Raising the minimum wage doesn’t lead to massive layoffs

It may result in a slight uptick in unemployment, offset by far greater gains in wages to those who are employed.

No, raising the minimum wage doesn’t lead to layoffs

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20 thoughts on “Raising the minimum wage doesn’t lead to massive layoffs

  1. Flavio Carrillo: +r herrold Raise it and see what happens. Then we’ll have data. It’s so much more fun arguing over actual data than fundamental microeconomics equilibrium.PS I’m still waiting for inflation to explode as a result of quantitative easing. This too was one of those fundamental microeconomics equilibrium thingies that hasn’t happened.TLDR; the Chicago School can kiss my ass. via plus.google.com

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  2. r herrold: I had the pleasure of access to the 1970 census tract data, and USDoL data doing just this analysis in DC during the Ford Admin … The test HAS been done (I was the data wrangler on the study) and the data are clear. Clearing wages at the low end are rarely more than entry auditionsTalent soon leaves the statutory floor; non-economic employees do not receive gifts from employers absent non-economic reasonsEcon 101 is clear that if a transfer payment is to be made, direct cash payments, being fungible, are most efficient. Dressing it to bribe votes from a poorly informed receiver is … just pure graft and fraud via plus.google.com

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  3. Flavio Carrillo: +r herrold It’s been a very long time indeed since we raised the minimum wage and in the meantime mean wages have stagnated.Demand is slack in large part because purchasing power is low. Anything that increases that is a good thing. So, yeah. Let’s try this like, right now, and see what happens right now, and not dig into the recesses of 1970 when mean wages in America where at or near their peak. No bribery, graft or corruption involved. It’s well past time minimum wage got adjusted, they have decayed due to inflation alone and aren’t worth today what they were worth a quarter century ago.If the economy blows up as a result and millions lose their jobs, you get to tell me you told me so. But until then: show me and I will believe. via plus.google.com

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  4. Flavio Carrillo: +Mitch Wagner He’s essentially letting it wither on the vine, yeah. Never adjusting it for inflation (as it hasn’t been for decades) amounts to the same thing. And while he’s focusing on the micro, he’s totally missing the macro here.At any rate it is going to go up and should. The only interesting question is how much. Some localities are willing push it up higher than the likely federal number. via plus.google.com

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  5. r herrold: I performed, ca. 1975 to 1976, some of the statistical work underlying the later work: More Than Subsistence: Minimum Wages for the Working Poor (Policy Studies in Employment & Welfare) Hardcover – June 1, 1979, by Professor Sar A. Levitan (that edition: ISBN: 9780801822513 )The takeaways include: 1) for an ‘honest’ receiver of social welfare transfer payments, paying ‘money’ rather than restricted vouchers (healthcare, childcare, bus passes, whatever) and letting the recipient allocate funds produces demonstrably better net increases of standard of living, than the alternative.  I put to one side a ‘non-honest’ recipient — the political stereotype is the Cadillac driving ‘double dipping’ recipient, falsely drawing, say, Workers Disability benefits, and more, conveniently suffered just after also qualifying for some other non-means tested benefits.  ‘Honest receivers’ are rarely long term participants in ‘safety net’ programs — recent stats on Food Pantry data which I have reviewed indicate MUCH LESS than 6 weeks for the median, although some ‘lifers’ are outliers.  2) Minimum wage is like that as well — the ‘first job’ is customarily the ‘starter fluid’ of a lifetime of employment, rather than a cap of earning capacity.  Any reasonably productive employee soon gets that first raise or promotion, or better job, and so departs above the need for the artificial price support.  But the iron laws of economics are clear that employers, absent third party inducements (welfare to work subsidies from a government or charitable foundation), simply cannot both remain viable, and pay more than the productivity of an employee merits — they net run out of the funds to themselves remain in the market against economically rational competitors, and die offThe linked article is a witches brew of over-statements and ‘straw-man’ hyperbole, by a predictable biased organ of one side of the modern state — Please take a moment and read it, and on a fair reading it is clear: ‘large number’, consistently wrong”, ‘Paying above the minimum inspires effort’  — INSPIRES ??? oh please — and indeed the article author confirms that a minimum raise is NOT needed in that same paragraphIf a supra-minimum is justified and yields all the asserted benefits, of course the economically rational employer pays more already after testing — no legislative raise needed.  This article is just the continuation of Politics under the false flag of Economics via plus.google.com

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  6. Flavio Carrillo: +r herrold Some of us would like to go back to the old fashioned title “political economy” and stop trying to divorce the two. You indeed have a number of unexamined political assumptions in here yourself.The United States somehow managed to keep unemployment low throughout most of the post war period notwithstanding minimum wage laws. On the other hand, during the long period of stagnant minimum wages productivity gains have increasingly been captured at the top. CEO pay has ballooned from 20 to 300 times the average worker and we’re reaching Gilded Age levels of inequality. Mean wages have gone nowhere for decades. These aren’t just economic problems, they are unavoidably distributional and political in nature. To the extent that minimum wages can reverse this, put upward pressure on wages generally (not just entry level jobs) and at the same time increase demand on the economy it’s past time it got adjusted upwards. Your statistical analysis takes no notice of developments in the last 40 years. via plus.google.com

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