Minimum Wage Study - MW Does Not Kill Jobs

[Loren Pechtel]

Nonsense. Provide evidence for your hand waved assertions.

Trying to pretend 2 + 2 doesn't add up to 4 doesn't make the problem go away. Show your math that it can be detected.

 

[Loren Pechtel]

The minimum wage was explicitly created to chop the bottom rungs off the employment ladder

Not around here it wasn't

Nor here in the USA. It was instituted nationally in 1938 by the Fair Labor Standards Act to prevent exploitation of workers.

It was instituted to keep blacks out of most jobs. Very easy to find on Google:

The Racist History of Minimum Wage Laws | Mises Institute

Historically, minimum wage laws have done a lot to stifle employment among African-Americans. The trend continues today.

mises.org

Just look at the unemployment rate for teens in the inner city, it's still doing it's job of keeping the black man down.

 

[Loren Pechtel]

GDP is a measure of production. It is also a measure of income generated. If labor income increases (i.e. the proportional increase in the minimum wage exceeds the absolute value in the proportional reduction in hours worked), GDP rises.

Whether there is a net reduction in the supply of needed products is an empirical question.

Your continued bringing up of irrelevant things merely adjacent to the issue shows that you know that you don't have a case.

A free market will always push towards the point of maximum productivity given the driving forces. There are two cases where this is an undesirable outcome:

1) The market fails to price externalities. We typically regulate this by things like pollution laws but it would be better handled by imposing those as costs.

2) We decide that fairness is more important. Typically this takes the form of worker rights laws. Note that this does not change the fact that we are making the market inefficient, it just says that sometimes fairness can't be assigned a price. (Although in most cases I think it could be--I rather suspect most worker rights issues could be handled akin to unemployment insurance: attach a cost to the undesired behavior, use the money to provide for those who suffer because of it.)

To pretend that you can impose fairness and yet increase productivity is 1984 level doublespeak.

 

[Juvenal]

It was instituted to keep blacks out of most jobs. Very easy to find on Google:

The Racist History of Minimum Wage Laws | Mises Institute

Historically, minimum wage laws have done a lot to stifle employment among African-Americans. The trend continues today.

mises.org

Just look at the unemployment rate for teens in the inner city, it's still doing it's job of keeping the black man down.

Offering lower wages to blacks is racist and even more effective at keeping the black man down.

 

[Toni]

The minimum wage was explicitly created to chop the bottom rungs off the employment ladder

Not around here it wasn't

Nor here in the USA. It was instituted nationally in 1938 by the Fair Labor Standards Act to prevent exploitation of workers.

It was instituted to keep blacks out of most jobs. Very easy to find on Google:

The Racist History of Minimum Wage Laws | Mises Institute

Historically, minimum wage laws have done a lot to stifle employment among African-Americans. The trend continues today.

mises.org

Just look at the unemployment rate for teens in the inner city, it's still doing it's job of keeping the black man down.

You are conflating unforeseen consequences with intent.

Minimum wage laws do not abd never have kept blacks out of jobs. Racism has.

You seem to believe that a system that pays women and blacks less than white men and one which pays minors lower wages than adults more fair.

Why?

As a result of increased mechanization and the use of pesticides to kill weeds, farm work became less labor intensive which dud displace some black farmers from work they had previously done. This work was arduous, backbreaking, and dangerous. Why do you think blacks had been enslaved? If the work were not so difficult then white people would have saved themselves the cost of buying slaves.

The truth is that certain groups of people have always been pushed into low paying, dangerous, difficult, filthy, hazardous. This is not because they were unfit, or unwilling or unable to do more desirable jobs for better wages. It is because ‘society’ or segments of society have decided that people in certain groups are not worthy of being safe, or healthy( beyond their capacity to do jobs their so called betters did not want to do themiselves) or being paid a decent wage. We STILL allow some industries to employ undocumented workers who can be paid less and be made to work in unsafe conditions as farm workers, restaurant and domestic labor and sometimes as some factory workers, especially in slaughter houses/meat packing plants. Now it seems some states are amending state labor laws to allow minors to work in a variety of unsafe conditions—at lower pay, of course. Instead of going to school. While corporate heads abd stockholders earn enormous sums of money at the expense of marginalized peoples.

