/biz/ on min wage increase

>>1100524

I don't like it because I make $12-$13 an hour.

>>1100524

minimum wage is stupid

>>1100524
Minimum wage increase should at least track inflation, and it's better if it goes up slowly. Doubling it instantly is a bad idea, anyway. Certainly it does seem odd that in a period of record increase in profit, companies couldn't afford minimum wage to increase or even track inflation - it's an argument I just don't buy, really.

That said, minimum wage does seem, like many well-intentioned policies, to have some detrimental effects. The argument that without minimum wage rules someone who isn't properly qualified or isn't productive enough to command minimum wage could offer to work at a reduced rate for a period of time for training/improvement or even just to have something on their resume for that time, does appear on its face to have some merit.

So in summary: if we have minimum wage rules it's probably best that the rate increases in a time of economic growth at least somewhat, though I'm not fully convinced it's good in all circumstances to have minimum wage rules.

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>>1100524
In general, there's a large enough body of empirical evidence that suggests modest increases in minimum wage don't have the negative impact on labor supply that neoclassical theory would suggest, at least not at the relatively low levels they're currently at.

Specifically, while an increase in minimum wage could certainly increase food prices it's very unlikely your tacos are more expensive due to minimum wage--or at least that it's the only reason. The fact is that the price of meat, especially beef, has only risen for several years now, and it's getting to the point where prices have to be raised. If you'll notice, Subway is doing 6 Dollar Footlongs now, and that's a nationwide promotion, not just in states with higher minimum wage.

The idea that nobody wants it to go up is false and basically reliant on theoretical knowledge and assumptions about how the market will react. The problem is that, as I said, those assumptions are pretty false. David Card and Alan Krueger did fantastic work in the 90s with some of the most solid numbers out there in econometrics. The problem is just that business will always be opposed to it simply because it will necessarily mean an increase in costs. When those businesses have enough influence to shift the public discourse, the reality gets blurred.

Of course, as >>1100543 says, going with the Bernie Sanders approach and doubling probably isn't a goo idea either.

>>1100524

As a follow up: if minimum wage goes up, every other wage should have to go up too; if minimum wage doubles my $12 an hour wage should double.

But it won't.

So what incentive do I, someone who will make the same $15 as a cashier, have to do anything but write every politician I can find asking them to block minimum wage raises?

>>1100578
Increasing minimum wage puts positive pressure on higher-than-minimum wages as well, look at other countries with high minimum wage

>>1100625
As an example, Australia's minimum wage is like $15-20 or so, and the median full-time income was $57k 5 years ago.

>>1100625

But does my wage immediately and effectively double (Or otherwise increase proportionately to the minimum wage?)? Or am I stuck with $15 (or whatever the raise is) until the system very slowly pushes the wages up while costs jump immediately in anticipation of the wage raise?

>>1100578
You prefer job x to the cashier job.

I don't know what kind of weird world you live in where people actually prefer working in fast food/retail, but something really tells me you haven't had much experience in that industry.

>>1100638
>But does my wage immediately and effectively double (Or otherwise increase proportionately to the minimum wage?)? Or am I stuck with $15 (or whatever the raise is) until the system very slowly pushes the wages up while costs jump immediately in anticipation of the wage raise?
Well I assume your work is harder than a minimum-wage job so you go to your boss and say look I could be making the same amount flipping burgers give me a raise or I walk, then your pay increases. Maybe not to double, maybe only to the same absolute difference. But it will still increase.

>>1100575
wow I am very glad to read this post.

can you elaborate on Card and krueger? I am very interested on what exactly it is they found.

minimum wage in general kills this country. hurts small biz while helping big biz. plus makes more of the country not gain skills to increase their wage. so many things wrong with minimum wage, there should be no minimum wage imo, the market will work it out.

>>1100524
Min wage is a joke. It's not needed. In Germany you can make $20/hr at McDonalds yet there is no min wage.

