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Thread: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recession

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    Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

    Quote Originally Posted by KevinKohler View Post
    No matter WHAT our wage floor is set at, machines are the way of the future...AUTOMATION is the way fo the future. Which would be fine by me, honestly, with the exception of ONE tiny little problem. Machines don't buy stuff.
    I don't believe a completely automated world will happen. Employers might act like complete dumbasses from time to time, but they have to be aware of the fact that people actually have to buy what they produce.

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    Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

    Quote Originally Posted by KevinKohler View Post
    And econ class taught by who? Mises?


    The most celebrated economist of the 90's all but denounced that theory. Look it up.
    Is this your first day? Mises died in 79, lets see what he has to say...
    Mises Daily | Mises Institute
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    Minimum wage - Mises Wiki, the global repository of classical-liberal thought
    Effects of the minimum wage[edit]

    A minimum wage law is compulsory unemployment. The law says: it is illegal, and therefore criminal, for anyone to hire anyone else below the level of X dollars an hour. This means, plainly and simply, that a large number of free and voluntary wage contracts are now outlawed and hence that there will be a large amount of unemployment. The minimum wage law provides no jobs; it only outlaws them; and outlawed jobs are the inevitable result.[2]
    A minimum wage leads to a reduction in the demand for labor and an increase in the supply of labor in the relevant market usually, the market for low-skill workers. It removes the ability of some workers to compete by accepting lower wages and shuts them out of the labor force. As a result, it reduces job opportunities for these workers.
    But there are additional, hidden costs of these interventions, which are more difficult to detect but perhaps more insidious. For example, one effect of a minimum wage is to reduce the availability of on-the-job training, since more resources are required simply to hire and retain a workforce. And further interventions in the labor market (for example, safety regulations and payroll taxes) make it still more costly to employ labor. These burdens together reduce a firm's willingness to hire laborers and in the long run must reduce the number of opportunities for those laborers to acquire valuable job skills. Far from increasing opportunities for the working poor, a minimum wage actually restricts their mobility.
    Firms faced with minimum wage laws often substitute skilled for unskilled labor. A report from the Show-Me Institute offers an illustrative example: Suppose that a job can be done by either three unskilled workers or two skilled workers. If the unskilled wage is $5 per hour and the skilled wage is $8 per hour, the firm will use unskilled labor and produce the output at a cost of $15. However, if we impose a minimum wage of $6 per hour, the firm will instead use two skilled workers and produce for $16 as opposed to the $18 cost of using unskilled workers. In the "official data" this shows up as a small job loss in this case, only one job but we see an increase in average wages to eight dollars per hour in spite of the fact that the least skilled workers are now unemployed.

    Minimum wage is especially harmful for minorities. According to a study of two labor economists, Professors William Even (Miami University of Ohio) and David Macpherson (Trinity University), each 10 percent increase in a federal or state minimum wage decreased employment of white males by 2.5 percent; for Hispanic males, the figure is 1.2 percent. But among black males in this group, each 10 percent increase in the minimum wage decreased employment by 6.5 percent. The effect is similar for hours worked: each 10 percent increase reduced hours worked by 3 percent among white males, 1.7 percent for Hispanic males, and by 6.6 percent for black males. The consequences of the minimum wage for the last subgroup were even more harmful than the consequences of the recession.[4]
    Although outright racism has often been blamed as the sole cause of heavy minority teenage unemployment, it is clearly not the only factor. In the late 1940s and early 1950s, young blacks had a lower unemployment rate than did whites of the same age group. But after the minimum wage increased significantly, especially in 1961, the black youth unemployment rate has increased to the extent that in 1980s it was a multiple of the white youth unemployment rate.

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    Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

    Quote Originally Posted by imagep View Post
    That's possible.

    It could also result in a higher rate of demand, increases in business sales, expansion of business, increased profitability, more jobs, more production, and more wealth production.

