Minimum Wage

“Racist” Filibuster vs. Minimum Wage and Gun Control

Published by Papa Giorgio

Larry Elder made a good point about Democrat’s “concerns” about the origins of something being racist means getting rid of it — which he nor Dems really believe the filibuster to be, rather, just a convenient argument in the use of the race-card in order to grab power. BUT, if the concern is genuine, then we should do away with gun control as well as the minimum wage.

— I use a video from the NRA (The DL l S1 E3: “Gun Control’s Racist History”) and recommend their article: Jim Crow and the Racist Roots of Gun Control

SEE AS WELL:

  • Democrats Claim Filibuster Is A Racist Tool — But Only When Republicans Use It (NEW YORK POST)
  • Biden’s Argument Against the Filibuster Gets Eviscerated by…Biden, Obama, and a Few Inconvenient Facts (RED STATE)

Minimum Wage and Jobs (Who Is The Loser?)

Published by Papa Giorgio

PRO TIP: I use a browser separate from my go to that I can erase all the history and cookies in order to open up articles from sites (like Forbes or American Spectator) that regulate how many free articles you can access before a “pay wall” is set up and they block you from access to more. You may need to do this if you follow the links below.

In a continuing discussion [of sorts], some more articles regarding the Davis Bacon Act (coming in a future post) and minimum wage issues have been linked/levied. I do not have time to respond to them all, but I will to some of the major articles. Here I will extend the discussion about employment… but the gist of our positions are as follows:

An article linked by Chris L. was an enjoyable read is from FORBES. While I believe parts of it are wrong, it was a good, digestible size. (And the reason he linked it had to do with a “living wage” 9point #1], but the article – even there – does not support Chris’s contention. Linking that article is actually a train wreck for Chris L., ?) HOWEVER, the portion about jobs is in full agreement with my position above. Here is my main point from the author’s seven that is still my main premise:

3) Myth: An increase in the minimum wage is bad for employers

Paying a higher wage to employees can also help employers cut costs in other ways, according to the Center on Budget and Policy Priorities. “Beyond simple supply and demand theory,” reads a comprehensive report on the economics of raising the minimum wage, “increasing the minimum wage may also spur businesses to operate more efficiently and employees to work harder.”

Yes, excellent, so, “more efficiently” is the same as saying “using less labour for the same output”. That is, they’ve just said that business will fire some people as a result of the higher wages. Or, as we keep saying, there will be unemployment as a result.

I believe Chris L. posted this article as a refutation of my position — and I clearly made the points that raising minimum wage leads to loss of jobs (almost always for the poorest among us).

CONTINUING with that article:

5) Myth: It will cost us jobs and raise unemployment

So far, there is no evidence that raising the minimum wage causes an increase in unemployment or job loss. In fact, in a Goldman Sachs analysis of the 13 states which have raised their minimum wage, found that “the states where the minimum wage went up had faster employment growth than the states where the minimum wage remained at its 2013 level.”

“No evidence” is a pretty strict test to have to meet. And that statement is entirely wrong:

We estimate the minimum wage’s effects on low-skilled workers’ employment and income trajectories. Our approach exploits two dimensions of the data we analyze. First, we compare workers in states that were bound by recent increases in the federal minimum wage to workers in states that were not. Second, we use 12 months of baseline data to divide low-skilled workers into a “target” group, whose baseline wage rates were directly affected, and a “within-state control” group with slightly higher baseline wage rates. Over three subsequent years, we find that binding minimum wage increases had significant, negative effects on the employment and income growth of targeted workers. Lost income reflects contributions from employment declines, increased probabilities of working without pay (i.e., an “internship” effect), and lost wage growth associated with reductions in experience accumulation. Methodologically, we show that our approach identifies targeted workers more precisely than the demographic and industrial proxies used regularly in the literature. Additionally, because we identify targeted workers on a population-wide basis, our approach is relatively well suited for extrapolating to estimates of the minimum wage’s effects on aggregate employment. Over the late 2000s, the average effective minimum wage rose by 30 percent across the United States. We estimate that these minimum wage increases reduced the national employment-to-population ratio by 0.7 percentage point.

And:

We review the burgeoning literature on the employment effects of minimum wages – in the United States and other countries – that was spurred by the new minimum wage research beginning in the early 1990s. Our review indicates that there is a wide range of existing estimates and, accordingly, a lack of consensus about the overall effects on low-wage employment of an increase in the minimum wage. However, the oft-stated assertion that recent research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect. A sizable majority of the studies surveyed in this monograph give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages. In addition, among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries. Two other important conclusions emerge from our review. First, we see very few – if any – studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model predicts disemployment effects. Second, the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups.

There may be evidence you’ve not seen, evidence you don’t know about, even evidence you’d prefer not to believe but the statement that there’s no evidence is simply flat out false.

The same author in another FORBES article refutes the idea that there is “no evidence” in the Card/Krugman study, in which the idea is found via Krugman:

  • There’s just no evidence that raising the minimum wage costs jobs, at least when the starting point is as low as it is in modern America. — Paul Krugman

Said author slams this position well! As have I in a past posts:

(More Below Referencing This “Study”)

A N D, here is a article on the same topic via the DAILY SIGNAL:

1. It would be a job-killer.

The Congressional Budget Office report estimated that a $15 minimum wage would lead to 1.3 million lost jobs by the year 2025, with job losses rising over time due to compounding negative impacts.

The exact number of job losses are highly uncertain, but the report says losses would most likely range between zero and 3.7 million, with a not-insignificant chance that losses could exceed 3.7 million.

A 2011 Heritage Foundation estimate was even bleaker. It estimated a $15 minimum wage would lead to 7 million lost jobs.

Some groups have tried to minimize this part of the picture, focusing instead on the 17 million workers who currently earn below $15 that would receive an income boost. But this simply means that for every 13 workers who would get a wage boost, one worker would lose their job entirely.

Considering that a lost job can mean a family loses its home, not to mention a host of other long-term consequences, that doesn’t seem like a trade-off worth making.

One position is right, the other wrong. It may be the fact that most economists actually care about the poor and are not in Cris L.’s world all evil, greedy, GOP’ers… or as he put it: …”you’re going to post a portion of a book by a conservative economist…”

But the issue is not one economist, although he [Thomas Sowell], it really deals with history as most economists sift through it. Here, for example, is an article from FORBES:

…In a comprehensive, 182-page summary of the research on this subject from the last two decades, economists David Neumark (UC-Irvine) and William Wascher (Federal Reserve Board) determined that 85 percent of the best research points to a loss of jobs following a minimum wage increase.

As in any academic discipline, there are outliers. But even the outliers are problematic: For instance, the famous (or rather, infamous) New Jersey study that associated a higher minimum with increased employment was later refuted in the same academic journal that originally published it. More recently, the paper that the President relied on to make his case for a higher minimum was debunked in a study published by the National Bureau of Economic Research.

Of course, the goal of minimum wage policy is not to reduce employment, but rather poverty. Indeed, Stevenson says explicitly in her commentary that a higher minimum wage will achieve this end. But empirical evidence refutes her point. Twenty-eight states raised minimum wages in the four years prior to passage of the last federal minimum wage increase. Economists from Cornell and American Universities, writing in the Southern Economic Journal, found no associated reduction in poverty rates….

[As an aside, I have the 182-page summary {book} mentioned in the article… I tried to find it on my book shelves, but, I am afraid I moved it to a box and placed it on my stored books pallet.]

New York is a good model as well for recent examples:

…Over the past four years, the minimum wage for New York City restaurants that employ more than 10 workers went from $10.50 an hour to $15. That’s a whopping 43% increase. Next year, every restaurant, big and small, will have to pay their workers at least $15 an hour.

A big victory for workers, right? That’s how it’s depicted by the “Fight for $15” crowd. And, yes, if you held a full-time minimum-wage job over those years, your gross income would have gone up by $9,360.

But those massive wage hikes come at a painful cost that backers refuse to acknowledge. They kill jobs. Just like they’re doing right now in New York City.