Full disclosure: Our retirement fund includes stocks. I’m sure yours does as well.

 

[laughing dog]

GDP is a measure of production. It is also a measure of income generated. If labor income increases (i.e. the proportional increase in the minimum wage exceeds the absolute value in the proportional reduction in hours worked), GDP rises.

Whether there is a net reduction in the supply of needed products is an empirical question.

Your continued bringing up of irrelevant things merely adjacent to the issue shows that you know that you don't have a case.

A free market will always push towards the point of maximum productivity given the driving forces. There are two cases where this is an undesirable outcome:

1) The market fails to price externalities. We typically regulate this by things like pollution laws but it would be better handled by imposing those as costs.

2) We decide that fairness is more important. Typically this takes the form of worker rights laws. Note that this does not change the fact that we are making the market inefficient, it just says that sometimes fairness can't be assigned a price. (Although in most cases I think it could be--I rather suspect most worker rights issues could be handled akin to unemployment insurance: attach a cost to the undesired behavior, use the money to provide for those who suffer because of it.)

To pretend that you can impose fairness and yet increase productivity is 1984 level doublespeak.

Why on earth are babbling about productivity or fairness? Nothing I wrote mentioned that.

 

[laughing dog]

Nonsense. Provide evidence for your hand waved assertions.

Trying to pretend 2 + 2 doesn't add up to 4 doesn't make the problem go away. Show your math that it can be detected.

You made empirical claims without providing evidence, not me. Your response is evasive.

 

[Lumpenproletariat]

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.

No -- There IS harm (even if non-measurable), and this harm is the higher prices consumers must pay = net harm which outweighs the benefit to some wage-earners.

And what "makes no sense" is to say that it's OK to do this (net) harm as long as it's too small to be measured. But also if it simply cannot be measured, regardless how big or small it is. Many/most harms are not empirically traceable to their particular cause, but they are real regardless that their cause is not empirically measurable or identifiable.

The higher prices caused by MW are a harm to consumers greater than the benefit to wage-earners. The wage-earners must be benefiting enough from their wage, even if it's low, because otherwise they would resign rather than work for less than it's worth. Obviously it's worth it to them or they would just quit, which is the real test of whether the wage is high enough. The only need for a higher wage is in order to discourage them from quitting, which sometimes is done, but that happens automatically with no MW law needed to make it happen. The employer has all the incentive necessary to increase the wage level however high to ensure that enough workers are there doing the needed work, and beyond that cost level the work is simply not worth it, or what's produced wouldn't have enough value.

The workers need to be paid however much is necessary to entice them to do the work, but no more than this amount. Getting the work done is the only point, i.e., to serve consumers. No legitimate good is done by forcing employers to pay higher than this level at which the workers choose voluntarily to do that work. But if workers start quitting and the work goes undone, it may be necessary to raise the wage level, which the profit-seeking employer always does when it's needed. Again, in order to serve the consumers better, which is the whole point.


Let's pick out a victim to feel sorry for.

Of course you can always dictate that some particular individual you select in the economy should be paid more, and whatever this is will be a net benefit to those ones paid more. But what about the consumers who pay for it? Why should they suffer the damage of paying the higher prices? There is no reasoning why this higher price should be imposed except only where it's needed to provide a high-enough enticement to workers to perform the work and not quit. Beyond that no one can give any reason why any workers should be paid more, or why we should feel more sorry for them than for the consumers forced to pay for it. MW law is not needed to provide the needed enticement to workers but is only an additional cost imposed onto consumers which adds no further benefit to them. What point is served by this additional cost to consumers which doesn't benefit them?

So MW inflicts a cost onto consumers in the form of certain production which would have happened but was suppressed and so is non-measurable empirically, being a non-existent value which would have existed if it had not been suppressed or snuffed out by a law which made it illegal for it to take place or be performed, threatening punishment on anyone who would perform such work -- i.e., all work which would have been paid less than the prescribed wage level and would have been done except for this suppression or prohibition of it. It obviously cannot be empirically observed or measured, because something nonexistent cannot be empirically measured. It was snuffed out by driving up the cost of producing it so it became less profitable and thus undesirable by the potential producers who would have done it but did not because the cost of it was driven up by this law.

