Miami archbishop: raise the minimum wage [CC]

[ishii]

How many people lost their job and were thrown out of work because the minimum wage was tripled during this period? Answer: None
The unemployment rate in 1985 was 7.2%
The unemployment rate today is 5.5%
In other words, by tripling the minimum wage, the unemployment rate has decreased from 7.2 to 5.5 which is a decrease of about 25%. The higher the minimum wage, the more people have jobs.

Tomdstone, not quite a fair comparison. 1985 was 30 years ago. The increase from $9 to $15/ hr is going to be implemented over just a few years. Quite a big difference in terms of what it means for small businesses to have to adjust. Remember that many jobs are provided by small businesses who don’t have the ability to absorb something like a significant minimum wage increase. It helps to understand how the economy / businesses work, Tomdstone.

Also, regarding the current unemployment rate: there are also record numbers of people who have left the work force due to no opportunities in the Obama stagnation economy (in which 6 years into office, we have negative economic growth. With recoveries like this, who needs recessions?).

Ishii

 

[Tomdstone]

Tomdstone, not quite a fair comparison. 1985 was 30 years ago. The increase from $9 to $15/ hr is going to be implemented over just a few years. Quite a big difference in terms of what it means for small businesses to have to adjust. Remember that many jobs are provided by small businesses who don’t have the ability to absorb something like a significant minimum wage increase. It helps to understand how the economy / businesses work, Tomdstone.

Also, regarding the current unemployment rate: there are also record numbers of people who have left the work force due to no opportunities in the Obama stagnation economy (in which 6 years into office, we have negative economic growth. With recoveries like this, who needs recessions?).

Ishii

There is no proof that a higher minimum wage leads to a loss in jobs. Actually, using the statistics provided by Mr. Ishii, higher minimum wages lead to more employment and more jobs.
1985 - present - minimum wage increased dramatically.
1985 108 million employed in the USA
today 139 million employed in the USA
As the minimum wage increases, the number of those employed increases.

 

[ishii]

There is no proof that a higher minimum wage leads to a loss in jobs. Actually, using the statistics provided by Mr. Ishii, higher minimum wages lead to more employment and more jobs.
1985 - present - minimum wage increased dramatically.
1985 108 million employed in the USA
today 139 million employed in the USA
As the minimum wage increases, the number of those employed increases.

Pretty funny tomdstone. Actually the population increased about 80 million since 1985. I wonder if that has something to do with the 31 million more people working? Maybe.

Anyway - I look forward to a more serious discussion. Hopefully that can happen.

Ishii

 

[Tomdstone]

Actually the population increased about 80 million since 1985.

A large number of those were infants and children who do not normally hold down full time jobs.
There is no proof that raising the minimum wage will result in loss of jobs. See:
The Impact of Increasing the Minimum Wage on Unemployment: No Evidence of Harm
aneconomicsense.com/2013/03/06/the-impact-of-increasing-the-minimum-wage-on-unemployment-no-evidence-of-it/
Further a 2013 study by John Schmitt of the Center for Economic and Policy Research shows no employment response to modest increases in the minimum wage.

 

[stinkcat_14]

True. And food got relatively cheaper as well, as adjusted for inflation. But a lot of people who would have been farm hands, harvest workers, farriers, harness makers, horse breeders, blacksmiths, mill hands, bakers, etc lost their jobs. Were they better off or not in the whole scheme of things? Everybody has his guess, but nobody knows for sure, just like nobody knows for sure whether raising minimum wage for marginal jobs is good or bad for people, on the whole.

I would argue that we were unequivocally better off from the transformation from an agricultural society to an industrial society, but part of that is because our economy at the time was growing and we were able to absorb the labor displaced by mechanization. I think things might be a bit more disruptive in developing countries where the poor rural folks move to the city and then live a life of poverty there.

But the artificiality of it is troubling. If government forces wages higher than the labor is worth, economically, is anything really solved?

On the other hand, we seem to have no problem with other methods of raising the price of labor higher than it is worth. For example, to practice law, do you really need to meet the standards that the ABA thinks is necessary? Or what about medicine, the AMA has disproportionate influence on who can practice medicine, therefore the result is physicians are paid more than they are worth.

 

[ishii]

A large number of those were infants and children who do not normally hold down full time jobs.

Anyone born between 1985 and 1997 would be someone looking for a job at this point.

There is no proof that raising the minimum wage will result in loss of jobs. See:
The Impact of Increasing the Minimum Wage on Unemployment: No Evidence of Harm
aneconomicsense.com/2013/03/06/the-impact-of-increasing-the-minimum-wage-on-unemployment-no-evidence-of-it/
Further a 2013 study by John Schmitt of the Center for Economic and Policy Research shows no employment response to modest increases in the minimum wage.

The key word is modest. In Seattle the city council voted to increase the minimum wage from $9 to $15. Hooray!! free money!!

