Ontario raising minimum wage to $15

[dismal]

Fake economics!!!

Maybe this will help:

This is the official study that was commissioned several years ago by the city of Seattle to study the impacts of raising the minimum wage, in a move that I applauded at the time as an honest and transparent attempt towards self-examination of a bold policy. It is the first study of a very high city-level minimum wage, with administrative data that has much more detail than is usually available. The first wave (examining the increase to $11/hr) last year was a mixed bag, with fairly imprecise estimates.
These findings, examining another year of data and including the increase to $13/hr, are unequivocal: the policy is an unmitigated disaster. The main findings:
– The numbers of hours worked by low-wage workers fell by *3.5 million hours per quarter*. This was reflected both in thousands of job losses and reductions in hours worked by those who retained their jobs.
– The losses were so dramatic that this increase “reduced income paid to low-wage employees of single-location Seattle businesses by roughly $120 million on an annual basis.” On average, low-wage workers *lost* $125 per month. The minimum wage has always been a lousy income transfer program, but at this level you’d come out ahead just setting a hundred million dollars a year on fire. And that’s before we get into who kept vs lost their jobs.
– Estimates of the response of labor demand are substantially higher than much of the previous research, which may have been expected given how much higher (and how localized) this minimum wage is relative to previously-studied ones.
– The impacts took some time to be reflected in the level of employment, as predicted by Meer and West (2016).
– The authors are able to replicate the results of other papers that find no impact on the restaurant industry with their own data by imposing the same limitations that other researchers have faced. This shows that those papers’ findings were likely driven by their data limitations. This is an important thing to remember as you see knee-jerk responses coming from the usual corners.
– You may also hear that the construction of the comparison group was flawed somehow, and that’s driving the results. I believe that the research team did as good of a job as possible, trying several approaches and presenting all of their findings extensively. There is no cherry-picking here. But more importantly, without getting too deep into the econometric weeds, my sense is that, given the evolution of the Seattle economy over the past two years, these results – if anything – *understate* the extent of the job losses.

http://marginalrevolution.com/marginalrevolution/2017/06/seattle-minimum-wage-study.html

If you click throught to the original link you get this as well:

This paper not only makes numerous valuable contributions to the economics literature, but should give serious pause to minimum wage advocates. Of course, that's not what's happening

...

If you genuinely care about helping poor people instead of just shouting slogans and virtue signaling, you should be in full opposition to high minimum wages and focus your energies on transfer programs that might actually help low-income households. And if you can look at this excellent study by respected researchers who show all their work and you find your way to dismissing them - *especially* if you're an economist - then it's time to admit that your views cannot be swayed by science. They might as well be religion.

 

[Crazy Eddie]

Nope. And I think you know that.

Well, you are the one who wrote:

It isn't a shit job if the person still agrees to do it without coercion

So what is it you think I know, exactly?

Because there are fifty other people competing for that same job who may also be more qualified than they are.

There MAY be. They may not be. Sometimes the opposite is true, with employers competing for employees.

That is not the case -- EVER -- in an unskilled labor position or even an entry-level position. It is CERTAINLY not the case for employees at or near minimum wage.

The suggestion that employers would ever be "competing" with each other for low-level employees working a shit job is completely absurd, but it is this suggestion that your entire UBI schtick basically depends on.

It doesn't MATTER whether they need the job or how much they need it

If they don't need the money, why are you upset about them not earning a "living wage"?

I didn't say they don't need the money. I said it doesn't matter to employers whether they need it or not, because employers don't care what their workers need to survive. They don't want or need any share in the responsibility for their employees' financial fortunes. This is the whole reason the minimum wage is a thing: because employers who don't care about their workers' future can cause a lot of unintended damage to that section of the labor market.

employees are in no position to request a more favorable deal, because any such request immediately makes them less attractive than the other 50 applicants for the same job.

So, you are upset that supply and demand is a thing, and that when there is more supply than demand the price goes down?

