Turns out raising the minimum wage really does reduce entry-level job opportunities. Wow, who could have predicted that?
Ah, if only the Forbes site didn't include mandatory membership (so they can clog your inbox with spam every day). Pass.
Given the venue, preaching to the choir, I assume. "Look, gentlemen, if we were foolish enough to raise wages for our lowest-paid employees, it would cut into our bottom line, and WE CAN'T HAVE THAT. So we'll noise it about that we'll raise wages if they'll accept 'downsizing.' Watch them turn on each other and do our job for us. Then we'll tell the survivors that we've reviewed the quarterly report and we just can't manage the wage increase, but they're welcome to keep their jobs if they're willing to work at the same wage, but with longer hours."
No such thing is required, only to wait 3 or so seconds. And google the concept "unsubscribe" for those sites that do require email (sometimes worth giving email for a good enough article). About Seattle: too soon to tell, but the end result is inevitable so an article is unnecessary (higher prices, lower teen employment, etc.).
Meh. I just remember when you could read a Forbes article without jumping through hoops. There are plenty of other sources without the snob factor.
There's no pay wall, but passing is a reasonable enough choice, because the writer employs a neat trick to compare apples to oranges, by framing it as a comparison between Seattle and not Seattle, when virtually all aspects of the two labor markets are different. Long story short, low skilled employment has increased in Seattle, regardless of the new minimum wage.
I've taught Economics garamet and let me in on a little lesson: If businesses don't make money, they don't stay in business. And then no one gets paid. High or low wages. If you want to help the low income people why don't you give away all your books for free?
"No one gets paid"? Only the CEOs who leave with their multi-million-dollar parachutes. Carly Fiorina. Donald Trump. Etc.
Costco starts it's employees at 16 dollars an hour in many places and haven't risen the price of their $1.50 hot dog combo since they opened their doors 30 years ago. It's hard as fuck to get in there, but the vast majority of their highers ups started out working hourly. Likewise, In n Out was playing 10 bucks an hour back when the California min wage was $6.25 and they've managed to keep pace. The original owner kept $100,000 a year in profits and put the rest back into his company and keeping the best workers around. Neither of these companies are floundering in the red.
There's a difference between building your business with a certain payscale in mind and having one imposed on it several years after the fact by government fiat. When you do it from the beginning your can spread the cost all thru your pricing structure so that it doesn't have undue impact on how your revenue stream works. When you suddenly are forced to arbitrarily raise wages based on the decree of a legislature that knows next to nothing about your business, you're going to find the extra money wherever you can.
I guess the question then is why more companies don't plan for such things before having to do cutbacks. Because having to cut workers who cost too much, only to hire another new person and training THAT guy a few years later costs a wholE helluva lot too.
The other problem with the elitist Democrats call for raising the minimum wage is that it might make sense in the elite neighborhoods and gated communities where they live, but for the 95% of America that doesn't live in such areas, such a wage is likely unsupportable. $15 an hour might be fine for Manhattan, Seattle, Beverly Hills, and Palm Beach, but it'll throw a ton of people out of work in places like Johnson City, Whitesburg, and Three Links, where people don't even produce $15 an hour in revenue. The devastating results can be seen in Puerto Rico, now bankrupt. After decades of keeping its minimum wage below that of the mainland, Congress decided to hold it to the same minimum wage as the rest of the US. But Puerto Rico can't support such a wage so unemployment skyrocketed and a huge portion of its labor force was forced to move to the mainland to seek employment. But if the elites do the same to the mainland's "fly over country" there won't be enough jobs in Seattle and Manhattan to support the tens of millions of people from Iowa, Kansas, and Alabama that will be thrown out of work.
Indeed, this is the one valid argument. I think there needs to be some regional adjustments, and I'd also support a lower minimum for teenagers, since I sure as hell wouldn't hire one for $15 an hour. I'm still shocked that my daughter makes $10.
