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Thread: Minimum Wage Hikes Reduced Employment of Low-Skilled Workers

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    Re: Minimum Wage Hikes Reduced Employment of Low-Skilled Workers

    Quote Originally Posted by Redress View Post
    OK, here, let me highlight a small bit of what SD said in your quote of him: "little if any effect on jobs and employment". He is acknowledging that there could be an effect. That is not saying there is no tradeoff.

    Acording to the CBO, it is possible that a minimum wage job could increase employment. The report is linked in this thread. It is not sure, but is within the range of most likely outcomes for a raise to 9 an hour.
    No, I think you are referencing when the CBO said that a MW raise would increase income, though it would lower employment.

    CBO: Once fully implemented raising the Minimum Wage to $10.10 would reduce total employment by about 500,000 workers, or 0.3 percent, but raise total family income by $2 Bn

    Note that focusing on the positive is not denying the negative.
    No. Actually denying the negative (see: above) is denying the negative. When Person A says "oh, raising the minimum wage will increase workers pay", Person B says "yeah, but it will cost some of those workers their jobs" and Person A responds "No it won't", Person A is denying the negative.

    Just as, if pressed, I am sure you would have to admit that many people would see a standard of living increase with a minimum wage hike, that is not what you focus on, those who support a minimum wage hike focus on the positive and not the negative.
    I agree that increasing the MW would increase the standard of living for many - certainly at least in the short term. I'm just not sure we want to subsidize the less-worse-off poor at the expense of the more-worse-off poor, and I am sure as all get out that we shouldn't do it unless we've openly acknowledged what we are doing, and have good reasons why. That is my second biggest problem with advocates of MW increases - it seems that they are unwilling to acknowledge the trade offs, and honestly defend them. They prefer to insist it will be a free lunch. Anytime someone promises you that, be skeptical.

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    Re: Minimum Wage Hikes Reduced Employment of Low-Skilled Workers

    Quote Originally Posted by Fruityfact View Post
    How so?
    Because you've increased the wages of some at the cost of jobs of others, but increased inflation to absorb the wage increases.

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    Re: Minimum Wage Hikes Reduced Employment of Low-Skilled Workers

    Quote Originally Posted by Lursa View Post
    I dont understand that statement. Can you please explain it further?
    He is pointing out that if demand for labor were perfectly inelastic, labor could demand any wage it pleased.

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    Re: Minimum Wage Hikes Reduced Employment of Low-Skilled Workers

    Quote Originally Posted by cpwill View Post
    He is pointing out that if demand for labor were perfectly inelastic, labor could demand any wage it pleased.
    Thanks. I will look again with that context.
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    Re: Minimum Wage Hikes Reduced Employment of Low-Skilled Workers

    Quote Originally Posted by cpwill View Post
    Because you've increased the wages of some at the cost of jobs of others, but increased inflation to absorb the wage increases.
    It is illogical to think that inflation will completely or even meaningfully cover the cost of the increase in wage.
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    Re: Minimum Wage Hikes Reduced Employment of Low-Skilled Workers

    Quote Originally Posted by Fruityfact View Post
    It is illogical to think that inflation will completely or even meaningfully cover the cost of the increase in wage.
    Cost, or benefit?

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    Re: Minimum Wage Hikes Reduced Employment of Low-Skilled Workers

    Quote Originally Posted by cpwill View Post
    Cost, or benefit?
    Sorry yea, that was worded poorly on my party
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    Re: Minimum Wage Hikes Reduced Employment of Low-Skilled Workers

    Quote Originally Posted by cpwill View Post
    No, I think you are referencing when the CBO said that a MW raise would increase income, though it would lower employment.

    CBO: Once fully implemented raising the Minimum Wage to $10.10 would reduce total employment by about 500,000 workers, or 0.3 percent, but raise total family income by $2 Bn
    No. Read the report, all of it. To quote the report, for an increase to 9 an hour:

    There is about a two-thirds chance that the effect would be in the range between a very slight increase in employment and a reduction in employment of 200,000 workers, in CBOs assessment.
    No. Actually denying the negative (see: above) is denying the negative. When Person A says "oh, raising the minimum wage will increase workers pay", Person B says "yeah, but it will cost some of those workers their jobs" and Person A responds "No it won't", Person A is denying the negative.
    Not what he said though.

    I agree that increasing the MW would increase the standard of living for many - certainly at least in the short term. I'm just not sure we want to subsidize the less-worse-off poor at the expense of the more-worse-off poor, and I am sure as all get out that we shouldn't do it unless we've openly acknowledged what we are doing, and have good reasons why. That is my second biggest problem with advocates of MW increases - it seems that they are unwilling to acknowledge the trade offs, and honestly defend them. They prefer to insist it will be a free lunch. Anytime someone promises you that, be skeptical.
    Now we are getting to real arguments. Here is my counterpoint: again using the CBO report, the largest job loss likely to happen is about 1 million short term, assuming an increase to 10.10(the 2/3 probability range for that increase is actually a "very slight decrease" to a decrease of 1 million). Note that this is in the short term and jobs levels will return to the norm over time. In contrast, 16.5 million people are working for less than 10.10, so they would see a raise of some amount. Or to put it another way, for every job lost, over 15 people see their standard of living increase. This does not include those who see a raise from the ripple effect, which would increase, probably dramatically, those who see at least a modest pay raise. Everything is about tradeoffs. To me, that sounds like a worthwhile tradeoff. Slightly harder to find a job for awhile, but when you get it, it pays more, and importantly, more relative to the cost of living.
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    Re: Minimum Wage Hikes Reduced Employment of Low-Skilled Workers

    Quote Originally Posted by Redress View Post
    No. Read the report, all of it. To quote the report, for an increase to 9 an hour:
    I did read the report. Citing the section where they stated that a lower increase would simply cost fewer jobs than a greater increase sort of only reinforces my point.

