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

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

Deuce said:

The increase in prices is not the same percentage as the increase in wages.

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Agreed. When I said they would be in relatively the same potion.. that's long term. They'll still be poor, and complaining in the not too distant future about how their (now) $15 an hour no-skilled min wage job doesn't allow them to take care of a family.

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

Boo Radley said:

What should happen is a lowering of prices or them staying the same as business will likely increase.

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So.. According to you, their labor costs go up, they get busier, they hire more (at the now higher wage) and magically reduce prices. :roll:

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

buck said:

Agreed. When I said they would be in relatively the same potion.. that's long term. They'll still be poor, and complaining in the not too distant future about how their (now) $15 an hour no-skilled min wage job doesn't allow them to take care of a family.

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They'd be better off at $15/hour than at $7.50/hour. Period.

Plus, this relieves some of the taxpayer burden that goes to helping support minimum wage workers. America spends billions of dollars subsidizing Walmart and McDonald's employees.

"They should just get better jobs" is something only a child would suggest.

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

buck said:

I'm sure it's just a coincidence that the states that raised their minimum wage the highest just happened to be the states that saw the worse employment opportunity for those of lower skill. I'm sure those two situations really have nothing to do with each other and employers don't find other ways to handle an effective wage increase of 30%.

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from the article.

As they write, "with sixty-four studies containing approximately fifteen hundred estimates, we have reason to believe that if there is some adverse employment effect from minimum wage raises, it must be of a small and policy-irrelevant magnitude."

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

ChezC3 said:

from the article.

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That's according to:

Deakin University's Hristos Doucouliagos and Hendrix College's T.D. Stanley

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From their 6 year old study aggregating many of the studies on minimum wage impacts, where they found there is downward pressure:

The conclusion they reached:

but with more of those estimates showing a slight downward pressure on employment.

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We now have an additional study showing the impact of MW increases during the recessions that cost 1 million jobs. Not so small or policy-irrelevant.

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

Deuce said:

They'd be better off at $15/hour than at $7.50/hour. Period.

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According to this study, one million of them are better off at $7.50/hour that at $0 per hour. Period.

Plus, this relieves some of the taxpayer burden that goes to helping support minimum wage workers. America spends billions of dollars subsidizing Walmart and McDonald's employees.

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Another 1 million added to those welfare rolls.

"They should just get better jobs" is something only a child would suggest.

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We should just give them more so they can raise families while flipping burgers, is something only a child would suggest.. You know, when they still believe money grows on trees.

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

danarhea said:

Um, that increase in the minimum wage came during the Bush administration. So you think Bush is a progressive? :mrgreen:

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I guess y'all are going to have to wuit crying about him all the time.

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

buck said:

Good thing we have studies to determine what really occurred rather than just taking what Kevin thought occurred as gospel.

This study, whether you choose to believe it or not, determined that about 15% of the lost jobs were due to the minimum wage hikes.

So while that decline may look like it was all recession, in reality it was around 15 percent due to the minimum wage, according to this paper.

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So I actually combed through the entire report (being the meticulous guy that I am), and all I saw was one GIANT correlation equals causation fallacy.

At no point did I find a SINGLE employer explain how an increase in the minimum wage meant they decreased their work force.

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

twixie1 said:

Our national minimum wage is £6.50 an hour..$10.22..Then tax and national insurance are taken out..(without your permission, before you receive your wages!)which gives you £940 a month after tax..

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That's a much better deal than the American min wage worker gets.

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

buck said:

I'm sure it's just a coincidence that the states that raised their minimum wage the highest just happened to be the states that saw the worse employment opportunity for those of lower skill. I'm sure those two situations really have nothing to do with each other and employers don't find other ways to handle an effective wage increase of 30%.

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Correlation =/= causation.

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

Fletch said:

If you think about it, it would actually create jobs. There is really no question about that.

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No it wouldn't. How would it create jobs? Do employers hire employees because it's cheap, or cheaper, to do so, or do they hire employees because they have **** for those employees to do? Think this through.

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

whysoserious said:

If you cared about the working poor, you would want less of those jobs. Working those jobs is an accurate description of what Hell must be like.

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Yeah, under educated, unskilled people should just be allowed to walk right into higher skill level jobs with no prior experience.

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

buck said:

Much better to be unemployed I'm sure.

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In our current environment, in some states....sadly, yes.

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

Fletch said:

If you think about it, it would actually create jobs. There is really no question about that.

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Why would less money in the hands of those who are most likely to spend every penny that they get create more jobs?

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

whysoserious said:

Is it? There is no shortage of these jobs. Has anyone, ever in the history, not been able to find a minimum wage job for an extended period of time? I don't think it's a big concern. No one is out there going, "God dammit, I can't get a job paying minimum wage at McDonalds or Walmart anymore!".

But hey, it's their bed so they should lay in it right? If they just worked harder they could have a better job anyway.

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McDonalds hasn't paid minimum wage in years.

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

buck said:

They make more causing higher prices to cover the increased labor costs. The poor are in the same (relative) spot they were in (after a little time has passed) ... and the middle class, whose dollars will now purchase less, are in a worse spot.

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History says otherwise.

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

buck said:

Agreed. When I said they would be in relatively the same potion.. that's long term. They'll still be poor, and complaining in the not too distant future about how their (now) $15 an hour no-skilled min wage job doesn't allow them to take care of a family.