Upset? That's been my argument this entire time. It was me that wrote a couple of days ago:

the demand for unskilled labor continues to outstrip the supply at a high enough rate that wages will continue to fall even while the marginal product of unskilled labor rises. This is EMPIRICALLY true whatever other theoretical projections you can make about the market: there are a lot more potential workers than there are jobs for everyone.

The minimum wage exists to offset the inevitable effect of a job shortage: that is, for a population that is constantly growing, there will almost always be more workers than there are jobs, which means wages will always tend to decline over time. Since a constant decline in wages is generally a BAD thing for the economy (and one of the things that makes growth unsustainable and leads to eventual collapse) it is imperative to keep a "bare minimum" in the labor market that keeps wages from falling toward zero.

The thing is, we're also not a bunch of assholes who only care about "the economy" and corporate bottom lines, so it's important to (some of us) that the minimum wage be set high enough that a person working full time can at least feed his family and maybe invest a little bit of his earnings in improving his situation later on. That's a moral imperative, not an economic one.

No, that's not the only way they can improve their bargaining power. That is only one way. Another way that comes immediately to mind is to get an education that gives them knowledge or skills in high demand. UBI can give them the income they need to get by while going to school.

So can welfare, paired with free education for all. Incidentally, this is why free public education is far more imperative than universal basic income. If you can't afford college tuition and training in the first place, your dependence on welfare/basic income is likely to become permanent.

On the other hand:

So an employee can indeed choose not to work a shit job because the terms of his employment are terrible. Sure, he won't starve to death, but he ALSO won't gather any relevant work experience that will put him in a better position the next time he applies for one. The one who took the job INSTEAD of him gains the experience he would have gained, and can now bargain for slightly better wages and working conditions at his next job or at the same company as an internal hire. Two years from now, the guy who passed up the shit job is now competing with a whole new crop of just-starting-out young workers on exactly the same terms as before.

Or he gets an education that enables him to skip the job category completely.

Education doesn't accomplish that. Access and business connections accomplish that. It's possible to obtain those connections while attending an educational program (particularly a high-profile one like MIT or Stanford Law) but without those connections, you're just a guy with a degree and no credible work experience.

You continue to push the fantasy that employers put any conscious thought to the financial situations of their employees in making hiring decisions.

Nope. But the financial desperation of the applicants allow them to do this to a much lower price point

The lowest price point they can do this is called "the minimum wage." If the minimum wage is zero, then even the presence of universal basic income won't change this.

 

[LordKiran]

"The left" are only resistant to the idea of trying to implement UBI at the expense of other priorities, like universal healthcare, corporate tax reform, Glass-Stiegel and the Volker Rule.

Bullshit. UBI isn't even on the table.

It is in THIS thread.

Agreed. It's like debating how many angels can dance on the head of a pin.

Exactly. And assuming that one could count those angels (i.e. specify the level of UBI and how it is implemented) there is no UBI in practice, nor is there likely to have any UBI anytime soon. So comparing the expected outcomes of change in current policy tool (the minimum wage) with the expected outcomes of an untried, theoretical policy that has no chance of current enactment is, at best, a pointless exercise.

The only reason UBI isn't "on the table" is because people refuse to put it there. That includes each of you if you are not putting it there. Arguing against something because it "won't happen" is very much a self fulfilling prophecy.

I don't support the UBI because it is an obvious welfare, redistribution program and as such it will be demonized at every turn and underfunded. I would prefer a job guarantee program mentioned briefly above that would provide a job to all who apply. The work would be what we now class as volunteer work, teaching and nursing aides, neighborhood cleanup, youth team coaches, etc.

They would pay the minimum wage, in fact they could replace the minimum wage requirement because they would set the minimum wage and the minimum benefits for paid work because the job guarantee program would compete for workers. Employers would have to pay more than the job guarantee program to hire any workers. It is using competition to establish a minimum wage rather than government regulation.

It is much better if people work for their money instead of it being handed to them.

These programs have been tried on a limited basis in Israel and Brazil. Those programs were successful to the point that they had more people applying than the government was willing to fund. There were many more people than they thought there would be, especially mothers who because the programs offered child care, preferred to work for pay and let someone else watch their children, even though they had to pay for the child care out of their earnings.

