Posted on 08/16/2019 6:30:54 AM PDT by central_va
With the “Fight for $15 External link ” making headlines, opinions abound about whether raising the federal minimum wage will have a positive or negative effect on unemployment rates. Advocates of an increase cite the impossible task of making ends meet on today’s paltry sum of $7.25 an hour and say an increase would have little effect on the overall economy. Those against such a move predict that doing so would cause employers to lay off more and hire less—raising unemployment rates as a result. As is often the case with such emotionally charged issues, especially in an election year, the broader conversation about the minimum wage tends to involve more feeling than historical fact. To balance such a dynamic, we decided to turn to the data to see what it reveals.
(Excerpt) Read more at onlinebusiness.syr.edu ...
OP has been unfailingly wrong on every economic issue in his observable history.
this is just more economics fail.
next.
But the correlation to consider is not the overall unemployment rate since most categories of employment are not at or close to minimum wage. In addition, in markets where entry level jobs already pay more than minimum wage the statutory minimum wage is irrelevant to employment, or even the choice of who gets employed.
So having picked the wrong data to analyze it isn't surprising that the results are inconclusive. It isn't really a surprise that overall unemployment rates aren't correlated with a factor which in any circumstance would only affect a small minority of the population.
The effects of setting a statutory minimum wage occur when the market price for labor for those entry level tasks is lower than the statutory minimum, or when the statutory minimum wage is high enough that it results in strategy changes by the employers.
I don't think anyone thinks that there is no correlation between a statutory minimum wage and employment levels for the kind of jobs where the minimum wage is relevant. There would be no point in having a statutory minimum wage if there was not a belief that employers would pay less, and employees would take jobs at prices below the proposed statutory minimum. On the other side, I think there is widespread agreement that a statutory minimum wage of say, $200 per hour would result in many businesses either being unable to afford to hire a worker, or replacing the entry level employees with someone much more highly skilled, or a machine.
So the correlation obviously exists. The policy debate is around how much of an effect minor changes in the statutory minimum wage cause. In good economic times those effects tend to be masked by the market prices being above the statutory minimum for many entry level job providers.
A more interesting question is how we can get back to the circumstances in the late 1960s and early 1970s where even fairly unskilled jobs were far more profitable than they are now, and living expenses, particularly real estate costs and bank interest costs were far less.
The latest comes from the casual dining chain Restaurants Unlimited Inc. which has just filed for bankruptcy proceedings. Corporate officers in the filing have stated that the primary reason for the chain’s struggles rests primarily with it grappling with new minimum wage laws. The correlation is not deniable.
The restaurant brands operated by RU are primarily in the Seattle area, where the minimum wage hike was long ago established. Other locations exist in the liberal strongholds along the Pacific coast, including San Francisco, another MW-15 enclave. The salary requirements have been a drain, since employment costs are always the highest expense for eateries.
In the court papers the company’s Chief Restructuring Officer, David Bagley, cited a number of influences on the corporate revenue stream, with the mandated wage hikes being the biggest strain on the company.
“Over the past three years, the company’s profitability has been significantly impacted by progressive wage laws along the Pacific coast that have increased the minimum wage,” Bagley said. “As a large employer in the Seattle metro market, for instance, the company was one of the first in the market to be forced to institute wage hikes.”
https://www.redstate.com/bradslager/2019/07/11/663739/
Yes I looked at the pretty little graphs and laughed! Why? Because my business background of owning small businesses for over 45 years and dealing with the impacts of government laws.
I think the claim has been that raising the minimum wage shuts out those who would normally be entering the job field for the first time and low skilled workers. Those who have the greatest need for a first step into employment. So it is not so much an unemployment problem but a who will be unemployed problem.
This is fake news and really corrupt scholarship.
If there is no correlation Between unemployment and the minimum wage, if the minimum wage were moved to $500/hour, there should be no change in the unemployment rate. Does anyone think that it would be the case?
I prefer the market to sort it out. Establishing a minimum wage interferes with the supply side of the economy. Consumers count too.
This is what I am talking about. The idea of raising the min wage to $500/hr is just a ridiculous as keeping it at $7.25/hr. It makes the right wing sound extremist and out of touch.
I am not surprised at all by this. I do not think that Capitalism requires peonage to work. But, cheap labor does help some people! The people paying them. The rest of us - not so much.
The labor market has been manipulated DOWNWARD with unmitigated LEGAL immigration to the point where the American workers are drowning. The Chamber of Cheap Labor wants to set wages by flooding the zone so I don't want to hear about free labor markets. That is a joke. If the min wage was raised it would reduce the pressure to import unskilled labor to work at the current $7.25/hr. It's a racket, why can't everyone see this?
If that were truly the case then why not make the minimum wage 50.00 per hour?
Wow, you get it. I am surprised because Free Republic is becoming the Jurassic park of the right wing.
Labor is only part of the market. By free market I mean the whole bit. I don’t want to see unthrottled or illegal immigration any more than a minimum wage.
You’re right about the racket. It all needs to go.
Uh, because $50.00 per hour is not the minimal amount it takes for a person to keep body and soul together? Really, what you said is sort of a “Squirrel!” argument. We live in a society where things have a general cost - a utility bill, apartment rent, a basic car note, a loaf of bread. So why would you ignore reality to make a specious and unrealistic statement?
Context, context, context.
What was not factored in was regardless of the official “unemployment” rate, what was the GDP doing - was the economy growing or not. The unemployment rate falls, regardless of minimum wage if the economy grows so that labor demand increases. Unemployment rate grows, regardless of minimum wage, if the economy is contracting and labor demand falls.
You CANNOT compare the real impact of the minimum wage if you are only comparing it with the unemployment rate. That is NOT a complete economic context for the minimum wage.
The silly statement (and I will not honor with the term “argument”, is simply that - a presumption that a minimum wage is some sort of totally arbitrary amount plucked out of thin air by bleeding heart liberals and commies. Of which, I am neither. I am the sort who thinks Attila the Hun was too nice. But, a MINIMUM wage is not an arbitrary amount, not down at the $15-$16 level. That would be about $600 per week gross, if the person worked 40 hours. And remember, a lot of poor folks only get 28 hour weeks to avoid giving them any benefits like medical insurance, pensions, and vacations.
Plus, if you really love the Constitution, it forbids PEONAGE!
(The idea of raising the min wage to $500/hr is just a ridiculous as keeping it at $7.25/hr. It makes the right wing sound extremist and out of touch.)
I was just using a counter-example to show how bogus the study was. The University was essentially saying that the minimum wage does not affect the unemployment rate! It’s like saying that prices do not affect demand for items! I don’t know what type of economics that is!
(If the min wage was raised it would reduce the pressure to import unskilled labor)
Two wrongs don’t make a right. A business that’s willing to hire illegal immigrants (already against the law), would not care about meeting minimum wage laws. We should just shut down illegal immigration, partly by enforcing those laws against employers who hire them.
“paltry sum of $7.25 an hour”
They are already calling for $20 per hour! Give them a little time and it will be $30. It will always go up. When the first increase fails, they call for a second. That will fail too, and they will demand more, leading to another failure.....(repeat until doomsday.)
Academia is full of academics.
ACADEMIC: An individual educated beyond his intelligence who is unable or unwilling to create or provide goods or services of value to others, who pontificates and expects to be paid for it, usually from public funds.
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.