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View Diary: DC Mayor Rejects Living Wage Ordinance. California to Raise Minimum Wage to $10. (70 comments)

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  •  California will be an interesting test (4+ / 0-)
    Recommended by:
    jpmassar, VClib, erush1345, llywrch

    The economic studies go both ways on whether raising the minimum wage means fewer jobs.  I've seen studies that go both ways.  The outcome depends on what assumptions you make.  

    I think that if you raise the minimum wage to something like $8, that will have a very small impact on jobs.  Pretty clearly, if you do some kind of huge increase -- like doubling it to $15.00, that will certainly have a negative impact on jobs.  If you look at the numbers, most fast food franchise outlets would simply not be profitable at all -- they'd lose money -- if they kept the same number of employees and roughly the same prices. And, of course, raising prices significantly affects sales.

    So if California takes some middle ground -- raising minimum wage to $10 -- I think a lot of the country will be watching to see what effect, if any, that has on jobs.  My guess is that there were be fewer jobs (economics tells you that -- when you raise cost, you decrease demand) but whether that's minimal or something more significant, we'll see.  

    •  Which, of course, is why Australia, (4+ / 0-)
      Recommended by:
      allergywoman, Crider, sukeyna, FogCityJohn

      with a minimum wage equivalent to about $15 US (with some exceptions), has horrible unemployment and went into a terrible recession.

      Not.  (5.8%, in fact avoided the Great Recession)

      •  Correlation is not causation. (4+ / 0-)
        Recommended by:
        VClib, erush1345, MGross, Sparhawk

        And Australia -- for so, so, so many reasons --- is not the United States.  Those two principles are so basic I can't believe I'm having to repeat them here, but if you are (foolishly) arguing, in essence,  "Australia's minimum wage CAUSED the 5.8% unemployment rate and if we raise our minimum wage to the same level we'll get 5.8% unemployment, too!" I guess I have to.  So, if that's your point, (1) provide evidence that one CAUSED the other; and (2) provide evidence that Australia's economy is so much like the U.S. that the same factor will cause the same effect here.  Hint: you can't -- Australia's economy is very different, much more heavily dependent on mining, for starters. And what's causing the economic slowdown in Australia now?  If correlation equaled causation, you'd argue that the high minimum wage was.  

        As I said, the economic studies I've read on the subject do not all agree on how much you can raise the minimum wage before you begin to see a negative impact on jobs.   California will be an interesting test.  

        •  It's nothing but simple supply and demand (1+ / 0-)
          Recommended by:
          FogCityJohn

          Supply siders keep forgetting that demand is what causes things to be sold in the first place. Higher wages = more demand.

          Supply-side economics is just Reagan-era bunk.

          "Societies strain harder and harder to sustain the decadent opulence of the ruling class, even as it destroys the foundations of productivity and wealth." — Chris Hedges

          by Crider on Thu Sep 12, 2013 at 11:06:21 AM PDT

          [ Parent ]

        •  You're being deliberately obtuse. (0+ / 0-)

          JP isn't saying a high minimum wage caused Australia's (relatively) low unemployment.  He's saying that Australia has a high minimum wage, a fact which co-exists just fine with its relatively low unemployment.

          Thus, if a high minimum wage caused high unemployment, one would expect to see higher unemployment in Australia than in the U.S., because Australia's minimum wage is higher.  But that's not what we see.  So contrary to your tired Republican claims, a high minimum wage does not seem to lead inevitably to high unemployment.

          I won't respond to your "American exceptionalism" argument, since it's the last refuge of every right winger.

          "Ça c'est une chanson que j'aurais vraiment aimé ne pas avoir écrite." -- Barbara

          by FogCityJohn on Thu Sep 12, 2013 at 04:18:46 PM PDT

          [ Parent ]

        •  However... (0+ / 0-)

          A $15 minimum wage may or may not have caused low unemployment in Australia, but:

          A $15 minimum wage didn't cause high unemployment in Australia.

    •  . (2+ / 0-)
      Recommended by:
      jpmassar, FogCityJohn

      So how is this fast food business pulling it off with $15/hr wages?

      http://www.dailykos.com/...

      And In-And-Out Burger already starts employees at $10 as well.

    •  The negative impact on jobs happens no matter what (0+ / 0-)

      the minimum wage is.  Companies who would fire someone to save $15.00 an hour have already fired them.  Those companies already operate at the minimum number of jobs they can get away with.

      Will they have to raise their prices?  Perhaps.  But so will their competitors.  All the more reason to raise the minimum wage for everyone rather than wait for the companies to do it on their own.

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