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View Diary: A Conservative Argument for Raising the Minimum Wage (108 comments)

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  •  Unrealistic and unhelpful. (2+ / 0-)
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    VClib, Wisper

    The minimum wage needs to go up, and might go up to $9 or $10. $15 is not going to happen -- at least, not immediately in one fell swoop, and for good reason.

    Economists are divided about whether a dollar or two increase in the minimum wage increases unemployment, by making labor more costly to employers.  (A basic principle of economics is that if something becomes more costly to a business, they will do less of it.)  See here and here.

    Most on the left use this study to support the notion that a minimum wage increase does not cause higher unemployment.

    So, let's look at the conclusions of the study -- which I think is persuasive.  Some on the left misuse it to say that there is NO link between minimum wage increases and a rise in unemployment, at ANY level.  But let's look at what the study says in its executive summary:  

    The employment effect of the minimum wage is one of the most studied topics in all of economics.
    This report examines the most recent wave of this research – roughly since 2000 – to determine the
    best current estimates of the impact of increases in the minimum wage on the employment prospects of low-wage workers. The weight of that evidence points to little or no employment response to modest increases in the minimum wage.

    The report reviews evidence on eleven possible adjustments to minimum-wage increases that may
    help to explain why the measured employment effects are so consistently small. The strongest evidence suggests that the most important channels of adjustment are: reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners ("wage compression"); and small price increases.

    Given the relatively small cost to employers of modest increases in the minimum wage, these adjustment mechanisms appear to be more than sufficient to avoid employment losses, even for  employers with a large share of low-wage workers.

    The conclusion is that employers have ways, other than hiring fewer workers, of dealing with MODEST increases to the minimum wage.

    I know of no study -- Zero, zilch -- that concludes that effectively DOUBLING the minimum wage in one step would have the same result.  Certainly, if you read that study carefully, it seems to support raising the minimum wage -- but only a "modest" amount."

    All this talk about an instant doubling of the national minimum wage is just unrealistic and counterproductive.   Clearly that would affect the number of minimum wage hobs.  Clearly that would mean -- just to give an example -- that fast food franchises, which operate on profit margins of maybe 4 - 6%, would start replacing some workers with things like touch-screen ordering, as well as raising prices -- the numbers don't work out for them any other way.  Even a business like ours, which hires some lower wage workers in entry-level positions, would definitely cut back on the workers we hire.  No doubt about it.  And this diary -- and some others like it -- blithely assume that we could suddenly double the minimum wage and there would be no adverse effects (like higher unemployment and higher prices) on unskilled or entry level workers.  

    The minimum wage needs to go up, but people need to focus on what's reasonable and what can be accomplished. This diary, for example, which assumes that the minimum wage would essentially double with no adverse effect on employment, is pie-in-the-sky fantasy that does not help the political dialogue at all.  

    •  Disagree with you on nearly every point - but (9+ / 0-)

      that's hardly unusual.

      First, nowhere did I say the increase would be in one shot.  You make the conclusion only because you have to in order to refute the points made.  Of course increasing it all at once is unrealistic and undesirable.  Of course it would be done in incremental steps over time - just as it's always been done.

      Second, I find the portions of the study results that you chose to highlight very interesting.  You don't highlight the phrase "the measured employment effects are so consistently small".  That's the result of the study, not the portions you chose to highlight.  There have been no studies of the effect of one large increase because there's never been one large  increase.  Since there have only ever been modest increases, that's the only thing a study can ever make any conclusions about.  Because the study limits itself to what's happened in the past does not mean the terms of that study prove that only those terms can work.

      Third, of course you always argue for more than you actually expect to get - or even want.  You, as an attorney, should certainly know that.  If you go into settlement negotiations asking for what you hope to ultimately get, I certainly don't want you as my attorney.

      Then again, since you've never found a progressive position that you agree with, I'd have been shocked to find you agreeing with a significant increase in the minimum wage.

      •  I would take you more seriously if you (1+ / 0-)
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        had some support for your positions.  

        First, your diary assumes that a $15 minimum wage surrounded by essentially today's economics in other areas.  That means an immediate -- or almost immediate -- increase to $15.  If you were arguing for a increase to $15 over the next 10 years, then the rest of your assumptions would be invalid.

        Second, quoting just this:

        "the measured employment effects are so consistently small".  
        as if it refutes what I say shows a decisive lack of analytic thinking.  The measured employment effects OF WHAT? That is the question.   What CAUSES those small employment effects?  "The measured effects of A MODEST INCREASE in the minimum wage" is what that phrase refers to.  In other words, just as I said, a MODEST increase in the minimum wage has "consistently small" effects on unemployment.  That conclusion does not, in any way, shape, or form apply to a DOUBLING of the minimum wage.  Please show me one study -- just one -- that shows that a DOUBLING of the minimum wage, done in the short term (when there is no accompanying inflation to justify it) has "small effects" on unemployment.  Go ahead.  I'll wait.  