Isn't it all really wealth redistribution though? Who's going to pay for all those new public sector jobs? It all eventually comes back to the people who have all the money.

I'm not against job guarantees in fact you may yet sell me on the idea, but in the abstract it all seems the same.

 

[Crazy Eddie]

– The authors are able to replicate the results of other papers that find no impact on the restaurant industry with their own data by imposing the same limitations that other researchers have faced. This shows that those papers’ findings were likely driven by their data limitations. This is an important thing to remember as you see knee-jerk responses coming from the usual corners.

In other words, you can support just about ANY conclusion just by selectively removing the right data sets.

No wonder they left the chain businesses out.

 

[dismal]

In other words, you can support just about ANY conclusion just by selectively removing the right data sets.

No wonder they left the chain businesses out.

I'm guessing you didn't read the paper. But somehow know it must be wrong.

A) they do not just willy-nilly decide to remove the data sets for employers with multiple establishments, they are excluded because of limitations in the data

4. Data
We study the impact of the 2015 and 2016 minimum wage hikes in Seattle using
administrative employment data from Washington State covering the period 2005 through the
third quarter of 2016. Washington’s Employment Security Department collects quarterly payroll
records for all workers who received wages in Washington and are covered by Unemployment
Insurance (UI).9 Washington is one of four states in the US that collects not only data on
earnings, but also on hours worked during the quarter. Employers are required to report actual
hours worked for employees whose hours are tracked (i.e. hourly workers), and report either
actual hours worked or total number of hours assuming a 40 hour work week for employees
whose hours are not tracked (i.e. salaried workers).10
This unique dataset allows us to measure the average wage paid to each worker in each
quarter.11 We measure hourly wage rate as total quarterly earnings divided by quarterly hours
worked, which corresponds to average hourly earnings, or realized hourly wage rate. As such, we
can identify jobs that would appear to be affected by an increase in the minimum wage, and track
trends in both employment counts and calculated average hourly wages.12 As a result, unlike the
prior literature, we can plausibly identify low-wage jobs across industries and in all demographic
groups, obviating the need for proxies based on those factors. We can estimate effects solely for
low-wage jobs within all industries.
The data identify business entities as UI account holders. Firms with multiple locations
have the option of establishing a separate account for each location, or a common account.
Geographic identification in the data is at the account level. As such, we can uniquely identify
business location only for single-site firms and those multi-site firms opting for separate
accounts by location.13
We therefore exclude multi-site single-account businesses from the
analysis, referring henceforth to the remaining firms as “single-site” businesses.

B) The remaining data covers a large cross-section of minimum wage jobs

As shown in Table 2, in Washington State as a whole, single-site businesses comprise 89% of firms and
employ 62% of the entire workforce (which includes 2.7 million employees in an average
quarter).

C) There's no particular reason to believe these businesses would behave differently than multi-site businesses

Survey evidence collected in Seattle at the time of the first minimum wage increase, and again one year later, increase suggests that
multi-location firms were in fact more likely to plan and implement staff reductions.14

In any case, it seems quite challenging to argue an economic theory for why the Law of Demand applies in single-site businesses but is magickally suspended in multi-site businesses.

 

[Horatio Parker]

I don't support the UBI because it is an obvious welfare, redistribution program and as such it will be demonized at every turn and underfunded. I would prefer a job guarantee program mentioned briefly above that would provide a job to all who apply. The work would be what we now class as volunteer work, teaching and nursing aides, neighborhood cleanup, youth team coaches, etc.

They would pay the minimum wage, in fact they could replace the minimum wage requirement because they would set the minimum wage and the minimum benefits for paid work because the job guarantee program would compete for workers. Employers would have to pay more than the job guarantee program to hire any workers. It is using competition to establish a minimum wage rather than government regulation.

It is much better if people work for their money instead of it being handed to them.

These programs have been tried on a limited basis in Israel and Brazil. Those programs were successful to the point that they had more people applying than the government was willing to fund. There were many more people than they thought there would be, especially mothers who because the programs offered child care, preferred to work for pay and let someone else watch their children, even though they had to pay for the child care out of their earnings.

