

I am not suggesting we take taxes at gun point and give it away, im suggesting you personally as a free individual do not support businesses that rely on or contribute to a shit society

 

I don't really care what it takes to get people to work for $15 an hour as long as force isn't involved.  People have an incredibly diverse set of goals and needs.  Who am I to tell people the minimum amount of money they should be willing to work for and how much employers are willing to pay for said work.  As long as the interaction is voluntary, people should be free to choose.

 

Money is also not an absolute value, it is relative based on what you can buy with it.  If you increase the cost of production, you increase the cost of goods, and therefore you can't inflate one without the other.  Reality and the production capacity of a market is the arbiter of the value of money, not what someone arbitrarily thinks others should be paid.  Do you think going back and paying middle ages serfs $15 an hour would have brought them out of poverty?

 

Also,  the poverty line is a constantly upward moving bar, where people working under the poverty line are better off than upper-class people 200 years ago.  Why is this?  Voluntary trade.

[LovePrevails]

if paying someone $15 means you have to go out of business, you should go out of business, your business is clearly not doing anything for anyone.

 

 

What gives you the right to decide and legislate that and play chess with the lives of all the poor business owners who are just scraping along, and now have to go out of business because of you - not to mention all the people who are quite willing to work for $14 that you want to put out of a job and send into the unemployment lines?

A minimum wage increase actually has small negative effects on the level of employment because the labor demand is inelastic. However it does have larger negative effects on employment growth.

 

those are only immediate effects - this is a stupid keynesian argument that just won't die

it may be relatively inelastic for large companies but that unfairly privileges them against mom and dad places

All the independent cafes shut down, starbucks continues to thrive

 

the additional money that would be spent on wages is not currently going nowhere, that is going in capital investments &c.

it is attracted to whatever businesses people project will turn a profit ie. serve their customers

that type of spending creates the kind of sustainable job growth that is hard or impossible to measure in the short term, because it does not take the form of a hike or major dip - it is measured in an incremental hardening of the very backbone of the economy

[LovePrevails]

In my view, after 8 years of intense study of economics and history, the best way to protect workers from exploitation is to have as many jobs in the economy as possible. This is basic supply and demand, if there are more jobs then employees are not choosing from a limited number of positions where they have to take what they can get and put up with shoddy treatment. If there are lots of jobs then in some cases employers are the ones competing for good staff, therefore working conditions and pay will increase over time. This is what actually did happen for the first 100 years after the industrial revolution, yeah it started out really crap in factories but over time conditions got better and better.

One of the reason I would oppose minimum wage in principle is it destroys low paying jobs for people who don't have skills and can't afford to train. Those are vulnerable people too. Taking a low paying job to learn skills put people on the job ladder they can get a much better job once they have experience. But I would not support abolishing the minimum wage as a measure in isolation. It would have to be frozen and in conjunction with lots of other policies that would increase the number of jobs such as making it easier to start up businesses, employ people, less red tape and regulations, and deregulation of private sector labour unions so that people could engage in collective bargaining for higher pay and better conditions. I hope that clears up some of my position.

[AccuTron]

A calculator site says that $15/hr is $30,000/yr.  

 

I found a site, can't find the link again, which sells lightweight, minimal, freestanding robots with basic arms that grasp and place, with visual capability.  It can do most repetitive handling tasks, such as feeding a part into a press, then putting it into a carton.  It has a screen where a head would be, presumably for programming, and in operation, a cartoon face appears, whereby the eyes follow the work piece.  

 

It's price is $25,000.  

 

Clearly, a purpose built burger maker or fries maker, mass produced, and which I suspect already exist, would cost much less, and not involve payroll taxes, H&R issues, careless contamination, getting to work in a snowstorm, etc.  Ordering and payment are already done at kiosks.  

 

That which seems to be already in motion would seem to be immediately pushed over the edge by a higher minimum wage law.  Yet, at any wage rate, some of the other advantages are so obvious that partial replacement by machines seems nearly a given.

[shirgall]

$15/hr workers cost employers more than that. For example, payroll taxes and social security are a significant percentage of a paycheck that's not reflected on the pay stub, but is nonetheless a cost for the employer. There's training, re-training, dealing with unexpected sickness, scheduling, making sure they don't get into overtime, and so on.

 

Robots can work more than 28 hours a week and not draw Obamacare.

 

Also, robots are a capital investment and not a wage expense. It's taxed differently that way as well.

 

Also, robots don't exhibit high turnover, leaving for another job when they get tired of flipping burgers.

 

Etc. etc. etc.

