A higher minimum wage doesn't reduce poverty, says… the federal government (Duh)

Hot Air.com ^ | December 31, 2015 | JAZZ SHAW

[Kaslin]

We reach the end of the year with yet another tale of crazy, one percenter wingnuts trying to claim that jacking up the minimum wage won’t do much to alleviate the issues facing the poorest Americans who the Democrats are seeking to help. This time the hateful claims are coming from… a study published by the federal government.

Increasing the minimum wage is an inefficient way to reduce poverty, according to a Fed research paper that comes amid a national clamor to hike pay for workers at the low end of the salary scale.

David Neumark, visiting scholar at the San Francisco Fed, contends in the paper that raising the minimum wage has only limited benefits in the war against poverty, due in part because relatively few of those falling below the poverty line actually receive the wage.

Many of the benefits from raising the wage, a move already undertaken by multiple governments around the country as well as some big-name companies, tend to go to higher-income families, said Neumark, who also pointed to research that shows raising wages kills jobs through higher costs to employers. Neumark is a professor of economics and director of the Center for Economics and Public Policy at the University of California, Irvine.

I’m sure that Hillary Clinton and Bernie Sanders will find a way to spin this story, as well as Ben Carson for that matter. (Rick Santorum too, now that we mention it.) But the numbers here really don’t come as any surprise when you stop to think about it. This report doesn’t deal so much with the employment impacts of a higher federal minimum wage, but more with who is getting those wages.

As the study shows, 57% of families currently below the poverty line have no members in the workforce, receiving all of their income from social welfare or entitlement programs combined with charity. A higher minimum wage has no effect on these families. Of the roughly 3 million workers who do receive the minimum wage, more than half are between the ages of 16 and 24 and are generally not the primary breadwinners in their households. Further, they found that among the families below the poverty line, nearly half (46%) are making more than the proposed $10.10 per hour already and more than one third (36%) are making 12 dollars per hour or more.

With those figures in mind, only a relatively small fraction of Americans living below the poverty line would see one extra red cent in their pockets with a higher federal minimum wage. And what can not yet be predicted is how many of those who did would be offset by the number of employers who would simply terminate unskilled labor positions to avoid the increased labor costs, moving to either more streamlined services or automation. And this is coming straight from the feds. How will the Fight for Fifteen folks and their pet Democrat candidates respond to this new information aside from abject denial? Oh, wait… the denial started already.

“The mainstream view, as illustrated by meta-surveys of the whole minimum wage research field, is that the job loss effects of raising the minimum wage are very, very small,” Paul Sohn, general counsel for the National Employment Law Project, said in an email to CNBC.com.

I’m sure the phrase “very small” will come as great comfort to the guy who loses his job operating the fry machine around the holiday season. But don’t let that bother you, guys. We’re from the government and we’re here to help.

[Property Rights Expansionist]

Piecemeal increases in the minimum wage merely attempt to restore workers to the purchasing power they had the last time the minimum wage was increased - it has always been a game of catch-up.

The proposal for a $15 minimum wage is the first effort to think and act ahead, instead of merely playing catch-up.

Having said that, I oppose increasing the minimum wage and believe the solution lies in the marketplace through greater property rights.

[KenD]

That sounds nice but HOW do you expand property rights?

[Property Rights Expansionist]

Allow property owners greater liberty to develop and transfer their property.

(1) Single-family zoning often prohibits so-called “accessory dwelling units” (ADUs) or “granny flats” which potentially could add marginal but important housing supply. Efforts to allow these in Seattle are in the process of failing due to NIMBY opposition, while San Jose has allowed properties to be developed more fully with two houses on one standard lot.

(2) Minimum lot size requirements allow homeowners to have large back yards, but what if the owner would rather put a second house in the back (like in San Jose)? What if the owner would rather sell part of the back yard to someone who wants to build a tiny house? That size requirement undercuts the owner’s property rights.

(3) Unrelated occupancy restrictions make housing unaffordable to singles by limiting their ability to split rent among multiple individuals. These restrictions should be up to the property owner, while government occupancy standards should be the same whether or not individuals are related. e.g. Nashville and Lubbock restrict unrelated occupancy to three; I know of a college town that limit it to two.

In a tight rental market - as exists today in many areas - a marginal increase in supply can have a significant economic impact.

Poor people without property necessarily depend on the property rights of others. Relying on government as the source of property rights seldom ends well for the poor.

And it might not end well for the middle class as well, if Kelo stands.

[KenD]

Another way to look at this is that "rights" come from God, or if you prefer, "rights" are those things we have simply because were alive.
Since we "allow" government to control land use, then property ownership has been relegated to being a "privilege", at least in the eyes of those that favor government.
There is a razor sharp line that we have to also consider, that being that one persons rights end where another persons begin.
Let's say, as an example, that I've just committed a significant amount of my earthly treasure to purchase a nice house in a nice neighborhood. If someone exercising their right to add whatever additional buildings they wished to add did so in a way that reduced the value of my property, they would have then trampled on my rights as a property owner.
Who arbitrates that conflict? If the answer is government, then the one-size-fits-all nature of government would eventually lead to some sort of zoning restrictions.
I suppose to sum up my reaction to your proposals would be that we have to keep in mind everyone's "rights" when we decide to make sweeping changes to "the way things are done now". I would certainly support severely limiting the use of eminent domain and I think property taxes should NOT be allowed, but when we "relax" zoning standards we need to be aware that doing so not only provides additional liberty to some property owners but it may also financially damage others.
Just so you know, I'm currently working my way around North Carolina's watershed laws in splitting my lot so that someone else can build on the ½ of my property that I don't really intend to use so I'm VERY aware of the nature of zoning rules and town requirements and the desire to make all of that bureaucracy go away.