Such higher cost harms all of society, e.g., all 300+ million Americans buying anything produced. Certain workers do benefit who gain a higher income as a result (while other workers get no benefit but just pay higher prices), just as with corporate welfare which benefits a few at the company, or a few investors, or some of the company's workers. This is a measurable empirical benefit -- higher income to those identifiable individuals, whereas the production which is suppressed and snuffed out by the MW law can't ever be measured because what's blotted out and thus nonexistent cannot be empirically measured. By definition it's nonexistent, made nonexistent by the law suppressing it, like Prohibition suppressed alcohol production. So we can try to estimate how much was suppressed, but this is not empirical measurement because the item being estimated is non-empirical as a result of its being suppressed and snuffed out by this law which is not about producing anything but only about snuffing out desirable production which would otherwise have happened.

This harm or damage is also unmeasurable in the same sense that some production does unintended harm, like coal and gasoline production, or other production which damages the environment, and yet we cannot identify the particular victims because it cannot be verified which victims were damaged by which production. So whereas the economic benefit to individual coal miners or oil company workers is measurable, yet the added harm to millions of individuals throughout society who contract additional lung diseases is not measurable because it can't be proved which source caused the damage to each victim.

The added harm from carbon emissions is probably not traceable to the exact source, so that source goes unidentified, whereas the higher wages and profits to the carbon-emission producers is measurable and the individual beneficiaries identified. So a polluting company and its workers enjoy measurable benefit from their product, i.e., higher incomes, but the worse polluting damage they put into the environment goes unidentified and unmeasured because their particular contribution to that damage is undistinguishable from the other sources also contributing to it. So the large number of lung cancer deaths cannot be empirically connected to the particular source of it in individual cases. So this too is damage which cannot be empirically measured.

And likewise minimum wage law drives up the cost of production which everyone has to pay, along with hundreds or thousands of other factors, so that we cannot measure each source. Obviously it contributes to higher inflation just as other costs do. All the higher costs force up the prices we must pay, but many cannot be individually measured or identified back to their source, just as each polluting source cannot be empirically connected to the resulting pollution to measure its individual contribution to the total damage. It's in that sense that it's unmeasurable, and yet it's no less real. Just because a real harm cannot be empirically measured doesn't make it any less real. The real damage is experienced but is not empirically traced to the source which caused it.

E.g., most climate-change damage cannot be empirically traced to the particular source which caused it, which is why climate-change deniers cannot be proved wrong by empirical data to document the harm done in individual cases, as also minimum wage crusaders cannot be refuted by empirical data about the damage caused by their laws prohibiting desirable work and production from taking place.

Most of what you know about the causes of benefit and harm is not based on empirical data identifying and measuring the particular cause of each benefit or harm.

 

[Toni]

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.

No -- There IS harm (even if non-measurable), and this harm is the higher prices consumers must pay = net harm which outweighs the benefit to some wage-earners.

And what "makes no sense" is to say that it's OK to do this (net) harm as long as it's too small to be measured. But also if it simply cannot be measured, regardless how big or small it is. Many/most harms are not empirically traceable to their particular cause, but they are real regardless that their cause is not empirically measurable or identifiable.

The higher prices caused by MW are a harm to consumers greater than the benefit to wage-earners. The wage-earners must be benefiting enough from their wage, even if it's low, because otherwise they would resign rather than work for less than it's worth. Obviously it's worth it to them or they would just quit, which is the real test of whether the wage is high enough. The only need for a higher wage is in order to discourage them from quitting, which sometimes is done, but that happens automatically with no MW law needed to make it happen. The employer has all the incentive necessary to increase the wage level however high to ensure that enough workers are there doing the needed work, and beyond that cost level the work is simply not worth it, or what's produced wouldn't have enough value.

The workers need to be paid however much is necessary to entice them to do the work, but no more than this amount. Getting the work done is the only point, i.e., to serve consumers. No legitimate good is done by forcing employers to pay higher than this level at which the workers choose voluntarily to do that work. But if workers start quitting and the work goes undone, it may be necessary to raise the wage level, which the profit-seeking employer always does when it's needed. Again, in order to serve the consumers better, which is the whole point.


Let's pick out a victim to feel sorry for.