In just the last three months of last year, 4,000 workers lost jobs at full-service restaurants, Bureau of Labor Statistics data show…

(IBD)

And in an article referenced in the above excerpt, we find this (via AEI):

An article in the New York Eater (“Restaurateurs Are Scrambling to Cut Service and Raise Prices After Minimum Wage Hike“) highlights some of the suffering New York City’s full-service restaurants are experiencing following the December 31, 2018 hike in the city’s minimum wage to $15 an hour, which is 15.4% higher than the $13 minimum wage a year earlier, and 36.4% higher than the $11 an hour two years ago. For example, Rosa Mexicana operates four restaurants in Manhattan and estimates the $15 mandated wage will increase their labor costs by $600,000 this year. Here’s a slice:

Now, across the city, restaurant owners and operators are reworking their budgets and operations to come up with those extra funds. Some restaurants, like Rosa Mexicano, are changing scheduling. Other restaurateurs are cutting hours and staffers, raising menu prices, and otherwise nixing costs wherever they can.

And though the new regulations are intended to benefit employees, some restaurateurs and staffers say that take home pay ends up being less due to fewer hours — or that employees face more work because there are fewer staffers per shift. The bottom line is, we have to reduce the number of hours we spend,” says Chris Westcott, Rosa Mexicano’s president and CEO. “And unfortunately that means that, in many cases, employees are earning less even though they’re making more.”

In a survey conducted by New York City Hospitality Alliance late last year, about 75% of the more than 300 respondents operating full-service restaurants reported they’ll reduce employee hours this year because of the new wage increases, while 47% said they’ll eliminate jobs in 2019.

Note also that the survey also reported that “76.50% of respondents report reducing employee hours and 36.30% eliminated jobs in 2018 in response to mandated wage increases.”…

So, to quote a “conservative” economist, Thomas Sowell, these raising wages — artificially, separate from the market — have consequences:

A majority of professional economists surveyed in Britain, Germany, Canada, Switzerland, and the United States agreed that minimum wage laws increase unemployment among low-skilled workers. Economists in France and Austria did not. However, the majority among Canadian economists was 85 percent and among American economists was 90 percent. Dozens of studies of the effects of minimum wages in the United States and dozens more studies of the effects of minimum wages in various countries in Europe, Latin America, the Caribbean, Indonesia, Canada, Australia, and New Zealand were reviewed in 2006 by two economists at the National Bureau of Economic Research. They concluded that, despite the various approaches and methods used in these studies, this literature as a whole was one “largely solidifying the conventional view that minimum wages reduce employment among low-skilled workers.”

[….]

Another group disproportionately affected by minimum wage laws are members of unpopular racial or ethnic minority groups. Indeed, minimum wage laws were once advocated explicitly because of the likelihood that such laws would reduce or eliminate the competition of particular minorities, whether they were Japanese in Canada during the 1920s or blacks in the United States and South Africa during the same era. Such expressions of overt racial discrimination were both legal and socially accepted in all three countries at that time.

Again, it is necessary to note how price is a factor even in racial discrimination. That is, surplus labor resulting from minimum wage laws makes it cheaper to discriminate against minority workers than it would be in a free market, where there is no chronic excess supply of labor. Passing up qualified minority workers in a free market means having to hire more other workers to take the jobs they were denied, and that in turn usually means either having to raise the pay to attract the additional workers or lowering the job qualifications at the existing pay level— both of which amount to the same thing economically, higher labor costs for getting a given amount of work done.

The history of black workers in the United States illustrates the point. As already noted, from the late nineteenth-century on through the middle of the twentieth century, the labor force participation rate of American blacks was slightly higher than that of American whites. In other words, blacks were just as employable at the wages they received as whites were at their very different wages. The minimum wage law changed that. Before federal minimum wage laws were instituted in the 1930s, the black unemployment rate was slightly lower than the white unemployment rate in 1930. But then followed the Davis-Bacon Act of 1931, the National Industrial Recovery Act of 1933 and the Fair Labor Standards Act of 1938— all of which imposed government-mandated minimum wages, either on a particular sector or more broadly.

The National Labor Relations Act of 1935, which promoted unionization, also tended to price black workers out of jobs, in addition to union rules that kept blacks from jobs by barring them from union membership. The National Industrial Recovery Act raised wage rates in the Southern textile industry by 70 percent in just five months and its impact nationwide was estimated to have cost blacks half a million jobs. While this Act was later declared unconstitutional by the Supreme Court, the Fair Labor Standards Act of 1938 was upheld by the High Court and became the major force establishing a national minimum wage. As already noted, the inflation of the 1940s largely nullified the effect of the Fair Labor Standards Act, until it was amended in 1950 to raise minimum wages to a level that would have some actual effect on current wages. By 1954, black unemployment rates were double those of whites and have continued to be at that level or higher. Those particularly hard hit by the resulting unemployment have been black teenage males.

Even though 1949— the year before a series of minimum wage escalations began— was a recession year, black teenage male unemployment that year was lower than it was to be at any time during the later boom years of the 1960s. The wide gap between the unemployment rates of black and white teenagers dates from the escalation of the minimum wage and the spread of its coverage in the 1950s. The usual explanations of high unemployment among black teenagers— inexperience, less education, lack of skills, racism— cannot explain their rising unemployment, since all these things were worse during the earlier period when black teenage unemployment was much lower. Taking the more normal year of 1948 as a basis for comparison, black male teenage unemployment then was less than half of what it would be at any time during the decade of the 1960s and less than one-third of what it would be in the 1970s.

Unemployment among 16 and 17-year-old black males was no higher than among white males of the same age in 1948. It was only after a series of minimum wage escalations began that black male teenage unemployment not only skyrocketed but became more than double the unemployment rates among white male teenagers. In the early twenty-first century, the unemployment rate for black teenagers exceeded 30 percent. After the American economy turned down in the wake of the housing and financial crises, unemployment among black teenagers reached 40 percent.

  • Thomas Sowell, Basic Economics: A Common Sense Guide to the Economy, 4th Edition (New York, NY: Basic Books, 2011), 241; 249-251

And here is more info regarding job loss as the main reason most economists are against the minimum wage… that is because employment IS THEE most important thing to poorer people (while I quote more conservative sources… they themselves are quoting more middle of the road studies):

  • Nearly 90 percent of surveyed economists believed an acceptable federal minimum wage should be less than $15 an hour. When asked what level of wage floor they would support, roughly 40 percent endorsed the current federal hourly minimum wage of $7.25 or less. And 66 percent said the minimum wage should be no higher than $10 an hour (FOX). The survey’s key findings include (PDF of survey can be found at EMPLOYMENT POLICIES INSTITUTE):
    • 74 percent oppose raising the federal minimum wage to $15 an hour;
    • 84 percent believe a $15 minimum wage will have negative effects on youth employment;
    • Two-thirds of economists (66 percent) believe that an appropriate federal minimum wage is $10 an hour or less;
    • Just six percent believe a $15 minimum wage is a very efficient means to target individuals in poverty, while 64 percent said the same thing about the Earned Income Tax Credit (EITC).
  • The nonpartisan Congressional Budget Office said Monday that raising the federal minimum wage to $15 an hour, up from the current rate of $7.25 a hour, would likely cause 1.3 million people to lose their jobs. (WASHINGTON EXAMINER)
  • Economists aren’t certain about many things, but on the minimum wage, nearly all of them (90 percent, according to one survey) believe that the case is open and shut. All else being equal, if you raise the price of something (for instance, labor), then the demand for it (for instance, by employers) will decline. That’s not just a theory; it’s a law. (James Glassman, “Don’t Raise the Minimum Wage,” Washington Post [Feb 24, 1998]
  • …percentage of economists who agree…. A minimum wage increases unemployment among young and unskilled workers. (79%) (Robert M. Beren, Professor of Economics at Harvard University ~ [More: WINTERY KNIGHT])

These specialists are not promoting “a narrative,” but displaying historical consequences as common sense economic laws.

