Minimum Wage Increase Not So Bad For the Economy - Maybe

[applejack]

NPR

States That Raised Minimum Wage See Faster Job Growth, Report Says
by SCOTT NEUMAN
July 19, 201412:25 PM ET

New data released by the Department of Labor suggests that raising the minimum wage in some states might have spurred job growth, contrary to what critics said would happen.

In a report on Friday, the 13 states that raised their minimum wages on Jan. 1 have added jobs at a faster pace than those that did not. The data run counter to a Congressional Budget Office report in February that said raising the minimum wage to $10.10 an hour, as the White House supports, would cost 500,000 jobs.

The Associated Press writes:

"In the 13 states that boosted their minimums at the beginning of the year, the number of jobs grew an average of 0.85 percent from January through June. The average for the other 37 states was 0.61 percent.

"Nine of the 13 states increased their minimum wages automatically in line with inflation: Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington. Four more states — Connecticut, New Jersey, New York and Rhode Island — approved legislation mandating the increases."

The AP notes: "[The] state-by-state hiring data, released Friday by the Labor Department, provides ammunition" to the camp in favor of raising the minimum wage.

"Economists who support a higher minimum say the figures are encouraging, though they acknowledge they don't establish a cause and effect. There are many possible reasons hiring might accelerate in a particular state.

" 'It raises serious questions about the claims that a raise in the minimum wage is a jobs disaster,' said John Schmitt, a senior economist at the liberal Center for Economic and Policy Research. The job data 'isn't definitive,' he added, but is 'probably a reasonable first cut at what's going on.' "

There are competing schools of thought among economists on the impact of raising the minimum wage. As The Washington Post notes: "Some studies, notably those lead by UMass Amherst economist Arin Dube, argue that there are no adverse employment effects from small increases in the minimum wage. Other studies, notably those lead by University of California Irvine economist David Neumark, argue there is an adverse effect."

The Economist says: "America's minimum wage has long been low by international standards, equalling just 38% of the median wage in 2011, close to the lowest in the OECD. Congress changes it only occasionally, and in the interim inflation eats away its value. The wage was last raised, to $7.25 per hour, in 2009. Since then its real value has slipped back to where it was in 1998."

As the article says, this is a preliminary finding, but I have to say, this sounds rather good.

[Broomstick]

For damn sure I'd be stimulating the economy a bit more if I was earning $10/hour - new clothes, get my car fixed, new tires for the pickup, shoes for the spouse, visit to the dentist, visit to the eye doctor, maybe a restaurant meal once or twice a month... multiply that by ten million or so. Yes, that does stimulate the economy.

[Borgholio]

I'm sure there's a nice balance in there where if you get the minimum wage just right, it provides maximum trickle down to the rest of the economy without being an excessive drain on employers. I would very much like to see research in that area to try to find that balance.

[Simon_Jester]

The interesting thing is that most of the businesses that hire workers at or near minimum wage are among the direct beneficiaries of the 'trickle down.' Restaurants, retail stores, places like that... that's where poor people who suddenly get 20-30% more money are going to spend that money, and yet those are the very places whose labor costs just went up.

So I suspect that it would be very surprising just how much of the increased cost of labor can be 'canceled out' by the trickle-down (or rather, trickle-sideways) effect of raising the minimum wage. Poor people spend much more of their income on direct consumption of goods than the rich do.

[Highlord Laan]

For damn sure I'd be stimulating the economy a bit more if I was earning $10/hour - new clothes, get my car fixed, new tires for the pickup, shoes for the spouse, visit to the dentist, visit to the eye doctor, maybe a restaurant meal once or twice a month... multiply that by ten million or so. Yes, that does stimulate the economy.

But if you were paid ten dollars an hour it would mean you're not being punished enough for not being a proper, boot-strapping, rugged individual murrican. All that money being wasted on you could be better spent by job creators. Whatever the hell those are.