Not so fast:

“***As the implementation date for Seattle’s strict $15 per hour minimum wage law approaches, the city is experiencing a rising trend in restaurant closures. The tough new law goes into effect April 1st. The closings have occurred across the city, from Grub in the upscale Queen Anne Hill neighborhood, to Little Uncle in gritty Pioneer Square, to the Boat Street Cafe on Western Avenue near the waterfront.

***The shut-downs have idled dozens of low-wage workers, the very people advocates say the wage law is supposed to help/*****I]. Instead of delivering the promised “living wage” of $15 an hour, economic realities created by the new law have dropped the hourly wage for these workers to zero.

Advocates of a high minimum wage said businesses would simply pay the mandated wage out of profits, raising earnings for workers. Restaurants operate on thin margins, though, with average profits of 4% or less, and the business is highly competitive.

According to the socialists in Seattle, the businesses forced to raise the minimum wage were supposed to simply reach into their bag of huge profits (no doubt earned from the cheap labor of exploited workers). All businesses make huge profits from exploiting the worker, right? Instead, many of the businesses - especially the smaller ones are either closing or facing that prospect. What good is a $15 wage for those who cannot find a job? Does tomdstone or the socialist Seattle city council think of those “forgotten workers” ? Apparently not.

Human labor really is an economic good like pretty much all of the others. Raise the price and the demand for it will drop (another way of putting this is that human labor is not a Giffen Good). Please do note though what is the prediction. Not that there’s going to be a wiping out of employment opportunities, nor that the economy of Seattle is going to become a howling wasteland. Rather, that less human labor will be employed at $15 an hour than would have been employed if the minimum wage had not risen to that amount. And for people who would like to have a job but now cannot find one that’s bad news.

Bad news indeed.

forbes.com/sites/timworstall/2015/03/16/we-are-seeing-the-effects-of-seattles-15-an-hour-minimum-wage/

Ishii*

 

[didymus]

It is a puzzle why people don’t move. But what is even more puzzling is why people don’t even move short distances. For example, Taney County, Mo has an 8.7% unemployment rate and it is just outside of Springfield’s orbit.

I think largely because Americans prize home ownership. Renting or not owning a car marks you as a lose. But a home is an anchor stopping people from seeking opportunity elsewhere.
Cities are far more efficient than having do two hour commutes. No, I’m not suggesting forcing everyone into Stalinist apartment blocks. But we could abolish a lot of the policies that favor owning over renting.

 

[stinkcat_14]

I think largely because Americans prize home ownership. Renting or not owning a car marks you as a lose. But a home is an anchor stopping people from seeking opportunity elsewhere.
Cities are far more efficient than having do two hour commutes. No, I’m not suggesting forcing everyone into Stalinist apartment blocks. But we could abolish a lot of the policies that favor owning over renting.

I think you are probably right, but unemployed minimum wage workers are probably not bogged down by home ownership.

However, unemployment rates are higher in metropolitan areas with higher homeownership, probably because it is costly to move. I agree that it makes no sense to have policies, particularly tax policies that favor home ownership over renting.

 

[meltzerboy]

I think you are probably right, but unemployed minimum wage workers are probably not bogged down by home ownership.

However, unemployment rates are higher in metropolitan areas with higher homeownership, probably because it is costly to move. I agree that it makes no sense to have policies, particularly tax policies that favor home ownership over renting.

Renting is slowly but surely becoming a thing of the past, at least in New York City, and, I would imagine, in other large cities as well. In New York, for example, many rental apartments have been converted into co-ops, which tenants own and pay monthly maintenance fees on. Landlords are trying hard to convert most of their rentals into co-ops. For those tenants who cannot afford to buy into the co-op system, just as they cannot afford to buy their own home, there is precious little in housing available to them. Mayor de Blasio is working on a low-income housing system, not the same as the awful projects of the 1960’s, but more favorable to tenants who cannot afford either co-ops or higher-priced rental apartments. If his plan works, it would be a major accomplishment for the benefit of many New York residents.

 

[stinkcat_14]

Renting is slowly but surely becoming a thing of the past, at least in New York City, and, I would imagine, in other large cities as well. In New York, for example, many rental apartments have been converted into co-ops, which tenants own and pay monthly maintenance fees on. Landlords are trying hard to convert most of their rentals into co-ops. For those tenants who cannot afford to buy into the co-op system, just as they cannot afford to buy their own home, there is precious little in housing available to them. Mayor de Blasio is working on a low-income housing system, not the same as the awful projects of the 1960’s, but more favorable to tenants who cannot afford either co-ops or higher-priced rental apartments. If his plan works, it would be a major accomplishment for the benefit of many New York residents.

The majority of people living in New York are still renters, but the number of condo and co-op conversions has increased dramatically. It is certainly a city that is tough to live in for the working class. The thing that amazes me is how expensive New York is relative to Chicago. In Chicago, you can find a condo in a decent neighborhood for a reasonably affordable price. That is almost impossible in Manhattan and the nicer parts of the outer boroughs. I am sure New York City’s complicated regulatory structure makes things more expensive, but it is not like Chicago is a bastion of unregulated bliss.