From tax breaks, through GMI, to FULL COMMUNISM - poverty elimination station

The Something Awful Forums > Discussion > Debate & Discussion > From tax breaks, through GMI, to FULL COMMUNISM - poverty elimination station

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tsa: Feb 3, 2014

QuarkJets posted:

I've taken asdf32's graph and placed red tick marks wherever we were in the middle of rapidly changing the minimum wage (eg whenever there were increases for several years in a row, I used the median year). Let's take a look:

I'm seeing a strange coincidence; whenever we increase the minimum wage, corporate profit as a fraction of GDP most often hits an inflection point. This suggests that corporate profits usually decrease whenever there's a minimum wage increase.

This could be coincidental. It's difficult to deconvolve the effect of minimum wage from the typical boom/bust cycles that an economy goes through. This is also a measurement of all corporations, most of which don't hire many minimum wage workers, so there's additional noise there.

You are seeing what you want to see dude, there's no statistical evidence to support that claim.

# ? Jun 19, 2015 21:14

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# ? May 15, 2024 02:02

Zeitgueist: Aug 8, 2003; by Ralp

tsa posted:

Well they certainly think they are.

They might be getting that idea from the whole repeatedly being backed up with data and being met with Econ 101 thing I dunno.

# ? Jun 19, 2015 21:29

Zeitgueist: Aug 8, 2003; by Ralp

Zeitgueist posted:

They might be getting that idea from the whole repeatedly being backed up with data and being met with Econ 101 thing I dunno.

As a reminder leftists werent the ones earnestly caring about Arthur Laffo

# ? Jun 19, 2015 21:30

QuarkJets: Sep 8, 2008

tsa posted:

You are seeing what you want to see dude, there's no statistical evidence to support that claim.

I agree. I never claimed that there was, I just made an observation

# ? Jun 19, 2015 21:39

VitalSigns: Sep 3, 2011

tsa posted:

The thing is people are just accepting the studies that support their biases, while rejecting any that do not.

Where's that metastudy that showed the claimed disemployment effects of the minimum wage were actually a result of selection bias, and the true effect is very close to zero?

# ? Jun 20, 2015 02:29

Zeitgueist: Aug 8, 2003; by Ralp

VitalSigns posted:

Where's that metastudy that showed the claimed disemployment effects of the minimum wage were actually a result of selection bias, and the true effect is very close to zero?

Click here for this one weird incredibly comprehensive metastudy that econ 101 idealogues hate.

# ? Jun 20, 2015 02:46

Ardennes: May 12, 2002

Zeitgueist posted:

Click here for this one weird incredibly comprehensive metastudy that econ 101 idealogues hate.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=630515

Moreove here is a further study that shows quite accurately that food service prices only increased .7% after 10% increase in the minimum wage, therefore while food prices increased they didn't enough to seriously effect affordability.

Ardennes fucked around with this message at 12:01 on Jun 20, 2015

# ? Jun 20, 2015 11:27

wateroverfire: Jul 3, 2010

Ardennes posted:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=630515

Moreove here is a further study that shows quite accurately that food service prices only increased .7% after 10% increase in the minimum wage, therefore while food prices increased they didn't enough to seriously effect affordability.

Was that your primary take-away from the study? If so you should go back and read it carefully again.

First, because that doesn't accurately characterize their empirical results. The authors found that price increases were greater where the minimum wage was more of a binding constraint (in limited service more than full service restaurants, for instance, and where the prevailing wage level was closer to the federal minimum). And their theoretical model implies that the higher the wage floor is relative to the prevailing compensation, the greater will be the price response. It is literally as standard as it gets.

Second, though, reporting price effects is not the point of the paper. The authors are trying to test whether it's more appropriate to model labor markets as monopsonistic or competitive. That question being interesting (outside of the academic context, where it's interesting for its own sake) because if one theoretical framework predicts better than another that has implications for things like how we should think about minimum wage changes that are out of sample and can't be examined empirically.

The significance of the empirical findings is that price increases are weakly inconsistent with a monopsony model. If monospony were the relevant framework it would be expected that employment would increase, or prices decrease, with a minimum wage hike if the minimum wage was a binding constraint. Since prices increased and employment stayed about level, one of two things is true. Either the market studied was competitive rather than monopsonistic, or the market was monopsonistic but the minimum wage increased wages above the theoretical perfectly competitive wage, in which case the market's behavior wrt the min wage hike would have been the same as under a competitive framework. The argument is more complex so definitely read the paper. =) The authors are also able to test several competing explanations for the observed market behavior, such as endogenous effort, adjustment from non-wage to wage compensation, and redistribution of wages from high earners to low earners. The only one that seemed to have any predictive power was the wealth effect generated by fast food workers having more money to spend on fast food, which accounted for part of the variance from the theoretical predictions.

@archangel: I know I owe you a response. I've been pretty busy but I'll get around to it this weekend, hopefully.

# ? Jun 20, 2015 14:25

Ardennes: May 12, 2002

wateroverfire posted:

Was that your primary take-away from the study? If so you should go back and read it carefully again.

First, because that doesn't accurately characterize their empirical results. The authors found that price increases were greater where the minimum wage was more of a binding constraint (in limited service more than full service restaurants, for instance, and where the prevailing wage level was closer to the federal minimum). And their theoretical model implies that the higher the wage floor is relative to the prevailing compensation, the greater will be the price response. It is literally as standard as it gets.

Second, though, reporting price effects is not the point of the paper. The authors are trying to test whether it's more appropriate to model labor markets as monopsonistic or competitive. That question being interesting (outside of the academic context, where it's interesting for its own sake) because if one theoretical framework predicts better than another that has implications for things like how we should think about minimum wage changes that are out of sample and can't be examined empirically.

The significance of the empirical findings is that price increases are weakly inconsistent with a monopsony model. If monospony were the relevant framework it would be expected that employment would increase, or prices decrease, with a minimum wage hike if the minimum wage was a binding constraint. Since prices increased and employment stayed about level, one of two things is true. Either the market studied was competitive rather than monopsonistic, or the market was monopsonistic but the minimum wage increased wages above the theoretical perfectly competitive wage, in which case the market's behavior wrt the min wage hike would have been the same as under a competitive framework. The argument is more complex so definitely read the paper. =) The authors are also able to test several competing explanations for the observed market behavior, such as endogenous effort, adjustment from non-wage to wage compensation, and redistribution of wages from high earners to low earners. The only one that seemed to have any predictive power was the wealth effect generated by fast food workers having more money to spend on fast food, which accounted for part of the variance from the theoretical predictions.

@archangel: I know I owe you a response. I've been pretty busy but I'll get around to it this weekend, hopefully.

Your not responding to my point.