Another Real World Example

See another post where the “Billingsley” example is used: TAX THE RICH (Plus: CEO Pay vs. Worker Pay)

My statement still stands in response to keeping people off the government doll:

Debating Minimum Wage In SEATTLE and NEW YORK CITY

Published by Papa Giorgio

So, I debated on whether to add this to our (Chris L. and myself conversation, posted HERE) earlier conversation, but, I decided to post it separately. So, in the same conversation he finally took a jaunt over to my MINIMUM WAGE portion of my ECON 101 page. He still doesn’t know why the minimum wage was used during the Davis/Bacon Act days (a), why the apartheid unions in South Africa used it (b), and why unions here use it and which community it hurts the most (c) — but at least he a c t u a l l y went to my link… and got it all wrong – lol:

…An even more insidious substitution effect of minimum wages can be seen from a few quotations. During South Africa’s apartheid era, racist unions, which would never accept a black member, were the major supporters of minimum wages for blacks. In 1925, the South African Economic and Wage Commission said, “The method would be to fix a minimum rate for an occupation or craft so high that no Native would be likely to be employed.” Gert Beetge, secretary of the racist Building Workers’ Union, complained, “There is no job reservation left in the building industry, and in the circumstances, I support the rate for the job (minimum wage) as the second-best way of protecting our white artisans.” “Equal pay for equal work” became the rallying slogan of the South African white labor movement. These laborers knew that if employers were forced to pay black workers the same wages as white workers, there’d be reduced incentive to hire blacks.

South Africans were not alone in their minimum wage conspiracy against blacks. After a bitter 1909 strike by the Brotherhood of Locomotive Firemen and Enginemen in the U.S., an arbitration board decreed that blacks and whites were to be paid equal wages. Union members expressed their delight, saying, “If this course of action is followed by the company and the incentive for employing the Negro thus removed, the strike will not have been in vain.”

Our nation’s first minimum wage law, the Davis-Bacon Act of 1931, had racist motivation. During its legislative debate, its congressional supporters made such statements as, “That contractor has cheap colored labor that he transports, and he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country.” During hearings, American Federation of Labor President William Green complained, “Colored labor is being sought to demoralize wage rates.”

Today’s stated intentions behind the support of minimum wages are nothing like yesteryear’s. However, intentions are irrelevant. In the name of decency, we must examine the effects….

…The white labor unions and other white supremacists lobbied for other regulations which, in effect, prohibited blacks from being hired. These groups demanded that the hiring of blacks and other nonwhites be subject to the same compulsory employer compensation and minimum wage requirements granted to white union members. The intent of such legislation, Williams contends, is obvious. Such labor laws took away the only bar-gaming chip available to the blacks and other non-whites—their willingness to work for a lower wage. Many whites recognized this. In 1925, for example, the report of the Mining Regulations Commission proposed a mandatory system of minimum wages per job “in order to rescue the European miner from the economic fetters which at present render him the easy victim of advancing native competition.”

Contrary to the view accepted by many on the political left, apartheid is not the result of white businessmen attempting to maximize profits by enslaving cheap black labor. It is instead a product of political privilege. Says Williams:

The mere existence of South Africa’s extensive racial regulatory laws is evidence enough that racial privilege is difficult through free market forces. Consider South Africa’s job reservation laws, which mandate that certain jobs be performed by whites only . . . . The presence of job reservation laws suggests that at least some employers would hire blacks in the “white jobs.” The fact that they would hire blacks to do white jobs neither requires nor suggests that these employers be necessarily any less white supremacist than anyone else. It does suggest that those employers who would hire blacks considered such a course of action to be an attractive alternative because blacks were willing to work for lower wages—“uncivilized wages”—than white workers. The business pursuit of profits—which caused employers to be less ardent supporters of the white supremacist doc-trine-has always been the enemy of white privilege. This is why South African white workers resorted to government.

“The whole ugly history of apartheid has been an attack on free markets and the rights of individuals, and a glorification of centralized government power,” Williams concludes. Only when South Africa’s people—black, white, or colored—“de-dare war against centralized government power” will there be genuine progress toward freedom. Walter Williams’ new book provides powerful intellectual ammunition for that war.

  • Matthew B. Kibbe, FEE

(Via AEI)

There is no inherent reason why low-skilled or high-risk employees are any less employable than high-skilled, low-risk employees. Someone who is five times as valuable to an employer is no more or less employable than someone who is one-fifth as valuable, when the pay differences reflect their differences in benefits to the employer.

This is more than a theoretical point. Historically, lower skill levels did not prevent black males from having labor force participation rates higher than that of white males for every US Census from 1890 through 1930. Since then, the general growth of wage-fixing arrangements: minimum wage laws, labor unions, civil service pay scales, etc. has reversed that and made more and more blacks unemployable despite their rising levels of education and skills: absolutely and relative to whites.

And here’s the “money quote”:

In short, no one is employable or unemployable absolutely, but only relative to a given pay scale.

And that highlights the essence of the economic logic that explains why the most vulnerable workers (low-skilled, uneducated, teenagers, etc.) are the group that is most harmed by minimum wage laws — those laws artificially raise the wages of low-skilled workers without increasing their productivity, and therefore significantly reduce their employability relative to higher-skilled workers.

For example, in the study from the team of researchers at the University of Washington on Seattle’s $15 an hour minimum wage, they reported (emphasis added):

Our preferred estimates suggest that the Seattle Minimum Wage Ordinance caused hours worked by low-skilled workers (i.e., those earning under $19 per hour) to fall by 9.4% during the three quarters when the minimum wage was $13 per hour, resulting in a loss of 3.5 million hours worked per calendar quarter. Alternative estimates show the number of low-wage jobs declined by 6.8%, which represents a loss of more than 5,000 jobs.

The work of least-paid workers might be performed more efficiently by more skilled and experienced workers commanding a substantially higher wage.

Bottom Line: Thomas Sowell’s comments illustrate an economic reality that is frequently overlooked: Workers compete against other workers (not employers) to find jobs and get the highest wages. Employers compete against other employers to find the best workers. In other words, low-skilled workers compete against high-skilled workers in the labor market. Low-skilled workers who would be employable at a low wage become unemployable at an artificially higher wage. And that explains the perverse cruelty of minimum wage laws: it inflicts the greatest harm on the very workers it is allegedly designed to help.

However, this is not the reason for this post. I merely wanted to show the hubris out there in stating propaganda (not intentionally, just in ignorance). Here is the portion that that I wanted to highlight and respond to. Here is the video so people can glean context:

So, here are the main points of the above:

  1. Minimum wage is still not $15.00 an hour
  2. It is $13.50 and in 2021 will be $13.69 (which he is right about, but we are talking about SEATTLE)
  3. [QUOTE] “Sean Giordano this is why I & everyone else should dismiss what ever you post. First minute & a half & anyone can prove she’s full of shit” [UNQUOTE]
  4. New York (remember, she said New York CITY) does not have $15.00 minimum wage, they are near $11.80
  5. California isn’t even over %15.00 an hour
  6. THEY ARE FULL OF SHIT!!

So my first response is to points #1 and #2

The Prager U video specifically mentions Seattle and New York City. This is key. I used two websites to find the current minimum wage in Seattle, Washington: MINIMUM-WAGE.ORG and SEATTLE GOVERNEMNT’S website. In the conversation I noted this many times, but granted, I wasn’t clear.

During the long discussion that followed a few paths, what I learned is that franchises are all included together as a large business. So if I were to franchise, say, The Brass Tap (bar/restaurant chain focuses mostly on its craft beer offerings), if the franchises nationwide have 501 employees, the tips earned do not lower the to $13.50. To make the point clearer I made a crude version:

A sad article of sorts was this one detailing the info:

Justices Reject Franchise Appeal Over Seattle’s $15 Minimum Wage (May 2, 2016)

SEATTLE — The U.S. Supreme Court will not hear a challenge to Seattle’s $15-an-hour minimum wage from franchise owners who say the law discriminates against them by treating them as large businesses.

