New study indicates caution needed on large minimum wage increases

This study is not from a partisan source. I think there is a good possibility that the difference in these results from other could well be due to the size, speed and continuing nature of the increases.

https://www.washingtonpost.com...

"When Seattle officials voted three years ago to incrementally boost the city's minimum wage up to $15 an hour, they'd hoped to improve the lives of low-income workers. Yet according to a major new study that could force economists to reassess past research on the issue, the hike has had the opposite effect.

The city is gradually increasing the hourly minimum to $15 over several years. Already, though, some employers have not been able to afford the increased minimums. They've cut their payrolls, putting off new hiring, reducing hours or letting their workers go, the study found.

The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city. The study, published as a working paper Monday by the National Bureau of Economic Research, has not yet been peer reviewed."




Gilgul said:

This study is not from a partisan source. I think there is a good possibility that the difference in these results from other could well be due to the size, speed and continuing nature of the increases.

https://www.washingtonpost.com...


"When Seattle officials voted three years ago to incrementally boost the city's minimum wage up to $15 an hour, they'd hoped to improve the lives of low-income workers. Yet according to a major new study that could force economists to reassess past research on the issue, the hike has had the opposite effect.

The city is gradually increasing the hourly minimum to $15 over several years. Already, though, some employers have not been able to afford the increased minimums. They've cut their payrolls, putting off new hiring, reducing hours or letting their workers go, the study found.

The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city. The study, published as a working paper Monday by the National Bureau of Economic Research, has not yet been peer reviewed."

is that where you stopped reading the article?


No. But clearly you skipped over all the parts you wanted to skip over to focus on the caveats. Which there are And which is why I used "caution needed" rather than something like "new study shows minimum wage increase cases harm". 

I will await your apology. I am patient.



Gilgul said:

No. But clearly you skipped over all the parts you wanted to skip over to focus on the caveats. Which there are And which is why I used "caution needed" rather than something like "new study shows minimum wage increase cases harm". 

I will await your apology. I am patient.

I read the entire article.  I don't think you represented it completely.  I'm not apologizing for that.


Jamie likes excerpts posted. But you can not post the entire article because of copywrite rules. So I posted unedited the first 3 paragraphs. I was not representing anything except what I wrote in the thread title. Which I still consider accurate.


you can paraphrase the other points instead of quoting. There were some important criticisms of the findings that you left out. 


I do not see any reason to paraphrase anything if a link is provided to the entire article.


so you put your summary in the headline with a weak caveat, and then added your own commentary, followed by a quote from the article that ended before the criticisms of the research.  But you still consider your post to be an "accurate" summary.

got it.


Here's the local (NJ) angle from the study (PDF).


They found that restaurants in New Jersey had, in fact, added more workers to their payrolls more than restaurants in neighboring Pennsylvania, where the minimum wage remained constant.

and here's one of the criticisms of the study:

There could be another explanation for the results, however: the fact that large employers are not included. It could be that even if employers with only a single location cut payrolls, large firms expanded at the same time, giving low-wage workers other opportunities to earn money.

Other researchers have found that large employers are better able to raise wages in response to changes in the minimum. Liberal economists often argue workers have less bargaining power when negotiating their contracts at larger firms, and that as a result, employees at those companies are often underpaid in the absence of a wage floor.

"I think they underestimate hugely the wage gains, and they overestimate hugely the employment loss," said Michael Reich, an economist at the University of California, Berkeley who was part of a group that published its own study of the minimum wage in Seattle last week.

I expected this thread to be a discussion of the article and the issue rather than a p---ing match, but it is Monday I guess...

I'm not surprised by the findings of the report in the WaPo. Setting an artificially high minimum wage, while it sounds nice in theory, causes distortions in the labor market and unintended consequences borne by the people such a law is meant to help.  



Smedley said:

I expected this thread to be a discussion of the article and the issue rather than a p---ing match, but it is Monday I guess...

Are you new to MOL?


Gilgul said:

 But you can not post the entire article because of copywrite rules. 

Really? I did not know that.

The problem I have with discussions of the minimum wage is that I do not see the advantage to a "low wage worker" of having a job where they do not make enough money to live on. 



once again people with a particular point of view cherry pick the one study that seems to confirm their pre-conceived notion.

people who actually care about facts will read the article and see that there are so far at least two studies completed, and they contradict each other.  People who actually care about facts will wait to see more data before deciding what the best answer to this question is.



Smedley said:

I expected this thread to be a discussion of the article and the issue rather than a p---ing match, but it is Monday I guess...

I'm not surprised by the findings of the report in the WaPo. Setting an artificially high minimum wage, while it sounds nice in theory, causes distortions in the labor market and unintended consequences borne by the people such a law is meant to help.  

you call it a pissing match, I call it a discussion of whether or not the facts of the article are being presented fully.