>>1100639

I'd rather kill myself than go back.

I've had enough with customers treating me like shit and having to pretend like a job that won't give me full time deserves to be treated like a career.

So yes, I prefer Job X, but part of preferring Job X is being paid enough to maintain a modest lifestyle.

Hell, I've got it worked out where I could actually live in a house if I play my cards right.

If they raise minimum wage but my spending power effectively goes down, that plan could be shot to hell.

It's scary when a bunch of people who don't have the gumption to get out of retail/service have the influence on the political system to ruin my life.

>>1100653
Card released this paper in 1992
http://davidcard.berkeley.edu/papers/fed-min-wage-var.pdf

In it, he runs regressions for wage increase and employment before and after a minimum wage bump using multiple sampling groups and find no statistically significant correlation between the two variables.

In 1994 he did this case study with Kruegman:
http://davidcard.berkeley.edu/papers/njmin-aer.pdf
And they came to a similar conclusion.

Neither are applicable to any sort of standard theory of the effects of minimum wage, but the fact that they, along with most attempts to replicate the results, find that there is no correlation between increased minimum wage and increased unemployment proves that the neoclassical model can't be used to accurately predict all effects.

>>1100661
>yet there is no min wage.
Patently false.

Minimum wages originated as a way to keep women and minorities from competing with white male Americans for jobs. It's a strictly protectionist policy to benefit job holders at the expense of job seekers.

Keep minimum wage steady, or at least following inflation (.25 cents increase a semi-annually or something). Minimum wage, at least in Canada, is for the students or the immigrants. I do think minimum wage in the US is low and should atleast be a wage where you can afford all necessities.

If I were the government, I would instead look at increasing opportunities for those that want to move up in the world (capping textbook costs, subsidies for school and apprenticeship, more money for entrepreneurs). Gotta reward the people that are striving to be something in life

>>1100524
I'm barely above minimum wage and I'm against it.

I know when I'm a worthless piece of replaceable shit and I won't demand a wage I literally do not deserve.

For some reason people are slowly getting used to the idea that working a bottom of the barrell menial job should net you anything other than a life of poverty and unfulfilled needs.

>>1100738
Got anything beyond your intro to micro mind experiment to back that up?

Raise it to $10.50, tie it to inflation, and don't touch it again for fifty years.

>>1100781
prove it wrong oh PHD in ECON

>>1100790
http://davidcard.berkeley.edu/papers/fed-min-wage-var.pdf
http://davidcard.berkeley.edu/papers/njmin-aer.pdf

If you'd read the thread you'd see counterexamples have already been provided, m8.

If you're arguing that minimum wage should be raised to hold the same purchasing power as the 80s then you need to include a market basket that consists only of necessities. Minimum wage should be for necessities not luxuries.

>>1100524
Murica. One of the few places who still believes a small incremental increase will kill their economy.

>>1100898
What qualifies as a necessity has changed, though. For instance, a cell phone is by all intents and purposes a necessity these days.

>>1100524
So a 30 cent increase is going to destroy your budget?

>>1100910
That's where the basket is created. This falls on the economists at Congress. To research the "adjusted inflation" for goods that they deem necessary today. Once the basket is created a true purchasing power parity can be established and wages can be adjusted accordingly.

However, raising the minimum wage to 15 dollars an hour through law is dumb. Something like that would take affect immediately and there could be consequences for such a harsh shift. What wage increase there will be needs to be gradual.

>>1100709
Can you explain this a little more?

>>1100937
The original intent of minimum wage was to stop minorities from getting jobs since they are generally lower skilled. It was done in South Africa, the US, and other places.

If you look at groups who were racist in the past they stated this very thing. If you rise prices people will want less of said good, it has always been and always will be like that.

>>1100575
Markets don't exist in a bubble. Empirical data is totally impotent to explain market phenomena.

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>"Stop outsourcing jawbs!"
>Better raise the minimum wage, though

>>1100962
Then why are dems generally in favour of higher minimum wage?