[aeonicentity]

What does it take to get people to be willing to work for $15 an hour? Besides the kids who just want to make extra money to blow at the weekend...you need massive under employment or unemployment - a large section of the workforce living under the poverty line - and no safety net

 

I am not suggesting we take taxes at gun point and give it away, im suggesting you personally as a free individual do not support businesses that rely on or contribute to a shit society

Plenty of people legitimately want to work for under $15 an hour. For example, kids under the age of 18 probably are willing to work really hard for a small amount of money since video games cost an order of magnitude less than renting an apartment. In fact, before minimum wage laws became ridiculous, those jobs usually were held by kids who were going to school and such. Now those jobs are being held by the kinds of people who should probably be doing some form of skilled labor, who are hiding in a BK because the economy is still bad. However, let me put some things in perspective for you:

 

Low-skill IT workers can expect to be hired for about $12-15 an hour. That's a pretty normal wage for people who are interns in Computer Science, or who are talented kids who know more than your average bear. You're saying that people who've spent at least 2-3 years learning to code, or maintain computers are not needed or worth more than $15 an hour? Their jobs are extremely important, they usually maintain the equipment that runs businesses, and maintains transactions, sometimes for thousands of customers. Damn skippy those guys are important. But often don't get paid in excess of $15 an hour.

 

Old retired folks probably would love to make a few dollars an hour doing some easy task that makes them feel useful, gives them excercize, but has NO BURDEN OF RESPONSIBILITY. Young bucks trying to buy the latest video game system or some new toy, or their first car so they can go on dates would probably love to work at some easy job they can do in between school that lets them both work and have fun while they're young! Your opinion would foist on others the requirement to ad-hear to YOUR sense of moral superiority, and I reject it entirely.

[trout007]

Everyone here is missing the damn point. The real question you should be asking is why a person working a low skiled job can't make ends meet?

 

I was a teenager in the late 80's early 90's. I never had a minimum wage job. Minimum was around $4/hr but I always made $6-$9/hr for things like store clerk, fast food, or amusement park. Gas was $1 and a Extra Value Meal with a gallon of soda and 5 pounds of fried was $1.

 

But what we didn't have was a war on terror, war on drugs (at least not as bad), police state, surveilence state, etc. All of these things divert resources and production away from what people want. Less production and more people not involved in production getting state $$'s means higher prices for everyone.

 

The solution is eliminating these programs. Get rid of the Empire and War on drugs and a low skilled job will be able to support you.

[GRosado]

those are only immediate effects - this is a stupid keynesian argument that just won't die

it may be relatively inelastic for large companies but that unfairly privileges them against mom and dad places

All the independent cafes shut down, starbucks continues to thrive

 

the additional money that would be spent on wages is not currently going nowhere, that is going in capital investments &c.

it is attracted to whatever businesses people project will turn a profit ie. serve their customers

that type of spending creates the kind of sustainable job growth that is hard or impossible to measure in the short term, because it does not take the form of a hike or major dip - it is measured in an incremental hardening of the very backbone of the economy

Of course the empirical literature differentiates between the short run effects (small decrease in employment level & increased purchasing power) & long run effects(reduced employment growth & lower labor turnover). It's not a stupid Keynesian argument it's an empirical argument & labeling it as such seems like a way to dismiss it without rebutting it while at the same time winning over others with an emotionally charged word that many people on here cringe at. If we aggregate the labor market we see that labor demand is leaning towards inelasticity hence why in aggregates we see small decreases from the minimum wage on the level of employment. That being said the minimum wage does crush smaller businesses since they don't have economies of scale compared to Walmart or Target which can absorb the costs.

 

I will have to look into the data on that because from what I've seen & heard businesses aren't investing in new projects they are simply maintaining depreciating capital but I could be wrong I need to read more into that.

The spending isn't impossible or hard to measure its easy, it's called investment spending. But I know what you're saying I don't think any economist looks at investment as a short run phenomena though so I don't see where you're getting that from.

[bootoo]

What gives you the right to decide and legislate that and play chess with the lives of all the poor business owners who are just scraping along, and now have to go out of business because of you - not to mention all the people who are quite willing to work for $14 that you want to put out of a job and send into the unemployment lines?

 

I have no right to legislate anything, i dont want to legislate anything I am currently free to not support assholes, and free to talk about who i consider to be an asshole

 

Assholes are people who could give a fuck about other humans apart from how it benefits them.

[bootoo]

I don't really care what it takes to get people to work for $15 an hour as long as force isn't involved.  People have an incredibly diverse set of goals and needs.  Who am I to tell people the minimum amount of money they should be willing to work for and how much employers are willing to pay for said work.  As long as the interaction is voluntary, people should be free to choose.

 

Money is also not an absolute value, it is relative based on what you can buy with it.  If you increase the cost of production, you increase the cost of goods, and therefore you can't inflate one without the other.  Reality and the production capacity of a market is the arbiter of the value of money, not what someone arbitrarily thinks others should be paid.  Do you think going back and paying middle ages serfs $15 an hour would have brought them out of poverty?

