Minimum Wage Study - MW Does Not Kill Jobs

[Cheerful Charlie]

Conservative politicians argue raising Minimum Wages eliminates jobs and therefore is bad economics. Yet another major study has debunked this conservative bad zombie argument. Federal MW is still $7.25 per hour.

.....
Over the next thirteen years, a long list of cities and states enacted minimum wage increases of unprecedented size. Between 2014 and 2022, California increased its minimum wage by 56 percent in inflation-adjusted terms. Over a similar time period, New York raised its wage floor by 72 percent.

Permanent double digit unemployment did not ensue.

In fact, not only did these historically large minimum wage hikes fail to put all fast food workers out of job, but a new study indicates that they actually induced job growth.
....

New Study Finds a High Minimum Wages Creates Jobs

Conventional wisdom had long suggested the opposite.

nymag.com

 

[Loren Pechtel]

Again?

Google shows me 1.4% of workers are at or below minimum wage. Last I looked 2/3 of those were below minimum wage--which means they're tipped employees very often making well above minimum wage. So let's call it .5% are working for minimum wage. Unemployment is reported to .1% and that last digit is very shaky.

Realistically, this means the noise floor is approximately half of minimum wage workers losing their job.

This is a case where (like most) you can't prove the negative, only show that you can't detect the effect--but this is a case where you can't expect to detect an effect. Anyone who does this "research" isn't interested in the truth or they wouldn't have set out to measure something they obviously can't.

 

[laughing dog]

Again?

Google shows me 1.4% of workers are at or below minimum wage. Last I looked 2/3 of those were below minimum wage--which means they're tipped employees very often making well above minimum wage. So let's call it .5% are working for minimum wage. Unemployment is reported to .1% and that last digit is very shaky.

Realistically, this means the noise floor is approximately half of minimum wage workers losing their job.

This is a case where (like most) you can't prove the negative, only show that you can't detect the effect--but this is a case where you can't expect to detect an effect. Anyone who does this "research" isn't interested in the truth or they wouldn't have set out to measure something they obviously can't.

The irony of your response is overwhelming.

A raise in the minimum wage should reduce the amount of labor assuming all other influences on the demand and supply of labor remain unchanged. Empirical work is usually unable to control or adjust for all those changes.

Moreover, if an increase in the minimum wage reduces hours worked instead of employees, there would be no observed effect on unemployment/jobs.

 

[Jimmy Higgins]

Again?

Google shows me 1.4% of workers are at or below minimum wage. Last I looked 2/3 of those were below minimum wage--which means they're tipped employees very often making well above minimum wage. So let's call it .5% are working for minimum wage. Unemployment is reported to .1% and that last digit is very shaky.

Realistically, this means the noise floor is approximately half of minimum wage workers losing their job.

This is a case where (like most) you can't prove the negative, only show that you can't detect the effect--but this is a case where you can't expect to detect an effect. Anyone who does this "research" isn't interested in the truth or they wouldn't have set out to measure something they obviously can't.

I don't recall the claim being a minimum wage hike would increase unemployment but not above background noise level.

 

[bilby]

"You can't detect it, but it's really happening" is a bad argument for ghosts, a bad argument for Gods, and a bad argument for psychic powers.

But apparently it's a good argument for not raising minimum wage in case it causes unemployment.

 

[Loren Pechtel]

Again?

Google shows me 1.4% of workers are at or below minimum wage. Last I looked 2/3 of those were below minimum wage--which means they're tipped employees very often making well above minimum wage. So let's call it .5% are working for minimum wage. Unemployment is reported to .1% and that last digit is very shaky.

Realistically, this means the noise floor is approximately half of minimum wage workers losing their job.

This is a case where (like most) you can't prove the negative, only show that you can't detect the effect--but this is a case where you can't expect to detect an effect. Anyone who does this "research" isn't interested in the truth or they wouldn't have set out to measure something they obviously can't.

The irony of your response is overwhelming.

A raise in the minimum wage should reduce the amount of labor assuming all other influences on the demand and supply of labor remain unchanged. Empirical work is usually unable to control or adjust for all those changes.

Moreover, if an increase in the minimum wage reduces hours worked instead of employees, there would be no observed effect on unemployment/jobs.

Which doesn't address my point at all. They make these "studies" so people will think there's no harm from a minimum wage increase, when in reality it's no data.