    Not what he said though.
    Alright. Show me where he admitted that increasing the MW would reduce the demand for labor at the lowest income.

    Now we are getting to real arguments. Here is my counterpoint: again using the CBO report, the largest job loss likely to happen is about 1 million short term, assuming an increase to 10.10(the 2/3 probability range for that increase is actually a "very slight decrease" to a decrease of 1 million). Note that this is in the short term and jobs levels will return to the norm over time.
    That is not what the report states:

    ...The change in employment of low-wage workers also differs over time. At first, when the minimum wage rises, some firms employ fewer low-wage workers, while other firms do not; the reduced employment is concentrated in businesses and industries where higher prices result in larger reductions in demand. Over a longer time frame, however, more firms replace low-wage workers with inputs that are relatively less expensive, such as more productive higher-wage workers. Thus, the percentage reduction in employment of low-wage workers is generally greater in the long term than in the short term...

    Which matches what I said above - by accelerating the process of automation and increasing the incentive to innovate in that space, you create a worse situation than the "well they may have lost those jobs in a few years anyway" scenario that was given in response.

    In contrast, 16.5 million people are working for less than 10.10, so they would see a raise of some amount. Or to put it another way, for every job lost, over 15 people see their standard of living increase. This does not include those who see a raise from the ripple effect, which would increase, probably dramatically, those who see at least a modest pay raise. Everything is about tradeoffs. To me, that sounds like a worthwhile tradeoff. Slightly harder to find a job for awhile, but when you get it, it pays more, and importantly, more relative to the cost of living.
    Two items:

    1. the people most likely to be laid off are the least-skilled, least-experienced, least-educated, who are also least-likely to be able to find a job at the new rate. In the ladder of life, you've taken the shortest people and told them to jump the most to reach the bottom rung.

    2. The cost of living will increase as well. Not all, but some (relative portion will likely differ by business model and industry), of the increased costs will be reflected in increased prices.


    and a final point: If we argue (and liberals make this argument convincingly) that society should be measured by how we treat The Least Of These, then I think it is worth arguing that we should not be completely screwing the poorest person in a group of 16 to hook up the other 15 with a couple of extra bucks an hour. I am not willing - and I think most folks would not be willing - to actively screw over the poorest of the poor to subsidize anyone, even slightly wealthier poor. It's worth noting in that context that 73.8% of the real wage increases will go to families who are already above the poverty line. However, I understand that some will not agree with that, placing greater emphasis on the net gain. I do appreciate the recognition, acceptance, and defense of the trade-off.

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    Re: Minimum Wage Hikes Reduced Employment of Low-Skilled Workers

    buck;1064200567]Here is an example of what occurs, from an article on CT:
    In Connecticut, some minimum-wage workers say raise hasn't helped much - LA Times
    You're source sites the opinion of ONE person, who is complaining that raising the minimum wage hasn't done ENOUGH to help. Hasn't really changed her life...why? Because she is a young single mom in CT...which means she gets about 10K per year in aid.

    "Because you're raising the cost of hiring, you can get this unintended consequence where some of the people on the margin have their hours reduced," he said.

    When Segui began working at Dunkin' Donuts, she was scheduled for 35 hours a week. A few months ago, she and other workers starting getting fewer hours. She now works from 20 to 27 hours a week.
    THAT is the result of the AHCA enacting it's true goal...to redefine the full time work week as being 30 hours. And yeah, THAT is evident in almost every low skill job you see...just about no one, anywhere in retail, is allowed to consistently schedule their employees for more than 27.5 hours per week, UNLESS they are classified by the company as being full time. Minimum wage increases have done absolutely NOTHING to affect that, though. Barking up the wrong tree.
    More important, though, I'm sure you'll agree, is what occurs in more than one individual or job location - i.e. at the state level. Here is how it effected workers in CT:
    How Minimum Wage Increased Unemployment and Reduced Job Creation in 2013 | Research | American Action Forum


    Min wage at the time of the study: $8.25
    unemployment rate increase due to MW over federal level - total population: 1.48%
    unemployment rate increase due to MW over federal level - Teenagers: 4.67%

    This is called correlation = causation fallacy. Your opinion piece does not provide any insights OTHER than some states with higher minimum wage have higher unemployment. It goes into NO details whatsoever about which, specifically, those states are, it goes into no details about poverty levels, it goes into no details about specific states economic realities (like, SOME states have oil, some don't, SOME states got rocked MUCH harder by 2008 than others, etc)

    In short, this was a half baked opinion article from the American Action Forum. The moment you want to pony up with some REAL data, feel free.
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