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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 ttwtt78640 View Post
    If the employer can afford $X in total payroll (and remain competitive in the market) then the easiest means to cope with a mandate to pay all entry level workers more is to use fewer of them. The losers in that game are the least skilled skilled and lower stamina workers. If an employer must choose which workers to keep and which to terminate then they are likely to keep the best (most experienced) and fastest making it ever more difficult for others to get a start (gain that needed experience) in the workforce.
    An employer isn't going to fire someone they truly NEED.


    However, your FIRST line is the most damning for my argument, as it implies an aspect that I simply have no defense against. SMALL businesses can afford less in total payroll and still remain competitive due to their inability to take losses year after year and still retain liquidity. Larger businesses can shoulder those losses by spreading them around to the various facets of their business, facets that a small business, by definition, don't have.

    But then, typically, small businesses don't pay minimum wage...to any of their employees. It would seem, then, that the REAL solution is to kill big business.
    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

    Quote Originally Posted by KevinKohler View Post
    An employer isn't going to fire someone they truly NEED.


    However, your FIRST line is the most damning for my argument, as it implies an aspect that I simply have no defense against. SMALL businesses can afford less in total payroll and still remain competitive due to their inability to take losses year after year and still retain liquidity. Larger businesses can shoulder those losses by spreading them around to the various facets of their business, facets that a small business, by definition, don't have.

    But then, typically, small businesses don't pay minimum wage...to any of their employees. It would seem, then, that the REAL solution is to kill big business.
    That (bolded above) is true. If Joe's Rib Joint truly needs 10 employees then they must either raise prices or close the business. However the owner of Joe's may decide to reduce their staff to 9 employees if they could convince those nine employees to agree to cover the current duties of the 10th worker and, in exchange, get a commensurate increase in their own pay (say $0.80/hour) rather than have to seek work elsewhere.

    Not many businesses operate at the bare minimum staff because of staff turnover, illness, personal emergency and vacation periods, yet most can (and do) adjust for these temporary staff reductions without having to pay that current staff any more. Many employers have found that paying their better workers more not only keeps them apt to show up more often but to work a bit harder to get that next raise.

    Since only about 3% now work at the federal MW, I find it hard to believe that those particular (entry level) workers are all that indispensable and that the other 97% of the workforce would not be willing and able to work a bit harder in order to keep their jobs (and enjoy the resulting increased pay).
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

  3. #483
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    Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

    Quote Originally Posted by ttwtt78640 View Post
    That (bolded above) is true. If Joe's Rib Joint truly needs 10 employees then they must either raise prices or close the business. However the owner of Joe's may decide to reduce their staff to 9 employees if they could convince those nine employees to agree to cover the current duties of the 10th worker and, in exchange, get a commensurate increase in their own pay (say $0.80/hour) rather than have to seek work elsewhere.

    Not many businesses operate at the bare minimum staff because of staff turnover, illness, personal emergency and vacation periods, yet most can (and do) adjust for these temporary staff reductions without having to pay that current staff any more. Many employers have found that paying their better workers more not only keeps them apt to show up more often but to work a bit harder to get that next raise.

    Since only about 3% now work at the federal MW, I find it hard to believe that those particular (entry level) workers are all that indispensable and that the other 97% of the workforce would not be willing and able to work a bit harder in order to keep their jobs (and enjoy the resulting increased pay).
    I have honestly never experienced that. And I've worked a lot of places, and more than a few different fields. Understand that I am not an economist, I have not gone to school for it, etc. I simply apply logic and personal experience to it, and then try to convince all of you that I know what I'm talking about, and that you should listen to me because I'm right.


    What you say sounds like it could happen, but logic deters my agreement to your assessment. From my exp, and I have exp TWO increases in minimum wage while being in a position of power, to date, is that an employer is going to TRY to do as you described, but will, ultimately, retain the orig number of employees, and move their prices up a little, where ever possible.

    The ONLY thing in my work history that has affected total staffing like you suggest thus far in my history has been the AHCA.
    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

    Quote Originally Posted by joG View Post
    Where you are right is that the math is not really simple. But it is pretty bread and butter for professionals to do this type of work. The results are very reliable.
    Not really. Studies on previous increases in minimum wage pretty much 100% concluded that increasing min wage did not cause unemployment, mostly because there was no uptick in the unemployment rate during those time periods. So someone decides to "prove" that increases in min wage cause unemployment, and they then only study the one increase in minimum wage that happened to be the same year that the Great Recession starts.

    You don't think that may show intellectual dishonesty? There is absolutely no way to conclude that X jobs were lost due to the increase in minimum wage, when we were losing jobs like crazy due to a deep recession. If they wanted to be honest about it, they would have studied the entire history of minimum wage increases instead of looking at the single outlier.
    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 ttwtt78640 View Post
    That (bolded above) is true. If Joe's Rib Joint truly needs 10 employees then they must either raise prices or close the business. However the owner of Joe's may decide to reduce their staff to 9 employees if they could convince those nine employees to agree to cover the current duties of the 10th worker and, in exchange, get a commensurate increase in their own pay (say $0.80/hour) rather than have to seek work elsewhere.