If we're going to have a discussion, shouldn't all the available information be presented before we start the discussion?


Perhaps, the low wage worker can join together with another person (low wage worker or not) and share expenses.  I am thinking the gamut from room-mates, spouses, boyfriend-girlfriend, hefriend-hefriend, shefriend-shefriend.  The law (such as Internal Revenue Code) incentivizes marriage and also home purchases which is often the result of such pairings described above.

LOST said:



Smedley said:

I expected this thread to be a discussion of the article and the issue rather than a p---ing match, but it is Monday I guess...

Are you new to MOL?



Gilgul said:

 But you can not post the entire article because of copywrite rules. 

Really? I did not know that.

The problem I have with discussions of the minimum wage is that I do not see the advantage to a "low wage worker" of having a job where they do not make enough money to live on. 



or people can get 2 or 3 jobs.  Or they can sell plasma.  Or stop eating so much.  

Why should someone expect to be able to live on the wages from a full time job?  The entitlement of some people.   vampire 

RealityForAll said:

Perhaps, the low wage worker can join together with another person (low wage worker or not) and share expenses.  I am thinking the gamut from room-mates, spouses, boyfriend-girlfriend, hefriend-hefriend, shefriend-shefriend.  The law (such as Internal Revenue Code) incentivizes marriage and also home purchases which is often the result of such pairings described above.
LOST said:



Smedley said:

I expected this thread to be a discussion of the article and the issue rather than a p---ing match, but it is Monday I guess...

Are you new to MOL?



Gilgul said:

 But you can not post the entire article because of copywrite rules. 

Really? I did not know that.

The problem I have with discussions of the minimum wage is that I do not see the advantage to a "low wage worker" of having a job where they do not make enough money to live on. 



ml1, I do not know what to make of your response.  I get it you disagree with me.  However, IMHO, your response was eccentric and disproportional (namely the following):  "Or they can sell plasma.  Or stop eating so much. "

My mild comment (much milder than that @#$%^ altright NYT article linked below):  Perhaps, the low wage worker can join together with another person (low wage worker or not) and share expenses.  I am thinking the gamut from room-mates, spouses, boyfriend-girlfriend, hefriend-hefriend, shefriend-shefriend.    

Your disproportional response causes me to pause, and ask you the following:

Do you have a personal issue with me?

Are you attempting to pick a fight?

A NYT article (of not so long ago) made points similar to what I made.  See http://www.nytimes.com/2011/06...

Pax vobiscum.  

ml1 said:

or people can get 2 or 3 jobs.  Or they can sell plasma.  Or stop eating so much.  

Why should someone expect to be able to live on the wages from a full time job?  The entitlement of some people.   vampire 
RealityForAll said:

Perhaps, the low wage worker can join together with another person (low wage worker or not) and share expenses.  I am thinking the gamut from room-mates, spouses, boyfriend-girlfriend, hefriend-hefriend, shefriend-shefriend.  The law (such as Internal Revenue Code) incentivizes marriage and also home purchases which is often the result of such pairings described above.
LOST said:



Smedley said:

I expected this thread to be a discussion of the article and the issue rather than a p---ing match, but it is Monday I guess...

Are you new to MOL?



Gilgul said:

 But you can not post the entire article because of copywrite rules. 

Really? I did not know that.

The problem I have with discussions of the minimum wage is that I do not see the advantage to a "low wage worker" of having a job where they do not make enough money to live on. 



I guess I'm being mean.

But your response is really not any sort of solution.  Get a roommate isn't a solution for a single person with a child for instance.

We may disagree on what the means are that get to a living wage for full time workers.  But your response seemed dismissive of the notion that someone working a full time job should expect to be able to live a decent independent life.


This. 

ml1 said:

I guess I'm being mean.

But your response is really not any sort of solution.  Get a roommate isn't a solution for a single person with a child for instance.



maybe I'm being unfair, but I think it's callous to tell people to get a second job, work more hours, get a roommate as the solution to the fact that the federal minimum wage, adjusted for inflation is now equal to what it was in the '50s (chart below).

There are solutions to this if we have the will to implement them.  On MOL there was this discussion of universal basic income.  That's pretty radical and not likely to happen any time soon. But some combination of the following for working people could do a lot.  And let's remember we're talking about people working full time, not "takers" or freeloaders.

  • Increased minimum wage
  • Further expansion of Medicaid
  • Expansion of SNAP
  • Expansion of EITC
  • Laws that better support union organizing in all workplaces
  • Free college for low-income families
  • Universal basic income

Those seem to me to be better solutions than telling people to lower their expectations for the American Dream, or work a second job.


Maybe an employer faced with having to pay his employees a living wage, and a reduction of profit, should find a way to join together with another person to share expenses.


why is it even a question in the 21st century that a person should be able to live minimally comfortably when working full-time?

