If you acknowledge that raising the minimum wage to $10 or 15 overnight will cost jobs, why can't you acknowledge that the same job loss occurs when you raise the MW from 0 to $10 over 75 years, albeit with more time to adjust and thus less stress?
If you snap a twig over your knee in a split second, or have a machine do it slowly over time, the twig still breaks. I’m not sure why you think these forces go away when more time is applied? It lessens the immediate stress, but in doing so just drags it out longer – lower stress per unit time, but the same stress beginning to end.
The fact is, there are a continuum of jobs that are worth anything from zero dollars an hour to several million an hour for the person hiring. By instituting a minimum wage, you’re eliminating the bottom jobs from the pool, which tend to be the only ones low skilled workers can get. Doing it slowly means people working those jobs have time to find better ones (if they can, and as real MW goes up, that gets harder and harder for the unskilled), and employers can find mechanical or procedural replacements, but the jobs are still gone.
Here (.pdf) are better data (USCB) on people living in poverty in 2014.
26.5MM age 18-64 lived in poverty.
16.4MM (62%) of them did not work.
7.1MM (27%) worked, but not full-time, year-round
3.1MM (12%) worked full-time, year-round
Why they didn’t work, or only part-time, is really neither here nor there. But USCB has those data if anyone is curious.
But what we see here is that most people living in poverty either do not work or work only a little. But they’re poor, and many people think we should do something about that. That requires spending someone’s money on it. Now one proposal is to raise minimum wage, altering how money flows from business owners, regardless of income, and from their customers, regardless of income, to MW earners, regardless of income; recall that most MW earners are not living in poverty. If you’re going to use someone’s money to try to solve the problem, I would much prefer to use taxes from people who can afford them (I can afford them) and direct the funds toward the people who need them. How that manifests is a matter for discussion.
For the same reason I can acknowledge that taking a bottle full of aspirin in one sitting is bad for you whereas doing it over he course of a year in modest doses can be beneficial. Honestly, does what you wrote make any sense to you?
Further, you are completely misrepresenting the reality of the MW. There was never a time where we went from an effective minimum wage of $0 to $10. People generally will not work for nothing, so the effective minimum wage is not going to be zero save internships and the like. So the change at any given point is going to be X vs. X+ some amount dictated by a minimum wage. So far, that change has not really had measurable deleterious societal effects AFAICT.
And there is a data from other countries on this as well. Germany instituted a minimum wage last year going from, in your parlance, 0 to 8.5 euros/hour overnight. Most accounts I have seen indicate no evidence of job losses. See here, here, and here.
There is little evidence this is actually true. Let’s look at broad trends here. The value of minimum wage has fallen something like 30% since the 80’s, yet teen employment has also fallen during that time. Why? By pure, cold economic logic, employers should be hiring more people since it’s cheaper for them to do so. Why hasn’t that happened with teens? Why wouldn’t McDonald’s, for example, go on a hiring spree given they can in theory hire more people for the same cost?
This speaks to your point that these bottom jobs evaporate due to a high wage floor. Obviously that may be the case under certain circumstances, but it doesn’t seem to pan out in the real world. There is little reason for me, as the owner of a McDonald’s in a world without MWs, to hire more cooks just because they are slightly cheaper. I especially am not just gonna hire dropouts, felons, and/or the incompetent just because they are a bargain on paper. I’d rather just pocket the money to use on something else. I, the owner, get richer, and society ends up having to subsidize me by providing my “underpaid” employees with benefits because having millions of people who cannot provide for themselves has been deemed sub-optimal.
But let’s assume that your contention is broadly true. Why should I care? Why should society be okay with the fact that I can hypothetically find enough people to exploit at poverty level wages absent a legislated MW? Why should I cosign this plan that is almost inevitably going to equate people to chattel whose desperation must be seized upon so that I can remain competitive?
Also, why haven’t most countries come to the same enlightened conclusion you have? Just about every successful country has a minimum wage either via legislation or collective bargaining. If a free market system where individuals negotiate for the own pay is best for society, why hasn’t any country (AFAICT) realized this and implemented it for the good of their own citizens? Is everyone uninformed?
The jobs are evaporating for the unskilled regardless. That is what technology does.
I agree the “why not all at once?” baffles me. Predictability and the ability to plan are good for markets.
Most teens, and more each year, do not *want *to work. Discussion in this article: http://college.usatoday.com/2015/06/29/teen-employment-falling/
It looks like each year there are fewer teens who want work but can’t find it. My guess is it has some part to do with increased focus on college.
That is not a subsidy to the employer. The employer sees no difference if the employee is receiving government benefits or not. And the employee is likely not, given that most MW earners are not living in poverty.
