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Waterloomike
06-27-2017, 10:48 AM
https://fee.org/articles/seattles-minimum-wage-has-been-a-disaster-as-the-citys-own-study-confirms/?utm_source=FEE+Email+Subscriber+List&utm_campaign=f34f77ee78-MC_FEE_DAILY_2017_06_27&utm_medium=email&utm_term=0_84cc8d089b-f34f77ee78-107186733

The Seattle Minimum Wage Study, a study supported and funded in part by the Seattle city government, is out with a new NBER paper evaluating Seattle’s minimum wage increase to $13 an hour and it finds significant disemployment effects that on net reduce the incomes of minimum wage workers. I farm this one out to Jonathan Meer on FB.

This is the official study that was commissioned several years ago by the city of Seattle to study the impacts of raising the minimum wage, in a move that I applauded at the time as an honest and transparent attempt towards self-examination of a bold policy. It is the first study of a very high city-level minimum wage, with administrative data that has much more detail than is usually available. The first wave (examining the increase to $11/hr) last year was a mixed bag, with fairly imprecise estimates.

These findings, examining another year of data and including the increase to $13/hr, are unequivocal: the policy is an unmitigated disaster. The main findings:

– The numbers of hours worked by low-wage workers fell by *3.5 million hours per quarter*. This was reflected both in thousands of job losses and reductions in hours worked by those who retained their jobs.

– The losses were so dramatic that this increase “reduced income paid to low-wage employees of single-location Seattle businesses by roughly $120 million on an annual basis.” On average, low-wage workers *lost* $125 per month. The minimum wage has always been a lousy income transfer program, but at this level you’d come out ahead just setting a hundred million dollars a year on fire. And that’s before we get into who kept vs lost their jobs.

– Estimates of the response of labor demand are substantially higher than much of the previous research, which may have been expected given how much higher (and how localized) this minimum wage is relative to previously-studied ones.

– The impacts took some time to be reflected in the level of employment, as predicted by Meer and West (2016).

– The authors are able to replicate the results of other papers that find no impact on the restaurant industry with their own data by imposing the same limitations that other researchers have faced. This shows that those papers’ findings were likely driven by their data limitations. This is an important thing to remember as you see knee-jerk responses coming from the usual corners.

– You may also hear that the construction of the comparison group was flawed somehow, and that’s driving the results. I believe that the research team did as good of a job as possible, trying several approaches and presenting all of their findings extensively. There is no cherry-picking here. But more importantly, without getting too deep into the econometric weeds, my sense is that, given the evolution of the Seattle economy over the past two years, these results – if anything – *understate* the extent of the job losses.

This paper not only makes numerous valuable contributions to the economics literature, but should give serious pause to minimum wage advocates. Of course, that’s not what’s happening, to the extent that the mayor of Seattle commissioned *another* study, by an advocacy group at Berkeley whose previous work on the minimum wage is so consistently one-sided that you can set your watch by it, that unsurprisingly finds no effect. They deliberately timed its release for several days before this paper came out, and I find that whole affair abhorrent. Seattle politicians are so unwilling to accept reality that they’ll undermine their own researchers and waste taxpayer dollars on what is barely a cut above propaganda.

I don’t envy the backlash this team is going to face for daring to present results that will be seen as heresy. I know that so many people just desperately want to believe that the minimum wage is a free lunch. It’s not. These job losses will only get worse as the minimum wage climbs higher, and this team is working on linking to demographic data to examine who the losers from this policy are. I fully expect that these losses are borne most heavily by low-income and minority households.

Doug_M
06-27-2017, 12:01 PM
I didn't see that coming

Waynetheman
06-27-2017, 12:13 PM
So dumb obviously if they went to $15 this wouldn't be a problem.

RangeBob
06-27-2017, 12:42 PM
I didn't see that coming

You might not have seen it coming, but Doug_M did.


Forbes (right) says it kills jobs.

SpenceyHR
06-27-2017, 12:45 PM
Gubment forces rules on employers, employers adapt. Usually not in a fashion that's in the employee's favor.

soulchaser
06-27-2017, 12:48 PM
A study the McGuinty Liberals, in which Wynne was a Cabinet Minister, commissioned 10 YEARS ago warned against minimum wage hikes.