Seattle was one of the first cities in the nation to adopt a law aiming for a $15 minimum wage, giving small businesses employing fewer than 500 people seven years to phase it in. Large employers must do so over three or four years, depending on whether they offer health insurance to their employees.

Five franchises and the International Franchise Association sued the city, saying the law treats Seattle’s 623 franchises like large businesses because they are part of multistate networks. But the franchises say they are small businesses and should have more time to phase in the higher wage.

[….]

“Seattle’s ordinance is blatantly discriminatory and affirmatively harms Seattle hard-working franchise small business owners every day since it has gone into effect,” Robert Cresanti said in a statement. “We are simply attempting to level the playing field for the 600 local franchise business owners employing 19,000 people in Seattle.”….

Remember, Seattle has a higher minimum wage than the rest of the state.

I likewise responded to points #4 thus

This comes from the NEW YORK CITY GOVERNMENTS website:

The minimum wage in New York City is $15.00 per hour. The New York State Department of Labor oversees wage regulations in New York State. Businesses employing people in New York State should be aware of wage requirements and regulations.

After December 31, 2019, all employees in New York City must be paid at least $15.00 per hour. …

#5 deals with California as a state

However, just like New York state/New York City and Washington state/Seattle, so to goes California. There are many cities in California that have differing minimum wage laws than the state. Here is just one example (click to enlarge):

So, there are a couple numbers not dealt with yet…

they are numbers #3 and #6

  • #3 [QUOTE] “Sean Giordano this is why I & everyone else should dismiss what ever you post. First minute & a half & anyone can prove she’s full of shit” [UNQUOTE]

If the opposite of Chris L’s premise is in fact shown, and if his position is “true” of me — that is: “why I & everyone else should dismiss what ever you post.” Why should I, or we, not dismiss whatever he says. I mean, he is full of shit (#6!!).

Later in the conversation discussion about the effects of minimum wage hurting restaurants, to which Chris posted the following:

I merely responded with

  • The hospitality group, which lobbies on behalf of the restaurant and hotel industry, concluded that Seattle was the hardest-hit city in Washington state, with 624 bars and bistros that have permanently shut down. (BLOG.RESTUARANT)  

So, if 29 opened up DESPITE minimum wage and covid… would the 624 be closed BECAUSE of the minimum wage and covid?

 

Minimum Wage Cost Me My Job (PragerU)

Published by Papa Giorgio

What happens when politicians decide they are in a better position than business owners to know how much workers should be paid? We don’t have to guess. Cities like Seattle and New York have already done so with their $15/hour minimum wage mandates. Simone Barron, a lifelong restaurant worker, recounts how “helping” her impacted her wallet, her career, and her life.

What Isn’t Taught During Black History Month (Larry Elder)

Published by Papa Giorgio

Larry Elder takes the opportunity this Black History Month to investigate certain myths surrounding Black history and why some people think Black History Month is not necessary. Topics:

  • Slavery;
  • Gun Control;
  • Minimum Wage.

(Also see my voluminous post on RACIAL MANTRAS)

The Truth About Economics, Minimum Wage, and the Middle Class

Published by Papa Giorgio

(An Economic Serious Saturday)

Don Boudreaux (economics professor) joins Dave to discuss classical liberalism, the basic principles about economics, the minimum wage debate, and more.

Don Boudreaux (economics professor) joins Dave to discuss his views about the reality of the state of the middle class, the flat tax debate, and more.

Minimum Wage Follies Hits New York

Published by Papa Giorgio

HOT AIR has this recent story from the NYC:

There’s been yet another development in the Fight for Fifteen, this time coming to us from the Big Apple. With great fanfare, the Democrats in New York City (and in the state government as well) have been trying to outdo each other this election cycle by jacking up the minimum wage. Recent legislative moves brought the city to the point where they’ve had six minimum wage increases in two years. As you might imagine, this has been particularly tough on the restaurant and bar business. The city is quickly making some eateries essentially unprofitable unless they increase their menu prices to the point where they will likely just drive away customers anyway.

This has Heartland Brewery CEO Jon Bloostein raising the alarm to anyone who will listen. He’s describing the overall effect on his business as that of a “bomb dropping on the city.” And to say that in New York you’ve got to be pretty serious. (Fox Business News)

I’m taking it personally now,” Bloostein told FOX Business’ Stuart Varney on “Varney & Co.” on Friday.

He said restaurant owners “can’t absorb” six minimum-wage increases in a three-year period.

“A bomb fell on the city in 2015,” he said. “I think Albany thinks because it’s New York City we can just add menu prices as high as we want – doesn’t work.”

In response, New York City restaurant owners are pushing for lawmakers to allow them to add a 5% surcharge to offset the cost and help prevent rising prices on the menus, Bloostein said.

Bloostein isn’t objecting to the idea of an increased minimum wage. He just needs the increases to stay somewhere close to other costs and not completely tank his business model. At this point, he’s not even lobbying to have the increased wage scaled back. He’s asking that merchants be allowed to add a 5% city surcharge onto the bill so they can make back some of the losses without having to increase their menu prices, likely scaring more customers off.

Unfortunately, due to New York City’s oppressive nanny state rules, he can’t even do that without getting the permission of City Hall. 

[….]

Allowing restaurants to put such a surcharge on their customers’ bills would be a reminder of exactly who raised the menu prices and what the money was going toward. Even as overwhelmingly liberal as the city is, sooner or later the government is going to price them out of existence and just possibly convince New Yorkers to take a look at some other candidates when they go to the polls. But de Blasio just won another term in office handily, so it’s hard to be too sympathetic to diners facing higher prices when they go out to dinner. You keep voting these people back into office and you really do get what you deserve.

Neumark/Wascher Bitch Slap Card/Krueger

Published by Papa Giorgio

I was listening to Larry Elder interview Lee Ohanian, who is professor of economics, University of California, Los Angeles. During the conversation Larry asked the professor about the Card Krueger study, and he mentioned the book that I excerpt below.

  • David Neumark and William L. Wascher, Minimum Wages (Cambridge, MA: MIT Press, 2008), 71-77.

(See more in my MINIMUM WAGE section of my Economic’s “mantra page“)

[p.>71] 3.4.5 Reactions to the State Case Studies

The case studies that constitute the other strand of the new minimum wage literature soon generated considerable controversy. Some labor economists embraced the studies as praiseworthy examples of the use­fulness of the natural experiment approach to studying the economic effects of policy changes (e.g., Freeman 1995). Others, however, were more critical of these studies. For example, referring to the descriptions of these studies in Myth and Measurement, Welch writes: “I am con­vinced that the book’s long-run impact will instead be to spur, by neg­ative example, a much-needed consideration of standards we should institute for the collection, analysis, and release of primary data” (1995, 842). Likewise, Hamermesh concludes that “even on its own grounds, CK’s [Card and Krueger’s] strongest evidence is fatally flawed” (1995, 838).

The criticisms of the case study approach focus on three main is­sues. The first concerns the adequacy of the control groups used in the studies. On its face, for example, it seems reasonable to question the use of Georgia, Florida, and Dallas/Ft. Worth as appropriate control groups in Card’s (1992b) study of the California minimum wage increase, given that these places are far from California and likely influenced by very different demand conditions. But even for states in close geo­graphic proximity, using one state as a control for analyzing a policy change in another state can sometimes be problematic. For example, Deere, Murphy, and Welch (1995) point out that teenage employment [p.>72] rates in New Jersey diverged significantly from those in Pennsylvania beginning in 1988, casting doubt on Card and Krueger’s claim that res­taurants in Pennsylvania provided a sensible control group with which to compare restaurants in New Jersey. More broadly, Hamermesh notes that the variance in employment seems to be dominated by de­mand shocks, which suggests that “any changes in the relative demand shocks” affecting two geographic areas will easily “swamp the effect of a higher minimum wage” (1995, 837). In our view, this issue highlights a potential advantage of a larger panel with many minimum wage increases, over which these demand shocks would be much more likely to be, on average, uncorrelated with minimum wage changes.