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Agreed. But short term, they'll buy the latest smart phone.


We are a consumer economy. More consumption = better economy.

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

buck said:

They make more causing higher prices to cover the increased labor costs. The poor are in the same (relative) spot they were in (after a little time has passed) ... and the middle class, whose dollars will now purchase less, are in a worse spot.

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That's too simplified a look at the issue.

If labor costs are, say, 20% of the cost of an item, and labor costs increase 30%, the cost goes up 6% and we can assume prices follow roughly the same. So the workforce gets a raise of 30%, and prices go up 6%. That's not a bad deal, and it assumes that businesses can pass along all increases in costs dollar for dollar to their customers, which is doubtful. Likely there is some shifting of costs (higher prices), with profits taking some hit.

And in the meantime, that employee spends an extra (net of price increases) 24% on other goods, etc.......

Not saying there isn't an employment effect when the minimum wage goes up (not sure either way), but we can't assume the poor are left no better off with raises. Those with a job are very, very likely to see significant increases in their standard of living.

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

JasperL said:

That's too simplified a look at the issue.

If labor costs are, say, 20% of the cost of an item, and labor costs increase 30%, the cost goes up 6% and we can assume prices follow roughly the same. So the workforce gets a raise of 30%, and prices go up 6%. That's not a bad deal, and it assumes that businesses can pass along all increases in costs dollar for dollar to their customers, which is doubtful. Likely there is some shifting of costs (higher prices), with profits taking some hit.

And in the meantime, that employee spends an extra (net of price increases) 24% on other goods, etc.......

Not saying there isn't an employment effect when the minimum wage goes up (not sure either way), but we can't assume the poor are left no better off with raises. Those with a job are very, very likely to see significant increases in their standard of living.

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It occurs to me that if employers can pass along the cost of higher wages, then there is no need for a loss of jobs.

Alternatively, if they can decrease the number of workers, then there is no need for inflation to result from higher wages.

I don't understand why some people will argue that a higher min wage would cause both, or why when you defeat their argument about one of those options, they jump over to the other.

And what they totally ignore are all the other factors such as the cost savings to business due to an increase in economy of scale that ocures when demand increases. "Unintended consequences" are not always unintended, nor are they always bad.

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

KevinKohler said:

So I actually combed through the entire report (being the meticulous guy that I am), and all I saw was one GIANT correlation equals causation fallacy.

At no point did I find a SINGLE employer explain how an increase in the minimum wage meant they decreased their work force.

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From the little I can read (only the synopsis at NBER) it sounds well reasoned and encompassing enough to reach some valid conclusions.

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

JasperL said:

That's too simplified a look at the issue.

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Of course it is. I wasn't trying to write a long diatribe on the subject. However, basically and simply, no matter what we raise min wage to, in x number of years those making minimum wage will be back saying they can't afford to raise a family on that new dollar amount.

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

buck said:

Of course it is. I wasn't trying to write a long diatribe on the subject. However, basically and simply, no matter what we raise min wage to, in x number of years those making minimum wage will be back saying they can't afford to raise a family on that new dollar amount.

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And that would be a good thing, because it would indicate that the median standard of living has increased.

There is nothing bad about an increasing standard of living.

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

buck said:

We should just give them more so they can raise families while flipping burgers, is something only a child would suggest.. You know, when they still believe money grows on trees.

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Their labor, by definition, has surplus value. The money exists, you just don't want it distributed the same way I do.

Uh oh, I used the scary "D" word. Before you go off on a tangent about socialism, just stop right there. This isn't about socialism.

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

imagep said:

And that would be a good thing, because it would indicate that the median standard of living has increased.

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For some, temporarily anyway. For others (a million according to this study) not so much.

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

buck said:

From the little I can read (only the synopsis at NBER) it sounds well reasoned and encompassing enough to reach some valid conclusions.

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The Minimum Wage and the Great Recession: Evidence of Effects on the Employment and Income Trajectories of Low-Skilled Workers | Heartland Institute


It's a link to a link. The entire study is linked on this site. What you'll gather after going through it is that their study is based on the premise of higher labor cost = lower employment. In other words, the entire study is completely flawed. What you'll also notice is that they provide not one tiny shred of evidence to support that premise.

Why? Because it's completely illogical. Employers employ ONLY because they have too much work to get done for just themselves. At that point, it's either deny business, of hire. Period. Cost of hiring never even enters into the equation, because ultimately, it's the ONLY way to grow the business. Otherwise, there would be NOTHING but sole ownership, employee count of one businesses out there. It doesn't matter if the minimum wage is .01 cents per hour, or 20 dollars per hour, employers only hire the absolute minimum staff needed to get the work done. The only thing that changed in the recession is that businesses went OUT of business due to a lack of demand, not overpriced employees, which created a surplus of laborers looking for work. Which, of course, meant that employers could work their existing employees harder, because there WERE no better jobs for them to leave to.

But hey, don't take my word for it, lol. Go find another "study".

Food for thought...


Since it's inception, the minimum wage has been hated and reviled by people like you. And predicted to cause disaster after disaster. Now, it's been around a for a little while. And so far, the only economic disasters that have happened have NOT been the result of minimum wages.