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Virtually every study ever done says that moderate min wage increases have no, or a very slightly negative impact on unemployment. The policy is highly imperfect and has some drags but it is easily administered and overall, when the increases are moderate, it is a good policy for the poor. $15/hr won't be a big problem by the time it rolls round.
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May 10, 2015 13:50
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VitalSigns posted:Lucky you, we're actually practically there already! The US minimum wage is currently set somewhere between gently caress-you and crime-against-humanity so really all we'd have to do to be like Denmark is have the large collective bargaining agreements that they have which set even fast food jobs at almost 3 times what we make here in the USA. Why are you attributing the Danish McWage to their unions instead of market conditions? Why do (unionized) software engineers in Denmark make less money than un-unionized software engineers in California? GlyphGryph posted:Yes, I'd like to see a citation, as the arguments that it will lower employment at the rate being discussed seems to be completely illogical. I'd also like to see a citation about the price raise actually being a bad one. Sure, they're easy to find, this one just came out in one of the top 4 economics journals. Here's the WSJ condensed version of it, though if you want to read the whole paper: MaCurdy, Thomas, 2015, How Effective Is the Minimum Wage at Supporting the Poor?, Journal of Political Economy. http://www.wsj.com/articles/thomas-macurdy-the-minimum-wage-stealth-tax-on-the-poor-1424644567 quote:In a peer-reviewed study, “How Effective Is the Minimum Wage at Supporting the Poor?” (forthcoming in the Journal of Political Economy), I analyzed who won and who lost after Congress raised the minimum wage in 1996 to $5.15 from $4.25, a raise that occurred in phases over the period 1996-97. That would be comparable to raising the current minimum wage of $7.25 to nearly $8.80. The results show the failure of minimum-wage hikes as an antipoverty policy. Essentially what he did was he matched the price effects of a minimum wage increase with the consumption patterns of different income groups and found that companies responded to minimum wage increases by passing on costs, but most importantly, they passed on the costs to the poorest people in society. The really really big losers of an increase in the minimum wage were poor people who were not affected by the change.
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May 10, 2015 13:58
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Geriatric Pirate posted:Why are you attributing the Danish McWage to their unions instead of market conditions? Why do (unionized) software engineers in Denmark make less money than un-unionized software engineers in California? Assuming the premise of that article for the moment, we should simply pair minimum wage increases with increased tax credits to the poor and leverage that cost by taxing top earners. Bonus, we're giving workers more freedom to pick their employment with the tax credits which may drive wages higher naturally too, which is what you seem to want as well.
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May 10, 2015 14:17
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QuarkJets posted:If the argument is that a minimum wage increase causes a price increase, then that should be true even if the minimum wage increase is small. It's fascinating that people will continue to claim that even a small increase will result in a price increase despite all evidence to the contrary. If I burn a dollar bill theory says that will cause economy-wide deflation. A study isn't going to detect that. Sometimes the signal-to-noise ratio really is too low. We both know economic studies face this challenge and it's the case that the amount of dollars involved in typical minimum wage policy is small. Also again, according to supporters even if all of the costs are absorbed by the capitalist class minimum wage is supposed to increase overall demand . That's inflationary as well. I'll say for the 4th time that I don't consider inflation to be a major problem here. But it's certainly true that for multiple reasons minimum wage puts upward pressure on inflation. The correct answer from supporters is "who cares if its small", not "it won't happen". VitalSigns posted:"We need only count the dollars" is amazingly ignorant. This is completely wrong VitalSigns. All of it. AX^2 is exponential regardless of the value of A. By phrasing things in terms of percent increase all you did was plug in a fraction for A. Your example is a perfect illustration of exactly why it's exponential. Because the first dollar went to 1 person, the second dollar went to 2 people and the 3rd dollar went to 3 people. That's exponential and roughly matches the economy which has a similar staggered wage distribution. And finally we really do want to focus mostly on the impact itself. If my proposal changes wages by X total dollars and your proposal changes wages by 8X total dollars that's an 8X increase in impact and the impact is the thing we're going for (or trying to avoid). asdf32 fucked around with this message at 14:39 on May 10, 2015 |
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May 10, 2015 14:36
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Mo_Steel posted:Assuming the premise of that article for the moment, we should simply pair minimum wage increases with increased tax credits to the poor and leverage that cost by taxing top earners. Why would you increase the minimum wage at all? Your post doesn't make any sense or you misunderstood the article (the point wasn't that minimum wage increases weren't big enough, it's that many poor people are not affected by them but see the rising costs because they shop at businesses that use minimum wage labor). The point was that the minimum wage is a policy that helps low wage workers, who are not necessarily all poor. In response, places employing them raise prices, and it turns out that a lot of these places are actually patronized by poor people. And these poor people for the most part don't benefit from minimum wage increases (because they don't work, or work at wages above the minimum wage but have other costs etc.) So it doesn't make sense to mix it with any policy. Especially with a policy that gives tax credits to low income working people, who are already the group that is presumed to benefit from minimum wage increases. If you want to increase EITC, just vote Republican.