[Lost Soal]

For damn sure I'd be stimulating the economy a bit more if I was earning $10/hour - new clothes, get my car fixed, new tires for the pickup, shoes for the spouse, visit to the dentist, visit to the eye doctor, maybe a restaurant meal once or twice a month... multiply that by ten million or so. Yes, that does stimulate the economy.

But if you were paid ten dollars an hour it would mean you're not being punished enough for not being a proper, boot-strapping, rugged individual murrican. All that money being wasted on you could be better spent by job creators. Whatever the hell those are.

People like these ones, obviously

[Darmalus]

People like these ones, obviously

Pfft, like they weren't going to do that the moment they could anyway.

[bilateralrope]

A tablet to take someones order is easy. The hardest part is to prevent anyone stealing it, but I can see some options there.

A robot to bring the order to the table, that's the part where there will be trouble. Has anyone even tried robot waitstaff as a gimmick yet ?

[Zaune]

People like these ones, obviously
http://cdn.crooksandliars.com/files/ima ... ag0016.jpg

Take that line of reasoning to its ultimate logical conclusion and we might as well roll back the ban on indentured servitude. Or the Emancipation Proclamation for that matter, although if the Republican Party carries on the way it has been I give it another ten years before someone stands up in Congress and argues for that very thing.

[Borgholio]

Take that line of reasoning to its ultimate logical conclusion and we might as well roll back the ban on indentured servitude.

I think that most anti-$15 per hour wage people would still agree that a minimum wage is a good thing, they just don't like how high it's getting and they cannot fathom the secondary benefits that come from a higher minimum wage.

although if the Republican Party carries on the way it has been I give it another ten years before someone stands up in Congress and argues for that very thing.

Sadly, I think there are already a number of right-wingers who would happily purchase a few slaves at auction if they could.

[Elheru Aran]

A robot to bring the order to the table, that's the part where there will be trouble. Has anyone even tried robot waitstaff as a gimmick yet ?

Probably Japan. They already have restaurants there with conveyor belts which carry the food straight to you. Wouldn't be surprised if they're doing the robot thing already. I can see how it might work with some sort of track and collision-avoidance sensors to keep from hitting anybody walking over the track.

[Borgholio]

They already have restaurants there with conveyor belts which carry the food straight to you.

They're over here too. I've been in quite a few sushi bars that have a conveyer belt where you can place your order on a slip of paper and have it delivered...or just take off the belt as you see it and get charged per plate. The only thing you need a waiter for is to make a special order or for drinks. Kinda fun actually.

[Lost Soal]

They already have restaurants there with conveyor belts which carry the food straight to you.

They're over here too. I've been in quite a few sushi bars that have a conveyer belt where you can place your order on a slip of paper and have it delivered...or just take off the belt as you see it and get charged per plate. The only thing you need a waiter for is to make a special order or for drinks. Kinda fun actually.

Yo Sushi! Its also very easy to lose track of just how much your spending since its just; "Ohh that looks nice, I'll try it" and half an hour later you have small stack of dishes.

[Soontir C'boath]

Take that line of reasoning to its ultimate logical conclusion and we might as well roll back the ban on indentured servitude.

I think that most anti-$15 per hour wage people would still agree that a minimum wage is a good thing, they just don't like how high it's getting and they cannot fathom the secondary benefits that come from a higher minimum wage.

And/Or they cannot fathom that the minimum wage, which has stagnated, would require such a leap. In their eyes, all they see is a five-eight dollar jump for "low-grade" college students' work without realizing $7.25 an hour just doesn't cut it anymore for anyone. The idea that it should be a shit paying job to strive for a better one doesn't work in this economy when it's all people can get.

And frankly, that notion should have never taken hold when the minimum wage had once meant you could live in a good home, have a car, or don't have to work two jobs to support yourself and a family no matter if it was shoveling coal, working at McDonald's, etc. When all people can afford in NYC is a fucking room, something's wrong.