Seems like common sense to have everyone who wants to work working. In an economy where a small portion of the workforce provides the necessities, there is a good amount of discretion. But some would rather sideline a significant portion of the potential workforce just because the private sector doesn't need them.

 

[Crazy Eddie]

In other words, you can support just about ANY conclusion just by selectively removing the right data sets.

No wonder they left the chain businesses out.

I'm guessing you didn't read the paper.

You guess wrong.

But somehow know it must be wrong.

I don't know that either. As far as the data they actually collected, it appears to be correct. But even with my own non-expert reading it was pretty obvious from the start that they were being very selective about what data they actually chose. This is a feature I have learned to notice in papers that are deliberately pushing a specific conclusion; if there is some sort of highly elaborate selection/weighting criteria for their data sets, it's because the researchers know or at least suspect that they won't get the conclusions they expect to get if they collect data from ALL sources unfiltered.

The better papers I've seen actually collect firsthand data from all possible sources and THEN filter the data in various ways to see what conclusions could be drawn from it. Most of the papers I read that use this approach are medical journals and computer science research; they give you the raw data in a big stack of figures and then the researchers walk the readers through the different ways of interpreting those numbers while eventually demonstrating which interpretation is the most likely.

they do not just willy-nilly decide to remove the data sets for employers with multiple establishments, they are excluded because of limitations in the data

Which means they assume a priori that the "limited" data will not be applicable to their conclusions. There's no way they can know that unless they already know what their conclusions are supposed to be.

Specifically:

The data identify business entities as UI account holders. Firms with multiple locations
have the option of establishing a separate account for each location, or a common account.
Geographic identification in the data is at the account level. As such, we can uniquely identify
business location only for single-site firms and those multi-site firms opting for separate
accounts by location.13
We therefore exclude multi-site single-account businesses from the
analysis, referring henceforth to the remaining firms as “single-site” businesses.

Failing to collect multi-site data leaves it ambiguous whether or not the same effect would be consistent with the multi-site data sets. That being true would actually invalidate their conclusion, and their choice to exclude it implies that they KNOW this: a multi-site account having similar results as various single-site accounts despite not actually being in the Seattle area would suggest something other than the wage hike being involved in the effect.

The remaining data covers a large cross-section of minimum wage jobs

It covers a cross section of minimum wage jobs at a specific type of business. To wit, businesses that only have a single location. Common sense alone tells us that a large portion of minimum wage jobs are probably chain businesses like fast food restaurants, convenience stores, gas stations, temp agencies, chain restaurants (Dardan locations, among others) amusement parks, movie theaters, school districts, rental management companies, even housekeeping agencies with more than one office (quite a few of them do).

That data set would literally only include small businesses with extremely limited growth potential and may already be suffering from Seattle's pre-existing marketing conditions in the first place.

There's no particular reason to believe these businesses would behave differently than multi-site businesses

Survey evidence collected in Seattle at the time of the first minimum wage increase, and again one year later, increase suggests that
multi-location firms were in fact more likely to plan and implement staff reductions.

... but since they didn't bother to collect the data on multi-location firms, this is rather difficult to verify, innit?

And again, my reading comprehension may not be all it's cracked up to be, but it APPEARS that this paper is actually using "hours worked" as a proxy for employment and then extrapolating low-wage employment under poorly-defined terms specifically to connect "low wage" to "minimum wage." That would have the effect of attributing a reduction in low-wage hours to the wage hike without being able to rule out that reduction being the result in low wage workers no longer pulling a low wage.

In any case, it seems quite challenging to argue an economic theory for why the Law of Demand applies in single-site businesses but is magickally suspended in multi-site businesses.

As I've said many times, the demand for labor isn't determined by employee wagers, it's determined by customer demand for services. You and many others have this relationship completely ass backwards: wages do not determine demand for labor, demand for labor determines wages. Demand for labor is always -- repeat, ALWAYS -- relatively low for unskilled workers (this should surprise exactly no one) but since automation and high-skilled labor cannot replace those jobs, it never actually reaches zero.