A few months ago there was a move to allow Puerto Rico to lower it's minimum wage to $4.25 for those under age 25. It was mostly the young and less skilled who were forced to move to the US mainland to find employment, as they were priced out of the market in Puerto Rico. Interestingly, the federal minimum wage is 77% of the Puerto Rican median wage, but generally less than 50% of the median wage in other states, and about 28% of the average mainland wage. It might make sense to use some statistical measure of median and average wages to determine what an areas minimum should be. Of course the Scandinavian solution is to set the minimum wage to zero. It seems to work quite well for them.
So first off, I need to point out the difference between the actual report and this blogger's take on it (this article is on Forbes blogger platform, not actual Forbes content). The author of this piece takes a few points out of context and ignores the rest, so worth reading the whole report (or at least the executive summary). https://www.documentcloud.org/documents/2997999-Seattle-Minimum-Wage-Final-Report.html Secondly, it's worth pointing out why this report exists. It's b/c when the City Council voted to raise the minimum wage (over a 8 year period, with small businesses having a slower rate increase) they also commissioned the UW to study the effects. That way the rates can be adjusted based on new evidence. This is what you call governance by facts, not ideology. Lastly it needs to be emphasized that by every metric, for all workers and businesses the situation improved after the minimum wage increase. Only in comparison to a created "synthetic" Seattle do you get what the blog author holds up as negative. Basically "Yeah, we were wrong about how this would cause Seattle's economy to crumble, instead it is going great, but see, see, by these selected metrics, taken out of context, things could have been even better!" Now the levels at which this guy gets it wrong: 1) He assumes that working hours are an end unto themself. He points out the 4 hours less of low wage work increases compared to "synthetic" Seattle. So while hours increased they didn't increase as much as they could have increased. However increased hours aren't an end unto themselves. For example, I'd much rather work 10 hours a week and make $40/h than work 40 hours a week and make $10/h. The actual report shows that existing low wage workers in Seattle that kept working through the wage increase saw their weekly take home pay increase $13 a week and their time decrease 15 minutes a week (an average). Only in wackoland does 'more money, less time' turn into a negative "Look, they cut hours!!!" 2) He assumes that low wage employment is an end unto itself. He highlights the point that while low wage employment increased in Seattle, it increased 1% less than "synthetic" Seattle. This assumes that we want to maximize low wage employment. Low wage employment is only good as an entry into the workforce for those without skills. As a workforce becomes more skilled and productive you would hope that the % of those in low skilled/low income positions would decrease. 3) Lastly and this one is more fuzzy, he ignores the values proposition here. This Seattle boom comes down to one basic foundation, people want to live here. That's the reality of the new creative economy. If you want the smart creative workers that fuel your business, you need to locate your business in a place where smart creative people want to live. When Facebook, Google, Ali Baba, Twitter and other tech companies choose to expand, there is a reason they do it in Seattle and not Des Moines. Obviously part of the reason creatives want to live here is the natural setting, but another part is the progressive politics. As people increasingly choose where to live based on politics, and the smartest folks tend to progressive, being at the forefront of progressive politics has a recruiting edge.
Slippery slope! Studies shows this happens 83.72% of the time, rounding that out... let's see, carry the 1... oh, shit.
And the author recognizes that it's an idiotic article. The key quote: "Other factors entirely swamp the effects of a minimum wage change." Even if you buy his weak argument that minimum wage employment increases would have been greater without the wage increase, he's conceded the point that a minimum wage increase is, at worst, no big deal.
Misleading thread title is misleading! When you google OOPS images without any filters it's far, far more entertaining/titillating than is your thread. Just sayin'
That's true, but they still could've chosen to keep raising prices along with inflation and make even more profit. Meanwhile, the Walton brats are the most wealthy heirs in America and their employees are having to do food drives to feed each other.
Yeah you're right - im pretty sure it's a loss leader for them which is no big deal considering the money they make.