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May 10, 2015 15:03
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Geriatric Pirate posted:
Lmao. Sure, vote republican while they gut social services for the same people EITC benefits, if they even would pass EITC improvements at all.
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May 10, 2015 15:09
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Geriatric Pirate posted:Why would you increase the minimum wage at all? Your post doesn't make any sense or you misunderstood the article (the point wasn't that minimum wage increases weren't big enough, it's that many poor people are not affected by them but see the rising costs because they shop at businesses that use minimum wage labor). The point was that the minimum wage is a policy that helps low wage workers, who are not necessarily all poor. In response, places employing them raise prices, and it turns out that a lot of these places are actually patronized by poor people. And these poor people for the most part don't benefit from minimum wage increases (because they don't work, or work at wages above the minimum wage but have other costs etc.) So it doesn't make sense to mix it with any policy. Especially with a policy that gives tax credits to low income working people, who are already the group that is presumed to benefit from minimum wage increases. I understood the article fine, the author compared the impacts to a VAT on poor consumers, particularly unemployed poor consumers who didn't receive the benefit of the mininmum wage increase directly, so I assumed the premise and proposed that when raising the minimum wage they should also provide a tax credit to low-income consumers. It doesn't need to be a function of the EITC, it can be a negative income tax credit. Then you offset the proposed increase in prices for the non-employed poor and the employed poor while also increasing their bargaining position with potential employers even more than a regular minimum wage increase does.
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May 10, 2015 15:11
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Ignoring that study's garbage methodology, it doesn't even provide evidence for what I asked for. A 2% increase in goods is not a severe price increase when compared against a 21% increase in wages. The comparison to a regressive tax is also absolutely absurd, since the minimum wage obviously didn't increase the wages of the top earners. Of course prices will rise - prices will raise even if we just give the poor folks free money, due to increased demand. A price increase of less than the inflation value does not in any way indicate a bad price increase.
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May 10, 2015 15:14
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Mo_Steel posted:I understood the article fine, the author compared the impacts to a VAT on poor consumers, particularly unemployed poor consumers who didn't receive the benefit of the mininmum wage increase directly, so I assumed the premise and proposed that when raising the minimum wage they should also provide a tax credit to low-income consumers. It doesn't need to be a function of the EITC, it can be a negative income tax credit. Then you offset the proposed increase in prices for the non-employed poor and the employed poor while also increasing their bargaining position with potential employers even more than a regular minimum wage increase does. Or just give poor people money directly, instead of trying to give poor people money through something like the minimum wage which gives money to low wage workers (who are not all poor) and ends up hurting poor people. It's one of the worst policies available for helping poor people. GlyphGryph posted:Ignoring that study's garbage methodology, it doesn't even provide evidence for what I asked for. What the paper does is look at who gets a 21% increase in wages and who gets a 2% increase in prices. (Assuming your numbers are not pulled out of your rear end for now, they probably are though)
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May 10, 2015 16:04
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Geriatric Pirate posted:Or just give poor people money directly, instead of trying to give poor people money through something like the minimum wage which gives money to low wage workers (who are not all poor) and ends up hurting poor people. It's one of the worst policies available for helping poor people. lmao
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May 10, 2015 16:11
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Geriatric Pirate posted:Or just give poor people money directly, instead of trying to give poor people money through something like the minimum wage which gives money to low wage workers (who are not all poor) and ends up hurting poor people. It's one of the worst policies available for helping poor people.  POLITICALLY IMPOSSIBLE to just give poor people money directly, are you claiming that raising the minimum wage would harm poor people more than maintaining the status quo, wherein poor people many times have to work multiple jobs for more than 40 hours a week (sometimes approaching 60+) just to pay the bills, and there's a raft of studies that disagree with the one you just dropped in here?Here's a summary of the CBO's study that laughs in the face of your claims.