You don’t, strictly speaking, need to be in poverty to receive government transfers and services based on income. That said, my point was that if a “living wage” in a given area is $10/hour, and we have two realities where the MW wage is $8 and another where the MW is $10, low wage workers in the former reality will often take advantage of government handouts (often with their employer’s prompting) to survive. Our decision not to legislate a $10/hour minimum wage in the above scenario means we are basically subsidizing the employer because they get to keep that extra $2/hour.
That’s why we can be reasonable sure that Walmart, et al., would have to raise their wages if SNAP and other government and/or private charitable services were not available to many of their employees.
Not forcing someone to pay above the market rate is not a subsidy.
You’re correct that poverty is not the cutoff. For example, SNAP cuts of at 130% of the poverty line. But I can bump myself below the poverty line or a benefits threshold by having enough kids. Well, I used to be able to. I could be employed. I could not be employed. If I am, having that 3rd kid and suddenly receiving benefits changes nothing for the employer.
What, people would stop working for them if they stopped receiving government and/or private charitable services?
Actually, you would make more, because why would you, with better skills, work at a harder job than a minimum wage job. This is the point that people miss. If low level workers make 15 bucks then higher level workers have to make more too. That is the benefit of union workers. I was an engineer back in the day and my benefits were based on what the unions could negotiate, because they couldn’t give engineers lesser benefits and we didn’t have a union.
This is a false comparison. A more apt one would be taking one aspirin the first week, two the second week, until you are taking 52 a day after a year.
So I really can’t imagine what your “expensive safety net” refers to — unless it’s just the usual “My money is Mine! Mine! Mine! Every penny the gummint steals from me at gunpoint is Armed Robbery!”
So … many Americans suffer from severe poverty for various reasons. And you yourself have shown why expanding a safety net is politically unlikely as long as the “My Money doesn’t belong with the gummint freeloaders!” mentality dominates. Therefore minimum wage hikes are left as one practical way to help lower-income Americans.
Or don’t you agree that’s a worthy goal?
Finally — the question of how many low-wage workers will lose their jobs with a MW hike is an important one. But point to economists’ writings please if you want to debate that — let’s not just parrot Forbes.com and Sean Hannity talking points … or worse, prattle about “it’s just Econ 101” while proving the writer has never taken Econ 101.
Despite all my complaints, I really don’t think a increase to $10 would be that big a deal, for good or bad. Just please peg the damn thing to inflation so we don’t have to talk about it any more.
However, this does sound appealing to a small evil part inside of me that wants life to be an action movie:
Oh I see now - you’re strictly defining poverty by the Federal poverty line. So, if you earn $1 over that line you’re suddenly middle class?
Reality doesn’t work that way. If you make (as an example for SNAP) 130% of the Federal poverty line you are still poor by any practical definition. You sure as hell aren’t middle class. Add in another kid and you are even more poor unless you’re keeping the kid naked in a dog kennel and barely feeding it enough to keep it alive. Kids cost money, they don’t earn it.
They’d probably not eat as well, lose their homes, find it harder to keep themselves and their clothes clean enough to be acceptable, and eventually lose their jobs due to being unable to afford to maintain even minimum standards or afford reliable transportation to work.
Call it what you will. As long as we are in rough agreement that employers benefit when their employers are able to collect social services that they would otherwise have to pay for with their wages.
It might if you decide you cannot support said third child on the wages you are receiving.
Many competent people would. Three things would tend to happen IMO: their employees would find ways to cut back or fill the hole (eg. sharing an apartment, stealing food), they would become worse employees because they would have to spent more time and effort taking care of themselves with less resources, or they would quit. In most circumstances, Walmart benefits by having that social safety net there to help their employees.
No, the analogy is just fine. Yours make no sense.
I generally agree. However, I do think $15/hour as some are arguing for is not really wise for a majority of the country.
I feel compelled to note that there is considerable distance between “no downside” and “economic crisis.”
Shodan is nearly always fundamentally wrong in the political positions he espouses, but the people who are fundamentally right really need to be on their toes when demonstrating that, and not ascribe to him positions which he can readily and persuasively deny having put forward.
I don’t think we are. When I hire someone, the wage is the same whether he or she is receiving government benefits or not. The good I am purchasing, labor, costs the same. If the government doubles the benefit, my “subsidy” gets doubled, but 2 x 0 = 0.
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Ah, you noticed that, did you. Did you notice that employees also pay taxes that “partially pay” for things like Food Stamps? Yes, the question “makes no sense” except to illustrate why your original assertion made no sense.
Honestly, do you think that is any kind of serious rebuttal? Just so you know, it ain’t. Also, see above.