When I link to a study I am providing a source, not necessarily a summary. My point in linking it is to show evidence of how price increase work in a national setting, and in this case we are talking about just a particular applicable example. Either way the central point is the nature of affordability and in general the price increases they found have been (predictably) not problematic. While fast service had larger increases (1.55%), ultimately they don't seem to be enough to truly an issue. (Even if they more or less assume price increase will generally pass though, but there is enough generalization in their model to be skeptical especially in the context of the other posted paper).

A discussion over a monopsonistic versus competitive employment model, they do find indications that from their data that it is a competitive model and that traditional assumption of labor markets apply...however they say this with some uncertainty. That said, at this point, I don't believe anyone in this thread was making the argument that price rises wouldn't happen (therefore we would be looking at the a monospony model) but rather they wouldn't be high enough to detract from the social benefits from a minimum wage. As for "shutting the door" on Card and Krueger, the authors themselves simply argue against a monospony model not against the entirety of C and K's findings.

As for minimum wages and profits, the best explanation is minimum wages are more likely going to happen nearer to the peak of boom periods so they generally seem to precede recessions (which is where the biggest profit losses happen).

Ardennes fucked around with this message at 15:50 on Jun 20, 2015

# ? Jun 20, 2015 15:15

asdf32: May 15, 2010; I lust for childrens' deaths. Ask me about how I don't care if my kids die.

Ardennes posted:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=630515

Moreove here is a further study that shows quite accurately that food service prices only increased .7% after 10% increase in the minimum wage, therefore while food prices increased they didn't enough to seriously effect affordability.

It's actually a really interesting study because of the level of detail of the data. Given the implication for recent price debate, you should have a response that's more than "0.7% isn't high".

Overview

They analyze actual detailed price data from individual restaurants, both full service (FS) sit-down restaurants and limited service (LS) restaurants (I.E. pay at the counter places)
The data is bi-monthly reporting of individual meal prices from 1000 restaurants over a 3 year period where federal minimum wage changed from $4.25 to $5.15
Additionally city-level CPI data was analyzed as well

Findings:

Prices unambiguously rise by an amount close to the predicted 100% pass-through ~0.7
Prices rise more at LS restaurants which have a higher proportion of minimum wage and rise more in cities with the same
The findings are most consistent with a competitive model. Without competition prices wouldn't rise or would actually decrease (for counter-intuitive reasons that are explained in detail) and the fact that higher increases correlated with higher concentrations of minimum wage workers is also consistent.

The main thing not explained by standard competition is why employment decreases aren't detected. The answer is that possibly employment does decrease by small amounts (1-3% is within the range of past studies. Also the fact that prices rise should make the need for layoffs smaller compared to models which don't allow prices to change) and/or that increased demand blunts a portion of that (because minimum wage workers are more likely to shop for fast food).

Other notes:

*The fact that prices rise indicate that minimum wage does increase employer cost (I.E. lower turnover doesn't pay for all of it)
Price increases didn't show up as larger price increases but simply as a higher frequency of typical small increases.

Findings:

quote:

We offer new empirical evidence using
output prices both at the store-level and aggregated to the city-level. In both cases, prices
unambiguously increase in response to a minimum wage change. Furthermore, the results are
similar across three sources of variation in the data: cross-state differences in the size of the
minimum wage change, cross-restaurant type differences in the tendency to pay at or near
the minimum wage, and cross-metro differences in the fraction of workers paid at or near
the minimum wage.

quote:

Therefore, our price results appear to provide evidence against the hypothesis that
monopsony power is important for understanding the small observed employment response
to minimum wage changes. Indeed, our estimated price responses provide evidence against
other explanations of the small employment response, including the potential substitution of
nonwage for wage compensation and the importance of endogenous work effort. Rather, we
interpret our price results to be fairly consistent with the textbook model of labor demand.

# ? Jun 20, 2015 15:49

Ardennes: May 12, 2002

asdf32 posted:

It's actually a really interesting study because of the level of detail of the data. Given the implication for recent price debate, you should have a response that's more than "0.7% isn't high".

Overview

They analyze actual detailed price data from individual restaurants, both full service (FS) sit-down restaurants and limited service (LS) restaurants (I.E. pay at the counter places)

The data is bi-monthly reporting of individual meal prices from 1000 restaurants over a 3 year period where federal minimum wage changed from $4.25 to $5.15

Additionally city-level CPI data was analyzed as well

Findings:

Prices unambiguously rise by an amount close to the predicted 100% pass-through ~0.7

Prices rise more at LS restaurants which have a higher proportion of minimum wage and rise more in cities with the same

The findings are most consistent with a competitive model. Without competition prices wouldn't rise or would actually decrease (for counter-intuitive reasons that are explained in detail) and the fact that higher increases correlated with higher concentrations of minimum wage workers is also consistent.

The main thing not explained by standard competition is why employment decreases aren't detected. The answer is that possibly employment does decrease by small amounts (1-3% is within the range of past studies. Also the fact that prices rise should make the need for layoffs smaller compared to models which don't allow prices to change) and/or that increased demand blunts a portion of that (because minimum wage workers are more likely to shop for fast food).

Other notes:

*The fact that prices rise indicate that minimum wage does increase employer cost (I.E. lower turnover doesn't pay for all of it)

Price increases didn't show up as larger price increases but simply as a higher frequency of typical small increases.

Findings:

Already responded above about it, and to be honest, I don't have a problem with using a (loose) competitive model but the issue is how you actually calculate costs at hand. I have seen predictions of increased costs in this thread far far higher than they have shown compared to much more modest increases by those who favor a minimum wage increase. I agree this particular study shows near-complete pass through of costs, but that said there is some wiggle room there based on their some assumptions of their model (I still wouldn't be surprised if most costs are passed through).

That said in total if we are talking about predictable price increases and minimum effects on unemployment, where is the ultimate argument against increases here especially if you consider regional pricing? One point they mentioned is that price levels fluctuate with prevailing local wage levels.

Ardennes fucked around with this message at 16:08 on Jun 20, 2015

# ? Jun 20, 2015 16:03

asdf32: May 15, 2010; I lust for childrens' deaths. Ask me about how I don't care if my kids die.

Ardennes posted:

Your not responding to my point.

When I link to a study I am providing a source, not necessarily a summary. My point in linking it is to show evidence of how price increase work in a national setting, and in this case we are talking about just a particular applicable example. Either way the central point is the nature of affordability and in general the price increases they found have been (predictably) not problematic. While fast service had larger increases (1.55%), ultimately they don't seem to be enough to truly an issue. (Even if they more or less assume price increase will generally pass though, but there is enough generalization in their model to be skeptical especially in the context of the other posted paper).

A discussion over a monopsonistic versus competitive employment model, they do find indications that from their data that it is a competitive model and that traditional assumption of labor markets apply...however they say this with some uncertainty. That said, at this point, I don't believe anyone in this thread was making the argument that price rises wouldn't happen (therefore we would be looking at the a monospony model) but rather they wouldn't be high enough to detract from the social benefits from a minimum wage. As for "shutting the door" on Card and Krueger, the authors themselves simply argue against a monospony model not against the entirety of C and K's findings.

