Depends on the business and the business model. Since everyone else loves anecdotes, here’s one. There is a Circle K that I like to go to (they have the best slushies IMHO). It’s a 24 hour/7 day a week concern. They are chronically short staffed there…usually only one person per shift (sometimes there is a manager as well), even during the day. This can be a problem when the person at the counter has an issue or problem. In general what this means is that the person closes the store and hangs a sign saying ‘will be back in 5 minutes’. This has happened a number of times since I’ve been going to the place. I spoke to the manager, and she told me that they would love to hire a second or even a third clerk or stock-person during the day, but that they can’t afford it.
So…lower minimum wage (or eliminate it completely and simply let the market decide the price of labor) and you could potentially have several more people working at the Circle K, instead of one harassed clerk who can’t even take a bathroom break without closing the store and then getting pounded on by fat Hispanics in search of a slushy fix…
Automation costs money, obviously. It becomes attractive when the price of low end labor is high enough to justify the initial capital costs, plus training costs and implementation.
I had the impression your parents made money by working hard to improve their homes and then selling them. I hold no animus against people who inherit money or other advantages in life, people don’t have any control over whether they are born rich or poor than they do over whether they are born black or white. Neither condition conveys any moral authority or moral shame in my book. Sorry I offended you.
I have been a Republican for as long as I have been a voter - so I will answer.
When I was coming of age politically, the dominant party in my area was the Democratic Party. It was also notoriously corrupt, and scandals hit the news regularly. While similar scandals did affect Pennsylvania Republicans, in my general area they were a more honest lot, being without power, and I liked and admired some of the politicians that were elected from that area and party like John Heinz and Dick Thornburg.
I was also a general supporter of Reagan - while I’m not blind to his faults, then as now, I think he was a tremendously consequential president and a man who was able to challenge some deeply held misconceptions.
The Republican Party has often disappointed me since - but since I don’t feel any natural affinity for the Democrats my general attitude has been to remain active with the Republicans, work in campaigns and vote in primaries and caucuses, and try to improve the party rather than abandon it.
I talk about trends, and you reply with an exception. OK. My exception is the most successful chain of convenience stores in the Midwest is QuikTrip, and the secret of their success is doing exactly the opposite of Circle K and 7-11. They are known for never having only a single employee on staff at any time, and this dramatically reduces the potential for armed robbery - dealing with two employees is more of a problem than one, so they will tend to rob the store that only has one. Also, QuickTrip pays a living wage, so they get bright, energetic employees and they promote from within, so every store manager has real customer experience.
Anyone who lives in an area like Kansas City will back this up. The QuickTrip on Wornall is always very busy, while the Circle K a mile up the same road is usually empty. People prefer dealing with people who treat them well, and those employees threat customers well because they are treated well.
You avoided the question. Is Blockbuster going to re-open their stores if they could get employees for a dollar an hour? Would all the RedBox devices disappear? A RedBox machine may cost $50,000 (a wild guess) but it is still going to cost less than opening a single store or cover the costs of managing a single overworked employee.
I work in automation, and this isn’t true. At least, not in the general case. Automation only fills jobs, in very specific categories. And it’s not cheap to implement or maintain. Certainly automation has had a big impact in manufacturing, agriculture, phone switching, and many other areas. But there are an equal number of areas where automation has made no inroads at all, or has actually required more human workers.
In the case of typical minimum wage jobs in the service industry, automation has had little impact. Minimum wage labor is cheap, and usually employed in areas that are hard to automate. Stocking grocery store shelves, mowing lawns and cleaning houses is not likely to be automated for a long, long time.
Really guys, it’s quite simple. Jobs exist for people if the productive value of the job exceeds the wage required to hire someone to do it, and if no higher-productivity options exist.
This basic fact is why economists generally agree that minimum wages reduce employment. When you raise the minimum wage, employees on the margin of worker productivity lose their jobs.
