David Neumark (who is no stranger to minimum wage research - it's his area of expertise: <a href="http://www.nber.org/authors/david_neumark" rel="nofollow">http://www.nber.org/authors/david_neumark</a>) astutely observed that Card-Kreuger has been widely deployed to exactly that effect (<a href="https://twitter.com/NeumarkDN/status/888134129945952256" rel="nofollow">https://twitter.com/NeumarkDN/status/888134129945952256</a>), effectively being used to say "MW is settled, now stop arguing about it".<p>I'm of the opinion that far too many people on both sides of the issue argue their positions from ideology rather than empiricism, to our collective detriment.<p>The headline is right - one alarming study <i>isn't</i> the final word, nor should it be. But we seem to be rather quick to let one study confirming our biases to be "the final word" when it confirms our priors, and rather quick to dismiss it as "just one study" when it contradicts them. Neither position is intellectually honest, and if we truly want to help the most vulnerable, we have to do it in ways that are backed by the evidence.
I remember my last visit to Baltimore. I saw a lot of homeless people. I saw a lot of buildings in need of repair. There were people needing work and work needing to be done (fixing buildings). I was left wondering what was preventing the economy from functioning.<p>Every side of an argument has an element of truth. Businesses will not pay people more than they must, which can be a problem if people don't have enough money to buy propping up the economy. And for every rich philanthropist, there's probably ten donald trumps.
Minimum wage laws don't tend to increase real wages, at best they reduce hours. In some cases (data indicates this in Seattle) the reduction in hours overshoots the increase in rates. Labour has a utility to employers, and if the employee can not provide utility that the employer can translate into more than a minimum wage's worth of value, then they simply can not be hired for that rate at that time.<p>I am taking time away from work right now, which is possible due to my frugal lifestyle and fairly high skills. I would love to do part time work to keep me on my feet, even below minimum wage. There are endless things around town that I'm sure somebody is willing to pay something for.<p>There is no such thing as a living wage, there might be such a thing as a living salary. Due to good planning, my expenses are tiny, my living income would be maybe two thirds of the U.S. poverty threshold (in the U.S. I could still afford health insurance at or below the poverty line with my other expenses), and that's in a real city.
You can find the original study (from the University of Washington) here: <a href="http://www.nber.org/papers/w23532" rel="nofollow">http://www.nber.org/papers/w23532</a><p>And the UC Berkeley study here: <a href="http://irle.berkeley.edu/files/2017/Seattles-Minimum-Wage-Experiences-2015-16.pdf" rel="nofollow">http://irle.berkeley.edu/files/2017/Seattles-Minimum-Wage-Ex...</a>
The problem is one of perspective, and looking at the problem from the wrong point of view.<p>We <i>want</i> jobs replaced by technology. That is, after all, one of the reasons we're all in this technology game. It is what drives forward productivity and leads to an improved standard of living.<p>The issue is seeing the private sector as the creator of jobs. It is not. It creates jobs only as a side effect of investing capital. If a capitalist can get the entire job done by machine, they will do - unless human labour is very, very cheap.<p>So to get the investment effect we need labour to be expensive.<p>And that means that the private sector isn't the place to look for jobs in the long term. The public sector has to create them so there are always more jobs that there are people: <a href="https://medium.com/modern-money-matters/running-a-modern-money-economy-ada9682a5fb9" rel="nofollow">https://medium.com/modern-money-matters/running-a-modern-mon...</a> Then the private sector has to compete for labour, and will choose to invest to eliminate jobs more often than not.<p>The issue was best described by Kalecki in the 1940s.<p>"It is true that profits would be higher under a regime of full employment than they are on the average under laissez-faire, and even the rise in wage rates resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices, and thus adversely affects only the rentier interests. But 'discipline in the factories' and 'political stability' are more appreciated than profits by business leaders. Their class instinct tells them that lasting full employment is unsound from their point of view, and that unemployment is an integral part of the 'normal' capitalist system."<p><a href="http://web.archive.org/web/20170202134920/http://mrzine.monthlyreview.org/2010/kalecki220510.html" rel="nofollow">http://web.archive.org/web/20170202134920/http://mrzine.mont...</a>
It kind of is. I'm not against a higher minimum wage...in fact I welcome it. But let's be honest, it's going to crush small businesses and force larger ones into automation. The real problem is that this cuts into the unskilled lifeline. Unskilled labor is dying, these people must learn a trade. I have no hypothetical solution for those unable or unwilling, sadly, outside of UBI which presents its own issues.
At the very least, the "control group" in this study seems problematic:<p>"But a quick look at the data suggests something else may be going on. Between the second quarters of 2014 and 2016, earnings in Seattle grew by an incredible 21 percent, as opposed to 6 percent in parts of Washington outside the Seattle area. And the first quarter of 2016 was exactly when the very large gap in overall wage growth between Seattle and rest of the state (where the control group comes from) really opened up, coinciding with the timing of the job loss found by the University of Washington team. At this point we don’t know enough, but clearly there are some missing pieces to this puzzle."<p>And, I'm kind of surprised they are matching to the rest of Washington rather than against Vancouver, Tacoma or Spokane only. The rest of Washington is so different that I just can't imagine it being a useful "control".
<i>Comparing the losses (in yellow) with the gains up to $19 (in maroon) suggests that...</i><p>If they're going to pick such non-intuitive colors, why not just have a grayscale graphic? Does this help the colorblind?
I'm a supporter of people earning a living wage. The problem with raising the minimum wage is that no matter what the minimum is it will never be enough. Nobody want's to earn minimum after you've worked at the same place for years and have someone new come in and earn the same on the first day on the job. Once minimum hits everyone wants a raise too and inflation picks up, eventually the problem returns. It's human nature. Additionally technology will be brought in to reduce costs by reducing jobs.<p>The fix is to give every one that needs it an income credit. Right now it's only possible through the federal income tax, but you need to qualify, but it should also be in the state income tax too and the qualifications should be income only. Let's say you worked 2080 hours for the year then for every hour you worked you should get some amount that will raise your income to some agreed on minimum.<p>This has the benefit of stopping the tit for tat raises.
Does minimum wage provide impetus to <a href="https://en.m.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs" rel="nofollow">https://en.m.wikipedia.org/wiki/Maslow%27s_hierarchy_of_need...</a>