Skip to comments.As a Matter of Fact, Minimum Wage Laws Hurt the Poor
Posted on 01/10/2018 10:29:28 AM PST by Kaslin
NO ONE LIKES to admit having been wrong. It's especially tough for members of the pundit class, whose job amounts to telling people what to think. So when National Review's critic-at-large Kyle Smith last week published a piece with the headline "We Were Wrong About Stop-and-Frisk," people noticed.
Smith and National Review are conservative. Like many conservatives, they had predicted that if New York Mayor Bill de Blasio fulfilled his campaign pledge to end stop-and-frisk the police practice of stopping, questioning, and patting down people for weapons merely because they seemed suspicious crime in the city would go up. But that's not what happened.
In the four years since de Blasio became mayor, conceded Smith, major crime has declined "to the lowest rates since New York City began keeping extensive records on crime in the early 1960s." The left-wing mayor turned out to be right about stop-and-frisk. The right-wing journal said so, and in so doing, displayed more loyalty to truth than to theory.
Following facts where they lead is a principle easier to state than to live up to, particularly when the facts upend our preconceptions. Some public-policy debates are endless because they are rooted in disagreement over fundamental principles the question of capital punishment, for example. But other disputes ought to be resolvable, at some point, by facts on the ground. Advocates of an aggressive stop-and-frisk policy were certain the only alternative was higher crime rates. They were mistaken. The honest response is to acknowledge it, and end the debate.
Another controversy that should be laid to rest is the impact of minimum-wage laws.
When government raises the lowest hourly wage at which a worker may lawfully be employed, does it help those at the foot of the economic ladder? The issue has been fought over for decades. Yet reality repeatedly renders the same verdict: Artificially hiking minimum wages makes it harder to employ unskilled workers. Raising the cost of labor invariably prices some marginal laborers out of the job market. Advocates of higher minimums may wish to ensure a "living wage" for the working poor. Yet the result is that fewer poor people get work.
Two years ago, Seattle's hourly minimum wage jumped to $13, the second hike in less than a year. Before the legislation was enacted, there had been the usual arguments pro and con. But the impact of Seattle's law is now a matter of facts, not theory. And those facts confirm what opponents of the increase had foretold: Minimum-wage hikes hurt the poor.
In a major research paper last summer, economists commissioned by the city of Seattle reported that the hike to $13 an hour caused a decline in the employment of low-wage workers. For those who remained employed, it caused a sharp cutback in hours. When the gain from higher hourly wages was set against the loss of jobs and hours, the bottom line was stark: "The minimum wage ordinance lowered low-wage employees' earnings by an average of $125 per month in 2016."
Another 2017 study, by Harvard Business School scholars, analyzed the effect of minimum wage hikes on San Francisco-area restaurants. The upshot: Every $1 increase in the mandatory minimum wage led to a 14 percent increase in the likelihood that a median-rated restaurant would go out of business. Decades of empirical research, dating back to the first federal minimum-wage law, have reached similar conclusions.
In 18 states this month, minimum wages are going up. Will those changes make unskilled workers more employable? Will the hours they work be increased? As in Seattle and the Bay Area, these questions will have answers. Soon enough, fresh data will shed even more light on the question of what happens to unskilled laborers when their labor is made more costly. Perhaps that will be the moment when someone more loyal to truth than to theory will publish an essay bowing to reality and conceding, at long last: "We Were Wrong About the Minimum Wage."
Every min. wage raise hurts everyone. It devalues the dollar.
They hurt retirees on a fixed income harder than anyone else.
....and the illiterate, and uneducated, and low or no marketable skills, dropouts and all around lazy types................
The Progressive meme on "minimum wage" is both misleading and a deliberate political tool of people like the Clintons and the Schumer/Pelosi pair in order to get votes in order to gain power over the very people they claim as subjects.
Ping for $1000.00 hourly Minimum wage solving ALL problems.
Minimum wage = $0.00 per hour.
If a prospective employer wishes to pay a stipend for an inexperienced, untrained worker until some economically valuable work product starts to come from that new hire, then that is his prerogative, an incentive for the new employee to strive to learn with all possible alacrity the fundamentals of his or her designated position.
This is “zero-based” wage scale.
EVERYTHING should be set to “zero-base”.
Paying 93,000,000 not to work hurts even more.
“Red Robin to offset minimum wage hikes by canning busboys”
They have 570 restaurants so that is what, around 6,000 or more out of work?
This isn’t even a case of unexpected consequences. These consequences were quite expected by people who understand business economics.
I used to work for minimum wage, and whenever the minimum wage was raised out hours were reduced.
What hurts the poor is a deranged immigration policy that has flooded the USA economy with millions of low-skill foreign workers.
Supply and demand.
When there is a MASSIVE oversupply of low skill labor, wages get crushed.
In Seattle they actually lost money; the employers just cut their hours.
Re: Red Robin to offset minimum wage hikes by canning busboys
Maybe the busboys should go back to Mexico?
Or does Mexico have a minimum wage, too?
The government does not have the right to set a minimum or maximum hourly rate.
Hikes in the Minimum Wage have the satisfying effect of putting more of those pesky industrious poor where they belong, on the dole where they are more likely to vote Democrat.
>>Or does Mexico have a minimum wage, too?<<
But what happens in Mexico except for the very large corporations (restaurant/supermarket chains, factories, etc.) companies do a LOT of business and employment under the table.
The corrupt unions are everywhere and they featherbed the hell out of the small businesses (outrageous time off, severance packages, health care) so small business go to the gray market or go out of business.
“Minimum wage” is “debtor’s prison” redux: if you can’t earn enough, you’re not allowed to earn anything at all.
And a thing is worth only what another will give for it, including wages for work.
No! What hurts the poor is a deranged immigration policy
Hah! Thank you for illustrating why rational debate is almost impossible today.
Yes! Minimum wage laws hurt the poor.
Yes! Insane immigration policies hurt the poor.
Those two harms are not exclusive of each other. You may rightly debate which of those two bad policies causes more harm. OTOH, to say that either one is NOT harmful, because the other one exists is consistent neither with logic nor with observed fact.
While I appreciate the joke, it's worth looking at the limits of the idea:
Average US earnings ( GDP / (population * 2000 hrs) ) is about $29/hr.
That's with _everyone_ working.
As minimum wage approaches that number, and if we tacitly assume the unemployed are receiving benefits on par with min wage, that rapidly flattens out how much the actually productive among us get to keep. Rising $minwage first adjusts the values of low- vs high-end work (revisiting the accepted value of work), then starts trimming employment (cutting jobs that just aren't worth $minwage) and moving many/most of those onto welfare, then starts killing businesses that simply can't afford that cost vs revenue ... to wit: pay for high-end jobs drops, followed by gov't raising taxes to afford welfare approximating Universal Basic Income.
Thus, at a minimum wage of $29/hr (ignoring inflation), no worker nets earnings greater than that, no unemployed nets entitlements less than that, and nobody has an incentive to work for that (much less produce significantly more on-the-books). Society collapses.
Of course, in analyzing the joke, any minimum wage over $29/hr means straight-up inflation; all prices would simply scale accordingly. GDP is a number dividing the total value of all productivity; increasing $minwage just makes those slices smaller.
TL;DR - Maximum "minimum wage" is $29/hr. At that point, society dies.
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