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May 10, 2015 16:25
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Ghost of Reagan Past posted:Since it is So post one other study that has actually tracked which groups of people benefit and which groups don't as a result of minimum wage increases. And you're getting confused about who actual minimum wage workers are, which seems to be a common theme among the left-wing posters here (hint: they're not all people working 3 jobs just to get by) WSJ Article posted:The first step in understanding why they won’t is to recognize that minimum-wage workers are typically not in low-income families; instead they are dispersed evenly among families rich, middle-class and poor. About one in five families in the bottom fifth of the income distribution had a minimum-wage worker affected by the 1996 increase, the same share as for families in the top fifth.
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May 10, 2015 16:29
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Are we at the point of the thread where we're defining minimum wage worker as "people working exactly $7.25/hr" instead of "anyone whose wage would go up if it was placed at $15/hr" ?
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May 10, 2015 16:32
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Ghost of Reagan Past posted:Here's a summary of the CBO's study that laughs in the face of your claims. The CBO analysis does not track who the consumers that are affected by price increases are unlike the article, therefore it is unable to as accurately look at who is affected. Secondly, the CBO analysis does not address (e: pre-existing) non-working poor people at all in their analysis of incomes (instead they look just at those laid off), while these people were the biggest losers in the Macurdy paper due to rising prices. Even there, the CBO notes that the biggest winners will not be the poorest workers but instead people making between 1.0 and 3.0 times the poverty line. Also, contrary to your earlier claims, the CBO analysis notes that people will actually lose their jobs under a minimum wage increase. Geriatric Pirate fucked around with this message at 16:40 on May 10, 2015 |
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May 10, 2015 16:36
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asdf32 posted:This is completely wrong VitalSigns. All of it. Describing it by total dollars doesn't make sense. That would imply that the same minimum wage change in a larger economy has a bigger impact on the economy because there are more workers, therefore more dollars. But, duh, the bigger economy is better able to absorb the change because it is bigger. The important thing is the percentage change in total labor costs. I have already proven to you that total labor costs are always something less than a linear function of minimum wage increases (only the limiting case, all workers are making exactly the minimum wage, is linear). You're fighting a war against middle school math and it is really bizarre to watch. If you double the minimum wage, and everyone makes minimum wage, you will double total labor costs in the economy. This is a linear relationship: y(2*x) = 2*y(x) If you double the minimum wage and some people currently make more than the minimum wage, their salaries will be something less than doubled, and total labor costs in the economy would be something less than doubled: y(2*x) < 2*y(x) (This is what actually happens) An exponential relationship would mean something like you doubled the minimum wage and total labor costs in the economy increased by some power of that: y(2*x) = 2n*y(x) If your exponential relationship is a square one, n=2, then y(x)=x2 and doubling the minimum wage would quadruple total labor costs, for example, because y(2x)=(2x)2=4x2=4y(x) These are just the definitions of the terms you are using, there's your 8th-grade algebra lesson for the day Edits: clarity & niceness Edit2: Maybe think of it this way, you say it's exponential because each dollar increase covers more people. But, when you're looking at the percentage change of total labor costs, all those people are already there, in the denominator (the current total labor costs) and you're just adding them to the numerator. As you do that, the number of people in the numerator starts to approach all workers, the relationship will more and more approximate a linear function. If we double the minimum wage, we'd expect total labor costs to less than double. If we multiplied the minimum wage by a million, we'd expect total labor costs to increase by a factor very close to a million. VitalSigns fucked around with this message at 17:12 on May 10, 2015 |
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May 10, 2015 16:50
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VitalSigns posted:Of course, in Nordic countries like Denmark, fast food workers make $20/hr, an absurd economy-destroying amount that has surely led to the worst unemployment anywhere on earth That only works in Denmark because everyone is white.