Of course you can always dictate that some particular individual you select in the economy should be paid more, and whatever this is will be a net benefit to those ones paid more. But what about the consumers who pay for it? Why should they suffer the damage of paying the higher prices? There is no reasoning why this higher price should be imposed except only where it's needed to provide a high-enough enticement to workers to perform the work and not quit. Beyond that no one can give any reason why any workers should be paid more, or why we should feel more sorry for them than for the consumers forced to pay for it. MW law is not needed to provide the needed enticement to workers but is only an additional cost imposed onto consumers which adds no further benefit to them. What point is served by this additional cost to consumers which doesn't benefit them?

So MW inflicts a cost onto consumers in the form of certain production which would have happened but was suppressed and so is non-measurable empirically, being a non-existent value which would have existed if it had not been suppressed or snuffed out by a law which made it illegal for it to take place or be performed, threatening punishment on anyone who would perform such work -- i.e., all work which would have been paid less than the prescribed wage level and would have been done except for this suppression or prohibition of it. It obviously cannot be empirically observed or measured, because something nonexistent cannot be empirically measured. It was snuffed out by driving up the cost of producing it so it became less profitable and thus undesirable by the potential producers who would have done it but did not because the cost of it was driven up by this law.

Such higher cost harms all of society, e.g., all 300+ million Americans buying anything produced. Certain workers do benefit who gain a higher income as a result (while other workers get no benefit but just pay higher prices), just as with corporate welfare which benefits a few at the company, or a few investors, or some of the company's workers. This is a measurable empirical benefit -- higher income to those identifiable individuals, whereas the production which is suppressed and snuffed out by the MW law can't ever be measured because what's blotted out and thus nonexistent cannot be empirically measured. By definition it's nonexistent, made nonexistent by the law suppressing it, like Prohibition suppressed alcohol production. So we can try to estimate how much was suppressed, but this is not empirical measurement because the item being estimated is non-empirical as a result of its being suppressed and snuffed out by this law which is not about producing anything but only about snuffing out desirable production which would otherwise have happened.

This harm or damage is also unmeasurable in the same sense that some production does unintended harm, like coal and gasoline production, or other production which damages the environment, and yet we cannot identify the particular victims because it cannot be verified which victims were damaged by which production. So whereas the economic benefit to individual coal miners or oil company workers is measurable, yet the added harm to millions of individuals throughout society who contract additional lung diseases is not measurable because it can't be proved which source caused the damage to each victim.

The added harm from carbon emissions is probably not traceable to the exact source, so that source goes unidentified, whereas the higher wages and profits to the carbon-emission producers is measurable and the individual beneficiaries identified. So a polluting company and its workers enjoy measurable benefit from their product, i.e., higher incomes, but the worse polluting damage they put into the environment goes unidentified and unmeasured because their particular contribution to that damage is undistinguishable from the other sources also contributing to it. So the large number of lung cancer deaths cannot be empirically connected to the particular source of it in individual cases. So this too is damage which cannot be empirically measured.

And likewise minimum wage law drives up the cost of production which everyone has to pay, along with hundreds or thousands of other factors, so that we cannot measure each source. Obviously it contributes to higher inflation just as other costs do. All the higher costs force up the prices we must pay, but many cannot be individually measured or identified back to their source, just as each polluting source cannot be empirically connected to the resulting pollution to measure its individual contribution to the total damage. It's in that sense that it's unmeasurable, and yet it's no less real. Just because a real harm cannot be empirically measured doesn't make it any less real. The real damage is experienced but is not empirically traced to the source which caused it.

E.g., most climate-change damage cannot be empirically traced to the particular source which caused it, which is why climate-change deniers cannot be proved wrong by empirical data to document the harm done in individual cases, as also minimum wage crusaders cannot be refuted by empirical data about the damage caused by their laws prohibiting desirable work and production from taking place.

Most of what you know about the causes of benefit and harm is not based on empirical data identifying and measuring the particular cause of each benefit or harm.

That’s a whole lot of words to basically say you have no data and no studies to back your positions.

Labor costs do drive costs of products and services. So do materials, transportation, a lot of things.