As for minimum wages and profits, the best explanation is minimum wages are more likely going to happen nearer to the peak of boom periods so they generally seem to precede recessions (which is where the biggest profit losses happen).

Yes people have been arguing against price increases.

Regarding costs being passed on as price increases (bold is original):

QuarkJets posted:

But this has never, ever been true. You are completely wrong. The data shows that you are wrong. Every single observable minimum wage increase has shown that statement to be false. Even your most pessimistic sources don't support this idea. In the very worst measurement, a total outlier, a $2.50 increase in wages resulted in a 3% increase in prices. This isn't even close to "the majority" of the increase being absorbed by price increases.

I don't know why you keep saying poo poo that is completely and plainly wrong, even according to your own sources, but I wish you would just loving stop

Just to be clear, the implications of price increases are fairly straightforward. They don't torpedo minimum wage alone, instead they just indicate that the general population, not "capital", pays for the increase. And because of shopping habits (poor workers buy from poor workers), it nets out that minimum wage is effectively a regressive tax distributed to poor workers. Yes, minimum wage still helps minimum wage workers and you might continue to support it for this reason alone (or because you think it's "fair"), but if prices increase that means it's paid for by other poor workers disproportionately.

So it's not about a vague notion of whether price increases are "affordable" or not. It's simply about properly tracking who actually pays for minimum wage. If your support is based on the idea that minimum wage is good at redistributing wealth, price increases indicate it's not.

Ardennes posted:

Already responded above about it, and to be honest, I don't have a problem with using a (loose) competitive model but the issue is how you actually calculate costs at hand. I have seen predictions of increased costs in this thread far far higher than they have shown compared to much more modest increases by those who favor a minimum wage increase. I agree this particular study shows near-complete pass through of costs, but that said there is some wiggle room there based on their some assumptions of their model (I still wouldn't be surprised if most costs are passed through).

That said in total if we are talking about predictable price increases and minimum effects on unemployment, where is the ultimate argument against increases here especially if you consider regional pricing? One point they mentioned is that price levels fluctuate with prevailing local wage levels.

Well just to be clear when I'm personally talking about prices or inflation it's to figure out the pass-through. I don't actually care about prices or inflation on their own in this context. And I care about the pass-through because that tells me who's paying for minimum wage (everyone or "capital"). And I do care about that for the purpose of evaluating minimum wage.

asdf32 fucked around with this message at 16:11 on Jun 20, 2015

# ? Jun 20, 2015 16:07

Ardennes: May 12, 2002

asdf32 posted:

Yes people have been arguing against price increases.

Regarding costs being passed on as price increases (bold is original):

He is very clearly not arguing against price increases in that quote but a particular level of price increases. That is quite dishonest.

quote:

Just to be clear, the implications of price increases are fairly straightforward. They don't torpedo minimum wage alone, instead they just indicate that the general population, not "capital", pays for the increase. And because of shopping habits (poor workers buy from poor workers), it nets out that minimum wage is effectively a regressive tax distributed to poor workers. Yes, minimum wage still helps minimum wage workers and you might continue to support it for this reason alone (or because you think it's "fair"), but if prices increase that means it's paid for by other poor workers disproportionately.

You really can't talk in detail about the mechanics of economics on one hand and then hand wave the, it isn't just increase increases but it is the strength of them and in this case they have been shown to predictably minute with the higher increases happening in a industry which has a high amount of minimum wage workers. The issue here is that minimum wages are only a portion of all wages which are in turn a portion of costs, and false moralizing doesn't really answer if people are ahead or not in this case. Remember too there are plenty of non-minimum wage workers who are buying hamburgers and bicycles and everything else.

In addition, we are talking about all prices at this point, and fast food or really served food in general is only a portion of the spending of a struggling American, there are plenty of other costs as well and therefore the ultimate question is about the bottom line.

quote:

So it's not about a vague notion of whether price increases are "affordable" or not. It's simply about properly tracking who actually pays for minimum wage. If your support is based on the idea that minimum wage is good at redistributing wealth, price increases indicate it's not.

It does matter, because the question is are price increases really effecting workers as much as potential increases in pay, and the study doesn't show this. While the study doesn't indicate that profits are taking a hit, it also doesn't talk about society as a whole. As I said, minimum wage and poorer workers are only part of the customer base. If anything quick service probably has a higher amount of minimum wage workers than average, which means to decide total price increases you need to create a typical basket of expenses and then calculate the expense of minimum wages on it.

(Oh and before you mention people without income, an increase in pay of minimum wage workers would mean more federal revenue and less strain on social services like food stamps.)

Ardennes fucked around with this message at 16:28 on Jun 20, 2015

# ? Jun 20, 2015 16:23

asdf32: May 15, 2010; I lust for childrens' deaths. Ask me about how I don't care if my kids die.

Ardennes posted:

He is very clearly not arguing against price increases in that quote but a particular level of price increases. That is quite dishonest.

Which he was wrong about but also tried to say that meta-strudies showed zero price increase elsewhere.

quote:

You really can't talk in detail about the mechanics of economics on one hand and then hand wave the, it isn't just increase increases but it is the strength of them and in this case they have been shown to predictably minute with the higher increases happening in a industry which has a high amount of minimum wage workers. The issue here is that minimum wages are only a portion of all wages which are in turn a portion of costs, and false moralizing doesn't really answer if people are ahead or not in this case. Remember too there are plenty of non-minimum wage workers who are buying hamburgers and bicycles and everything else.

In addition, we are talking about all prices at this point, and fast food or really served food in general is only a portion of the spending of a struggling American, there are plenty of other costs as well and therefore the ultimate question is about the bottom line.

It does matter, because the question is are price increases really effecting workers as much as potential increases in pay, and the study doesn't show this. While the study doesn't indicate that profits are taking a hit, it also doesn't talk about society as a whole. As I said, minimum wage and poorer workers are only part of the customer base. If anything quick service probably has a higher amount of minimum wage workers than average, which means to decide total price increases you need to create a typical basket of expenses and then calculate the expense of minimum wages on it.

(Oh and before you mention people without income, an increase in pay of minimum wage workers would mean more federal revenue and less strain on social services like food stamps.)

I still don't think you're getting it. I'm not disputing whether minimum a minimum wage workers who gets a raise is benefiting. They are benefiting. This is patently obvious. Many times people have misunderstood or strawmanned price debates to be about whether they cancel out the benefits for minimum wage workers. As should be obvious to everyone, that doesn't and can't happen entirely.