 

Also,  the poverty line is a constantly upward moving bar, where people working under the poverty line are better off than upper-class people 200 years ago.  Why is this?  Voluntary trade.

 

Voluntary - choosing between starving or working a minimum wage job

 

And look at those minimum wage jobs - fast food places, handing out heart disease and obesity, coming out of the job with no skills or money to put towards bettering yourself or your community - yet the kind hearted peopel running the jobs pogram we call mcdonalds are billionaires

 

I would recommend caring about why things are how they are  

[bootoo]

Everyone here is missing the damn point. The real question you should be asking is why a person working a low skiled job can't make ends meet?

 

I was a teenager in the late 80's early 90's. I never had a minimum wage job. Minimum was around $4/hr but I always made $6-$9/hr for things like store clerk, fast food, or amusement park. Gas was $1 and a Extra Value Meal with a gallon of soda and 5 pounds of fried was $1.

 

But what we didn't have was a war on terror, war on drugs (at least not as bad), police state, surveilence state, etc. All of these things divert resources and production away from what people want. Less production and more people not involved in production getting state $$'s means higher prices for everyone.

 

The solution is eliminating these programs. Get rid of the Empire and War on drugs and a low skilled job will be able to support you.

 

do you really want a society of people working low skilled jobs? Rather than a society of people living free and independent lives without the need to whore themselves to employers and land lords? 

 

If we are playing hypotheticals why not go all the way? FREEDOM!

[LovePrevails]

Voluntary - choosing between starving or working a minimum wage job

 

 

Thanks for putting out this objection because it is a common concern, and a misconception that should be cleared up.

 

Yes it is voluntary, because your labour is worth more with the job than without the job - or you wouldn't take it. Your employer is making your activity more valuable with the position, their reputation, their premises, their investment, their machinery, their contacts, their customers, &c.

you are not being forced to starve: you can go live in a commune, hermitage, or retreat, you can ask for charity, you can beg or play an instrument in the street for donations, you can start your own business or create your own job, you can become an apprentice, you can make educational youtube videos and canvas for support, you can try network marketing, affiliate marketing or joint ventures - selling other peoples products on their behalf for commission, you can go to the bank and get a loan to make investments - necessity is not exploiting you 

you are not the one who is enslaved, if you want to force people to give you a job and pay you more than you are worth then you are enslaving them

 

If you want a higher wage the path is clear - gain more valuable skills and contribute more to the well-being of others.

There are plenty ways to do that: apprenticeships, night classes, online courses many of which are free, mentorship, community work, volunteering, skill swaps, asking your manager to put you on a training course, going to college, getting busy with your hands

 

if you don't have skills there is only one place to point the finger - mandatory education.

They let you leave school without a single skill that can eary you 15$ an hour?

12-14 years is more than enough time to become a concert pianist.

So you were robbed by the state, not the free market.

[Dylan Lawrence Moore]

There be trolls is these woods...

[cab21]

if there were only jobs that paid 15 or more, where is this money coming from? inflation?

 

what about self employed people and entrepreneurs, do they need to make sure they are getting 15$ an hour or more from the start? is this a average? or is one slow hour or start up costs make it so they should close down.

 

i mean, there are people that make 50 an hour of "work", but really work 4 hours to that 1 hour, or 5 hours, since they have just made 50, rather than 75. thats below 15 an hour.

[shirgall]

And look at those minimum wage jobs - fast food places, handing out heart disease and obesity, coming out of the job with no skills or money to put towards bettering yourself or your community - yet the kind hearted peopel running the jobs pogram we call mcdonalds are billionaires

 

Did you know most of the people working for McDonald's make more than minimum wage?

 

Also, there are plenty of other jobs besides fast food that pay minimum: unskilled cashiers at stores, unskilled restockers at stores, lifeguards, ski patrol, casino dealers, models, manicurists, pedicurists, dishwashers, bus boys, unskilled laborers, and on and on...

 

Yet minimum wage workers are less than 5% of the population, because once you get some experience that can be put on a resume, or some useful skills that have some margin of scarcity, a worker's value to a prospective company increases.

 

The people that make a lot of money are ones that risks a lot of money, work, or time on some project that has a significant chance of failure. Opening a McDonald's and keeping it open, stocked, and staffed is not free, and no one is forced to eat there.

[Romulox]

And look at those minimum wage jobs - fast food places, handing out heart disease and obesity, coming out of the job with no skills or money to put towards bettering yourself or your community

 

How do you expect children from low income families, who are affected most by the unemployment caused by the minimum wage, to initially get those skills to put towards bettering themselves and their community (such owning or managing a business)?  Are their single moms on welfare going to send them to school to get their MBA?  The path to managing a McDonalds and witnessing first hand how an efficient business is run is open to anyone willing to put up the effort.

[cab21]

in the country, there are plenty of management jobs, and self employed people, making less than 15 an hour