Paying people less than a liveable wage also increases costs to society as society steps in to partially ameliorate the ills of poverty. This comes from taxing that ‘everyone else’ that you are sooo concerned about protecting. Of course the wealthy ( individuals and corporations) are able to avoid paying taxes, making them double winners: they save on labor cost and they don’t have to pay what many consider to be their fair share of taxes. A third benefit is creating and maintaining a permanent underclass that has few choices but to continue in the lowest rungs of the work force.

Of course, this only lasts as long as people are willing to put up with it. Revolutions tend to be very expensive.

Personally I think a better way to go is to stop dividing people into us vs them and just recognize that society works best when we are all just us.

 

[Lumpenproletariat]

Time and time again, conservative politicians and their pet charlatan economists have shrieked and howled raising minimum wages would create mass unemployment, loss of small businesses and locust plagues etc. But states, and local governments have raised minimum wages.

And the promised unemployment apocalypse has never occurred as loudly squealed about from these morons. That is all.

translation: Though minimum wage increase makes the nation worse off, it's OK because the total damage done is small. It's good to inflict small amounts of damage.

 

[Toni]

Time and time again, conservative politicians and their pet charlatan economists have shrieked and howled raising minimum wages would create mass unemployment, loss of small businesses and locust plagues etc. But states, and local governments have raised minimum wages.

And the promised unemployment apocalypse has never occurred as loudly squealed about from these morons. That is all.

translation: Though minimum wage increase makes the nation worse off, it's OK because the total damage done is small. It's good to inflict small amounts of damage.

Yes, small amounts of damage are better than large amounts of damage.

But so far, you have not demonstrated that increasing minimum wage does any damage at all.

 

[Politesse]

Most of what you know about the causes of benefit and harm is not based on empirical data identifying and measuring the particular cause of each benefit or harm

Big words coming from a man with zero data to back up his own outrageous claims.

 

[Jimmy Higgins]

Nonsense. Provide evidence for your hand waved assertions.

Trying to pretend 2 + 2 doesn't add up to 4 doesn't make the problem go away. Show your math that it can be detected.

Sounds like an argument for God in there Loren.

 

[Lumpenproletariat]

Employer-bashing comes first
and -scapegoating = highest MW priority

And people in the 1.1 to 1.5 range are only relevant if you have a big change to minimum wage.

Like the 52% - 73% referenced above? You know - the ones you complain about? The ones that did NOT cost the jobs that conservos flatly stated would be “lost”?

And herein lies the true motive--punishment.

Bullshit.
Oh, it would be nice to let everyone who wants to be an oligarch be an oligarch - I don’t mean to “punish” them, just maybe take a small fraction of a percent of existing oligarchs’ excess riches to provide subsistence to the less greedy.

You have no empirical data to show that minimum wage law provides any such "subsistence" to anyone. You have no empirical studies proving that minimum-wage workers would be starving otherwise, and that those below minimum wage are starving.

Redistributing wealth from the oligarchs to the lower class has nothing to do with driving up labor costs to employers, most of whom are not the super-rich. Employers who hire cheap labor are mostly the less wealthy small businesses struggling to survive. Kicking these in the teeth with MW law does nothing to get at the greedy "oligarchs."

Having less restrictions on employers, allowing them to hire whoever they need at any agreed price, would result in much more income to the lower classes, even though much would be in low-wage jobs. Still the living standard among the poor would greatly increase as lower-level employers would expand and seek more help which they could afford at the lower cost.

But when your main concern is venom and hate against employers as a class, then of course you don't really care about doing what's best for the poor and for all consumers and the whole nation. Spewing hate against the scapegoat takes first priority.

 

[Lumpenproletariat]

If we can give the millions of Americans receiving Social Security an annual cost-of-living adjustment without resulting in runaway inflation, then we can do the same for the tiny fraction of people earning minimum wage. And then never have to argue over when and how much Minimum Wage should be increased again.

Just index MW to inflation and be done with it.

The dispute is over whether there should be a minimum wage imposed, not how much the MW should be. Each time the argument comes up there's virtually no debate over how much to increase the MW, because the demagogues leading the charge for higher MW always keep their flock together in lockstep without any individual differences allowed or questioning the gurus leading the crusade. A question like: "Why this much increase? Why only $1. 25 increase and not $2.00?" would encourage the disciples to ask too many questions, which would kill the minimum-wage religion. The focus must be kept on the employer-bashing, not numbers-crunching over the details, which requires facts and logic and other distractions which would only confuse the disciples.