I repeat that this paper and its conclusions are not necessarily incorrect as far as it's worth. It's that the data used to support those conclusions is second hand, VERY incomplete, is very thin on context and depends on a lot of bad assumptions.

 

[SimpleDon]

Here is the data from the University of Washington study on the Seattle minimum wage increase. They said that the number of hours worked dropped by 9.2%. I agree with the poster at Angry Bear that I don't see any nearly 10% drop in the number of hours quoted. It seems like the number of hours increased.

​

going from left to right under Panel A All Industries for 9 quarters/6 quarters after enforcement started,

• The number of jobs paying under $13 decreased from 39,807 to 23,232, a decrease of 71%, as you would expect.
• The number of jobs paying under $19 decreased from 92,959 to 86,842, a decrease of 7%.
• The total number of jobs increased from 292,640 to 336,517, an increase of 15%.
• The number of hours (x 1000 typ., per quarter, assumed) for jobs paying less than $13 an hour decreased from 14,117 to 8,046, a decrease of 75%.
• The number of hours for jobs paying less than $19 an hour decreased from 37,408 to 35,867, a decrease of 4%.
• The total number of hours for all jobs increased from 130,607 to 153,603, an increase of 17%.

That is enough.

This means the number of people earning under $13 an hour decreased by 71% while the number of hours worked decreased by 75%, indicating that indeed the difference of 4% means that these workers did work fewer hours. It is indeed a decrease of ((14,117,000/39,807) - (8,046,000/23,232))/(14,117,000/39,807) × 100 = -9.2% decrease in the number of hours a person working for less than $13 an hour.

But the story is different for those earning less than $19 an hour. It shows a gain of 2.6% of hours worked which is 1 - ((37,408,000/92,959) - (35,867,000/86,842))/(37,408,000/92,959) × 100 = 2.6% gain in number of hours person.

What is happening is exactly what we want to happen, wages are increasing all across the board. But it would be wrong to claim that these results are due to the minimum wage increase. Obviously market forces are raising wages across the board. What is happening is that with the higher wages above $13 an hour the better people are jumping up to claim the jobs paying higher than that. It is tempting to say that the employers are having to pay the higher wages to keep the better people working at the previous work that they did under $13 an hour, but this is probably stretching the reasoning too far.

 

[dismal]

I don't know that either. As far as the data they actually collected, it appears to be correct. But even with my own non-expert reading it was pretty obvious from the start that they were being very selective about what data they actually chose. This is a feature I have learned to notice in papers that are deliberately pushing a specific conclusion; if there is some sort of highly elaborate selection/weighting criteria for their data sets, it's because the researchers know or at least suspect that they won't get the conclusions they expect to get if they collect data from ALL sources unfiltered.

Wow, I like the way you claim to have read the paper and instantaneously ignore the realities of what's in it. They didn't ignore multi-site reports because of some nefarious agenda. These people were hired by the City of Seattle - aka the people pushing the higher minimum wage law.

They ignored the multi-site forms because the data were unusable for their purpose.

The data is for employers in the State of Washington. Seattle not equal the State of Washington. You can't study the effects of the minimum wage in Seattle if you are looking at a jumble of data from multiple sites inside and outside Seattle.

Hopefully you can stop beclowning yourself with silly conspiracy theories over that issue and acknowledge what they did find:

a) Losses in hours at single-site employers, which more than offset the higher hourly wage (aka the law of Demand applies!)
b) No reason to expect it wouldn't at multi-site employers given they had higher expectations of reducing workers in surveys

Or, you could just put your hands over your ears and say "Hail Marxs" until your faith in your religion is restored.

 

[Loren Pechtel]

Attacked, yes, but that doesn't prove it's being torn apart.

No, it's being torn apart.

"Torn apart" by a study that can't replicate the data in fast food workers. Surprise--the study didn't find it happening with fast food workers in the first place!

 

[Loren Pechtel]

No, it's being torn apart.

Yes, it's only 100x as thorough and relevant as the Kreuger-Card study leftists have been jacking off to for decades.