A second criticism concerns the timing of the surveys used in the case study analyses. In each of the fast-food case studies, the post­treatment observation comes less than a year after the relevant mini­mum wage increase. As we noted earlier, however, there is substantial empirical evidence that the disemployment effects of an increase in the minimum wage may occur with a lag of one year or more. For the same reason, both Brown (1995) and Freeman (1995) suggest that these studies are more appropriate for examining the short-run effects of minimum wage changes than for estimating their long-run effects.

A third concern involves questions about the reliability of the data used in these case studies. In each study, the researchers conducted their own telephone surveys of fast-food restaurants, which were not subject to the same rigorous standards as those employed in develop­ing the surveys used in government statistical programs. Welch (1995) expresses significant doubts about the quality of the data, noting in particular some puzzling features of the sample collected for the analy­sis in Card and Krueger (1994). In Neumark and Wascher (2000), we document what seems to us to be an unusually high degree of volatil­ity in the employment changes measured with Card and Krueger’s survey data.

In light of these concerns, a number of researchers subsequently reexamined the results reported in the initial round of state-specific case studies. For example, Kim and Taylor (1995) revisit Card’s study of the effects of California’s 1988 minimum wage increase on employ­ment in the low-wage retail sector. Using data for the retail trade sector as a whole, Kim and Taylor first replicate Card’s finding that employ­ment growth in California around the time of the minimum wage in­crease was not statistically different from retail employment growth for the United States as a whole. However, they also point out that the [p.>73] volume of retail sales in California rose much more rapidly during that period than in the United States, which raises questions about the va­lidity of this experiment. Kim and Taylor then turn to more-detailed in­dustry data within the retail sector and examine whether differences across industries in wage growth in California relative to the United States as a whole were negatively correlated with differences across industries in California versus U.S. employment growth in various years. The results show a negative and statistically significant correla­tion for the changes from March 1988 to March 1989, the period that included the minimum wage increase, but not for the changes in earlier years; they interpret this result as consistent with a negative employ­ment effect of the minimum wage. A similar result emerges from their analysis of county-level employment growth and wage growth. The implied minimum wage elasticities that they calculate from their esti­mates range from —0.15 to —0.2.31

In Neumark and Wascher 2000, we revisit Card and Krueger’s anal­ysis of New Jersey’s minimum wage increase, paying particular atten­tion to data quality issues. In particular, we collected administrative payroll records on hours worked from 235 fast-food establishments that were in the universe from which Card and Krueger drew their sample, and compare the two data sources. The Card-Krueger data were elicited from a survey that asked managers or assistant managers “How many full-time and part-time workers are employed in your res­taurant, excluding managers and assistant managers?” This question is highly ambiguous, as it could refer to the current shift, the day, or per­haps the payroll period, and the respondents’ interpretation of it could differ in the observations covering the periods before and after the minimum wage increase. In contrast, the payroll data referred unam­biguously to the payroll period used by the restaurant. Reflecting this difference, the data collected by Card and Krueger had much greater variability across the two observations than did the payroll data, with changes that were sometimes implausible.32

We then replicate Card and Krueger’s difference-in-differences test after replacing their survey-based data with observations taken from the payroll records. In contrast to Card and Krueger’s results, the re­sults from our replication indicate that the minimum wage increase in New Jersey led to a decline in employment (FTEs) in the New Jersey sample of restaurants relative to the Pennsylvania sample. The elastic­ities from our direct replication analysis were a little larger than —0.2, while additional sensitivity analyses suggested a range of elasticities [p.>74] from —0.1 to —0.25, with many (but not all) of the estimates statisti­cally significant at conventional levels.

In their reply, Card and Krueger (2000) present several additional analyses of the effects of New Jersey’s minimum wage increase using both their original data and our payroll records. In addition, they re­port results from a separate longitudinal sample of fast-food restau­rants obtained from BLS records. In contrast both to their original study and to our replication, their reanalysis generally finds small and statistically insignificant effects of the increase in New Jersey’s mini­mum wage on employment, and they conclude that “the increase in New Jersey’s minimum wage probably had no effect on total employ­ment in New Jersey’s fast-food industry, and possibly had a small pos­itive effect” (1419). Of course, had this been the conclusion from Card and Krueger’s original analysis, there would have been much less scope for casting doubt on the standard competitive model of labor markets.

A more recent case study is contained in a paper by Powers, Baiman, and Persky (2007), who revisit the question of the effects of the mini­mum wage on employment and hours in the fast-food industry based on an increase in the minimum wage in Illinois. Their research design parallels very closely the original design of the Card and Krueger 1994 study, using survey data to examine employment changes in counties along the Illinois-Indiana border between the fall of 2003 and the fall of 2005, when the Indiana minimum wage was unchanged and the Illi­nois minimum wage rose from $5.15 (the federal minimum) to $6.50 in two steps.

As in Card and Krueger, Powers, Baiman, and Persky (2007) use two estimators: (1) a simple difference-in-differences comparison of em­ployment changes in Illinois to those in Indiana, and (2) a regression of employment changes on the wage gap between the average starting wage before the minimum wage increase and the new minimum wage. As dependent variables, they look at the change in FTE employees (weighting part-time workers at 0.5), changes in the numbers of full-time and part-time employees separately, and the change in weekly hours. In all cases, they examine both absolute and percentage changes.

One significant improvement in this study is the use of a more pre­cise employment question that asks “How many people … were on your restaurant’s payroll during the last pay period?” The responses to this question should correspond much more closely to the type of in‑[p.>75]-formation we collected from payroll records. Unfortunately, however, Powers, Baiman, and Persky do not provide any information on the distribution of employment changes to confirm that they obtained far fewer of the implausibly large employment changes that we docu­mented in Card and Krueger’s data (Neumark and Wascher, 2000).

For the entire 2003-2005 period, the state difference-in-differences specifications for FTE employment yield an estimate of zero for the ab­solute changes, and a negative but insignificant (and imprecise) esti­mate for the relative changes, with an implied elasticity in the latter case of -0.14. For the gap specification, they also obtain negative but insignificant estimates. When they estimate specifications for part-time and full-time employees separately, the evidence for part-time em­ployment points to negative effects, while the evidence for full-time employment points to positive (and generally much smaller) effects. However, the only significant estimate is a negative effect for the absolute change in part-time employment in the state difference-in­differences specification. When they break the sample into 2003-2004 and 2004-2005 changes, they find significant negative effects on FTE employment from the second minimum wage change using both the difference-in-differences and gap specifications, but little evidence of any effect from the first minimum wage change. For the 2004-2005 pe­riod, the estimated elasticity for the difference-in-differences specifica­tion is -0.75, which is very large. The stronger evidence of negative effects for the latter change could reflect the fact that the minimum wage only rose by 35 cents in January 2004, while it rose by $1.00 in January 2005, as well as the possibility that the 2004-2005 change includes some lagged effects from the first increase.33

Powers, Baiman, and Persky conclude from this research: “While we can reasonably conclude that the Illinois-Indiana comparison shows no positive response to minimum wages (the most striking claim of the original Card-Krueger study), we cannot yet confidently assert that the overall response is negative (the conventional hypothesis)” (2007, 26). This statement closely parallels our conclusion based on our reevalua­tion of the Card and Krueger study.34

Regardless of what the case studies of the fast-food industry show, we think that their importance is overstated. For one thing, there is no reason to expect the predicted negative employment effect to show up in studies of a particular state minimum wage increase—especially in light of Hamermesh’s point about the importance of relative demand shocks in generating fluctuations in employment. In addition, as we [p.>76] discussed in section 3.2, the interpretation of evidence from case studies of a specific industry is unclear, given that the neoclassical model does not predict that employment in a particular sub-sector of the economy will decline in response to a general increase in the mini­mum wage. For example, it is possible that fast-food restaurant chains are less intensive in low-wage labor than are their competitors, in which case the effect of the higher wage floor on prices at the low-wage-intensive establishments could induce greater consumer demand for fast-food output and an increase in fast-food employment. As a consequence, the absence of an employment decline for a narrow industry should not be viewed as a contradiction of that model.