In cases where the minimum wage had no effect on jobs, it was for one of two reasons:
The prevailing wage is already higher than the new minimum wage. This is common with a lot of labor law, actually - wages go up, then politicians pass laws to raise the minimum wage. No unemployment takes place, and the politicians take credit for the wage increase that was actually driven by market pressure, and not by the law. The same has happened with bad labor practices - the general public reacts to a bad labor practice, and market pressure forces companies to abandon it. The government then passes a law against the practice, and takes credit for ending it. That largely happened with child labor, for example.
Wage stickiness. There is some evidence that small increases to the minimum wage may not result in additional unemployment because it simply costs too much for employers to fire people and change their business practices (and because employers don’t actually like firing people - they’re humans too). So instead, they might increase their prices or cut back in other areas to make up the difference. For example, if you force employers to increase the minimum wage, they might respond by cutting back on other benefits - anything from free coffee at coffee breaks to extra vacation or year-end bonuses or sales commissions. The other thing employers might do is force the existing workers to raise their productivity by working them harder instead of hiring more staff.
During the last minimum wage debate, I pointed out that prevailing wages were already higher than the new minimum in many areas, and therefore it would probably have little effect on unemployment - but also not actually raise anyone’s wage except in a few places. The problem I pointed out is that raising a price floor on wages as the economy heats up runs the risk of making the employment market brittle in the case of an economic downturn. If worker productivity were to drop substantially, and employers did not have the right to reduce wages accordingly, the result would be that employment would fall off a cliff as employee’s productivity fell below the minimum wage. That may be exactly what happened.
No sweat - I could not figure out why you were so pissed off at me. Thanks again for the cite. Everyone has already picked it apart and lets face it, it effectively says that there is not anything conclusive on this one. I DID do a quick review at NBER and my admittedly quick perusal resulted in this review paper cite (emphasis on certain lines that run counter to your claims by me):
So here is some information published in 2006, that is a recent counter cite to your link. I checked this out before my earlier post, which is why I am fairly confident that the economists just ain’t sure. This, of course, reminds me of a classic Bloom County strip:
As I stated, I stopped formally studying econ in 1991 when I graduated from University. I took two additional courses in business school, but neither of them spent more than a few minutes on minimum wage impacts. I receive the NBER Digest delivered to my home still, and I enjoy scanning the abstracts (the complete journal articles no longer hold much of my interest).
And so long as we’re also willing to look at what makes so many modern workplaces, um, not-hellholes.
I don’t want to give up when looking at economic conditions. I’d be delighted to hear what you think our assumptions are, and how we must supervise, work, hire/fire, get along/not get along. I have no idea where you’re going with this, but I eagerly await the details.
Uh, okay. I don’t see why management analysts would need sociologists, but, again, by all means, lay out for me whatever you’ve got in mind, here.
A prescient statement, given the rest of your post.
OK, let me get this straight. You read a peer-reviewed journal article and apparently understood it well enough to argue that the modified version noted that there was no statistically significant relationship between unemployment and minimum wages.
You like this paper enough to use it as the basis to argue against my claim that there was a strong relationship between minimum wage increases and new jobs. Fine so far.
You then claim that my evidence for job creation is just correlation, not causation (not true for all my cites, but I’m with you so far).
You then throw away the peer-reviewed cited article, link to some crap CNN non-peer reviewed editorial as support for your case. and worst of all, the editorial you cite is just garbage correlation=causation claptrap issued by some policy group.
Son, I am disappoint.
Well, you now have a chance to show what a big man you are, and apply your own standards to yourself. Have fun!
This is a Neumark and Wascher paper; they’ve had issues with data reliability before. Here’s what Fox has to say about their 2000 study:
And here’s some criticism of their 2006 study
So Neumark has had data reliability issues in prior papers, uses himself as a cite, cherry-picks the data, and is apparently a member of a restaurant lobbying firm. I’m not blown away.
If you want to know what the consensus is on minimum wages, read this:
I know Nobel Memorial prize winners in Economics have nothing to bring to the table against the bald assertions of some of our resident conservatives, but this is the best I can do.