    We have had enough history of increases in minimum wage that historic evidence exists to prove which set of possibilities is the most likely to happen. The past is the best predictor of the future.
    Its possible? This is widely studied and the results are clear-all thats left is spin. We know that for numerous reasons this ends up harming both the consumer and the employee. Businesses will adapt by taking finite resources and reallocating them.

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    Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

    Quote Originally Posted by US Conservative View Post
    Jesus dude.

    How about less hours worked, and less new hires?
    So scaling back a profitable business typically results in higher profits? Couldn't that be done regardless of how much the min wage is? Hell, why not just fire everyone, that should really increase profits.

    That or higher prices are the options.
    If all a business had to do to increase profits was to jack up it's price, a paper clip would cost a billion dollars today, because businesses would have already done that.

    And if an employer does NOT do that, they are less competitive and eventually may lose out to competitors because of higher operating costs.
    The left does this for votes, and if it punishes capitalists at the same time, so be it.
    No, their operating costs would be just the same compared to it's competitors. And if the competitors all jacked up their prices, then the one who didn't would capture a huge portion of market share, and it's profits would skyrocket. If the competitors all alternatively cut back on the quality of the product and customer care (but firing workers), then those competitors who did that would have a less satisfied customer base, and would lose business to those who didn't.

    You have to look at the unintended consequences. They aren't all bad, nor are they all really unintentional. The mistake you are making is that you are taking a formula, and only looking at what would happen if one variable changed. All the variables in economics are dependent and codependent on each other, thus if one variable changes, they all change. that change is not always bad.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

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    Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

    Quote Originally Posted by US Conservative View Post
    Its possible? This is widely studied and the results are clear-all thats left is spin. We know that for numerous reasons this ends up harming both the consumer and the employee. Businesses will adapt by taking finite resources and reallocating them.
    When all you do is to pick and chose which evidence you believe in, so that it matches your ideology, then things always appear to be clear cut.

    However, when one is open to finding the truth, regardless of ideology or rhetoric, nothing is "clear cut". From the preponderance of evidence offered in the studies that I have read, if anything, it's just the opposite.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

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    Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

    Quote Originally Posted by KevinKohler View Post
    Less hours worked? So you think that, due to an increase in minimum wage, people are going to suddenly consume less?


    I don't follow how you have logically come to this strange conclusion. Please explain.
    If an employers labor expenses are raised through legislation, the employer has the options of reducing the number of hours worked by each employee, or of laying off an employee. This would lead to less service and more work for the remaining employees, OR the employer could raise prices to pass on the costs, making them less competitive which also hurts them long run.

    In the end the employee, employer, and consumer are harmed by govt intervention into the employee-employer contract. This is basic econ, bro. Did you get any college?

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    Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

    Quote Originally Posted by imagep View Post
    It's not clear cut at all. From the preponderance of evidence offered in the studies that I have read, if anything, it's just the opposite.
    So despite the basic laws of economics, increasing operating costs magically benefits everyone?

    Citations, please-and not from left wing blogs.

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    Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

    Quote Originally Posted by US Conservative View Post
    If an employers labor expenses are raised through legislation, the employer has the options of reducing the number of hours worked by each employee, or of laying off an employee. This would lead to less service and more work for the remaining employees, OR the employer could raise prices to pass on the costs, making them less competitive which also hurts them long run.

    In the end the employee, employer, and consumer are harmed by govt intervention into the employee-employer contract. This is basic econ, bro. Did you get any college?
    Lol. Wow

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    Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

    Quote Originally Posted by Henrin View Post
    I don't believe a completely automated world will happen. Employers might act like complete dumbasses from time to time, but they have to be aware of the fact that people actually have to buy what they produce.

    Tell that to all of the self professed employers right here who want to pay the people they expect to buy their crap LESS.
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

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    Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

    I see no refutation of my post....so....I'm kind of wondering why you linked this?
    Quote Originally Posted by calamity View Post
    Reports indicate that everyone knew he was hauling a bunch of guns up there. But, since you brought it up, there's something which should be illegal: guns that breakdown.

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