Finally, two recent studies attempt, in one way or another, to explore some of the explanations of the differences in results between the industry-specific case studies and the panel data analysis of broader af­fected groups. Dube, Lester, and Reich attempt to broaden the analysis by studying the restaurant industry as a whole, rather than the fast-food sector in isolation, and by computing difference-in-differences estimates for a large number of minimum wage increases over many geographic areas. Their preferred specifications yield estimated mini­mum wage effects that are near zero. The authors suggest that because they look at the entire restaurant industry, for which substitution in consumption between the output of subsectors of the industry is not problematic, their study can help to reconcile the findings of the fast-food studies and the state-level panel data studies of groups of low-skill workers (2007, 3 and 39).

In general, it seems preferable to estimate minimum wage effects from a large set of increases over many regions, in order to avoid the undue influence of idiosyncratic shocks that may plague a case study of a single minimum wage increase in an isolated region; and certainly, in that sense, their study is more like the state-level panel analyses. However, their focus on the restaurant industry is complicated by two factors. First, tip credits—which are important for non-fast-food restaurants—vary across states, making measurement of the effective minimum wage complicated.35 Second, as discussed earlier with refer­ence to the paper by Wessels (1997), monopsony-like effects can arise in an industry with tipped workers, raising questions about whether these results can be generalized to other industries (aside from other industry differences). As a result, the implications of these results for more aggregate state-level panel data studies are unclear.36

Hoffman and Trace (2007) attempt to bridge the gap between the state-level panel data analyses and the fast-food case studies in a differ‑[p.>77]-ent way. They focus on teenagers and other low-skill groups, as in the state-level panel data analyses, but they restrict their attention to New Jersey and Pennsylvania in the 1991-1993 period surrounding the minimum wage increase in New Jersey that Card and Krueger (1994) studied. In addition, they examine a “reverse” experiment for these two states for the 1995-1998 period, when Pennsylvania’s minimum wage went up faster than New Jersey’s in 1996 and 1997 because of the federal minimum wage increases in those years (coupled with New Jersey’s higher minimum wage prior to the federal increases).

Their results are mixed. For the 1991-1993 period, they find a nega­tive but insignificant effect on the employment of teenagers, but a posi­tive and significant effect for non-teenage dropouts. In contrast, in the 1995-1998 period, they find that employment of sixteen- to nineteen-year-olds and sixteen- to twenty-four-year-olds and of non-teenage high-school dropouts declined in Pennsylvania relative to New Jersey, with the results especially strong in a triple difference estimate that compares employment changes for these groups with changes in the employment of thirty- to forty-nine-year-olds. They also examine changes in the shares of teenagers in the restaurant industry in each state and find weak evidence suggesting that minimum wages reduced this share in the 1995-1998 period, but evidence of a positive effect in the 1991-1993 period. Thus, this study also does not successfully rec­oncile the fast-food case studies and state-level panel data analyses, al­though it does help to emphasize the fragility of results from studies that estimate minimum wage effects from the impact of an isolated minimum wage increase in a single pair of nearby regions.

FOOTNOTES

31. A potential shortcoming of Kim and Taylor’s analysis is the absence of a direct wage measure in the County Business Pattern data they used (Card and Krueger 1995a; Kennan 1995). In particular, they computed wage rates by dividing total payrolls for the first quarter of each year by total employment for a single pay period in March, which may induce measurement errors associated with differences in the timing of the numera­tor and denominator and with variation in the average number of hours included in the pay period. Kim and Taylor were well aware of this data problem and noted that there is no indication of a negative correlation in years in which the minimum wage was con­stant; they also showed that IV estimates that use lagged wages and average firm size in the industry as instruments produce similar results. Card and Krueger address the first point by showing that there is a negative correlation in the 1989-1990 change (although this could reflect a lagged effect from the 1988 increase in the minimum wage). In addi­tion, they point out that the significant negative coefficient in the IV estimates relies on the inclusion of average firm size as an instrument, which they argue is inappropriate.

32. The same problem likely exists in the Katz and Krueger (1992) study. Although the paper is not very specific about the nature of the questions used to elicit the employment data for the Texas study, the survey instrument appears to be included in an appendix to a related paper (Katz and Krueger 1991), with wording similar to that used in Card and Krueger’s New Jersey study. Figure 2 in the 1992 study similarly indicates some very large changes in employment.

33. The estimates for total hours are somewhat stronger. All four estimates (for the two specifications, and with hours changes measured in absolute and percentage terms) are negative, with the state difference-in-differences estimates statistically significant at the 5 percent level. However, the estimated effects are very large, with the implied elasticities ranging from —0.85 to —0.92. The authors indicate that they are less confident about the hours results, however, because of measurement problems.

34. We concluded, “The payroll data raise serious doubts about the conclusions CK drew from their data, and provide a reasonable basis for concluding that New Jersey’s minimum-wage increase reduced fast-food employment … in New Jersey rela­tive to the Pennsylvania control group. Combined with the new evidence from the ES-202 data that CK present … we think we can be more decisive in concluding that New Jersey’s minimum-wage increase did not raise fast-food employment in that state” (2000, 1391).

35. Tip credits specify a dollar or percentage amount of the minimum wage that can be made up by tips. For example, a 50 percent credit coupled with a $5.00 minimum wage would imply that as long as hourly tips exceed $2.50, the employer has to pay only a base hourly wage of $2.50. The paper makes no reference to taking account of tip credits in defining state minimum wages, and tip credits vary across states; see http://www.dol .gov/esa/programs/whd/state/tipped.htm (viewed November 6, 2007).

36. Indeed, earlier work by Partridge and Partridge (1999) noted the potential for the tip credit to render results for the restaurant industry inapplicable to other industries. In their study, they present some evidence of disemployment effects for the retail sector as a whole and for the retail sector excluding eating and drinking establishments. However, the estimated effects for eating and drinking establishments, although negative, are mostly insignificant. That said, we also have doubts about their analysis, as they find sig­nificant negative effects of the minimum wage on overall nonfarm employment growth as well, which seems implausible.

REFERENCES

Brown, Charles. 1995. “Myth and Measurement: The New Economics of the Minimum Wage: Comment.” Industrial and Labor Relations Review 48, no. 4 (July): 828-830.

Deere, Donald, Kevin M. Murphy, and Finis Welch. 1995. “Employment and the 1990­1991 Minimum-Wage Hike.” American Economic Review Papers and Proceedings 85, no. 2 (May): 232-237.

Freeman, Richard B. 1995. “Myth and Measurement: The New Economics of the Mini­mum Wage: Comment.” Industrial and Labor Relations Review 48, no. 4 (July): 830-834.

Hamermesh, Daniel S. 1995. “Myth and Measurement: The New Economics of the Mini­mum Wage: Comment.” Industrial and Labor Relations Review 48, no. 4 (July): 835-838.

Kim, Taeil, and Lowell J. Taylor. 1995. “The Employment Effect in Retail Trade of Califor­nia’s 1988 Minimum Wage Increase.” Journal of Business and Economic Statistics 13, no. 2 (April): 175-182.

Neumark, David, and William Wascher. 2000. “Minimum Wages and Employment: A. Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment.” Amer­ican Economic Review 90, no. 5 (December): 1362-1396.

Even Leftists Get It – Minimum Wage (UPDATED)

Published by Papa Giorgio

(Rearranged for homogeneous play) This is originally from Southwest Business Association: “Small business owners share their story and how a Minneapolis specific minimum wage will impact their business.” (Learn more at their website)

I find it sad that Leftists HATE big-business and the corporate models of doing business… yet they are all for getting rid of the small business owner by pricing them out of the market. Much to the GLEE of corporations.