P.s., you should link to the actual paper, not the abstract.
"The belief that raising the minimum wage causes job loss was more commonly accepted by economists decades ago, but high-quality research by leading academic economists has forced the economic community to re-evaluate these arguments. This consensus view rapidly eroded following evidence from the 1990s. Even Benjamin Bernanke, President Bush’s appointee as the Chairman of the Federal Reserve, has noted that “economists disagree about …whether increases in the minimum wage reduce employment of low-wage workers”(Bernanke 2006). In lieu of negative employment effects, economists are frequently citing higher productivity, decreased turnover, lower recruiting and training costs, decreased absenteeism, and increased worker morale as ways in which employers may be able to offset some of the costs of a wage increase (Bernstein and Schmitt 1998; Card and Krueger 1995a).
Some distinguished economists have acknowledged their change of opinion on the issue. Former Federal Reserve Vice Chairman and current Princeton economist Alan Blinder commented, “My thinking on this has changed dramatically. The evidence appears to be against the simple-minded theory that a modest increase in the minimum wage causes substantial job loss” (Chipman 2006). The latest version of his popular introductory economics textbook reflects his change in thinking"
“Over 650 economists, including five Nobel Prize winners and six past presidents of the American Economics Association, recently signed a statement stating that federal and state minimum wage increases “can significantly improve the lives of low-income workers and their families, without the adverse effects that critics have claimed””
You seem reluctant to take a position (now that your last one has been refuted). I ask again, is it your position that increases in the minimum wage will have no effect on employment no matter what?
My heart aches to answer your question, but your refusal to own up to your mistakes makes me think that you are not conducting this discussion in good faith, so I’m not going to waste my time.
Perhaps you can use my example as inspiration to do the right thing? Or, is this a situation where, to paraphrase, “mistakes don’t build character, they reveal it”?
Of course it will have “an effect”. What a stupid question, especially given the “no matter what”. Setting the bar at “one single anecdotal incident disproves the entire assertion” is requiring a ludicrous burden of proof.
The question ought to be to what extent raising the minimum wage has a net job loss effect (or otherwise significantly inhibits job growth) as quite a lot of Conservatives claim it does every time this comes up.
I linked to the National Bureau of Economic Research web site where the article and abstract are posted. FYI - The abstract is more than sufficient for an online debate forum, and there was a link to the paper on the page I linked to.
You should try linking to peer reviewed research, rather than just copying and pasting from a left-wing think tank summary. I am sure that having a BOD where most (if not all) of the major unions are represented has NO influence on the material provided. Board of Directors | Economic Policy Institute
I also like you citing “Fox.”
Finally, I do so enjoy a good academic pissing match. It is apparent that Card & Kreuger go head-to-head with Neumark, et al. No doubt the conferences are fun (do they do shots at the bar afterwards, and then fight over the level of tipping to the minimum wage paid bartender?), and I would assume that both sides have requested that the other not be allowed to review each other’s papers for submission (I have seen that in academia on more than one occasion).
For others who want an overview of this fascinating topic, there is a decently footnoted resource here: Minimum Wages - Econlib
Getting back to the OP - people who think that they will someday BE “moving on up” will vote for the team that seems to support those who HAVE moved on up. To the East Side. In a Deluxe Apartment in the Sky. They might not ever get there, and they might not be necessarily voting in their best interest in reality, but that can drive some voting behavior.
Only NBER members can access the paper from that link. The link I provided is open to anyone. I think that when the paper is freely available, it should be linked to in preference to just the abstract, and then the readers themselves can decide if they just want to stop at the abstract.
The site I linked to is cited and footnoted with peer reviewed research. That said, I agree that the fact that they are a biased source (if in fact they are a biased source), should be taken into account.
I mean Liana Fox, not the news source.
If you’re going to accuse me of linking to a biased source, and then yourself link to the Library of Economics and Liberty in your rebuttal, then I have trouble taking you seriously. Are you unaware of who funds Econlib? Hint: it’s the Liberty Fund.