That has nothing to do with my point here. My point is simply about who pays for it. A lot of people want to believe minimum wage is this:
"Captial" -> poor workers

But this price data (and demographic data) indicates it's not. It's:
Everyone (weighted towards poor people) -> minimum wage workers (only slightly weighted towards poor people).

So that's the point. It's a clearer picture of what's actually happening.

# ? Jun 20, 2015 17:07

Ardennes: May 12, 2002

asdf32 posted:

But this price data (and demographic data) indicates it's not. It's:
Everyone (weighted towards poor people) -> minimum wage workers (only slightly weighted towards poor people).

You have to provide that price increases of all consumer expenses are more weighed to the poor than the minimum wage is (and remember you have to also considering secondary effects of a minimum wage and those dependent on a minimum wage as well). Also don't say only people below the poverty line are poor.

I get what you are trying to say, but yeah, I don't see it.

Ardennes fucked around with this message at 17:21 on Jun 20, 2015

# ? Jun 20, 2015 17:14

asdf32: May 15, 2010; I lust for childrens' deaths. Ask me about how I don't care if my kids die.

Ardennes posted:

You have to provide that price increases of all consumer expenses are more weighed to the poor than the minimum wage is (and remember you have to also considering secondary effects of a minimum wage and those dependent on a minimum wage as well).

What? No. You still seem to think I'm implying some conclusion I'm probably not.

What I said is happening is what I think is happening (and is well substantiated by that last study).

# ? Jun 20, 2015 17:20

Ardennes: May 12, 2002

asdf32 posted:

What? No. You still seem to think I'm implying some conclusion I'm probably not.

What I said is happening is what I think is happening (and is well substantiated by that last study).

The study is saying most costs are passed through to customers (and other issues that don't directly apply to this point) but ultimately it is a small piece of a larger puzzle, because as they admit , that the amount of minimum wage workers isn't the same in each industry and food, especially fast food, is only a portion of all expenses. In addition, only poor consumers shouldn't be counted especially since global expenses will impact many different industries which will have different labor costs. If anything we are talking about total prices in aggregate here.

So if you want to question the effectiveness (or lack of it) of a minimum wage on assisting a population, you have to show the total global effects. If it comes down to prices, then what is the total price increase on a basket of expenses going to look like here for different demographic groups? Do they lose or gain considering higher government revenue and negating crowding out effects on social systems?

Btw, everyone has a bias and is trying to form a conclusion be it publicly or not.

Ardennes fucked around with this message at 17:34 on Jun 20, 2015

# ? Jun 20, 2015 17:27

asdf32: May 15, 2010; I lust for childrens' deaths. Ask me about how I don't care if my kids die.

Ardennes posted:

The study is saying most costs are passed through to customers (and other issues that don't directly apply to this point) but ultimately it is a small piece of a larger puzzle because as they admit that the amount of minimum wage workers isn't the same and food, especially fast food, isn't the only expense.and only poor consumers shouldn't be counted especially since global expenses will impact so many different aspects of the economy. If anything we are talking about total prices in aggregate here.

So if you want to question the effectiveness (or lack of it) of a minimum wage on assisting a population, you have to show the total global effects. If it comes down to prices, then what is the total price increase on a basket of expenses going to look like here for different demographic groups?

Btw, everyone has a bias and is trying to form a conclusion be it publicly or not?

We're still talking past each other. A major thing for me is simply the pass-through. A lot of people look at the wage increase and think that represents the befit. It doesn't until we properly account for who paid for that. The difference between everyone paying and owners paying is huge in this calculation. Yes minimum wage transfers some wealth but when it's paid for with prices instead of profits it makes a large difference as to how effective this is.

I'm not trying to imply this is a self-contained anti-minimum wage argument itself. It's just a reality I think everyone needs to understand. For me personally what I see is that the thing in the "pro" column (wealth transfer) is actually quite weak. And while small minimum wage increases clearly have limited cons, I think that's less true as minimum wage increases. Hence my skeptical stance towards large increases.

# ? Jun 20, 2015 17:40

Ardennes: May 12, 2002

asdf32 posted:

We're still talking past each other. A major thing for me is simply the pass-through. A lot of people look at the wage increase and think that represents the befit. It doesn't until we properly account for who paid for that. The difference between everyone paying and owners paying is huge in this calculation. Yes minimum wage transfers some wealth but when it's paid for with prices instead of profits it makes a large difference as to how effective this is.

I'm not trying to imply this is a self-contained anti-minimum wage argument itself. It's just a reality I think everyone needs to understand. For me personally what I see is that the thing in the "pro" column (wealth transfer) is actually quite weak. And while small minimum wage increases clearly have limited cons, I think that's less true as minimum wage increases. Hence my skeptical stance towards large increases.

That is assuming that wealth transfer from the companies themselves was really a necessary part of supporting a minimum wage in the first place, when in reality it was a hypothetical that is still being thought over. You could say a wealth transfer is still happening, but between consumers. Anyway, the ultimate issue is where those prices themselves will fall, how great they are and if this actually greatly diminishes the argument for a minimum wage.

The argument for a GMI usually if you tax high income earners to benefit with but it neglects the mechanics of how that can realistically take place in a traditional budgeting framework and the limits of higher brackets in generating revenue.

In reality you should do both, but if a GMI isn't possible at very least have a high minimum wage that is then stabilized with government support for people under the poverty line who face price increases. Wealth transfers through prices should either come from middle/higher earners, the government itself (and very high earners through taxes) or people making minimum or near minimum.

Ardennes fucked around with this message at 18:00 on Jun 20, 2015

# ? Jun 20, 2015 17:53

President Kucinich: Feb 21, 2003; Bitterly Clinging to my AK47 and Das Kapital

Edit: don't have time for this.

President Kucinich fucked around with this message at 19:23 on Jun 20, 2015

# ? Jun 20, 2015 19:20

FieryBalrog: Apr 7, 2010; Grimey Drawer

IMO the minimum wage should be $40/hr .

Why should anyone be poor? $15 is not enough to live on and $20 is barely scraping by. loving hell?

# ? Jun 20, 2015 21:23

QuarkJets: Sep 8, 2008

asdf32 posted:

Yes people have been arguing against price increases.

Regarding costs being passed on as price increases (bold is original):

Lying about the past, again, asdf32? Your argument at the time was that the majority of a minimum wage increase is absorbed by price hikes, a conclusion that is not supported by the data. I have consistently stated that any price increase would be very small, being pulled from a probability distribution with a median around zero, the same conclusion reached by the various metastudies that have been posted here before. I have never stated that there would be no price increase at all.

asdf32 posted:

Which he was wrong about but also tried to say that meta-strudies showed zero price increase elsewhere.

Are you misunderstanding math terms again? When I say "median", that implies a probability distribution that is not infinitely thin. This means a price increase could happen as a result of a minimum wage increase, but that increase would be small. It also means that there could be a price decrease (as has been shown in some of the individual studies posted in the thread, some of which are even referenced by the most recent paper that you're now citing!)

asdf32 posted:

Which he was wrong about but also tried to say that meta-strudies showed zero price increase elsewhere.