Here are the three business highlighted in the video:

  • Alaina Nelson – co-owner of Nicollet Ace Hardware (FACEBOOK)
  • Jane Elias – Owner of Simply Jane Art Studio (WWW)
  • Heather Bray – co-owner of The Lowbrow Burgers and Beer (WWW)

SEE MY: Economics 101 | Minimum Wage

Just to note though, as many of the comments to follow from my YouTube and LiveLeak also note… these are the same people running around screaming for “free college,” more welfare benefits, etc. They only speak up with economic common sense when THEIR bottom line is hit.

  • I’m sorry to say, but it serves you right… and I have no sympathy for you. These people who are proud Bernie supporters and die-hard “progressives” staunchly support these horrific agendas as long as it’s someone else who has to foot the bill.
  • The left is so f’ing stingy with their minimum wage anyway. Why not $50 a hour?
  • So basically they support Bernie and his socialist ideas, except for when they personally need to chip in. Tells you everything you need to know about the character of these a$%holes.
  • f&*k these twats, if it didn’t effect them they’d be out on the streets screaming for $15 an hour.
  • Libtards are economically illiterate people, and the only way to make them understand how idiotic their policies are is to hit them in the pocketbook. Unfortunately most of them own nothing of value and spend most of their time hating and envying people who are better off than them, so it’s not an easy battle.
  • Liberals only understand economics when it bites them in the ass personally.
  • Self hating Leftist…
  • funny how they wake up the minute it is not OTHER peoples money!
  • Sad that they’re speaking the truth, and yet nobody would believe them unless they identified themselves as far left. Because hey, if a conservative said the exact same thing, it MUST be a lie!
  • Hard to believe lefties get basic economics.
  • I want to ask these people why it’s okay for them to not pay 15 dollars an hour but say corporations are greedy for not wanting to pay 15 dollars an hour.

Economics 101

Published by Papa Giorgio

“One of the great non sequiturs of the left is that, if the free market doesn’t work perfectly, then it doesn’t work at all-and the government should step in.” — Thomas Sowell

  • JUMP to the minimum wage section below
  • JUMP to Socialism

No really! The Russian jeep carrying the ashes of the late Cuban leader

Fidel Castro broke down and had to be pushed for a period on Saturday.

SOCIALISM

Dennis Prager Series – Left vs. Right:

  1. How Big Should Government Be?
  2. Does it Feel Good or Does it Do Good?
  3. How Do You Judge America?
  4. How Do You Deal With Painful Truths?
  5. How Do We Make Society Better?

MINIMUM WAGE (>>> Main Page <<<)

What happens when politicians decide they are in a better position than business owners to know how much workers should be paid? We don’t have to guess. Cities like Seattle and New York have already done so with their $15/hour minimum wage mandates. Simone Barron, a lifelong restaurant worker, recounts how “helping” her impacted her wallet, her career, and her life.

Corporations can absorb this “do-goodism”, small business owners cannot!

“Any Econ 101 student can tell you the answer: ‘The higher wage reduces
the quantity of labor demanded, and hence leads to unemployment’.”
(Larry Elder)

[fbvideo link=”https://www.facebook.com/SWBAmpls/videos/753869208152531/” width=”690″ height=”400″ onlyvideo=”0″]

See more on their website, HERE.

  • Economists aren’t certain about many things, but on the minimum wage, nearly all of them (90 percent, according to one survey) believe that the case is open and shut. All else being equal, if you raise the price of something (for instance, labor), then the demand for it (for instance, by employers) will decline. That’s not just a theory; it’s a law.

James Glassman, “Don’t Raise the Minimum Wage,” Washington Post (Feb 24, 1998).

  • A majority of professional economists surveyed in Britain, Germany, Canada, Switzerland, and the United States agreed that minimum wage laws increase unemployment among low-skilled workers. Economists in France and Austria did not. However, the majority among Canadian economists was 85 percent and among American economists was 90 percent. Dozens of studies of the effects of minimum wages in the United States and dozens more studies of the effects of minimum wages in various countries in Europe, Latin America, the Caribbean, Indonesia, Canada, Australia, and New Zealand were reviewed in 2006 by two economists at the National Bureau of Economic Research. They concluded that, despite the various approaches and methods used in these studies, this literature as a whole was one “largely solidifying the conventional view that minimum wages reduce employment among low-skilled workers.”

Thomas Sowell, Basic Economics: A Common Sense Guide to the Economy, 4th Edition (New York, NY: Basic Books, 2011), 241. [Link to 5th edition]

  • …percentage of economists who agree…. A minimum wage increases unemployment among young and unskilled workers. (79%)

Robert M. Beren, Professor of Economics at Harvard University ~ (More: Wintery Knight)

  • Economically, minimum wages may not make sense. But morally, socially, and politically they make every sense…

Jerry Brown (Reason.org)

Last Friday, I wrote about how 81% of economists agree that rent controls are bad policy. In a field so renowned for its fractiousness, this degree of consensus might seem rather surprising.

The same is true with minimum wages. In 2015 the Employment Policies Institute surveyed 166 economists based in the United States on the subject. They found that

  • Nearly three-quarters of these US-based economists oppose a federal minimum wage of $15.00 per hour.
  • The majority of surveyed economists believe a $15.00 per hour minimum wage will have negative effects on youth employment levels (83%), adult employment levels (52%), and the number of jobs available (76%).
  • When economists were asked what effect a $15.00 per hour minimum wage will have on the skill level of entry-level positions, 8 out of 10 economists (80%) believe employers will hire entry-level positions with greater skills.
  • When economists were asked what effect a $15.00 per hour minimum wage will have on small businesses with fewer than 50 employees, nearly 7 out of 10 economists (67%) believe it would make it harder for them to stay in business.
  • A majority of surveyed economists (71%) believe that the Earned Income Tax Credit (EITC) is a very efficient way to address the income needs of poor families; only five percent believe a $15.00 per hour minimum wage would be very efficient.
  • The economists surveyed are divided on the impact of a $15.00 per hour minimum wage will have on poverty rates, as well as the impact it would have on the spending level for public programs such as the EITC, TANF, or others.
  • At lower levels (under $11.00 per hour) of proposed federal minimum wages, economists are divided largely by self-identified party identification as to an acceptable rate with a majority of Republicans and Independents who responded favoring lower minimum wages ($7.50 per hour or less) and a plurality of Democrats who responded preferring a minimum wage between $10.00 and $10.50 per hour.

This isn’t surprising. After all, as I’ve written before, the balance of empirical evidence suggests these things to be true…..

John Phelan (AMERICAN EXPERIMENT)

TeXaS vs CaLiFORNia

 

Minimum Wage

Published by Papa Giorgio

(I am changing some of my “Pages” to “Posts,” so some of this info is older to my site)

The above video is a good one-two-three punch explanation that is concise and short!

These people must be crazy! When there is near [damn] consensus on a topic… people should know about it, especially when the raising the minimum wage hurts the black community. But the left thinks and rants that not raising minimum wage is hurting the poor and minorities… when it is the exact opposite. What a crock!

Hurting the Poor

Thomas Sowell (left) and Walter Williams (right) explain the negative effects of the minimum wage.

(Minimum wage laws make discrimination on ethnicity and gender easy, via Milton Friedman) Here is Walter Williams referencing some statistics to make his point (including Neumark), followed by the excellent lead-up to the debate between [included as well] between L.A. Times columnist, Michael Hiltzik, and professor of economics at UC Irvine, David Neumark:

….University of California, Irvine economist David Neumark has examined more than 100 major academic studies on the minimum wage. He states that the White House claim “grossly misstates the weight of the evidence.” About 85 percent of the studies “find a negative employment effect on low-skilled workers.” A 1976 American Economic Association survey found that 90 percent of its members agreed that increasing the minimum wage raises unemployment among young and unskilled workers. A 1990 survey found that 80 percent of economists agreed with the statement that increases in the minimum wage cause unemployment among the youth and low-skilled. If you’re looking for a consensus in most fields of study, examine the introductory and intermediate college textbooks in the field. Economics textbooks that mention the minimum wage say that it increases unemployment for the least skilled worker.