Krueger-Card

- - - Updated - - -

Yes, it's only 100x as thorough and relevant as the Kreuger-Card study leftists have been jacking off to for decades.

nah.

I mean did Kreuger-Card exclude nearly half of the relevant workers?

Never mind that the rebuttal study excluded even more--and specifically focused on the area where the original found there to be no effect.

 

[Loren Pechtel]

That is not the case -- EVER -- in an unskilled labor position or even an entry-level position. It is CERTAINLY not the case for employees at or near minimum wage.

Then you never find a location where the market clearing price is above the minimum wage.

Unfortunately for your position, such places exist.

- - - Updated - - -

In other words, you can support just about ANY conclusion just by selectively removing the right data sets.

No wonder they left the chain businesses out.

They didn't leave chain businesses out. They left out businesses that operated both inside and outside the area in question. I strongly suspect that was a limitation on their data--if their data doesn't include where any given worker works trying to include such data would mess things up.

 

[SimpleDon]

=============== continued from above ===============​

Ontario is bumping up its minimum wage to $15 (Canadian) per hour. It is doing it rapidly, from $11 over the next couple of years.

Rapidly is wrong, but over a couple years is not rapidly.

It has also planned many other mandatory benefits for employees, from increased vacation time to mandatory equal pay for seasonal and temporary workers.

Benefits are wages. A benefit that costs a dollar an hour is a wage increase of a dollar an hour. Whether it is worth a dollar an hour is subjective and depends on the individual and the benefit.

We are likely to wind up where our premier says we will: With all Ontario workers earning a decent wage, and with more mandatory vacation time and other perks. Great news for them.

Yes, this is the desired result, to convert profits into higher wages and more benefits.

I have argued in the past that there is a reason that the economy exists, that it has a purpose, that we need it. This idea, which I believe is obvious, has met with some resistance here, presumably among people who believe that the economy has no purpose, that there is no reason for it to exist.

If this is what you believe, humor me for a minute. Assume that I am right that the economy has a purpose, has a reason to exist, a reason that we need the economy. What would that reason be? Would it be to increase profits while maintaining wages constant in real terms to make the already rich, a very few people, very wealthy? Or would it be, as I think, to somewhat more equably distribute the rewards of the economy to everyone to provide for their needs and, after that, to their wants, within reason?

Humor me just a little further to describe what role that you think that the government should have in determining what is considered to be equitable?

I believe that it is very well established not only that it is the government that determines how the rewards from the production of the economy are distributed, but that this is why government was first created and is why government is still needed today. That from the first time that a tribal chief divided the meat from the hunt among the members of the tribe that this has been the major reason why governments exist and are needed.

The only difference today is that the government determines the split between wages and profits, largely through its taxation policies and the degree to which government policies supports wages, including the minimum wage, the degree to which the government supports unions, the degree that the government imposes externalities on producers such as reducing pollution and product and workers safety, and even the enforcement of usury impacts the split between wages and profits in the overall economy.

=============== continued below ===============​

 

[dismal]

Yes, this is the desired result, to convert profits into higher wages and more benefits.

Well then, as long as people keep hiring employees when they no longer make profit from doing so we should be fine.

 

[LordKiran]

Yes, this is the desired result, to convert profits into higher wages and more benefits.

Well then, as long as people keep hiring employees when they no longer make profit from doing so we should be fine.

This week's false dichotomy brought to you by:

Dismal: because compromise is for pussies.

 

[SimpleDon]

=============== continued from above ===============​

What she isn't saying is that a lot of businesses won't survive this sudden increase, a lot of low end workers will be laid off, and a lot of those making just over $15 per hour will find the prices of everything going up so employers can pay wages.

Some businesses might fail, but the ones who do will be the ones who are making so little profit that they can't absorb the increase in wages by reducing their profits, they can't increase their prices because of competition from more efficient companies. This is what is called "creative destruction" and it is both an inescapable and a desirable feature of capitalism.

It is the same thing that happens when raw material prices go up. Some marginal companies go bankrupt but more efficient companies step in to claim the market share that the failed business had, sometimes even to the point of buying the production facilities of the failed business, at a steep discount, and employing the same workers. In fact, it is more likely that stronger more efficient companies will buyout the weaker less efficient companies long before the failing company into bankruptcy. Especially if the economy is strong, a point I will return to below.