 

[Loren Pechtel]

"You can't detect it, but it's really happening" is a bad argument for ghosts, a bad argument for Gods, and a bad argument for psychic powers.

But apparently it's a good argument for not raising minimum wage in case it causes unemployment.

We have one data point where the signal could have shown up above the noise floor--and it was obviously seen. Attempting to bury that in measurements where there's no hope of seeing a signal won't change that.

 

[laughing dog]

Again?

Google shows me 1.4% of workers are at or below minimum wage. Last I looked 2/3 of those were below minimum wage--which means they're tipped employees very often making well above minimum wage. So let's call it .5% are working for minimum wage. Unemployment is reported to .1% and that last digit is very shaky.

Realistically, this means the noise floor is approximately half of minimum wage workers losing their job.

This is a case where (like most) you can't prove the negative, only show that you can't detect the effect--but this is a case where you can't expect to detect an effect. Anyone who does this "research" isn't interested in the truth or they wouldn't have set out to measure something they obviously can't.

The irony of your response is overwhelming.

A raise in the minimum wage should reduce the amount of labor assuming all other influences on the demand and supply of labor remain unchanged. Empirical work is usually unable to control or adjust for all those changes.

Moreover, if an increase in the minimum wage reduces hours worked instead of employees, there would be no observed effect on unemployment/jobs.

Which doesn't address my point at all. They make these "studies" so people will think there's no harm from a minimum wage increase, when in reality it's no data.

You point is based on poor economics. Your response shifts the goalpost since you have no clue what the intentions of the author of these studies.

 

[Lumpenproletariat]

Nothing new here


There are also "studies" which disprove that today's climate change is any threat or any different than previous changes in climate 1000 or 10,000 years ago, or that it's caused by carbon emissions or other human behavior.

There are also "studies" which prove that face masks and vaccines don't make any difference to protect us from Covid or other viruses. Today you can find "studies" to prove anything the screaming mob wants to hear.

This "study" of minimum wage adds nothing new to all the previous "studies" -- and the legitimate part of them is to show that the damage from minimum wage is usually too small to be measurable.


There is overall net damage.

Example of economic loss which cannot be measured
----- a truckload of oranges is lost:

If there's an accident and the truck goes over a cliff, the cargo is lost, which causes an increase in the price of oranges somewhere (due to reduced supply), probably in the region near the accident.

We know there's upward pressure on the price of oranges somewhere in the region, but it's impossible to prove which stores or neighborhoods had price increases, or how much the prices went up.



But in a major case -- (e.g., where 1000 tons of product is lost) -- probably the damage is measurable. But in all cases there is net damage, in the form of price increase. Even if the damage is small and cannot be measured, there is still net damage and loss to the economy, to consumers. It makes no sense to argue that it's OK for the harm to be done as long as it's too small to be measured, which is the argument for minimum wage.

All MW "studies" acknowledge that MW cannot be raised beyond some point without causing noticeable damage. The recommendation to raise the MW always includes a warning to place restrictions or limits so that the damage it will cause is minimized and not noticeable. The increases are kept to a low percentage and are phased in slowly so that the harm can happen without attracting attention.

Minimum wage is almost always phased in slowly.

State Minimum Wage Chart - State-by-State Requirements 2024

This state-by-state minimum wage chart tracks minimum wage requirements from federal and state laws & legislation that can change annually for any state.

www.employerpass.com

This chart shows how the highly-publicized $15/hour wage is still very rare in the U.S., being phased in slowly, because everyone knows the net damage that would be done if it was imposed abruptly.

The example of American Samoa, 2007-2010, illustrates the harm done by imposing the higher MW too abruptly. The original plan was for Samoa's MW to be made equal to the 50 states by 2010, phasing it in slowly. And yet, not only did that optimistic pipedream fall flat, but when they tried to reschedule it, to delay the phase-in for a few years, it still failed and they had to delay it again, and then again. So that even today, more than 10 years later, it's still too soon for the Samoa MW to be made equal to the 50 states. The final date to phase it in has been delayed to 2035. Probably the reasoning is to go so slowly that the inevitable damage will happen in several tiny minishocks along the way, spread over 15-20 years, so it won't be noticed.

