Also, for everyone in this thread talking about poverty, don't fool yourselves into thinking that the minimum wage is effective at reducing poverty:
Recently, Michael Wither and Jeffrey Clemens of the University of California, San Diego looked at data from the 2007 federal minimum-wage hike and found that it reduced the national employment-to-population ratio by 0.7 percentage points (which is actually a lot), and led to a six percentage point decrease in the likelihood that a low-wage worker would have a job.
This research say absolutely nothing about the meaningful long-term impacts of minimum wages, only about a fraction of the most short term impacts. Of course, their will be some short term job loss. That is because companies create business models under a set of assumptions, and companies whose models require wages below a proposed minimum will have to cut workers. But those job losses are recovered over time by smarter or more adaptive companies capable of creating business models that can accommodate higher wages. Over time, the economy adjusts and those short-term job loses become irrelevant, and the net effect is fewer people living in poverty.
Many economists have pointed out that as a poverty-fighting measure the minimum wage is horribly targeted. A 2010 study by Joseph Sabia and Richard Burkhauser found that only 11.3 percent of workers who would benefit from raising the wage to $9.50 an hour would come from poor households.
That % is total bullshit. First, it is not actual empirical research. It is nothing but their untested theory. They compute that purely hypothetical % based upon a complex algorithm filled with dozens of questionable assumptions about job loss, and other factors. Plus, they only predict for a couple of years into the future. IOW, they did not "find" anything at all, they predict it but have no evidence that their prediction is accurate. Like so much of economics non-science, they don't test predictions with actual data, they merely run "simulations" that presume (but cannot test) the very assumptions in question. But because they present these predictions as though they are "data" suckers fall for it as real science.
In addition, even within their own simulations they acknowledge that the % of "poor" more than doubles if people just above the poverty line are included. Also, they use $20,000 in a household of 4 people as their definition of who is "poor". Such "Household income" figures includes all forms of income for every person living in a house. That "income" includes welfare and food stamps, and includes income from grandparents, uncles, and kids, and near total strangers aka roommates, plus it ignores the fact that some people work 80 hours a week to get above that poverty level. Low income people are more likely to be forced to share their dwelling with extended family to make ends meet and more likely to force their kids to get jobs to help with rent (including by forging birth certificates on kids under 16. The fact that the combined income of 2 parents working, 2 teenage kids, 2 grandparents, and an uncle totals $50,000 does not make a family not "poor" by any reasonable understanding. Also, it is hardly a solution to the problem of poor people that many min wage earners get above the poverty line by spending every waking hour working, no time with kids, no time exercising, no time on their mental and physical well being, and no time improving their skills for future work opportunities. Also, many min wage earning parents have teens who also have min wage jobs that they are forced to work at more than 20 hours per week which harms their education and future earnings. Plus, it is rather absurd that the definition of "poor": means that a min wage worker who is near the poverty line is either poor or not at all poor depending entirely upon the income of a near stranger that owes them nothing but happens to be their current roommate. The fact that poor people are forced to crowd themselves into dwellings with others, does magically eliminate their poverty.
Also, the % of poor people in min wage jobs is higher in fast food and big box retail that other areas. Teens of wealthier parents have more connections and opportunities (and are more white), thus they get entry level positions in areas with opportunity for advancement and skill learning.
Sectors where a huge % of the employees are at or near min wage are the ones most likely to have adults for whom it is their only job. In sum, the "research" presumes 11% bases upon absurd assumptions that many poor people crammed into a dwelling makes them no longer poor, or sacrificing your health and well being and that of your kids to pay the rent somehow means you are not poor. Basically, wages per hour worked should be the central defining feature of whether one is poor, whereas increasing income via unhealthy number of hours, forcing your kids work and pay rent, and sharing basic resources with other poor people you are not married to are byproducts of the poverty that needs to be reduced not things that should recategorize you as not being poor.
A study by Thomas MaCurdy of Stanford built on the fact that there are as manty individuals in high-income families making the minimum wage (teenagers) as in low-income families.
Lets parse this untruth. While it may be true that teens from high and low income families are equally likely to earn minimum wage, it is totally false that there as many individuals in high income families and low income families making minimum wage. This is because teens are a minority % of people making minimum wage. Again. Only 30% of McDonald employees are under 20, and only 12% of workers earning less than $10 per hour are under 20. That includes many 17-19 year olds not living with their parents and not supported by their parents. So those true teens that are working while living with their parents are a meaningless fraction of the millions earning minimum wage or just above it, who are very disproportionately lower-income, which is inherently true of all min wage workers without a parent or spouse paying most of their bills.
MaCurdy found that the costs of raising the wage are passed on to consumers in the form of higher prices. Minimum-wage workers often work at places that disproportionately serve people down the income scale.
More lies. He "found" no such thing. He presumes such a thing, and has no good evidence or theory to support it. Most economic analyses show that the inflationary effects of min wage hikes are minimal compared to the income gains for the workers that buy those products. Yes, min wage workers are more likely than higher income people to buy products produced by min wage labor. However, that labor is only a fraction of the cost of the goods and only a fraction of the goods that min wage workers buy. Thus, almost every worker whose income goes up with a min wage increase will only pay a fraction of that extra income in higher prices, resulting in a net gain to their income,.