I still don't think you're getting it. I'm not disputing whether minimum a minimum wage workers who gets a raise is benefiting. They are benefiting. This is patently obvious. Many times people have misunderstood or strawmanned price debates to be about whether they cancel out the benefits for minimum wage workers. As should be obvious to everyone, that doesn't and can't happen entirely.

That has nothing to do with my point here. My point is simply about who pays for it. A lot of people want to believe minimum wage is this:
"Captial" -> poor workers

But this price data (and demographic data) indicates it's not. It's:
Everyone (weighted towards poor people) -> minimum wage workers (only slightly weighted towards poor people).

So that's the point. It's a clearer picture of what's actually happening.

asdf32 posted:

What I said is happening is what I think is happening (and is well substantiated by that last study).

Your claim is that a majority of a minimum wage increase is absorbed by changes in price. The authors of that last study try to claim that this is the case, but their results show that a price increase would be relatively small; about 1.5% in the worst case (fast food restaurants) from a 10% increase in minimum wage. They don't actually show what fraction of the labor cost is offset by these price increases, or whether or not it's even a significant fraction of the total change in labor cost. Let us attempt to do that now:

I'm going to be extremely generous and only look at the limited service data, from which only the most pessimistic conclusions could be drawn. For limited service restaurants, a 10% increase in minimum wage resulted in a price increase of (1.5 +- 0.3)%. Their data includes only full meals, so a $7 meal consisting of burgers, fries, and a soda would increase in price by $0.10, a dime.

A typical McDonalds has roughly 5 minimum wage employees at typical open hours, so a 10% minimum wage increase ($7.25 to $8.00) would cause labor costs to rise by $3.75/hour. If prices rose by a dime in response to this, as the study suggests, then this crew would have to sell at least 38 meals per hour in order to fully offset the change in labor cost.

McDonalds has 33000 restaurants serving 6.5 million burgers per day. If we're extremely generous and assume that every burger is actually a full meal, that's an average of 8 meals per hour. This falls far short of 38 meals per hour; even if we assume that the average McDonalds is only open for 12 hours per day instead of 24 (effectively doubling our estimated meal output to 16), we'd still only be covering $1.60 of the $3.75 change in hourly labor costs.

So while prices would increase, given a number of pessimistic assumptions and assuming that this study is the One And True Source Of Accurate Conclusions (lol), they still wouldn't increase by enough to offset even half of the change in labor costs. This is completely consistent with the conclusions of the study; the competitive model applies, prices increase, and profit is still maximized, the price increase just isn't enough to cover even half of the change in labor cost.

I could criticize some issues that I have with the study itself, but there's not much point; even if we assume that the paper is our most accurate source of information, your statement that a majority of a minimum wage increase would be absorbed by price hikes is still not supported by it, asdf32.

# ? Jun 20, 2015 21:41

asdf32: May 15, 2010; I lust for childrens' deaths. Ask me about how I don't care if my kids die.

QuarkJets posted:

Lying about the past, again, asdf32? Your argument at the time was that the majority of a minimum wage increase is absorbed by price hikes, a conclusion that is not supported by the data. I have consistently stated that any price increase would be very small, being pulled from a probability distribution with a median around zero, the same conclusion reached by the various metastudies that have been posted here before. I have never stated that there would be no price increase at all.

Are you misunderstanding math terms again? When I say "median", that implies a probability distribution that is not infinitely thin. This means a price increase could happen as a result of a minimum wage increase, but that increase would be small. It also means that there could be a price decrease (as has been shown in some of the individual studies posted in the thread, some of which are even referenced by the most recent paper that you're now citing!)

Your claim is that a majority of a minimum wage increase is absorbed by changes in price. The authors of that last study try to claim that this is the case, but their results show that a price increase would be relatively small; about 1.5% in the worst case (fast food restaurants) from a 10% increase in minimum wage. They don't actually show what fraction of the labor cost is offset by these price increases, or whether or not it's even a significant fraction of the total change in labor cost. Let us attempt to do that now:

I'm going to be extremely generous and only look at the limited service data, from which only the most pessimistic conclusions could be drawn. For limited service restaurants, a 10% increase in minimum wage resulted in a price increase of (1.5 +- 0.3)%. Their data includes only full meals, so a $7 meal consisting of burgers, fries, and a soda would increase in price by $0.10, a dime.

A typical McDonalds has roughly 5 minimum wage employees at typical open hours, so a 10% minimum wage increase ($7.25 to $8.00) would cause labor costs to rise by $3.75/hour. If prices rose by a dime in response to this, as the study suggests, then this crew would have to sell at least 38 meals per hour in order to fully offset the change in labor cost.

McDonalds has 33000 restaurants serving 6.5 million burgers per day. If we're extremely generous and assume that every burger is actually a full meal, that's an average of 8 meals per hour. This falls far short of 38 meals per hour; even if we assume that the average McDonalds is only open for 12 hours per day instead of 24 (effectively doubling our estimated meal output to 16), we'd still only be covering $1.60 of the $3.75 change in hourly labor costs.

So while prices would increase, given a number of pessimistic assumptions and assuming that this study is the One And True Source Of Accurate Conclusions (lol), they still wouldn't increase by enough to offset even half of the change in labor costs. This is completely consistent with the conclusions of the study; the competitive model applies, prices increase, and profit is still maximized, the price increase just isn't enough to cover even half of the change in labor cost.

I could criticize some issues that I have with the study itself, but there's not much point; even if we assume that the paper is our most accurate source of information, your statement that a majority of a minimum wage increase would be absorbed by price hikes is still not supported by it, asdf32.

Umm they don't sell just burgers and clearly most McDonalds sell more than 8 meals per hour (what are you assuming is the meal price?).

Did you read the paper? The entire conclusion, that the data matches a competitive model, is predicated on high pass through.

They did the math and came to between 0.56 and 1.09 (using a cost method which is easier than your attempt to guess at meal sales volume):

quote:

To get a sense of whether the observed price responses are consistent with competition,
we note that minimum wage labor�s share of total costs is equal to labor�s share of total
costs multiplied by minimum wage labor�s share of labor costs. 10-K company reports, the
Economic Census for Accommodations and Foodservices, and the IRS� Statistics on Income
Bulletin all provide an estimate of labor�s share of total costs, and in each, the sample median
and mean are around 30 to 35 percent.20 Unfortunately, we are less certain of minimum wage
labor�s share of total labor costs for the average firm. Using household level data, we know
that about a third of all restaurant workers are paid near the minimum wage over this
time period, constituting 17% of all payments to labor.21 Using these values, we make two
calculations that bound the competitive response. If there is only one type of labor, all firms
have the same employment level, and all firms either pay 0% of their workers or 100% of
their workers the minimum wage, depending on the labor market, then 33% of all firms pay
the minimum wage. Given this, and the fact that about 33% of total costs are in the form of
labor costs, then a 10% increase in the minimum wage raises prices by 10% � 33% � 33% =
1.09%. Alternatively, if all firms hire above minimum wage labor in equal proportions, then
each restaurant must have 17% of its labor costs going to minimum wage labor. Thus, a 10%
increase in the minimum wage should raise prices by 10% � 33% � 17% = 0.56%.