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May 10, 2015 16:58
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Geriatric Pirate posted:Since you snuck that in with an edit, let's address that separately. So just come out and tell me if you think that increasing the minimum wage is worse than the status quo. There may be better policies, but put them aside. Do you think that the negative knock-on effects outweigh the benefits of an increase in the minimum wage, or not? The CBO study seems to indicate that on balance the minimum wage increase is a good thing even taking the negative knock-on effects into account.
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May 10, 2015 17:16
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Ghost of Reagan Past posted:I have not made any such claim. The CBO study ignores a large knock-on effect pointed out in another paper, namely price increases which seem to especially affect poor people who are not making minimum wage. So yes, raising the minimum wage will hurt poor people more than increasing it.
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May 10, 2015 17:18
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Geriatric Pirate posted:The pro-$15 minimum wage people seemed to be crying for a citation that minimum wage will either lower employment or raise prices which are just as obvious. hahahahaha how are you even stupider than the guy that didn't understand how percent changes worked until yesterday
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May 10, 2015 17:47
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Increasing the minimum wage might raise food prices by 2%. Doing nothing will probably raise prices 2% in a year due to existing inflation. For some reason only the former matters?
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May 10, 2015 17:50
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I open the thread up each day thinking 'surely yesterday was the it, they can't top their stupidity today' and lo and behold GP goes and proves that he's never even walked into a Econ class at any time.
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May 10, 2015 17:51
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Raskolnikov38 posted:hahahahaha how are you even stupider than the guy that didn't understand how percent changes worked until yesterday Why do you hate the poor so much?
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May 10, 2015 17:58
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Geriatric Pirate posted:The pro-$15 minimum wage people seemed to be crying for a citation that minimum wage will either lower employment or raise prices which are just as obvious. I am afraid that the idea that you need to spend money to survive in a capitalistic society and that people tend to do the things that allow them to survive actually is significantly more self-evident than the idea that a higher minimum wage lowers employment or raises prices in any significant way. I am not going to bother to find you a source I'm sure you're capable of searching google scholar yourself. The ideology eater fucked around with this message at 18:05 on May 10, 2015 |
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May 10, 2015 18:02
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Geriatric Pirate posted:Why do you hate the poor so much? because unlike you I've taken an Econ 101 class where if even Von Mises himself taught it, would take that increasing the wealth of the bottom class of people would increase demand, as something so self-evident that it doesn't even need to be taught
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May 10, 2015 18:06
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LorrdErnie posted:I am afraid that the idea that you need to spend money to survive in a capitalistic society and that people tend to do the things that allow them to survive actually is significantly more self-evident than the idea that minimum wage increases lower employment or raise prices in any significant way. I am not going to bother to find you a source I'm sure you're capable of searching google scholar yourself. Having to spend money in a capitalistic society might be self-evident, but the idea that minimum wage workers are more likely to spend money than other people is not. Even the idea that poor people will spend more money (which didn't happen during the Bush tax rebate, they instead paid off debt) is accepted as truth, you still have to figure out what the connection between minimum wage workers (who are almost as likely to be from a household in the top 20% of income as the bottom 20%) and spending more money is. So I'll just take that as a "I can't find anything."