Automation will also be encouraged further (though it will happen anyway). You can't find a McDonald's here anymore that doesn't have more than one cashier alongside rows of automated cashiers, and Tim Horton's has said they will be following suit.

In the US, we are facing the opposite problem, productivity has decreased, it is no longer increasing. Automation is a great driver of increasing productivity, which in turn is a driver of economic growth, second only to the population growth of working age adults. The more workers there are earning a wage, the more workers that the economy needs.

This brings us to another point, the so-called free market capitalists profess to believe in capitalism as the best economic system, by far. But it doesn't take long to realize that they don't appreciate capitalism ultimate strength, its ability to adapt to changing conditions. The free market capitalist views capitalistic economies as fragile clockwork mechanisms that are easily disrupted, when in truth they are robust and they adapt quickly to different conditions. You only have to look at the many different capitalistic economies that are running successfully in the world and the changes that they have made throughout history to see that this is true.

Also, it seems that in discussions like this one about the minimum wage free market capitalists treat the economy as a zero sum game, or worse. But it isn't. The more workers there are and the more money that they have from wages, the larger the economy will be. The fewer workers there are who have jobs and the lower that wages and salaries are the smaller the economy will be.

So my question to my premier, if I had her attention, would be: What will the government do to support those who are laid off and otherwise adversely damaged by this? She has no planned tax hike on the rich or on Bay Street speculation as Bernie Sanders always talks about. She has no planned tax cut for the low wage earners. She appears to be shifting a social problem (cost of living) onto employers and motivating employers to pull out, leaving the problem actually unaddressed.

You are letting your imagination run away with you. We have had frequent increases in the minimum wage and none have produced the problems that you want to assign to it. There is nothing in the literature to even come close to what you are predicting.

The most biased "con" studies that I could find predicted the highest possible unemployment resulting from an increase in the maximum wage to be barely what can be considered statistically significant, less than 0.4% of minimum wage workers receiving the increase. (Google "Publication bias") Most studies and the most exhaustive ones, the so-called cross border ones, report no unemployment resulting from an increase in the minimum wage. Unless you want to count yourself among the most rabidly anti-minimum wage opponents here, who believe that the possibility that a single person losing their job because of an increase in the minimum wage justifies never increasing it, an impossible standard to meet.

And also, what will she do to keep manufacturer's in the province? Ontario used to be a have province and became a have-not province under here predecessor (from the same party). Alberta (a have province) has increased its minimum wage to $15, and can afford to because of the oil industry. Alberta industry was able to absorb the hike in minimum wage for that reason. How is Ontario supposed to do it?

I don't follow the Canadian economy very closely any more. It has been more than thirty years since I lived in Canada, well in Montreal, not typical of the majority of the country. But yes, it is better if the minimum wage is raised across the entire country, not just in one province. Corporate profits in the US have gone from 5% of the GDP of the nation to 11% of GDP, and the amount of corporate capital investment has gone down as a portion of GDP in the same period, 1980 to 2008.
(Most so-called small businesses in the US are the LLCs and limited partnerships of doctors, lawyers, architects, engineers, etc., professionals organized as type S corporations for the tax savings, profits are actually the professionals' wages and there is minimal capital involved, therefore it is nearly impossible to look at these in terms of profits and capital investments.)

In a word our corporations in the US have gotten to be lazy. Instead of making profits by innovating and improving productivity they spend their money lobbying Congress for tax cuts. The RoR of money spent on lobbying and Pacs to elect subservient politicians to office is higher than the same money spent on coming up with better products and better ways to produce their current products.


Fun fact,: did you know that health care providers spend more money lobbying Congress than the defense contractors do?

This according to An American Sickness, How Healthcare became Big Business and How You Can Take It Back, 2017, by Elisabeth Rosenthal, Penguin Publishing Group. Kindle Edition, page 5.