But cite another study that pins it at 0.7%

quote:

Aaronson and French (2007) use a calibrated model of labor demand that accounts for
both firm and worker heterogeneity to show that when these factors are explicitly accounted
for, the competitive model predicts prices will increase by roughly 0.7%.

Then they find that prices rise by roughly 0.7% and therefore conclude high pass through

quote:

Given that we find rather large price increases in response to minimum wage hikes, firms seem to
be able to push costs onto consumers, and are not having their profits greatly reduced.

Separately the city level data matches the predicted outcome of perfect competition:

quote:

The most noteworthy aspect of figure 1 is the positive correlation between the two series.
The regression coefficient γ is 0.36 with a robust, city clustered-corrected standard error of
0.24.32 Not only is the sign of this coefficient consistent with competition but the magnitude
is as well. Assuming perfect competition in the labor market, the regression coefficient should
equal labor�s share. Recall from section 3, labor�s share is approximately 30 to 35 percent.

Also noting other studies on pass-through:

quote:

1We are not the first to estimate price pass-through in this context. See, e.g., Converse et al (1981),
Card and Krueger (1995), and Aaronson (2001). Card and Krueger use Consumer Price Indices for Food
Away from Home in 27 large metropolitan areas over a three year period, finding larger price increases in
those cities with higher proportions of low-wage workers. Although their estimates are consistent with full
pass-through, their standard errors are extremely large. They cannot reject zero price pass-through in many
of their specifications. Moreover, additional evidence from specific state increases in Texas and New Jersey
suggests close to no price response. As a result, they conclude that their estimates are �too imprecise to reach
a more confident assessment about the effects of the minimum wage on restaurant prices.� The size of the
panel that we use in this study allows us to estimate price effects much more precisely.

asdf32 fucked around with this message at 01:36 on Jun 21, 2015

# ? Jun 21, 2015 01:33

QuarkJets: Sep 8, 2008

asdf32 posted:

Umm they don't sell just burgers and clearly most McDonalds sell more than 8 meals per hour (what are you assuming is the meal price?).

Did you read the paper? The entire conclusion, that the data matches a competitive model, is predicated on high pass through.

They did the math and came to between 0.56 and 1.09 (using a cost method which is easier than your attempt to guess at meal sales volume):

But cite another study that pins it at 0.7%

Then they find that prices rise by roughly 0.7% and therefore conclude high pass through

Separately the city level data matches the predicted outcome of perfect competition:

Also noting other studies on pass-through:

In your attempt to show full price passthrough you've quoted a section that refers to several papers that were unable to reject zero price passthrough :psyduck:

It turns out that the reason for this was that the measurement uncertainties were too great, so these authors chose to assume zero measurement error as their first method. These are the numbers that you quote. The authors go out of their way to say that you should not use these numbers, since they're based on assuming no measurement error (lol) and it's impossible to deconvolve restaurants raising their prices as a response to the wage increase from restaurants raising their prices due to normal supply/demand (an example they give: a number of restaurants didn't change their prices at all despite experiencing a change in labor cost). Their second method is an actual statistical model that provides an R^2 close to zero for every category, which strongly suggests that they're still bound by significant measurement uncertainty and that they probably shouldn't be rejecting the null hypothesis without a lot of additional work.

# ? Jun 21, 2015 09:38

Liquid Communism: Mar 9, 2004

silence_kit posted:

Your point is taken, but I just wanted to point out that your transportation cost is pretty high, and that people who are on a budget don't need to pay that much.

40% of 1k per month is a pretty high number. That average number is pulled up because of all those people who drive pickup trucks, SUVs, luxury cars, which are pretty wasteful. Unless I am missing something, $400 a month should be able to pay for a lease for a brand new subcompact car, fuel for it for 1k miles a month, and insurance. That cost can be knocked down if you buy used and drive less than average.

Pro tip for you, people at the poverty line don't get approved to lease cars at reasonable rates. Good rates on car leases require both good credit and a substantial (in comparison to their yearly take-home pay) deposit. Predatory lending targets these people with great fervror, from the used car lots selling ex-rentals for just below new on bi-weekly payment plans to the payday loan sharks.

# ? Jun 21, 2015 12:14

rscott: Dec 10, 2009

Turns out that having poo poo credit makes your insurance go up too, that driving old lovely cars that break down all the time and require repairs costs money too. A lot of poor people don't even get their license until 18-21 which means they have a shorter driver history which is again going to drive up their rates, along with the zip code they live in, the extra installment charge becuase you can't afford a $600 lump sum payment for your 6 month term, etc. I pay almost $160/month just for liability insurance due to a combination of these factors. Some of my friends pay less for comprehensive coverage on two much newer cars. Our entire economic system is pretty much designed to make it as hard as possible to ever get ahead if you're poor.

# ? Jun 21, 2015 14:59

asdf32: May 15, 2010; I lust for childrens' deaths. Ask me about how I don't care if my kids die.

QuarkJets posted:

In your attempt to show full price passthrough you've quoted a section that refers to several papers that were unable to reject zero price passthrough

It turns out that the reason for this was that the measurement uncertainties were too great, so these authors chose to assume zero measurement error as their first method. These are the numbers that you quote. The authors go out of their way to say that you should not use these numbers, since they're based on assuming no measurement error (lol) and it's impossible to deconvolve restaurants raising their prices as a response to the wage increase from restaurants raising their prices due to normal supply/demand (an example they give: a number of restaurants didn't change their prices at all despite experiencing a change in labor cost). Their second method is an actual statistical model that provides an R^2 close to zero for every category, which strongly suggests that they're still bound by significant measurement uncertainty and that they probably shouldn't be rejecting the null hypothesis without a lot of additional work.

Yep I posted those citations to show that these results aren't inconsistent from other studies including Card and Kreuger. Obviously I posed the whole text so as to not be deceptive. Meanwhile you appear to be cherrypicking whatever you want and then not even citing it. Forcing me to waste time reverse-engineering what you're trying to do.

