Raising minimum wage:pro or con

[Sunday21]

https://www.economist.com/news/finance-and-economics/21724802-two-studies-their-impact-seattle-reach-opposite-conclusions-economists-argue

We are discussing raising minimum wage in my province. Apparently, the province will be asking for input. What are your thoughts?

My worry is students. Most of mine work. They have limited flexibility in hours and location. They need the work to get the education. I think we used to have a lower student wage but this was abolished. Students hated this lower wage. Hmmm.

Edited July 10, 2017 by Sunday21

[Guest]

Do you really need to ask?

https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.e23f65b133b2

https://www.usatoday.com/story/money/nation-now/2017/06/27/report-finds-seattles-15-minimum-wage-may-hurting-workers/431424001/

http://money.cnn.com/2017/06/26/news/seattle-minimum-wage-15/index.html

http://fortune.com/2017/06/27/seattle-minimum-wage-study-results-impact-15-dollar-uw/

[Sunday21]

@Carborendum, Did you read the last article that you posted from Fortune? Have a read...

[Guest]

52 minutes ago, Sunday21 said:

@Carborendum, Did you read the last article that you posted from Fortune? Have a read...

No, I hadn't.  Good catch.  I'll take a deeper look at it and see what I can see.

[Guest]

1 hour ago, Sunday21 said:

@Carborendum, Did you read the last article that you posted from Fortune? Have a read...

OK, I've studied it and found some interesting things.

First, it cites a study by UC-Berkley.  Now, I'll refrain from the ad hominem about their bias to get to the fact that their study was highly flawed as well.  They went into specific instances more than overall statistics.  The statistics that they did go into were heavily weighted to give the result they wanted.  Much of the study was rhetoric and generalized liberal declarations rather than an analysis of the data.  It was simply a poor report.

Second, the author claimed that the study omitted 40% of the employees affected by the wage change.  That was correct.  But what was the 40%?  It was the big businesses such as McDonald's.  I thought liberals were supposed to be for the little guy -- small business.  The UW study showed that small business simply couldn't keep up.  Their margins were too small.

Third, it doesn't take into account the behind-the-scenes actions.  McDonald's has gone along with it.  But they're doing whatever they can to replace humans with automation.  The fact is that they have to protect their bottom line.  No business can survive without that.  That will eventually cost more jobs.

Fourth, it says that businesses have received a boost from the higher wages.  In the manners in which they state, that is true.  How could it not be true? If you have to reduce staff, then the ones you keep are going to be the better workers.  They will be more motivated and be more productive.  The ones you let go were the ones who were dead weight.

A study alone is not worth the paper it's printed on without understanding behind it.

-- But, yes, I should have looked at it more deeply before posting the link.  I usually found Fortune to be a pretty good source.  But even they have stuff like this come up from SJW like Mr. Hoxie.  (Yes, he has quite a reputation).

[Sunday21]

Dear @Carborendum

I wonder if there are some good meta-analysis out there about the increase in minimum wage. I am interested because my provincial government is asking for feedback about a proposed increase in minimum wage. The economist did a review a while ago so I guess, I need to go looking for that issue. I would have thought that we would have good data on this as surely there are "before/after minimum wage increase" studies out there. One of my tasks for the summer is to learn how to do meta-analysis. Well I shall have to be a concerned citizen and have a look for some studies. I am not ideologically in the left or right camp. I am interested in what works. I am sure that there must be some studies on the effects of increases in minimum wage. Still even if an increase helps most citizens, it might be the case that increases in minimum wage hurt the most vulnerable citizens so that's a consideration.

[Fether]

I'm no economist, nor do I fully understand every aspect of the minimum wage debate... but here are the things I see in it  

Minimum wages rise = More money to EVERY low-income working job = prices rise because people have more money but quantity and quality of goods don't change = Companies "make more money" but worth stays the same = Everyone get's paid more money because companies have more money and demand for higher pay rises to maintain life styles they previously were able to live = More money in the US circulating = minimum wage paychecks still provide the same standard of living for people working as they did when minimum wage was $7.25 = 20 years from now, more people will be complaining and wanting to raise it again. (Rinse and repeat)

Technological and educational improvement coupled with more people willing to work harder would fix this. "giving out more money" would only satisfy it for a while. I work 3 jobs, a few weeks ago I worked 70ish hours with an average wage of like $11/hr. I am a  married college student living in a 2 bedroom apt and have PLENTY of money left over for savings and even quite a bit of luxury. But then again I am a privileged white male so everything is handed to me (I have actually had a blessed life). Why is my life so blessed? Because my parents worked their butts (excuse my language) and left the poverty they were raised in.

 

What do people expect to happen?

