Posted on 11/23/2019 5:47:06 AM PST by Kaslin
A $15 minimum wage has already destroyed hundreds of small businesses and many more jobs in cities like New York and San Francisco, and – as interest grows within state and local governments – it now threatens the livelihoods of millions of workers nationwide.
New research by my colleagues and me at the American Consumer Institute examines four major labor market policies – minimum wage hikes, predictive scheduling, mandatory paid leave and joint-employer regulations – and finds these labor regulations will lead to four million fewer jobs. The study estimates that half of these job losses will result as more jurisdictions adopt higher minimum wages.
When labor costs increase, so does the cost of producing goods and providing services. In response, employers may decide to reduce work hours or cut the number of workers, causing output to decrease. Businesses also often increase prices to offset minimum wage hikes, decreasing consumer welfare and eroding families’ purchasing power.
For every job and every dollar of production lost, indirect “multiplier” effects cascade through the economy, magnifying the damage. Employers produce less and hire less, resulting in decreases in employment earnings and leaving the economy with more than one job and more than one dollar lost.
In our analysis, we calculated the economic consequences of setting the minimum wage at $15 in every state, compared to each state’s current minimum. For the 21 states that currently enforce the federal $7.25 per hour minimum wage, a jump to $15 would constitute a more than 100 percent increase. Even Alan Krueger, a prominent liberal economist and adviser to President Obama, cautioned that “a $15-an-hour national minimum wage would put us in uncharted waters, and risk undesirable and unintended consequences.”
Our results give ample reason for caution. Cumulatively, we conclude that two million jobs would be destroyed from a $15 national minimum wage, relative to employment levels under current law. In Texas, a quarter-million jobs would vanish, while Pennsylvania, Florida, California, and Georgia would also suffer significant declines in low-wage employment. Total national economic output (GDP) would decline by $187 billion, and consumers would lose $138 billion in benefits through higher prices.
These findings are in line with hundreds of studies published over the last several decades, which consistently report that minimum wage hikes reduce employment opportunities for teens and low-skill adults. Last July, the nonpartisan Congressional Budget Office estimated that a $15 national minimum wage could jeopardize up to 3.7 million jobs.
Moreover, the three metrics of economic prosperity we examined -- consumer welfare, output, and employment -- only capture part of the minimum wage’s negative effects, which include reducing training opportunities available to employees, increasing job turnover, and encouraging employers to cut back on fringe benefits. While these unintended consequences are harder to quantify and predict, their impact on low-wage employees should not be dismissed.
In addition, it is becoming increasingly clear that minimum wages are ineffective anti-poverty tools. Most poor families have no workers in the household, and so aren’t positioned to benefit from a wage boost. And among households with a minimum wage worker, nearly 9 in 10 don’t live in poverty, since much of the low-wage labor force is composed of teenagers and young adults living in middle-income households and older second-earners supplementing a partner’s income.
So, while a $15 minimum wage would have sweeping negative effects on the U.S. economy, there is little evidence that it would do much good for those it’s meant to help. In short, American small businesses, consumers, and workers will pay the price.
In the end, the basic laws of economics can’t be negated with political rhetoric or wishful thinking. Americans deserve policymakers who look beyond the hype and carefully consider the numbers. The numbers don’t look good.
But leftards don't care. Passing minimum wage laws makes them feel so good inside. Plus more unemployed causes more parasites dependent on the giverment, who will vote for dums.
However that pretty well summarizes leftist economic policy. They seem to favor policies that have 3 characteristics: centralized control/regulation; they sound good or look good on paper; and they make the leftist sheeple feel good, like they're doing something good. Problem is, they fail just about 100% of the time due to unintended or ignored obvious consequences of these policies. Leftist should never be allowed to influence policy.
The sickest thing is listening to Leftist politicians blather about helping small business when it is obvious looking at their legislative proposals that they would like nothing better than to give those kulaks a bullet to the back of the head and seize whatever loot is left.
Are you voting for Sanders or Warren?
Is thinking like this why VA has trended the way it has?
Cave to idiocy to get idiocy off the table?
When has that ever worked?
If the Left were truly concerned, or the Republicans truly wanted to address the issue, Propose and implement the folowing.
The working poor pay no taxes, Both the employer and employee share go to the employee, not the government. The same with unemployment taxes. Pay the working poor the full FRUITS OF THEIR LABOR.
his has a positive impact on the working poor, on their employers, on the customers, on the economy.
]
It has a positive political impact on whoever pushes it.
It has a negative impact on one stakeholder, the gummint.
So the question comes down to should the voters and their representatives do what is best for the people? Or best for the gummint?
I took all the overtime I could get. It would be interesting to graph a third line showing labor force availability.
I’m in Texas, where we still have the federal minimum wage, so I tip pretty generously for good service.
But when I do visit the Northeast and California, I play by a whole different set of rules. I figure that the tips are already built into the pricing, so nothing more. I see it as a way to preserve their jobs, since it’s less likely I’ll eat out if I have to tip on top of the $15 minimum wage.
BFL
The McDonald’s team in the store a couple of miles from my house prove your point. They get my order wrong one out of five times (twice in one memorable trip).
Um, no it doesn't. The graph uses a ratio, not real youth unemployment. All this shows, is that the increase in the minimum wage affected the employment landscape somewhat equally. That doesn't meant it didn't have a negative impact.
The problem I have with the $15.00 jobs is they were designed for entry level experience into the job market. Young applicants with no job experience at all. They were not designed to feed a family. IMO
How's that checkout line in your local supermarket,Home Depot,Walmart, looking these days? More auto checkouts? Fewer people operating the cash registers? Baggers? Hmmmm? Minimum wage at those spots is ZERO!!!No Vay Kay. No sick leave no coffee breaks...just work. Duh!
“How’s that checkout line in your local supermarket..”
Same here. Home Depot, Walmart, Harris Teeter etc. With the exception of Home Depot having two, Walmart, and Harris Teeter have ten and expanding. Only one employee in each to supervise the robots. Even those employees are ‘seasoned’, there before robotics installed and rotated to other parts of the store to avoid boredom.
No.
In some circumstances, nothing is wrong with it. But as a mid-level government employee getting $150,000 a year and a pension equal to that amount per year or more, it is not sustainable. And in the case where the managers failed a company miserably but still continue to get paid very high salaries, that is a problem also. Or at least I think so.
If you are an entrepreneur or in some very specialized field, it is wonderful the rewards are there.
If you are Hunter Biden sucking tens of thousands of dollars a month from the U.S. foreign aid trough, it should be jail time.
Oh ya, you’re right on target there. Up here in northern Alberta, all the government people want to make what the private sector oil and gas guys do. As you said, it’s not sustainable, all it does it drive up taxes and costs of living and hurts everyone at that point.
If (when!) the minimum goes up; all other prices will adjust to match; as they always have.
What WILL gouge you is the fact that tax recipts will go UP over all, since the higher wages will be taxed at a higher rate than now.
When you buy a $12 steak now, and you make $20 bucks and hour; the $24 steak when you make $40 bucks an hour is the same percentage.
Your $40K a year is going to be taxed at a lower percentage than your $80K will be!
Yep, dirty little secret, taxes!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.