[Simon_Jester]

For damn sure I'd be stimulating the economy a bit more if I was earning $10/hour - new clothes, get my car fixed, new tires for the pickup, shoes for the spouse, visit to the dentist, visit to the eye doctor, maybe a restaurant meal once or twice a month... multiply that by ten million or so. Yes, that does stimulate the economy.

But if you were paid ten dollars an hour it would mean you're not being punished enough for not being a proper, boot-strapping, rugged individual murrican. All that money being wasted on you could be better spent by job creators. Whatever the hell those are.

People like these ones, obviously

http://cdn.crooksandliars.com/files/ima ... ag0016.jpg

To be fair, that would probably actually happen in a lot of restaurants; it may be misleading but it's not wrong. It happened at the gas stations before many of us were even born, and it is now in the process of happening at supermarket checkout lines- how many of us are scanning our own groceries, compared to five years ago? How about ten?

On the other hand, there would be more money flowing around the economy which would, well, make job creators. There are a lot of jobs out there that exist only because it's possible to pay someone eight or nine dollars an hour to do them... but there are also a lot of businesses out there that don't exist because people making eight or nine dollars an hour can never possibly afford to patronize them.

Take that line of reasoning to its ultimate logical conclusion and we might as well roll back the ban on indentured servitude.

I think that most anti-$15 per hour wage people would still agree that a minimum wage is a good thing, they just don't like how high it's getting and they cannot fathom the secondary benefits that come from a higher minimum wage.

And/Or they cannot fathom that the minimum wage, which has stagnated, would require such a leap. In their eyes, all they see is a five-eight dollar jump for "low-grade" college students' work without realizing $7.25 an hour just doesn't cut it anymore for anyone. The idea that it should be a shit paying job to strive for a better one doesn't work in this economy when it's all people can get.

And frankly, that notion should have never taken hold when the minimum wage had once meant you could live in a good home, have a car, or don't have to work two jobs to support yourself and a family no matter if it was shoveling coal, working at McDonald's, etc. When all people can afford in NYC is a fucking room, something's wrong.

The transition happened fairly gradually- in inflation-adjusted terms the minimum wage peaked in 1968, then declined steadily until 1990 or so, and remained more or less flat until 2006, after which it got bumped up fairly steadily for a few years.

For a few decades the fact after 1970 that things were changing was concealed, I think. Speculatively, I suspect this had to do with the fact that there were a lot more women entering the workplace in the '70s and '80s. Largely without noticing, we transitioned from an economic environment in which the norm was a single income supporting a family (possibly with minor odd-job support from a wife or older child working part-time) to a two-income family... so that even if both wage-earners were making minimum wage, the total was still enough for a family to live on.

But when things kept changing- well, to speak imprecisely:

In 1970 it might reasonably have taken one minimum-wage full-time worker to support a family. Good enough.

In 1990 it might have taken two earners... still possible, now that almost all women were in the workforce. And since we tend to view single-income families and people working alone as somehow 'incomplete,' we were not surprised as a nation when such people turned out to be poor; we did not ask "why can't they support themselves in middle-class comfort?"

But now in 2010 it'd take three minimum-wage earners to support that same family. And there is no third worker available.*

[Irbis]

The transition happened fairly gradually- in inflation-adjusted terms the minimum wage peaked in 1968, then declined steadily until 1990 or so, and remained more or less flat until 2006, after which it got bumped up fairly steadily for a few years.

Funny that, looks like largest fall in history that saw 40% drop can be attributed to a single president. Take wild shoot which one

You know, if you think a bit, this one number should delegate him firmly into top 3 of worst presidents if you grade them on well being of nation, yet somehow, right wing managed to sold that inept puppet as a saint for nearly 2 decades

But now in 2010 it'd take three minimum-wage earners to support that same family. And there is no third worker available.*

Clearly, USA should convert to polygamy then. Problem solved!