>>1100963
>Empirical data is totally impotent to explain market phenomena.
No, this is science 101, unless you want to be a race studies tier field empirical data is paramount.

Business already charge the highest price that will be paid by lots of people. Having minimum wage increased isn't not really going to affect this too much

>>1100997

Yeah, fast food places are going to outsource t china.

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>>1101046
>Business already charge the highest price that will be paid by lots of people.
Not necessarily. Got any sources?
>Yeah, fast food places are going to outsource to china
Even better: pic

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biggest problem is the "increases" in minimum wage, specifically how erratic they come about.
>be a no-skilled worker
>start off at $8 (min wage for argument)
>do well
>get a $0.5 after 6 months
>get up to $10 in 3 years
>"oh hey, we're increasing the minimum wage!"
>$10/hr
>now you're about minimum wage again

if the increases were a yearly thing tied to inflation it would be fine

>>1100647
>give me a raise or I'll walk
I'm sure that works out great for the paramedics making less than $15/hr

>>1100963
It's not "totally impotent" if it can be replicated across multiple markets and time periods.

But more to the point, the simple fact that counter-examples of the model working necessarily imply the model is flawed, m8. Theoretical economics is a fucking religion at this point. No matter how much evidence you get that your simple 2D line models may have too many assumptions to be accurate in the real world, you'll still cling to them because the idea that you don't really know what any given policy will do to the economy is too scary for you.

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>>1101046
>Business already charge the highest price that will be paid by lots of people.
No, they charge a price such that marginal revenue = marginal cost.

>>1101053
They certainly don't under charge people if that's what you're implying.

As for automation, the reason it's so big in Japan is because they have a declining population. Sure, it's popping up here and there in the US, but at the end of the day an increase in minimum wage isn't suddenly going to make the huge amount of capital, the struggle of dealing with customers trying to order through computers, and the maintenance cost less than some teenager after a day of training.

>>1101472
>They certainly don't under charge people if that's what you're implying.
No, but that doesn't mean they won't. It all depends on the elasticity of demand.
>at the end of the day an increase in minimum wage isn't suddenly going to make the huge amount of capital, the struggle of dealing with customers trying to order through computers, and the maintenance cost less than some teenager after a day of training.
On the long run it is a lot cheaper to automate, or no one would do it in any industry. Your only costs are buying the equipement and paying for its maintenance. It's a lot cheaper to not have to pay wages, deal with labour laws, eventual employee lawsuits, training, vacations, sickness, underperformance...
Again, it all depends on the company's plans, but raising the minimum wage will only give the management one more reason to employ automation.

>>1101596
There are industries in the US that aren't automated that are in other countries that have lower minimum wages than we do. Japan is automating fucking hotels, anon. This is because of a lack of labor, not taht labor costs too much. At the end of the day, that's a larger factor.

Of course increasing costs will make it more likely to invest in more capital, but you're acting like the second an employee becomes 10% pricier, a company is suddenly going to start substituting labor with capital. That's not the case. We are well below that level, and while Bernie's 15 may put us near or above that level, you can't honestly argue that small incremental increases in minimum wage that keep up with inflation would.

If anything, the decreasing cost of capital would be the driving force. It's really not "a lot cheaper to not have to pay wages", otherwise business would do that right now.

>>1101841
A small increase that keeps up with the inflation would not, indeed, cause massive layouts. It would, however, make labour more costly, giving companies one more reason to switch to automation. Maybe that won't be the the straw that breakes the camel's back, but it would surely help speed up the process.

I love the fact that half the people bitching about a minimum wage increase will destroy America, meanwhile it'll actually mean they have money to spend for once assuming they stop being NEETs and get a fucking job.

>>1100524
In a capitalist economy, everyone is entitled to raise prices. Except labor. Because reasons.

>>1100634

In USD the AUS median household income is $44k and the US median income is $51k.