Min. Wage[W:345]

[Libertie76]

We see min. wage hikes surging across the country. Giving an additional blow against the market where wages should fall in certain areas this will only create a bubble in wages. Is anyone actually in favor of this? If so please explain with rational economic theory or empirical data!

New York Expected To Approve $15 Fast Food Wage This Week - Forbes

Polls are multiple choice answers so click as many answers as you would like!!!

 

[a351]

I'd prefer a minimum wage indexed to inflation for the sake of stability and predictability. It's also worth noting that the 15 dollar threshold, while probably ill-advised, is a few years down the road.

 

[Gimmesometruth]

We see min. wage hikes surging across the country. Giving an additional blow against the market where wages should fall in certain areas this will only create a bubble in wages. Is anyone actually in favor of this? If so please explain with rational economic theory or empirical data!

Better yet, show where MW caused "wage bubbles" in the economic data. That should be a very easy and consistent correlation to show.

 

[imagep]

It appears to me that as many as 3 people predicted that a hike in min wage would cause both unemployment and inflation.

That doesn't really make a lot of sense. If employers can't pass on the cost of a wage hike, then it can't cause inflation. If employers can pass on the cost of the wage hike, then we may have some inflation, but not unemployment.

I'd like to see the poll where people can only pick one of those two options, because selecting both is irrational.

I'd also like to see another option, something like "increases in minimum wage will create an increase in demand which can lead to new job creation"

And maybe "increases in min wage will result in workers choosing to work shorter hours, thus employers will have to hire more workers".

 

[Gimmesometruth]

min. wage hikes.... will only create a bubble in wages.

 

[OrphanSlug]

A minimum wage hike *will help some people,* but for a temporary time frame until the price of goods and services adjust to the labor cost (adjusted price inflation pressure.. *will cause price inflation.*) What we will also see if an aggregate shift in the labor demand / supply curves equating to a probable less need for people working at this income quintile, meaning *will harm other people." Even the CBO report back in 2014 pointed all of this out in detail when we were talking about the $9.00 and $10.10 options. It is safe to assume that a $15 option would inflate the results. This is all economics 101.

In the end we have conflicting economist models on the real effect, but with a 5th income labor pool where we clearly have more workers than need for them there is little reason to suspect that all will be helped. And we know for sure that a minimum wage hike has zero chance of getting us to full employment.

"...the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects. As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers." (p1)

"Moreover, the increased earnings for some workers would be accompanied by reductions in real (inflation-adjusted) income for the people who became jobless because of the minimum-wage increase, for business owners, and for consumers facing higher prices." (p2)

"Real income would increase, on net, by $5 billion for families whose income will be below the poverty threshold under current law, boosting their average family income by about 3 percent and moving about 900,000 people, on net, above the poverty threshold (out of the roughly 45 million people who are projected to be below that threshold under current law.)" (p3)

https://www.cbo.gov/sites/default/files/44995-MinimumWage.pdf

 

[Beaudreaux]

Hell, I'd flip burgers for $25.00 an hour. But, I wouldn't be able to pay to eat them with what they would cost.

 

[Gimmesometruth]

A minimum wage hike *will help some people,*

http://www.cepr.net/documents/publications/min-wage-2013-02.pdf

 

[Gimmesometruth]

Hell, I'd flip burgers for $25.00 an hour...... .

Oh, is that what the graph shows you. OK.

 

[Beaudreaux]

Oh, is that what the graph shows you. OK.

Well, we're just coming up with arbitrary numbers aren't we?

 

[MaggieD]

We see min. wage hikes surging across the country. Giving an additional blow against the market where wages should fall in certain areas this will only create a bubble in wages. Is anyone actually in favor of this? If so please explain with rational economic theory or empirical data!

New York Expected To Approve $15 Fast Food Wage This Week - Forbes

Polls are multiple choice answers so click as many answers as you would like!!!

I think it will increase our middle class and hurt the uneducated.

 

[Gimmesometruth]

Well, we're just coming up with arbitrary numbers aren't we?

Actually, that graph was posted to show or not show a "wage bubble(s)" correlated to MW increases.

 

[OrphanSlug]

http://www.cepr.net/documents/publications/min-wage-2013-02.pdf

This is what I am talking about, conflicting models suggesting questionable methodologies. Especially when they conflict with a very basic labor supply and demand curve, we cannot ignore the basic premise of how these costs are absorbed by business model.

 

[Gimmesometruth]

This is what I am talking about, conflicting models suggesting questionable methodologies. Especially when they conflict with a very basic labor supply and demand curve, we cannot ignore the basic premise of how these costs are absorbed by business model.

Um, since nearly ALL of the 64 studies converged to 0 (ZERO) elasticity in MW increases effects on employment, it shows that the analysis ("models and methodology") is not "conflicting", much, if at all.