[Raw Shark]

The transition happened fairly gradually- in inflation-adjusted terms the minimum wage peaked in 1968, then declined steadily until 1990 or so, and remained more or less flat until 2006, after which it got bumped up fairly steadily for a few years.

Funny that, looks like largest fall in history that saw 40% drop can be attributed to a single president. Take wild shoot which one

You know, if you think a bit, this one number should delegate him firmly into top 3 of worst presidents if you grade them on well being of nation, yet somehow, right wing managed to sold that inept puppet as a saint for nearly 2 decades

Hey, now: That inept puppet fucked over the poor more than any other inept puppet! Show some respect where it is due.

But now in 2010 it'd take three minimum-wage earners to support that same family. And there is no third worker available.*

Clearly, USA should convert to polygamy then. Problem solved!

I actually saw this as an (intended for humor) future projection back in '90 or so.

[Simon_Jester]

Funny that, looks like largest fall in history that saw 40% drop can be attributed to a single president. Take wild shoot which one

You know, if you think a bit, this one number should delegate him firmly into top 3 of worst presidents if you grade them on well being of nation, yet somehow, right wing managed to sold that inept puppet as a saint for nearly 2 decades

I am fairly inclined to agree.

In this case, I simply didn't want to get into the specific political personalities, and concentrated on the economic trends, not the people responsible for them. We could speak (have spoken) volumes about who's responsible.

[Guardsman Bass]

Japan had places where they used a vending machine that took your money and printed a ticket you gave to the cook, instead of a regular cashier. Assuming you get some labor-saving technology used and they don't just raise prices across the board (since it would be affecting all the places paying minimum wage simultaneously), you'd likely see 1-2 cashiers monitoring a bunch of self-payment stations and running a cash register in case people need manual assistance, while having more staff working in the back as cooks.

To be fair, that would probably actually happen in a lot of restaurants; it may be misleading but it's not wrong. It happened at the gas stations before many of us were even born, and it is now in the process of happening at supermarket checkout lines- how many of us are scanning our own groceries, compared to five years ago? How about ten?

It doesn't seem to be affecting the overall number of cashiers employed at grocery stores, interestingly enough. Instead, they're just not growing that much in absolute numbers compared to the overall population - the number of grocery store cashiers went up by about 1% from 2003-2013, while the overall US population increased by about 8%.

[Simon_Jester]

I may be overgeneralizing from my own experience. Then again, I live in the Washington D.C. area, where wages are among the highest in the country overall. They may be paying their cashiers more than minimum wage.

[Zaune]

It may also be related to the fact that you can't buy alcohol through the automated checkout unless a member of staff inputs a code to verify you're of legal age for it. That might be less of a problem in countries where national ID cards are a thing though.

[madd0ct0r]

nah. uk automated checkouts still require a staff memebr to check your id matches you. Normally 2 staff members watching 10 or more tills.

[General Zod]

nah. uk automated checkouts still require a staff memebr to check your id matches you. Normally 2 staff members watching 10 or more tills.

They do the same thing in the US. At the CVS with automated checkouts you can't buy alcohol until a store associate verifies your ID.

[Simon_Jester]

Well yes, but I go to the supermarket today and see six registers being open, four of them automatic- three people. At the same place ten years ago I'd see four or five registers open, none of them automatic.

Alcohol may be the reason (though I don't even know where/if to find the alcohol at that supermarket, not sure they carry any). But it's definitely a decrease locally, and I think I overgeneralized into a decrease globally, or rather all over America.

[Irbis]

Well yes, but I go to the supermarket today and see six registers being open, four of them automatic- three people. At the same place ten years ago I'd see four or five registers open, none of them automatic.

Are you sure you don't have same six people, just three doing something else?

Also, even if it was just three people, you ignore that someone needs to design/produce the automatic registers, install them, then service. All are new jobs. Also, crew overlooking them needs to be better trained than just regular clerks, giving (small) incentive to try and treat them better than regular, replaceable shop staff. At least I'd hope so.