The MW philosophy is: Spread the damage out slowly, over many years, so the people generally will imagine there is only benefit and no damage. They notice some increased incomes to some celebrating wage-earners but don't notice the ones harmed by the inevitable cutbacks by companies trying to save on costs. (How many of the thousands of homeless people on the streets of America are victims of high minimum wage which priced them out of the labor market? This increase of homeless unemployed is a trend which has happened gradually, spread out over at least 50 years.)


This "Yet another major study" repeats the same as all the others.

No "studies" have ever demonstrated anything other than this inevitable pattern. Like this "new study," they all prove that the inevitable net damage can be hidden from view by making sure the increases are phased in slowly, so the damage is spread out slowly and unnoticeably, and not traceable to MW increase.)

 

[Cheerful Charlie]

What "everybody knows" is wrong. In the past, I have posted here a study which included 7 Nobel Prize winning economists debunking the conservative mythology minimum wage destroys employment. This issue keeps getting debunked by competent economists. Which is sort of like ignoring experts who warned us deregulating the banks again was a good idea. Conservative economic claims have been demonstrating their fallacity for decades. Let us learn from that.

Nobel economics prize rewards work on minimum wage

David Card, Joshua Angrist and Guido Imbens share the prestigious economics prize.

www.bbc.com

 

[Lumpenproletariat]

What "everybody knows" is wrong.

and thus: The earth is flat. And the moon-landing never happened. And 2 + 2 does not equal 4.

In the past, I have posted here a study which included 7 Nobel Prize winning economists debunking the conservative mythology minimum wage destroys employment.

Your "study" is phony and proves nothing, and you can't quote any part of it that gives evidence. Of course there are millions of phony "studies" which claim anything the crusaders are demanding for their propaganda campaigns. But you can't quote facts from these "studies" to confirm the net benefit of MW and debunking anything. They all concede that there are job losses when MW is increased, but dismiss them as "insignificant."

This issue keeps getting debunked by competent economists.

They keep admitting that there are job losses, but that these are too low to be measurable, or low enough to be dismissed as insignificant.

Which is sort of like ignoring experts who warned us deregulating the banks again was a good idea. Conservative economic claims have been demonstrating their fallacity for decades. Let us learn from that.

Nobel economics prize rewards work on minimum wage

David Card, Joshua Angrist and Guido Imbens share the prestigious economics prize.

www.bbc.com

"their fallacity"? The only error is claiming the damage from MW is greater than it really is, such as exaggerating that it will double the unemployment rate. The source here gives no evidence or verification that MW doesn't cause job losses.

You believe the "studies" that confirm your religious faith. You don't know the facts from those "studies" -- only the dogma and slogans you want from them. They don't prove your claim, or give any evidence for it. They give only the employer-bashing slogans you want to hear.

If there were really any facts, you'd quote them from your source. A clear giveaway that your source here has no facts to prove your dogma is the following phrase: "that the minimum wage had not led to significant job losses,"

The word "significant" is a concession there were job losses, and if the MW increase is phased in slowly enough, the harm done will be low enough so as to not be measurable. They give no facts in these "studies" to show that the damage from the job losses and reduced production is less than the benefit to wage-earners who gained higher incomes. Nobel Prizes in the real sciences like chemistry and physics are legitimate, but not in subjective Economics where the quantities cannot be measured and verified. In Literature and Philosophy and Religion and Economics and Poetry, a Nobel Prize claiming empirical verification is fraudulent.

All these "studies" which offer anything legitimate have concluded only that the damage done by MW wage is too low to be measurable if the increase is phased in very slowly. You cannot cite anything from these studies to show otherwise. Nothing in your source above says anything otherwise. Of course those who already agree with the dogmatic bias will say the "study" proved it. But they cannot cite the facts or evidence for this. Just as your source gives no verification or evidence, which is why you cannot quote any evidence from it, but can only quote the slogans and talking points.

 

[Jarhyn]

"You can't detect it, but it's really happening" is a bad argument for ghosts, a bad argument for Gods, and a bad argument for psychic powers.

But apparently it's a good argument for not raising minimum wage in case it causes unemployment.

I think the better option is to detect what IS happening.

You know when folks are hooked up to imaging or EEG, and the resulting images and weights are pushed to AI, the AI can often tokenize what it sees into actual words.

I wonder what it would say about what is going through the heads of those who are being haunted or those who claim psychic powers, what internal dialogue is going on.