    Not many businesses operate at the bare minimum staff because of staff turnover, illness, personal emergency and vacation periods, yet most can (and do) adjust for these temporary staff reductions without having to pay that current staff any more. Many employers have found that paying their better workers more not only keeps them apt to show up more often but to work a bit harder to get that next raise.

    Since only about 3% now work at the federal MW, I find it hard to believe that those particular (entry level) workers are all that indispensable and that the other 97% of the workforce would not be willing and able to work a bit harder in order to keep their jobs (and enjoy the resulting increased pay).
    I would think that if the employer could afford to pay the other ten workers 80 cents an hour more, that they could have afforded to keep the minimum wage worker, if they had chosen to. Anyhow, not all min wage employers operate on the margin, some make a great deal of profit. A typical McDonald's can rake in a million a year in net profit, and that's plenty enough for the owner/operator to have a nice standard of living and to not close the business, even if they find that they have to pay a little more in wages.

    The only time that an employer would absolutely HAVE to increase prices or to cut staff would be if that employer is only marginally profitable. There is certainly no law that says that business X has to make Y profit. Lot's of businesses eventually loose some profitability for one reason or another, and they do so without closing, or raising prices, or cutting employees.

    In theory, businesses always try to maximize profits, regardless of how much that profit is, so they are already operating with the optimal profit making number of employees, who are already being paid the optimal amount of wages, and prices are already set to the profit maximizing amount. If they have more employees than they need to maximize profits, or if they pay wages that are not profit maximizing, or if they are pricing above or below the profit maximizing amount, they weren't being managed very well to begin with.
    Last edited by imagep; 12-20-14 at 10:08 PM.
    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 imagep View Post
    I would think that if the employer could afford to pay the other ten workers 80 cents an hour more, that they could have afforded to keep the minimum wage worker, if they had chosen to. Anyhow, not all min wage employers operate on the margin, some make a great deal of profit. A typical McDonald's can rake in a million a year in net profit, and that's plenty enough for the owner/operator to have a nice standard of living and to not close the business, even if they find that they have to pay a little more in wages.

    The only time that an employer would absolutely HAVE to increase prices or to cut staff would be if that employer is only marginally profitable. There is certainly no law that says that business X has to make Y profit. Lot's of businesses eventually loose some profitability for one reason or another, and they do so without closing, or raising prices, or cutting employees.

    In theory, businesses always try to maximize profits, regardless of how much that profit is, so they are already operating with the optimal profit making number of employees, who are already being paid the optimal amount of wages, and prices are already set to the profit maximizing amount. If they have more employees than they need to maximize profits, or if they pay wages that are not profit maximizing, or if they are pricing above or below the profit maximizing amount, they weren't being managed very well to begin with.
    I used the $0.80/hour to represent current cost of MW Fred ($7.25/hour divided by the remaining 9 workers). I was assuming a scenario with a MW increase that cost significantly more, say raising by the MW to $15/hour - the equivalent of then having to pay MW Fred $7.75/hour more or $1.66/hour more if spread among the remaining 9 workers. In my example the total payroll remained completely unchanged but that does not mean that is the only alternative - the employer could then increase the "get rid of MW Fred" bonus offer up to $1.50/hour and still save money over keeping MW Fred on at $15/hour.
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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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
    So, in other words, you can't, you're only going to vaguely insinuate that I don't know what I'm talking about.


    It might surprise you to know that I used to be a small business owner, with 3, sometimes 4 employees, and am STILL am employer, with HUNDREDS of employees, though not for my own business. Just what, exactly, do I need, in terms of experience with the theory and practice, before I start asking different questions?
    I am glad you are doing so well. That is good to hear.

    But even in good positions in companies most employees will usually not do the math. But it works its way through the system anyway, by reducing the P/L of the supervisor or branch manager or managing director.

    This does not mean that every minimum wage will cause visible reductions of jobs. There have been a good number of studies with opposite findings. What you will always find, though, is that the impact is due to a number of contributing and limiting factors that reshuffle the costs, so that the effect is become invisible, but are felt elsewhere. Cost increases affect general competitiveness negatively, when the cost of a product is increased without increasing its qualities.

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

    Quote Originally Posted by Boo Radley View Post
    No, you did not. Do you have experience with a national economy? Explain.
    Yes. Do you?

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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
    Uh, he's not a college student, he's a business owner.
    Got me fooled.

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

    Quote Originally Posted by ttwtt78640 View Post
    I used the $0.80/hour to represent current cost of MW Fred ($7.25/hour divided by the remaining 9 workers). I was assuming a scenario with a MW increase that cost significantly more, say raising by the MW to $15/hour - the equivalent of then having to pay MW Fred $7.75/hour more or $1.66/hour more if spread among the remaining 9 workers. In my example the total payroll remained completely unchanged but that does not mean that is the only alternative - the employer could then increase the "get rid of MW Fred" bonus offer up to $1.50/hour and still save money over keeping MW Fred on at $15/hour.
    And then pray fervently that two things happen...that the reduced staff can handle the work load, which implies they were over staffed in the first place, and that their business doesn't increase at all. If business increases while they are already operating bellow minimal staffing needs, they are SCREWED.
    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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