As detailed in my recent book “Race and Economics” (2012), during times of gross racial discrimination, black unemployment was lower than white unemployment and blacks were more active in the labor market. For example, in 1948, black teen unemployment was less than white teen unemployment, and black teens were more active in the labor market. Today black teen unemployment is about 40 percent; for whites, it is about 20 percent. The minimum wage law weighs heavily in this devastating picture. Supporters of higher minimum wages want to index it to inflation so as to avoid its periodic examination….

…read more…

From the video description:

Larry Elder has on an L.A. Times columnist Michael Hiltzik on to defend his statements made in the column*, as well as professor David Neumark to debate some of the finer points. I do include the build up to the interview/debate, which includes and evisceration of anything deemed moderate at the L.A. Times — pointing out the bias lays firmly on the political-left.

More by Walter Williams:

How will the forced raising of the minimum wage hurt the poor?

As the #FightFor15 movement get fast food workers to strike in order to get a $15, and they watch businesses in Seattle closing because of the forced raise in wages. Automated cashier options are now an option to be weighed. Of course a business wants a human face to represent it. But the business wants to stay in business, so many are being forced to choose a cheaper, more sustainable option for its budget.

McDonald’s is buying 7,000 automated machines to replace people

Would you like some microchips with that burger? McDonald’s Europe strikes another blow against human interaction by installing 7,000 touch-screen computers to take your order and money.

[….]

McDonalds recently went on a hiring binge in the U.S., adding 62,000 employees to its roster. The hiring picture doesn’t look quite so rosy for Europe, where the fast food chain is drafting 7,000 touch-screen kiosks to handle cashiering duties.

The BELOW is and update to the above story about MceeDee’s in Seattle:

Via BizPic!

While it seems liberals may think that raising the minimum wage will raise living standards for poor Americans, they should have seen this coming.

With Los Angeles joining Seattle in setting a $15 minimum wage (Los Angeles by 2020, and Seattle by 2021), it stands to reason that McDonald’s would find a way around simply paying workers more, as Vox pointed out the obvious fact that “the reality is that McDonald’s just wants to make money.”

In a very real-world example of big business’ response to liberal policies, a conservative Twitter user sent Labor Day wishes from McDonald’s workers whose minimum wage never goes up.

And this real world affect of what politicians can merely raise taxes to meet budgets with (or, on the Federal level just print more money [a dumb move BTW]) is that small business go out of business, thus affecting the poor who want jobs.

But now the option through technology is to replace workers for businesses altogether:

(Washington Policy Center) Everyone is predicting what the real world impact of Seattle’s newly passed $15 minimum wage will be. The truth is there will not be a mass exodus of businesses from the city, nor will the economy crash.

Certainly, some businesses will move or close down, consumers will pay more, some workers will receive fewer benefits and the lowest skilled workers will have a harder time finding a job because they are competing with more experienced workers.

But many businesses will simply figure out how to employ fewer low-wage workers. They will do that by substituting machines and technology for people.

Service industry CEOs have cautioned a higher minimum wage is “encouraging automation,” which can improve efficiency. Even Microsoft co-founder Bill Gates warns that a higher minimum wage would “encourage labor substitution” and incentivize employers to “buy machines and automate things” and ultimately “cause job destruction.”

He’s right. When government increases the cost of labor, employers find other ways to save money.

Just look at how McDonald’s has responded to France’s $12 an hour minimum wage. In 2011, McDonald’s invested in 7,000 touch screen computers in France to reduce the number of workers needed. Restaurants around the country are already exploring automation as a means to cut costs; Applebee’s is installing 100,000 tabletop tablets for ordering and payments.

Many food businesses are considering a machine that can freshly grind, shape and custom grill 360 gourmet burgers per hour, no human labor needed. Alpha, the burger-making robot, can even slice and dice the pickles and tomatoes, put them on the burger, add condiments and wrap it up. The manufacturer makes the point that cashiers or servers aren’t even needed: “Customers could just punch in their order, pay, and wait at a dispensing window.” The maker says Alpha will pay for itself in a year.

…read it all…

See also: Businesses Forced To Hurt The Poor ~ Thanks Dems

  • “I’m hearing from a lot of customers, ‘I voted for that, and I didn’t realize it would affect you.’” (IJ-Review)

Powerline has a great short article about minimum-wage laws pushed by Democrats bumping into the steel reinforced wall of reality:

Via InstaPundit, a lesson in economics for liberals. This time, it’s the minimum wage:

San Francisco’s Proposition J, which 77 percent of voters approved in November, will raise the minimum wage in the city to $15 by 2018. As of today, May 1, [Brian] Hibbs is required by law to pay his employees at Comix Experience, and its sister store, Comix Experience Outpost on Ocean Avenue, $12.25 per hour. That’s just the first of four incremental raises that threaten to put hundreds of such shops out of business. …

Hibbs says that the $15-an-hour minimum wage will require a staggering $80,000 in extra revenue annually. “I was appalled!” he says. “My jaw dropped. Eighty-thousand a year! I didn’t know that. I thought we were talking a small amount of money, something I could absorb.” He runs a tight operation already, he says. Comix Experience is open ten hours a day, seven days a week, with usually just one employee at each store at a time. It’s not viable to cut hours, he says, because his slowest hours are in the middle of the day. And he can’t raise prices, because comic books and graphic novels have their retail prices printed on the cover.

If he can’t stay in business, all of his employees will lose their jobs.

[….]

“Why,” he asks, “can’t two consenting people make arrangements for less than x dollars per hour?”

Exactly. Conservatives should oppose minimum wage laws on fairness grounds. If a person is willing to work for, say, $8 an hour, how dare liberals tell him he must remain unemployed instead? There are many, many people whose best offer of employment will be for less than the $15 an hour that San Francisco will soon mandate. Liberals are, in effect, making it illegal for these people to work, even though they are ready, willing and able to do so.

Minimum wage jobs are overwhelmingly entry level employment. They provide valuable training, experience and opportunity for advancement. Making it illegal for young people, especially, to seek employment at the wage they can command isn’t just economically stupid, it is deeply unfair.

…read more…


Click to Enlarge

MINIMUM WAGE

“Any Econ 101 student can tell you the answer: ‘The higher wage reduces
the quantity of labor demanded, and hence leads to unemployment’.”
(Larry Elder)

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Economists aren’t certain about many things, but on the minimum wage, nearly all of them (90 percent, according to one survey) believe that the case is open and shut. All else being equal, if you raise the price of something (for instance, labor), then the demand for it (for instance, by employers) will decline. That’s not just a theory; it’s a law.

James Glassman, “Don’t Raise the Minimum Wage,” Washington Post (Feb 24, 1998).

A majority of professional economists surveyed in Britain, Germany, Canada, Switzerland, and the United States agreed that minimum wage laws increase unemployment among low-skilled workers. Economists in France and Austria did not. However, the majority among Canadian economists was 85 percent and among American economists was 90 percent. Dozens of studies of the effects of minimum wages in the United States and dozens more studies of the effects of minimum wages in various countries in Europe, Latin America, the Caribbean, Indonesia, Canada, Australia, and New Zealand were reviewed in 2006 by two economists at the National Bureau of Economic Research. They concluded that, despite the various approaches and methods used in these studies, this literature as a whole was one “largely solidifying the conventional view that minimum wages reduce employment among low-skilled workers.”

Thomas Sowell, Basic Economics: A Common Sense Guide to the Economy, 4th Edition (New York, NY: Basic Books, 2011), 241. [Link to 5th edition]

…percentage of economists who agree…. A minimum wage increases unemployment among young and unskilled workers. (79%)

Robert M. Beren, Professor of Economics at Harvard University ~ (More: Wintery Knight)

Economically, minimum wages may not make sense. But morally, socially, and politically they make every sense…

Jerry Brown (Reason.org)