That's the distortion of the "market" - the fact that people live in poverty while working their butts off.

Capitalists sure have a thing for being inhuman assh***s, ya know?





LOST said:

Maybe an employer faced with having to pay his employees a living wage, and a reduction of profit, should find a way to join together with another person to share expenses.

 snake 



LOST said:

Maybe an employer faced with having to pay his employees a living wage, and a reduction of profit, should find a way to join together with another person to share expenses.



Back to the topic - article in today's NY Times about two recent studies with different conclusions.  The OP started and entitled this thread by mentioning only one of the two studies.

https://www.nytimes.com/2017/0...

Three years ago, Seattle became one of the first jurisdictions in the nation to embrace a $15-an-hour minimum wage, to be phased in over several years.

Over the past week, two studies have purported to demonstrate the effects of the first stages of that increase — but with starkly diverging results.



@LOST, I take it that you are alleging asymmetry with respect to my viewpoints on:  i.) employees sharing expenses; and ii.) employers sharing expenses.   More fundamentally, the issue is that both the rational employee and rational employer have a common goal:  reducing expenses, both fixed and variable.  

However, I believe that you are missing several parts of the analysis (or perhaps you were attempting to make a funny).  The employer in the for profit world is subject to competition from competitors regarding its products or services.  This competition prevents the employer from pricing its product/service at an "excessive" rate (and thereby limits employer's profits).  Additionally, the employer is also in a constant competition with competitors to retain good employees.  Such competition for employees rewards those employees that have skills that employers are looking for.  One of the chief ways employees are lured away is by higher wages at the competitor.  $15/hour minimum wage laws distort the system.  Specifically, we want to encourage individuals to gain skills and be rewarded at the existing workplace (or lured away for more compensation).

Q.  If your employee is so skilled but exploited by low wages of their existing employer, then why doesn't a competitor come in and hire the skilled employee for a marginal increase?

A.  Employees frequently move to new employers for higher wages.  Alternatively, some employees have not been provided with sufficient incentive to acquire additional skills necessary to obtain higher wages ($15/hour minimum wage destroys the incentive for new skills acquisition for many employees).

Appeals to emotion are a technique frequently used by those who cannot make a cogent argument for their position.



LOST said:

Maybe an employer faced with having to pay his employees a living wage, and a reduction of profit, should find a way to join together with another person to share expenses.



I thought LOST was making a joke, not making an argument.



South_Mountaineer said:

Back to the topic - article in today's NY Times about two recent studies with different conclusions.  The OP started and entitled this thread by mentioning only one of the two studies.

https://www.nytimes.com/2017/0...


Three years ago, Seattle became one of the first jurisdictions in the nation to embrace a $15-an-hour minimum wage, to be phased in over several years.

Over the past week, two studies have purported to demonstrate the effects of the first stages of that increase — but with starkly diverging results.

Believe it or not I titled this thread "New study indicates caution needed on large minimum wage increases" on purpose and for a very specific reason. The weight of the evidence is that the initial increase from  9.47 to $11 did not have any significant negative impact on employment. But the most recent survey indicates that the further increase to $13 (with exceptions) so soon after the last increase may have had a negative impact. So it is not a matter of can the minimum wage be increased at all without significantly impacting employment but rather how fast and how much can it be done before crossing a threshold where there will be an impact on employment. And since Seattle is still in the middle of the process that will take it to $15 in relatively short order that is a question that deserves attention and serious consideration of the results of independent studies. Not just dismissive wishful thinking.



ml1 said:

maybe I'm being unfair, but I think it's callous to tell people to get a second job, work more hours, get a roommate as the solution to the fact that the federal minimum wage, adjusted for inflation is now equal to what it was in the '50s (chart below).

There are solutions to this if we have the will to implement them.  On MOL there was this discussion of universal basic income.  That's pretty radical and not likely to happen any time soon. But some combination of the following for working people could do a lot.  And let's remember we're talking about people working full time, not "takers" or freeloaders.
  • Increased minimum wage
  • Further expansion of Medicaid
  • Expansion of SNAP
  • Expansion of EITC
  • Laws that better support union organizing in all workplaces
  • Free college for low-income families
  • Universal basic income

Those seem to me to be better solutions than telling people to lower their expectations for the American Dream, or work a second job.

I would much rather see a single ubi with streamlined administration than a further expansion of the laundry list of separate government programs.


Seattle's  unemployment rate is 3.3%.  

From the NY Times article:

Most seriously, skeptics argue that the researchers confused the effects of a minimum-wage increase with the effects of a hot labor market. During a boom, which Seattle has experienced in recent years, employers bid up wages, effectively replacing low-wage jobs with higher-paying ones.

However, I'm not going to sit here with 2 contradictory studies in front of me and conclude that only one of them represents the truth.  I would suggest that more studies need to weigh in before anyone draws any conclusion.


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