 

[Ford]

Time and time again, conservative politicians and their pet charlatan economists have shrieked and howled raising minimum wages would create mass unemployment, loss of small businesses and locust plagues etc. But states, and local governments have raised minimum wages.

And the promised unemployment apocalypse has never occurred as loudly squealed about from these morons. That is all.

translation: Though minimum wage increase makes the nation worse off, it's OK because the total damage done is small. It's good to inflict small amounts of damage.

Yes, small amounts of damage are better than large amounts of damage.

But so far, you have not demonstrated that increasing minimum wage does any damage at all.

Ah, but you see..."increasing minimum wage is catastrophic" is an article of faith. No amount of studies or real-world evidence will change that.

 

[Lumpenproletariat]

What is the result of higher wage
artificially forced up by MW law fiat? rather than the market?

I don't see how you are addressing my point at all.

If increasing a wage results in less hours instead of fewer jobs, then an increase in the minimum wage does not cause a job loss.

Maybe. But what it causes is reduced production, with fewer hours of work. And reduced production = reduced supply and higher prices = lower living standard for all consumers.

And if the reduction in hours is relatively smaller than the wage increase, income earned rises (for example, if wages go up by 5% while hours worked falls by 3%, income earned rises by 2%).

i.e., earned income for those workers, but reduced living standard generally for society, with the reduced production. What matters is the overall impact on society, not just the incomes of certain workers. All other workers are adversely affected by the reduced production, as consumers.

Static demand and supply analysis indicates a reduction in the use of labor when wages increase. The amount of the reduction in the static case depends on the responsiveness of demand for labor and the supply of labor to wages. Typically, neither is very responsive ( the technical term is inelastic ) in the short run which is why I suspect it is rare to find a noticeable result.

more simply, we don't know the exact result when government interferes into the supply-and-demand conditions by imposing terms onto buyers and sellers (like MW increase). But in cases where this interference is on a large scale, having a large impact, it's always a negative result (except for necessary environmental regulations, or to enforce anti-fraud laws, etc. which are done for everyone's benefit rather than to promote ideological prejudice against certain economic classes like the "greedy capitalist pigs" and other scapegoats, especially employers).

E.g., we know that Soviet and Cuban suppression of the Underground Economy in those countries resulted in widespread shortages and disruption of needed production for consumers, and only when this interference was reduced did that damage finally get reduced to a more tolerable level, as in both cases the government finally submitted to legalization of more private production. This is clear empirical evidence that such interference into the market by government causes net harm rather than benefit.


Indisputable EMPIRICAL EVIDENCE that MW increase did net harm

And in American Samoa the minimum wage increases of 2007-2010 led to disastrous consequences, which is empirically verified by the fact that even the pro-minimum-wage crusaders (U.S. Congress) had to reverse their MW agenda and rescind the increase -- President Obama later had to sign the law to undo the MW increase he voted for earlier in the Senate.

Over longer periods of time, neither demand or supply remains unchanged which makes teasing out the sole effect even more difficult.

It's always difficult when the overall impact is small, as the politicians try to keep it, because they know that the impact will be negative if the impact is large. All the empirical evidence indicates this: that the impact is generally negative when government interferes to cause major change -- at least in cases of dictating terms like wages and prices. But usually there's not enough impact to be able to identify that the impact was negative or positive.

To summarize, there is no theoretical reason in economics for a change in the minimum wage to necessarily affect the number of jobs that are available.

Wrong. As long as supply-and-demand is the theory, the higher cost of the job necessarily causes some reduced demand for labor, or job offers. This has to be the case as long as the employers are trying to maximize their profit, which basic theory assumes.

And further, the minimum wage REQUIRES that some jobs be eliminated or that the cost of them be increased -- and the employers are free to choose between these two alternatives. When such an ultimatum is imposed onto someone, we have to assume those threatened will choose one or the other alternative. It's pure ideological asinine bone-headedness to insist that ALL the subjects, among thousands, even millions, will automatically choose the same alternative to pay the higher cost. What is the probability of that? An ultimatum is imposed onto the subjects, possibly millions of them, and you insist that 100% of them, without exception, all choose the same alternative? They're all free to eliminate a job rather than paying the higher cost, and you insist stubbornly that not one single subject chooses the alternative to eliminate the job rather than paying the higher cost?