The first method they deliberately skip a statistical model because they're looking at the probability that individual firms raise or lower prices. Decreasing prices are (somewhat counter-intuitively) the predicted outcome from monopsony firms. In a scenario where some firms are competitive and some firms are monpsonies you would see both price increases and price decreases increase in probability following a min wage increase (hence averaging would hide this). They don't find this. Only price increases become more common:

quote:

Our first approach ignores errors in the price data and simply tabulates price increases and
decreases after a minimum wage change. In the model described in section 4, we formally show
that price data can be used to infer labor market structure. In particular, price cuts tend to
be an outcome unique to monopsonistic labor markets. In the absence of measurement error,
observed price cuts allow us to identify individual firms that potentially have monopsony
power.

The existence of monopsony firms is now unlikely, but that didn't help figure out if overall pass-through matches a competitive model, hence the rest of the paper:

quote:

Given that some restaurants do not increase prices after minimum wage hikes, but restaurants that
do raise their prices usually do so by more than 0.7%, it is difficult to compare the observed
price response to the competitive prediction. Section 3.2 presents a statistical model to better
make this comparison.

BOLD: Actually I still need you to cite the bold because I have no idea where you got it. Maybe you misread this, where they try to eliminate alternatives

quote:

The most plausible alternative explanation for these price responses is that they are driven
by shocks to demand that happen to be correlated with changes to the minimum wage. We
tried two ways to test this possibility. First, we estimated equation 2 without year fixed effects
but included changes in the city CPI in the xit vector. The intercept from this specification
is not statistically different from zero, suggesting that prices do not rise after minimum wage
hikes in areas where the minimum wage does not bind. This finding is consistent with the
view that demand shocks are not confounding our estimates because if they were, we would
expect that prices would rise in areas where the minimum wage does not bind.

# ? Jun 21, 2015 15:49

QuarkJets: Sep 8, 2008

asdf32 posted:

Yep I posted those citations to show that these results aren't inconsistent from other studies including Card and Kreuger. Obviously I posed the whole text so as to not be deceptive. Meanwhile you appear to be cherrypicking whatever you want and then not even citing it. Forcing me to waste time reverse-engineering what you're trying to do.

That's hilarious, so you believe that I "cherry-picked" all of the price pass-through results from Section 3: "Estimates of Price Pass-Through"?

As for citations, I'm using the same paper that you're using: see Aaronson, French, and MacDonald, "The Minimum Wage, Restaurant Prices, and Labor Market Structure", FRB of Chicago Working Paper No. 2004-21 (2007). I'll be sure to put little reference numbers in my next post (I'm not going to do this)

quote:

The first method they deliberately skip a statistical model because they're looking at the probability that individual firms raise or lower prices. Decreasing prices are (somewhat counter-intuitively) the predicted outcome from monopsony firms. In a scenario where some firms are competitive and some firms are monpsonies you would see both price increases and price decreases increase in probability following a min wage increase (hence averaging would hide this). They don't find this. Only price increases become more common:

The existence of monopsony firms is now unlikely, but that didn't help figure out if overall pass-through matches a competitive model, hence the rest of the paper:

That isn't really relevant to my principle complaint: the authors don't attempt to reject the null hypothesis despite having an incredibly low R^2, which drives me to suspect that they weren't actually able to reject the null hypothesis at all, as previous authors weren't. They're using the same BLS data as everyone else, after all, so their measurement errors are the same. This is just a working paper, so it's not surprising that something as important as this could be overlooked.

In case you don't understand the importance of this, an inability to reject the null hypothesis would indicate that their model's results are statistically indistinguishable from a model that predicts no price impacts at all.

quote:

BOLD: Actually I still need you to cite the bold because I have no idea where you got it. Maybe you misread this, where they try to eliminate alternatives

The part that you bolded is from the paper, are you referring to the part of my post that you quoted? Here you go:

quote:

Aaronson and French (2007) use a calibrated model of labor demand that accounts for both firm and worker heterogeneity to show that when these factors are explicitly accounted for, the competitive model predicts prices will increase by roughly 0.7%. Moreover, because limited service restaurants are more likely to pay the minimum wage than full service restaurants, competition would imply larger price increases at limited service restaurants. Given that some restaurants do not increase prices after minimum wage hikes, but restaurants that do raise their prices usually do so by more than 0.7%, it is difficult to compare the observed price response to the competitive prediction. Section 3.2 presents a statistical model to better make this comparison.

# ? Jun 21, 2015 19:24

asdf32: May 15, 2010; I lust for childrens' deaths. Ask me about how I don't care if my kids die.

QuarkJets posted:

That's hilarious, so you believe that I "cherry-picked" all of the price pass-through results from Section 3: "Estimates of Price Pass-Through"?

As for citations, I'm using the same paper that you're using: see Aaronson, French, and MacDonald, "The Minimum Wage, Restaurant Prices, and Labor Market Structure", FRB of Chicago Working Paper No. 2004-21 (2007). I'll be sure to put little reference numbers in my next post (I'm not going to do this)

That isn't really relevant to my principle complaint: the authors don't attempt to reject the null hypothesis despite having an incredibly low R^2, which drives me to suspect that they weren't actually able to reject the null hypothesis at all, as previous authors weren't. They're using the same BLS data as everyone else, after all, so their measurement errors are the same. This is just a working paper, so it's not surprising that something as important as this could be overlooked.

In case you don't understand the importance of this, an inability to reject the null hypothesis would indicate that their model's results are statistically indistinguishable from a model that predicts no price impacts at all.

The part that you bolded is from the paper, are you referring to the part of my post that you quoted? Here you go:

Cherrypicking and misunderstanding are pretty similar results and honestly with you it's hard to distinguish because your posting is so lazy.

After starting off with "this paper doesn't conclude high pass through" (wrong) you then took a section where they said "we did A for B reason but this doesn't help us with C so read the rest of the paper where we use analysis XYZ to prove C instead". You tried to pass this of as "LOL even they say their data is bad" and cited a section I had just used in my explanation of why you were wrong to back yourself up.

The other thing you're misunderstanding (I thought it was deliberate at first) is to conflate city level CPI data which is comparable to Card and Kreuger (and they use also), to their more detailed restaurant level data which is not. Yes it's BLS, no it's not the same

quote:

Under an agreement with the Bureau of Labor Statistics (BLS), we were granted access
to the store-level data employed to construct the food away from home component of the
CPI during 1995 to 1997.5

Oh R^2? Let me guess, you're confusing the errors in parenthesis with correlation.

# ? Jun 21, 2015 21:08

Spangly A: May 14, 2009; God help you if ever you're caught on these shores

A man's ambition must indeed be small
To write his name upon a shithouse wall

QuarkJets posted:

That's hilarious, so you believe that I "cherry-picked" all of the price pass-through results from Section 3: "Estimates of Price Pass-Through"?

As for citations, I'm using the same paper that you're using: see Aaronson, French, and MacDonald, "The Minimum Wage, Restaurant Prices, and Labor Market Structure", FRB of Chicago Working Paper No. 2004-21 (2007). I'll be sure to put little reference numbers in my next post (I'm not going to do this)

I came for the clickbait and 100 pages later, people are quoting chicago school.