The author, U of T economist Morley Gunderson estimated it would kill 80,000 to 155,000 jobs for people aged 15 to 24.

http://business.financialpost.com/fp-comment/matthew-lau-wynnes-ontario-liberals-know-a-15-minimum-wage-will-kill-thousands-of-jobs-but-theyre-doing-it-anyway/wcm/6a18ad90-b955-4aa4-bcb9-fab3efffb17e

M1917 Enfield
06-27-2017, 12:50 PM
It will work out much different in Ontario when they shortly go to a $15 minimum wage!

In Ontario, Canada, Employers will be very happy to pay the higher wages right the way up the wage chain and the all resulting higher employment taxes and CP + EI increases that come with it!

FallisCowboy
06-27-2017, 12:51 PM
This paper not only makes numerous valuable contributions to the economics literature, but should give serious pause to minimum wage advocates. Of course, that’s not what’s happening, to the extent that the mayor of Seattle commissioned *another* study, by an advocacy group at Berkeley whose previous work on the minimum wage is so consistently one-sided that you can set your watch by it, that unsurprisingly finds no effect. They deliberately timed its release for several days before this paper came out, and I find that whole affair abhorrent. Seattle politicians are so unwilling to accept reality that they’ll undermine their own researchers and waste taxpayer dollars on what is barely a cut above propaganda.

I don’t envy the backlash this team is going to face for daring to present results that will be seen as heresy. I know that so many people just desperately want to believe that the minimum wage is a free lunch. It’s not. These job losses will only get worse as the minimum wage climbs higher, and this team is working on linking to demographic data to examine who the losers from this policy are. I fully expect that these losses are borne most heavily by low-income and minority households.

This is the part that I personally find very disturbing and so common in the libtarded mind. The arrogance that they cannot possibly be wrong and they will then gladly spend our money over and over, until they get an answer they want to hear.

Waterloomike
06-27-2017, 01:09 PM
This is the part that I personally find very disturbing and so common in the libtarded mind. The arrogance that they cannot possibly be wrong and they will then gladly spend our money over and over, until they get an answer they want to hear.

get with the program. It's feelings that matter. This is 2017 so sayeth the prime effeminate jackass.

What you described is one solid definition of insane or stupid, if you like. And we all know you can't fix stupid. Or insane.

kennymo
06-27-2017, 01:16 PM
I didn't see that coming

Lost....

Oh wait, wrong thread....

Zinilin
06-27-2017, 01:25 PM
The compensation in Ontario for an hours work of minimal value is about two pounds of bacon. ($CDN $5.00/lbs.)
Link: https://www.loblaws.ca/Food/Meat-%26-Seafood/Pork/Bacon/plp/LSL001004003007

The compensation in Seattle for an hours work of minimal value is about two pounds of bacon. ($USD $6.11/lbs)
Link: http://www.seattletimes.com/nation-world/as-americans-pig-out-bacon-sees-sizzling-price-hikes/

Minimum wage is not a number, it is a representation of the relative worth of unskilled labour; no government can change that.

Minimum Wage increases Cause the inflation needed to re-align the value of unskilled labour.

In June, shoppers paid $6.11 on average for a pound of sliced bacon in grocery stores, a record high, according to the U.S. Bureau of Labor Statistics. Four years earlier, the average price was $4.05 a pound.


Drivers ordering bacon-topped burgers at drive-through windows will pay nearly $5 on average, the unofficial ceiling on fast-food burgers, according to SpenDifference, a restaurant supply chain co-op in Denver. Its recent restaurant chain survey showed that 93 percent of the 60 chains interviewed planned to raise prices during the second half of this year.

Mark-II
06-28-2017, 06:31 AM
The harsh reality is that you're not supposed to make a career out of min wage jobs.

I'm not sure why the socialists think that raising it will redistribute wealth top down within a company rather than making them respond in the traditional way to increasing costs of doing business - increasing prices and/or cutting staff.

Perhaps my error is in believing that socialists think, or at a level above primal jealousy.

Waterloomike
06-28-2017, 08:37 AM
The harsh reality is that you're not supposed to make a career out of min wage jobs.

I'm not sure why the socialists think that raising it will redistribute wealth top down within a company rather than making them respond in the traditional way to increasing costs of doing business - increasing prices and/or cutting staff.

Perhaps my error is in believing that socialists think, or at a level above primal jealousy.

Without a profound sense of unearned entitlement, there is nothing to counter any part of that Mark.

You get the "well done" merit badge.