You know that can't be the case. You know there are at least a few MARGINAL employers who cannot afford the higher labor cost and instead will eliminate some jobs.

Where in Economics 1A does it say that in ALL cases of a choice, or ultimatum imposed onto buyers or sellers, it's automatic that Option A is the universal choice of every subject among the millions, and not a single one ever chooses Option B? Cut it out! You know that's nuts.

At least some of them choose Option B, to eliminate a job, and so there are at least some job losses. It's a virtual certainty, which you'd admit if you'd stop pulling our leg and be honest.

There is also no theoretical reason that an increase in a wage necessarily causes a reduction in earned income.

It depends. But if that wage increase is imposed by ideologues in the government rather than by market supply-and-demand, it has a negative consequence in some form. At least one result is reduced supply, as the production becomes more costly than before (or rather, more costly than without the government interference, so that the output is reduced from what it would have been without this higher cost imposed by the government interference.)

But if it's not reduced production, there is some other negative consequence. Even if there's no empirical data (as there usually is not), we still must assume the negative consequence happening somewhere. We must assume this just as we assume 2 + 2 = 4. Possibly if you have empirical data to show otherwise, we might consider whether it's possible for the government to distort the market like this and not cause a bad outcome. We have to look at all possibilities, but to conclude that this interference into the market had no bad consequences, you'd have to show the empirical data to prove it, which you cannot, because you don't have any such empirical data. Those who preach that there's no negative consequences have never produced empirical data to prove it, despite their dishonest "studies" claiming to prove it. It's fashionable for dishonest propagandists to produce "empirical studies" proving their false claims.



What is REAL empirical evidence?

Usually the claim to have "studies" proving your controversial belief is dishonest, at least today with all the disinformation and media propagandists and pundits and radio talk-show hosts. E.g., the Right-Wing talk-show hosts quoting their "studies" to prove that face masks and vaccinations make no difference, and also their "studies" debunking the climate-change scientists. And don't pretend that Left-wing propagandists are basically different and always honest.

So, what evidence can we really believe?

It may be difficult to fix a hard black-and-white differential to distinguish fact from fiction in all cases. But the example of the failure of MW increase in American Samoa has to be recognized as a case where the real Truth is exposed for all to see. Because in this one case the advocates on one side had to admit that they were wrong. It's not the Republicans or MW opponents who rescinded the MW increase there, but the Democrats who first imposed this onto Samoa. When the economy of Samoa collapsed, as a result of businesses closing or cutting back their production, it became apparent that the higher labor cost was unbearable and unrealistic in that economy. At least in that one case the MW advocates had to admit that a MW increase did net harm. That's an example of legitimate empirical evidence, unlike the many fraudulent empirical "studies" cited so often by propagandists on both sides.

Empirically, this means the effects of an increase in the minimum wage will depend on the specific conditions of the targeted labor market.

The specifics always vary from one case to another, no matter what the issue.

However, in ALL cases where the impact was major, the effect was negative. Only when the impact is small is it possible for MW crusaders to claim a positive outcome, and this claim is never agreed to by the other side. It's always an ideological claim only, not proved by the evidence, as in the case of Samoa where all sides agree that the outcome was negative.

Why is it that the MW crusaders cannot cite one case of a positive outcome resulting from a major MW increase?

It also suggests that there is a lack of empirical justification for the claim that an increase in the minimum wage causes job loss may be due to technical difficulties in teasing out the effect, but it also suggests any negative effect is likely to be small.

The negative effect in Samoa was large, not small, as the MW crusaders, Democrats, in Congress had to admit reluctantly. Of course most of them still try to claim that MW has good results if done right, and try to circumvent the Samoa case, but they voted to rescind the increase they voted for earlier. So their action, voting against what they had voted for years earlier, proves that they know their MW plan caused a large negative effect, not small, and so was a failure, and wrong.

 

[Lumpenproletariat]

Just index MW to inflation and be done with it.