Corporate profits are meaningless and worthless :unsmith:

# ? Jun 21, 2015 21:24

QuarkJets: Sep 8, 2008

asdf32 posted:

Cherrypicking and misunderstanding are pretty similar results and honestly with you it's hard to distinguish because your posting is so lazy.

Says the man who can't even be bothered to read the sections that he's quoting for discrepancies with his argument

quote:

After starting off with "this paper doesn't conclude high pass through" (wrong) you then took a section where they said "we did A for B reason but this doesn't help us with C so read the rest of the paper where we use analysis XYZ to prove C instead". You tried to pass this of as "LOL even they say their data is bad" and cited a section I had just used in my explanation of why you were wrong to back yourself up.

You quoted some numbers that the authors admit are bullshit because they ignore measurement error, and I pointed this out. I don't know how you're misinterpreting the sequence of events so badly. You can keep trying to respin this if you want, but it's not really working.

You're still trying to ignore that their model fails to reject the null hypothesis, which is basically a fatal blow

quote:

The other thing you're misunderstanding (I thought it was deliberate at first) is to conflate city level CPI data which is comparable to Card and Kreuger (and they use also), to their more detailed restaurant level data which is not. Yes it's BLS, no it's not the same

In Section 2 they describe that they use store-level data from the BLS that was used as an input to the CPI, which will actually have greater measurement uncertainty than the CPI itself. This actually makes it more difficult to reject the null hypothesis, not less.

quote:

Oh R^2? Let me guess, you're confusing the errors in parenthesis with correlation.

No, I'm talking about the row labeled R^2 you obstinate rear end.

QuarkJets fucked around with this message at 21:43 on Jun 21, 2015

# ? Jun 21, 2015 21:41

Neurolimal: Nov 3, 2012

asdf32, do you really want to be known as the guy who doesn't understand math

I know admitting you're wrong can be hard, but digging a deeper hole has never been the solution. you aint swaying nobody

unless this is all a troll then lol you've written pages of words to troll a forum that doesn't ignore trolling by design

# ? Jun 21, 2015 21:46

QuarkJets: Sep 8, 2008

Neurolimal posted:

asdf32, do you really want to be known as the guy who doesn't understand math

I know admitting you're wrong can be hard, but digging a deeper hole has never been the solution. you aint swaying nobody

unless this is all a troll then lol you've written pages of words to troll a forum that doesn't ignore trolling by design

It's already too late for that. asdf32 argued for something like 5 pages that a quadratic is actually exponential before finally recanting, and I think that he might still believe that (100 - 15) < (15 - 7)

QuarkJets fucked around with this message at 00:22 on Jun 22, 2015

# ? Jun 21, 2015 21:48

reignofevil: Nov 7, 2008

QuarkJets posted:

It's already too late for that. asdf32 argued for something like 5 pages that a quadratic is actually exponential before finally recanting, and I think that he might still believe that (100 - 15) > (15 - 7)

I think this is really what we are up against. We have been officially talking with terms that have specific definitions like R^2 and Fail to Reject and I have yet to see any indication that asdf actually has any idea what these words mean or how to us them.

# ? Jun 21, 2015 22:32

Doktor Avalanche: Dec 30, 2008

QuarkJets posted:

and I think that he might still believe that (100 - 15) > (15 - 7)

He might still believe that 85 is larger than 8? That's...right?

# ? Jun 21, 2015 22:57

down with slavery: Dec 23, 2013; STOP QUOTING MY POSTS SO PEOPLE THAT AREN'T IDIOTS DON'T HAVE TO READ MY FUCKING TERRIBLE OPINIONS THANKS

Neurolimal posted:

unless this is all a troll

(USER WAS PUT ON PROBATION FOR THIS POST)

# ? Jun 21, 2015 23:09

Dr. Arbitrary: Mar 15, 2006; Bleak Gremlin

Can someone with a little more understanding of economic indicators help me with this article from Heritage?
http://dailysignal.com/2015/06/20/how-liberals-manipulate-data-about-the-minimum-wage/

When it comes to Heritage, I feel like I'm reading an Encyclopedia Brown novel. I know Bugs Meany is telling a lie somewhere but I can't figure it out.

# ? Jun 22, 2015 00:08

QuarkJets: Sep 8, 2008

Barbe Rouge posted:

He might still believe that 85 is larger than 8? That's...right?

Whoops, that's a typo; he claimed that 15 was closer to 100 than 7.25. Edited

# ? Jun 22, 2015 00:23

Doktor Avalanche: Dec 30, 2008

OK, that's a lot clearer now.

# ? Jun 22, 2015 00:34

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# ? May 15, 2024 02:02

asdf32: May 15, 2010; I lust for childrens' deaths. Ask me about how I don't care if my kids die.

QuarkJets posted:

Says the man who can't even be bothered to read the sections that he's quoting for discrepancies with his argument

You quoted some numbers that the authors admit are bullshit because they ignore measurement error, and I pointed this out. I don't know how you're misinterpreting the sequence of events so badly. You can keep trying to respin this if you want, but it's not really working.

The events are that you claimed this study didn't indicate the level of pass through (it did), then tried some McDonalds math which was off-base, then fixated on one section where they set aside error to look at a specific thing for a stated reason (monopsony) before incorporating error into multiple additional sections. Which number did I cite from that section?

quote:

You're still trying to ignore that their model fails to reject the null hypothesis, which is basically a fatal blow

In Section 2 they describe that they use store-level data from the BLS that was used as an input to the CPI, which will actually have greater measurement uncertainty than the CPI itself. This actually makes it more difficult to reject the null hypothesis, not less.

You and your null hypothesis. The choice of a null hypothesis is a hypothesis buddy. "No price increases" isn't the clear null hypothesis in the case of a labor cost increase.

Also the statement is incorrect. Assuming identical base data higher level city data isn't necessarily more certain (obviously). Far from it, higher level city data strips out the details of individual restaurants which was a key aspect of this study. Both for looking for mosospony firms within the statistics (in the section you didn't like) and for showing how the competitive model predicted the difference between limited and full service restaurants (which other models did not)

quote:

No, I'm talking about the row labeled R^2 you obstinate rear end.

Ok I did miss that row. It figures that you're trying to reject the study based on R squared alone which is a limited metric. If you're trying to claim the results are statistically insignificant you're incorrect.

Compare R^2 here to a comparable study if you want to persue this further.

QuarkJets posted:

It's already too late for that. asdf32 argued for something like 5 pages that a quadratic is actually exponential before finally recanting, and I think that he might still believe that (100 - 15) < (15 - 7)

None of us are perfect.

# ? Jun 22, 2015 02:59

The Something Awful Forums > Discussion > Debate & Discussion > From tax breaks, through GMI, to FULL COMMUNISM - poverty elimination station

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