I bet the result would not be flattering to those who make such claims frequently. It would probably be something like "what if I said there was..." And exposure of the unconscious lie/speech/"be center of attention" loop.

 

[Jimmy Higgins]

The fundamental problem with the accusation that raising minimum wage causes unemployment, is the fact that wages are a part of the cost of employment. A notable one, but it is still just a part. If a company is selling a service, the cost of employment is a part of the cost of the service. So wages are a fraction of a fraction on the cost of production. It isn't insignificant, but it isn't 1 to 1 either. Increasing minimum wage likely increases the cost of production, but not by as much as feared. Additionally, all the costs involved in employment (FICA, insurance, health insurance, management, reliability to show up), not merely wages, helps push companies to want to automate.

And finally, we need to stop pretending $15 an hour is a lot of money. You try living off $15 an hour (gross) at 32 hours a week. People are so in-tuned to their own history, you get people who are 50+ years old thinking, $15 is a lot. Yeah... in 1990 it was. Now $15 doesn't buy you one month of Netflix at 4K. Cars cost $25k to $30k today. Houses $200k is cheap for a new home. $15 an hour doesn't get you far at all.

 

[Politesse]

It makes no sense to argue that it's OK for the harm to be done as long as it's too small to be measured, which is the argument for minimum wage.

If there is a measurable benefit and no measurable harm... we should not do it.


I would be interested to see how you live out your daily life as a result of this strange philosophy of yours. It must be miserable!

 

[Loren Pechtel]

You point is based on poor economics. Your response shifts the goalpost since you have no clue what the intentions of the author of these studies.

If something is wrong with my analysis point it out, don't just claim it's wrong because you don't like it.

 

[Loren Pechtel]

It makes no sense to argue that it's OK for the harm to be done as long as it's too small to be measured, which is the argument for minimum wage.

If there is a measurable benefit and no measurable harm... we should not do it.


I would be interested to see how you live out your daily life as a result of this strange philosophy of yours. It must be miserable!

The basic problem is that measuring the harm is hard because there's so much noise. It doesn't mean the harm is small.

Birds obviously do not sing because you can't hear them in the payload compartment of a Falcon Heavy launch.

 

[laughing dog]

You point is based on poor economics. Your response shifts the goalpost since you have no clue what the intentions of the author of these studies.

If something is wrong with my analysis point it out, don't just claim it's wrong because you don't like it.

I did in post #3.

 

[laughing dog]

It makes no sense to argue that it's OK for the harm to be done as long as it's too small to be measured, which is the argument for minimum wage.

If there is a measurable benefit and no measurable harm... we should not do it.


I would be interested to see how you live out your daily life as a result of this strange philosophy of yours. It must be miserable!

The basic problem is that measuring the harm is hard because there's so much noise. It doesn't mean the harm is small.

Actually, it sorta does mean it’s small because large effects in economics are noticeable. And, of course, if there is too much noise, it doesn’t mean the harm is large.

 

[Elixir]

Realistically, this means the noise floor is approximately half of minimum wage workers losing their job.

As you point out, actual workers earning exactly minimum wage are a nearly negligible component of the workforce. Half of them losing their jobs is pretty much a nothingburger. Now, if you start looking at people making 1.1 to 1.5x minimum wage, you’ll be including a lot more people, and real life experience tells us nowhere near half of them lose their jobs, even when a minimum wage increase means they will necessarily get a raise if they are retained.
IMO your whole post is an erroneous extrapolation from cherry-picked data. People making EXACTLY minimum wage are not representative of much.
I also believe that people employing the 0.5% of whom you speak, are making bank on the backs of those workers.

 

[Politesse]

It makes no sense to argue that it's OK for the harm to be done as long as it's too small to be measured, which is the argument for minimum wage.

If there is a measurable benefit and no measurable harm... we should not do it.


I would be interested to see how you live out your daily life as a result of this strange philosophy of yours. It must be miserable!

The basic problem is that measuring the harm is hard because there's so much noise. It doesn't mean the harm is small.

Birds obviously do not sing because you can't hear them in the payload compartment of a Falcon Heavy launch.

Yes, but if someone told me the launch facility couldn't raise my wages because it would result in a catastrophic increase in bird noise in the loading bay, I'd want to see their proof that that was a real problem. Not just an assertion that it could somehow be true.