        Third, you are not negotiating a settlement here.  You are making what is supposed to be a fact-based argument for a policy decision.  I simply pointed out that your supposed fact-based argument for a doubling of the minimum wage is not based on facts, but is based on fantasy, and is not supported by any serious economic study.  Studies support a "modest" increase, not a doubling.

        Finally, this:  

        Then again, since you've never found a progressive position that you agree with, I'd have been shocked to find you agreeing with a significant increase in the minimum wage.
        What I said -- a modest increase in the minimum wage would have small effects on employment, and that the minimum wage needs to increase -- is in complete accord with the position of the Democrats in Congress and the President.  I don't care at all that you find it unacceptable or not "progressive" enough.  If "progressive" means "not in any way connected to empirical data or basic economics," then I'm not a progressive.    

        What I said is that the diary is "unrealistic" -- which it is, in assuming that you can double the minimum wage in the short term (assuming all of today's other economics) with no adverse effect on unemployment -- and "unhelpful" -- which any diary arguing for a policy position that has such obvious holes in the logic clearly is.

        If you want an increase in the minimum wage -- something I agree is necessary -- you are better off spending time advocating realistic goals based on obvious facts.  This diary -- based on clearly erroneous assumptions -- does not convince any one who is not already on the extreme partisan left that the minimum wage should be doubled.  And, by making such transparently flawed arguments, it does not help the cause of a realistic increase in the minimum wage, which should be the goal here.  

        •  Fortunately, I wouldn't take you seriously (9+ / 0-)

          under any circumstances.

          First, the numbers I used were EXAMPLES (you might have heard of those before?) to show the argument.  Nowhere did I say it should be raised to $15 an hour; I said I used that because I can't imagine anyone having any financial security with less.  But where the amount should be is open for argument.  Second, what the hell would I use but today's situation?  Do you think I should have guessed what the situation will be in 10 years and then used that guess as the basis of my example?  

          This was not intended to be "realistic" in all details.  It was intended to establish the very realistic fact that right now taxpayers are subsidizing the too low  minimum wage.  However, since you don't want to discuss this theory any more than you want to discuss the ACTUAL finding of the study you cite, you try to pick apart silly aspects and essentially change the subject.  Look, there's a really shiny thing over there!"  Sorry, I'm not buying.  The fact of the matter is that the government IS subsidizing a much too low minimum wage right now and that means every person who pays taxes is doing so as well.  You ARE contributing to the purchase of a Big Mac regardless of whether you're buying one.  Since you can't argue with that fact, you go for the low hanging fruit and try and pick it apart by creating your own strawmen.  

          Yes, unfortunately you are in accord with too many of the Democrats in Congress.  Not, however, with the President who supports increasing the minimum wage.  And more and more of the Democrats in Congress are beginning to agree.  In this diary, I merely discussed another angle that could help get more of them, and even some Republicans, to agree as well.

        •  I think you're taking the point too literally. (1+ / 0-)
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          The argument is more poignant at the extreme of $15, but the same argument is true for any increase.


          "Jersey_Boy" was taken.

          by New Jersey Boy on Tue Nov 19, 2013 at 06:56:12 PM PST

          [ Parent ]

    •  This point ignores... (5+ / 0-)
      Economists are divided about whether a dollar or two increase in the minimum wage increases unemployment, by making labor more costly to employers.  (A basic principle of economics is that if something becomes more costly to a business, they will do less of it.)  
      This point ignores the increase in consumer spending leading to higher demand for products and services and thus a higher demand for those employed delivering those products and services.

      Almost every cent of a minimum wage increase would go right back into the economy in spending.  Right now those who live at minimum wage aren't spending much on much of anything except for the necessities -- Shelter, food staples, power, transportation.  Give 'em more money and suddenly they can afford things like healther (and more expensive) foods, replacing tires before the belts are showing through, clothing from places other than Wal-Mart, etc, etc, etc.  And the fact of the matter is that most minimum-wage jobs are in service/retail industries which would directly benefit from the increase in spending.  It's the Ford Effect.

      Any study which ignores this effect is at best an amateurish piece of BS, and at worst, anti-worker propaganda.

      •  Demand, correct. (0+ / 0-)

        .................expect us......................... FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Tue Nov 19, 2013 at 05:21:09 PM PST

        [ Parent ]

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