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Does raising minimum wage kill jobs? The century-long search for the elusive answer shows why economics is so difficult

15 Comments
By Veronika Dolar

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Data trumps theory

This was a motto of Andrew Yang's campaign.

So many of the theories of the conservative right are magical thinking: trickle down economics, pulling yourself up by your bootstraps (think about it), even climate change denial and anti-vax .

They fall apart when confronted by empirical data.

0 ( +4 / -4 )

Not if done incrementally over time which gives businesses time to adjust. However you can't go too high or manufacturing and other jobs will just get outsourced to cheaper labor markets abroad.

-2 ( +1 / -3 )

No.

Look at Australia. Research concluded. Next question.

3 ( +5 / -2 )

Does raising minimum wage kill jobs? A friend of mine told me yesterday in a conversation that he asked his kids where did they want to go out for dinner they requested MC Donalds. He thought nothing of it because he said it was a quick meal to get and he could get home to watch the Dodgers game. He said for a family of 3 he spent $54.00 dollars. Minimum wage doesn't kill jobs what it does is increase the price of goods to offset the owners paying the workers more. Average restaurant worker in the US can now get anywhere from $13.00-24.00

0 ( +0 / -0 )

Scandinavia: high wages, low unemployment.

Bangladesh: low wages, high unemployment.

4 ( +5 / -1 )

Yes, most definitely because I have seen it with a very good friend of mine who lost his restaurant business because of forced wage hikes, I have also seen it wipe out a number of businesses in the LA area.

https://www.wsj.com/articles/seattles-wage-mandate-kills-restaurants-11576195087

https://www.cnbc.com/2021/02/10/one-third-of-small-businesses-say-15-minimum-wage-means-layoffs.html

-3 ( +0 / -3 )

I have also seen it wipe out a number of businesses in the LA area.

Waving the bs flag. Name the names of these businesses please. Be specific.

5 ( +5 / -0 )

An older study of a 26.9% increase in the minimum in California shows no reduction in employment or teen employment.

http://citeseer.ist.psu.edu/viewdoc/download?doi=10.1.1.135.4335&rep=rep1&type=pdf

2 ( +2 / -0 )

Scandinavia: high wages, low unemployment.

Bangladesh: low wages, high unemployment.

Low wages at formal jobs drive people into the underground economy, or to engage in crime, to survive.

4 ( +4 / -0 )

When low income workers get a salary increase they don't put it in offshore tax havens, they enjoy life and spend more. When they spend more businesses thrive and more workers are hired. Unemployment rates can actually drop when wages are improved. Of course to be a total solution to the problem many CEOs would have to be satisfied with a yearly income of somewhat less than the amount one of their workers earns in 300 years which is often the case.

4 ( +4 / -0 )

Theoretically possible. But unlikely in modern society.

In the end, this equates to if your company is incapable of generating sufficient value to pay all your employees for their time.

0 ( +0 / -0 )

Low wages at formal jobs drive people into the underground economy, or to engage in crime, to survive.

For many small businesses raising the minimum wage will drive up prices that will be forwarded over to the customer decreasing patronage and will often lead to either layoffs or closure. You look out for your employee, but at the end of the day you have a business that you are responsible for and if you can't keep the lights on it is not worth it, especially if the job is a temp job or transitional job.

-2 ( +0 / -2 )

No, raising the minimum wage doesn’t kill jobs.

The reason there is. Minimum wage is to keep employers from paying even less, which they would happily do if there weren’t a law preventing it.

1 ( +2 / -1 )

No, raising the minimum wage doesn’t kill jobs.

Yes, it does in the restaurant and service industry jobs, particularly the smaller chains, that is the reason why they are compensated in tips.

The reason there is. Minimum wage is to keep employers from paying even less, which they would happily do if there weren’t a law preventing it.

That is absolute nonsense, the truth of the matter is that most of these jobs overall are career stepping stones towards something better and they are mostly designed for the younger inexperienced college kid that works either weekends or part-time and is not made for the average family person.

A proposal to simply raise the overall minimum wage to $11 (not including that for tipped workers) by 2026 would cost as many as 310,000 jobs across the country.

Keeping the tip credit intact is key to minimizing additional job losses – projected job loss by 2026 is 37% lower if the tipped wage is left alone.

Combining an $11 overall minimum wage with elimination of the federal tip credit (making the tipped wage $11 per hour) would cost up to 490,000 jobs by 2026.

Even raising the tipped minimum wage to equal half of the regular wage (reaching $5.50 per hour) by 2026 would cost up to 390,000 jobs by 2026.

Further indexing the minimum wage after reaching $11 also changes the calculus for businesses and their employees.

While job losses will undoubtedly occur during the proposed phase in period for $11, requiring the federal wage to increase annually thereafter means that businesses must adapt to higher payroll costs every year.

Indexing also extends job losses beyond the date for the targeted $11 wage, and CBO analysis shows additional job losses occurring through the next decade.

So without a doubt, it is a definite job killer overall, and as bad as the economy is right now, a wage hike is the last thing that should happen for the time being.

https://minimumwage.com/2021/05/dear-sens-romney-and-sinema-an-11-minimum-wage-can-still-have-severe-consequences/

-1 ( +0 / -1 )

Dollar’s article is so much academic laziness!

How she has the title of professor is a mystery to me as her research and conclusion are as ethereal as morning mist.

If billionaires and conglomerate heads still want more and more then what would a poor person say?

Did she even bother to ask?

It appears not…

0 ( +0 / -0 )

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