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May 10, 2015 18:08
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Raskolnikov38 posted:because unlike you I've taken an Econ 101 class where if even Von Mises himself taught it, would take that increasing the wealth of the bottom class of people would increase demand, as something so self-evident that it doesn't even need to be taught Which I guess is why you support a policy that lowers the real wealth of the "bottom class of people"
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May 10, 2015 18:10
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so we can add economy of scale to the big ol' list of poo poo you don't know.
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May 10, 2015 18:12
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Geriatric Pirate posted:Which I guess is why you support a policy that lowers the real wealth of the "bottom class of people" No that's not what we're arguing now, we're arguing your complete incompetence when it comes to basic economic concepts
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May 10, 2015 18:13
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Geriatric Pirate posted:Having to spend money in a capitalistic society might be self-evident, but the idea that minimum wage workers are more likely to spend money than other people is not. Even the idea that poor people will spend more money (which didn't happen during the Bush tax rebate, they instead paid off debt) is accepted as truth, you still have to figure out what the connection between minimum wage workers (who are almost as likely to be from a household in the top 20% of income as the bottom 20%) and spending more money is. So I'll just take that as a "I can't find anything." If the people spent their money influx on their debts.... doesn't it follow that an equally large share of whatever money they would have been forced to spend on those debts probably got spent on drugs or rims or something else? Isn't that spending more money even if it isn't literally the exact same money.
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May 10, 2015 18:15
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It is possible that spending habits associated with a one time small windfall might differ than for reliable income?
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May 10, 2015 18:16
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Raskolnikov38 posted:No that's not what we're arguing now, we're arguing your complete incompetence when it comes to basic economic concepts Seems like you're a bit confused by the terms "minimum wage workers" and "poor people." It's ok, even though I've highlighted the distinction about 8 times already, some are slow learners. reignofevil posted:If the people spent their money influx on their debts.... doesn't it follow that an equally large share of whatever money they would have been forced to spend on those debts probably got spent on drugs or rims or something else? Isn't that spending more money even if it isn't literally the exact same money. That's like saying if a rich person uses a boost in income to invest, you just argue that he could have used other money for consumption. I don't really want to make that specific point a big deal because it isn't, you can read the paper if you want through the NBER website or by googling the title, the key point is that not all poor people are minimum wage workers (most aren't) and not all minimum wage workers are poor.
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May 10, 2015 18:19
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Member Since Apr 25, 2008 Post Count 1408 Post Rate 0.55 per day Last Post May 10, 2015 1:19 PM
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May 10, 2015 18:20
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geriatric pirate cosplays as an american poor in his free time (ample)
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May 10, 2015 18:20
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Geriatric Pirate posted:
Firstly a wealthy person is not as obligated to invest their money as a poor person will be obligated to pay their debts and so they are not analogous. Secondly while giving the rich more money to spend WOULD be a boost to consumption (a small one) giving millions of minimum wage workers a boost would increase consumption further in a shorter period of time so while I am not against either from the onset obviously the people who should get the (hypothetical) cash are the people who would bring about the largest net benefit.
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May 10, 2015 18:25
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Popular Thug Drink posted:geriatric pirate cosplays as an american poor in his free time (ample) Well your mom gives me a discount if I act like most of her clients, so why not?
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May 10, 2015 18:25
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VideoTapir posted:That only works in Denmark because everyone is white. drat
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May 10, 2015 18:41
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Watching Geriatric Pirate jump from justification to justification each post is pretty fun.
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May 10, 2015 19:15
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Zeitgueist posted:Watching Geriatric Pirate jump from justification to justification each post is pretty fun. Why do you hate poor people by supporting a policy that makes them worse off?
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May 10, 2015 19:27
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I can't believe that anyone with a functioning brain would argue that UMC teenagers working at a McDonald's are evidence that wages have nothing to do with economic class.
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May 10, 2015 19:34
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Geriatric Pirate posted:Why do you hate poor people by supporting a policy that makes them worse off? I don't support keeping wages unlivably low so I'm not sure why you are asking me that?
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May 10, 2015 19:35
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