Sounds reasonable, but it would need to be backdated to the 1968 peak of its purchasing power.

That's too subjective.

Why not date it back to February 21, 1848 to commemorate the publication of The Communist Manifesto.

 

[Lumpenproletariat]

Minimum wage theory = the law of supply-and-demand is suspended
(only for labor of course)

(some material for Drag Queen Story Hour)

Static demand and supply analysis indicates a reduction in the use of labor when wages increase. The amount of the reduction in the static case depends on the responsiveness of demand for labor and the supply of labor to wages. Typically, neither is very responsive ( the technical term is inelastic ) in the short run which is why I suspect it is rare to find a noticeable result. Over longer periods of time, neither demand or supply remains unchanged which makes teasing out the sole effect even more difficult.

Never mind "longer periods of time"; In any situation where some disposable incomes increase (higher wage) and others decrease (reduced hours and/or job losses), demand certainly changes, and the total size of the economy likely also changes.

The instant you change minimum wage, you also necessarily change supply and/or demand.

But not if you change the price of anything else. This suspension of supply-and-demand is a magical phenomenon which happens only when something about labor changes but not any other commodity in the market or anything else in the universe.

The overall effect is impossible to ascertain by a simplistic calculation based on the false assumption that neither demand nor the total size of the economy has varied.

And we haven't even considered that productivity will likely also change. If a team of ten staff is reduced to nine, those nine will likely still get the same work done, at least for a time. Equally, it might be harder to get the same work done if an eleventh employee is hired, as the new guy needs training and may generate additional work fixing their errors while they're learning. Productivity is VERY elastic. And most workplaces have some slack "built in" to allow for unexpected increases in demand, or unexpected employee absences, or both.

The real world isn't simple, and a simplistic analysis of it by simpletons is rarely useful.

Increasing minimum wage could easily lead to increased employment, . . .

Of course increased employment could follow, just as tougher gun laws could lead to double the cases of mass shootings.

But we're entitled to reason what the CAUSE of the change is and to discount something unlikely. Of course there's NO ABSOLUTE CERTAINTY -- 100% probability to any prediction or explanation of the outcomes and causes.

But forcing up the price of labor is unlikely to cause an increase in the demand for labor, just like the price of anything else in the economy. We always assume, safely, for good reason, that a higher price for something in itself will cause some reduced demand for it. There's no reason to set aside this reasonable assumption only in the case of wages, or a forced higher wage level, imposed higher cost.

What other example is there in the economy where we assume a higher cost of something leads normally to more demand for it?

There are some RARE EXCEPTIONS you could probably name. But this is not the norm, and we're entitled to assume the norm for most cases of higher cost. Usually the law of supply & demand does apply, meaning a higher cost causes less demand. We can name many examples of it, from historical precedent. Plus also it's a basic axiom of economics that buyers prefer LOWER cost, not higher. And for labor theory, the employers are BUYERS and the workers are SELLERS, and these buyers and sellers show the same normal behavior patterns as all other buyers and sellers.

. . . easily lead to increased employment, rather than the reduced employment that a crude analysis suggests.

What's "crude" about assuming that the normal supply-and-demand conditions apply to a given case where there's no evidence to suggest otherwise?

. . . rather than the reduced employment that a crude analysis suggests. And remember, the moon-landing never really happened. It's de . . . .

J-u-u-u-u-ust kidding. He never really said that. I'm just checking to see if you're awake.

It's dependent on the starting conditions and the magnitude of the increase, and the likelihood is that the direction, as well as the magnitude, of any changes will vary from one location to another.

O-o-o-o-K so then tell us which are the locations where the law of supply-and-demand does not apply. Where is it that higher cost results in higher demand from buyers rather than lower? where buyers flock to the store or gas station where the prices doubled and away from where there's a discount? where the plumbers are paid minimum wage and the hamburger-flippers $50/hour?

Is this happening on some planet where the law of gravity also has been suspended?

 

[Cheerful Charlie]

where the plumbers are paid minimum wage and the hamburger-flippers $50/hour?

Ah yes. The old strawman gambit again. If burger flippers were paid $1 an hour, burgers would be cheap. So let us stimulate demand for burgers by slashing minimum wage for burger flippers to $1 an hour.