 

[OrphanSlug]

Um, since nearly ALL of the 64 studies converged to 0 (ZERO) elasticity in MW increases effects on employment, it shows that the analysis ("models and methodology") is not "conflicting", much, if at all.

So you are saying the CBO is wrong...

 

[Gimmesometruth]

So you are saying the CBO is wrong...

Um, there has been lots of discussion since the release of the CBO's view on their correctness, I'm just showing 64 major studies on the effect. If you like single data points, cool, if you want to consistently point to the CBO for projections...fine.

 

[Libertie76]

Better yet, show where MW caused "wage bubbles" in the economic data. That should be a very easy and consistent correlation to show.

Because low-wage labor will be over-valued, so the prices will be high and we will probably use government to step in and induce subsidies to hire more workers... = bubble

 

[Paschendale]

And maybe "increases in min wage will result in workers choosing to work shorter hours, thus employers will have to hire more workers".

This does seem like the ideal outcome, doesn't it? Especially since automation is likely to continually lower the number of jobs available for quite some time. The future is very much going to be about paying people more for less work. There's going to be less and less work to do, and all the earnings will continue to stagnate and concentrate in the upper class unless we alter our system.

 

[Libertie76]

It appears to me that as many as 3 people predicted that a hike in min wage would cause both unemployment and inflation.

That doesn't really make a lot of sense. If employers can't pass on the cost of a wage hike, then it can't cause inflation. If employers can pass on the cost of the wage hike, then we may have some inflation, but not unemployment.

I'd like to see the poll where people can only pick one of those two options, because selecting both is irrational.

I'd also like to see another option, something like "increases in minimum wage will create an increase in demand which can lead to new job creation"

And maybe "increases in min wage will result in workers choosing to work shorter hours, thus employers will have to hire more workers".

The employers can only pass the hike on the consumer if the demand is inelastic. so we can see prices rise as a result

Sorry i would of put that in, however i dont rationalize that logic because increasing "aggregate demand" will not create new jobs unless investment into the right capital is behind it. Which it is not when we enforce an artificial wage hike, because when that happens we use state force to re-allocate capital and not reinvest in the capital structure

The employers will not hire more workers if they can not afford to pay the workers, in fact with the high wages workers will see a decrease in hours all right in the entire wage hike zone. There are places that if the Federal wage hike went to 15, we can predict a huge chunk of industry will be forced to close down, or replace workers with robots.

 

[Libertie76]

These arent nominal statistics these are real statistics, they are holding inflation fixed and saying the levels of productivity were to rise while holding Real Wage constant this is how much wealth would be earned. Increasing the Nominal min. wage will only suppress the real min. wage even more

 

[Helix]

fifteen would probably be counterproductive. they should link the federal minimum wage to inflation, however.

what would help a lot more would be to guarantee debt free access to post secondary education / job training.

 

[Libertie76]

I think it will increase our middle class and hurt the uneducated.

I disagree this will harm the middle class because the drop in employment will force government subsidies to initially prop up businesses to help remain afloat and then it will be allocating capital to the wrong sector of production which will push the middle class out.

 

[Cephus]

It appears to me that as many as 3 people predicted that a hike in min wage would cause both unemployment and inflation.

That doesn't really make a lot of sense. If employers can't pass on the cost of a wage hike, then it can't cause inflation. If employers can pass on the cost of the wage hike, then we may have some inflation, but not unemployment.

I'd like to see the poll where people can only pick one of those two options, because selecting both is irrational.

I'd also like to see another option, something like "increases in minimum wage will create an increase in demand which can lead to new job creation"

And maybe "increases in min wage will result in workers choosing to work shorter hours, thus employers will have to hire more workers".

Um... nowhere in the poll does it say unemployment. It says full employment, not full unemployment. Just FYI.

 

[MaggieD]

I disagree this will harm the middle class because the drop in employment will force government subsidies to initially prop up businesses to help remain afloat and then it will be allocating capital to the wrong sector of production which will push the middle class out.

Well, I'll give you a Like....if I really understood what you said? I might agree with you.

 

[Libertie76]

fifteen would probably be counterproductive. they should link the federal minimum wage to inflation, however.

what would help a lot more would be to guarantee debt free access to post secondary education / job training.

1. there is no such thing as debt free, when government finances these institutions it just leverages debt on to savers and tax payers

2. When we inflate the school funding asset bubble even more we will see even more unsustainable college loans which put graduates into a level of nominal debt thats virtually impossible to pay off, especially with concepts of raising the Min. Wage to 15/hr. This is because there is no capital in long term investments. Cant figure out how to show yield index, but its showing a decrease in interest rates which reflects a slowing down on long term investments. Which means there is no longer any capital for production. Leverging more debt and attempting to shove more assets into the wrong sector is the worse thing we can do