I see this driving the gap between rich and poor faster, and bumping up unemployment, and I would like to see the Liberal Party, or maybe the NDP putting a plan out on how to deal with that. I am myself for Universal Basic Income instead of minimum wage, but I don't see anybody politician proposing it.

I am opposed to an Universal Basic Income. It is better for all concerned if people have to work for their incomes. It is a moral risk to just hand people money without them having to work for it. This is true for the welfare recipients and doubly true for the children of the wealthy, the Donald Trumps and George W. Bushes of the world. (I favor a confiscatory level inheritance tax.)

 

[dismal]

Well then, as long as people keep hiring employees when they no longer make profit from doing so we should be fine.

This week's false dichotomy brought to you by:

Dismal: because compromise is for pussies.

Nope, it's a continuum. The more profit you destroy by raising the price of labor, the more jobs you kill.

Economics class should have told you.

 

[SimpleDon]

Yes, this is the desired result, to convert profits into higher wages and more benefits.

Well then, as long as people keep hiring employees when they no longer make profit from doing so we should be fine.

Corporate profits have doubled under our neoliberal economic policies since 1980, as a portion of GDP, to where they are more than five times the amount of corporate capital investment, up from twice in 1980. They continue to climb year after year. There is a lot of profits to convert into wages before we threaten to eliminate profits, don't you agree?

I assume from the brevity of your response that this is the only point I presented that you had a problem with?

 

[Crazy Eddie]

I don't know that either. As far as the data they actually collected, it appears to be correct. But even with my own non-expert reading it was pretty obvious from the start that they were being very selective about what data they actually chose. This is a feature I have learned to notice in papers that are deliberately pushing a specific conclusion; if there is some sort of highly elaborate selection/weighting criteria for their data sets, it's because the researchers know or at least suspect that they won't get the conclusions they expect to get if they collect data from ALL sources unfiltered.

Wow, I like the way you claim to have read the paper and instantaneously ignore the realities of what's in it. They didn't ignore multi-site reports because of some nefarious agenda.

There's nothing nefarious about confirmation bias. If my boss asks me to look at our financial records and figure out -- in general -- which of our employees are having the hardest time retaining clients and which ones are getting the maximum volume, I can easily do that. If she wants me to come up with a relationship between pay rate and productivity and motivation, I can do that too. Because I consider myself a professional, I will give her exactly the data she asks for exactly how she asks for it. But I am WELL AWARE of the fact that if I include some data sources and exclude others, I can make a very convincing case that the workers who are paid the least are the ones having the hardest time and demonstrate a positive correlation between pay rate and productivity. Or, I can produce numbers that make it look like the best paid workers have a morale problem and that a pay raise for all of our workers -- including myself -- would help improve productivity.

And if I was convinced my boss was an idiot who doesn't make smart decisions or isn't capable of drawing the obvious conclusions for herself, I might do EXACTLY that and help her get there on her own.

Bias is hardly "nefarious" but using statistics to justify a bias is inherently dishonest. And it's a lot more common than most people would like to believe.

Hopefully you can stop beclowning yourself with silly conspiracy theories over that issue and acknowledge what they did find:

a) Losses in hours at single-site employers, which more than offset the higher hourly wage (aka the law of Demand applies!)

Irrelevant, since they don't actually demonstrate losses at multi-site employers. Besides, as Don astutely demonstrates right above you, both the number of jobs and the hours worked actually INCREASED after the wage hike. It doesn't actually demonstrate job losses, it demonstrates the loss of LOW WAGE jobs at or near minimum wage.

b) No reason to expect it wouldn't at multi-site employers given they had higher expectations of reducing workers in surveys

Statistical analysis cannot and does not rely on assumptions based on third party data, which is why this claim is bullshit.

 

[laughing dog]

This week's false dichotomy brought to you by:

Dismal: because compromise is for pussies.

Nope, it's a continuum. The more profit you destroy by raising the price of labor, the more jobs you kill.

Economics class should have told you.

Any economics class that told anyone that is being taught by either an incompetent fool or an ignorant ideologue. There is nothing in neoclassical or Marxian economic theory that indicates a reduction in profit by raising the price of labor necessarily kills jobs.