Do they think they will all get richer? That is a thought process I had when I was 5 and learned that CO, the state I lived in, had a money printing facility.

Do they think that it will remove the less qualified workers? Sounds like poverty would shoot through the roof!

Do they think more money will be circulating and allow more trade? I guess that could be true, but if anything we would be replacing our pennies with dollars.

[Snigmorder]

I don't trust any minimum wage hike because they're always pushed by individuals who have a superstitious fear of business.

Raising the minimum wage just gives incentive to cut the workforce.

[Guest MormonGator]

There are literally dozens of reasons why raising the minimum wage is a horrible idea. 

 http://reason.com/archives/2014/03/03/9-reasons-why-raising-the-minimum-wage-i Reason Magazine is libertarian. 

https://www.bloomberg.com/view/articles/2014-02-18/raising-the-minimum-wage-is-still-a-bad-idea Bloomberg news is fairly objective, leaning slightly liberal

http://www.slate.com/articles/news_and_politics/politics/2015/04/the_fight_for_15_it_s_a_bad_idea_raising_the_minimum_wage_to_15_would_hurt.html-Slate is liberal. 

https://www.brookings.edu/opinions/a-15-hour-minimum-wage-could-harm-americas-poorest-workers/-Brookings is liberal.

I could go on. It's really a horrible, horrible, horrible idea. If I wanted to punish a poor community and didn't want to burn it to the ground via arson, I'd raise the minimum wage. 

I get it, we want to be compassionate and give more people money, but we need to think of the consequences of our actions-especially the unintended ones. 

Edited July 10, 2017 by MormonGator

[Sunday21]

Thanks! I think a minimum wage increase may hurt my students.

[Larry Cotrell]

As you already know, the minimum wage in Seattle just went up to $15/hour (or $13.50 with medical benefits) and many other cities and states are soon to follow suit. One problem is that peoples' hours have been cut so that the employers don't lose money. Most people end up making less overall because they're working less hours. Not to mention, the price of goods obviously skyrockets. I agree, it's a horrible idea and probably the biggest threat to our economy right now.

Edited July 10, 2017 by Larry Cotrell

[Backroads]

Any business able to afford rewarding loyal and hardworking employees with a raise is A-OK in my book. Part of capitalism in a free society is that generally speaking you have very little power over your employees choosing to work for you or not. Want to attract/keep the good ones with money so they don't go elsewhere? Awesome.

But no, I'm not in favor of raising minimum wage. All the fancy economic stuff is part of the reason, but the other is, good grief, I'm a selfish person serving our nation's children, what about me? Is my job really a small step above minimum wage? (and I know a few people here think so, but humor me for the thread). $15 an hour would shrink very much a gap.

There's been an interesting trend in displacement of employees that I have observed myself in my life. The places that used to be staffed by teenagers and college students seeking to make a few bucks and learn some basic work skills are replaced by full-fledged adults, adults who in a sense are ruining what those jobs used to be. I drive by the Burger King and see them hiring and offering medical benefits. Now, I ultimately have no problem with a company compensating their employees in such way and even applaud it, yet how did we go from teenagers working the Burger King counter to adults needing medical insurance?

[bytebear]

I am against it.  it locks out entry level workers, and reduces hours.  And it raises inflation.  I see no benefits other than it's good for votes.

[SpiritDragon]

Hey @Sunday21 what province do you live in?

I'm personally not in favour of minimum wage increases for many of the reasons that have already been stated. One possibly different perspective I can offer is that as someone who works for a not-for-profit charitable organization, the minimum wage hikes are particular difficult to deal with. Here in Alberta,  a lot of my co-workers were excited to vote in an NDP government (a far left wing party for those not familiar with them). They thought it would be so good because the government would increase funding and grants for many of our services. Instead they've managed to lose funding because businesses that previously donated money to charities are not doing so and we have to pay the entry-level staff more on account of the soon-to-be $15.00/hr minimum wage. This complicates everything because we have a stratified pay-grid which needs to adjust up the chain of seniority so that people starting out aren't making as much as people who have been around five years. So we have more staff expenses and less operating budget in many areas. This is of course the opposite of what people seemed to think would happen when voting, but not surprising to me.

[Sunday21]

@SpiritDragon. Hi. I am in Ontario! Thanks your your comments! A concerning situation. Thank you for letting me know.

[wenglund]

Letting the politically motivated government (i.e. people with little or no business experience or interest) artificially inflate business wages, rather than letting the free market set the price of labor? What could possibly go wrong?

What would you think were the government to set minimum prices for goods and services, thereby forcing you to pay more? In principle, it is the same.

Thanks, -Wade Englujnd-