Sunday, July 31, 2016

Seattle Minimum Wage Increase Doesn't Help

The Daily Sheeple reports Seattle's recent minimum wage increase doesn't seem to have helped much:

"According to a group of economists who were hired by the city to figure out what effects the wage hike has had on workers, the average hourly wage for effected workers has bumped up from $9.96 to $11.14, but that would have likely happened anyway since Seattleā€™s economy was already rapidly improving. They also found that while some workers were earning more, fewer people have jobs, and those who are working have fewer hours.

 And none of this takes into account how much more businesses have to spend on their workers. They still have to raise costs, which are passed on to the consumer, and result in a higher cost of living that would nullify any benefits of a minimum wage hike."

This should come as no surprise.


At 8:42 AM, Anonymous Anonymous said...

Quoting the opening paragraph upon which the blog post was based. The Washington Post:

"Things seem to be going pretty well since Seattle bumped the hourly minimum wage for large businesses up to $11 last year, from the statewide minimum of $9.47 an hour. Low-wage workers are getting more time on the job and making more money. Fewer businesses are closing, and more new ones are opening. The technology and construction sectors are booming."

And while the stats reported sound ominous, there was actually a small benefit, according to the study. And, it's not in a peer-reviewed journal near as I can figure... just published on the school's website. In short, be skeptical.

At 9:01 AM, Blogger Henchman Of Justice said...

Of course, owners (corporate too) profit margins/net take home does not necessarily decrease.

Everything else increases in costs before profits are tapped.

So, what is the data for supposed "lost or less profits booked by ownership"? Was profit taking/sharing already gouging the lower employees?

Become your own boss, do tour own work, avoid employees, avoid taxes, avoid the bullshit.

Fend for yourself is FREEDOM!

"Gubbamint hate fending, wants dependency," says Tonto to Lone Ranger.

At 9:28 AM, Blogger Bob Wallace said...

"have to raise costs, which are passed on to the consumer"

That sounds like what might happen, doesn't it?

But sometimes reality can slap you across the face with dead mackerel.

A year after Seattle increased its minimum wage to $12.50 prices at most stores haven't gone up.

And I'll bet that those stores that are now paying their employees a more reasonable hourly rate are enjoying new customers.

All over the city there are thousands of people with a bit more money to spend and they're not going to jet to Paris for lunch. They're going to stop in for a cup of coffee or buy a piece of clothing that their kid needs.

At 9:33 AM, Blogger Bob Wallace said...

Here's an interesting page that deals with minimum wage increase myths.

Here are a couple of examples -

Myth: Increasing the minimum wage is bad for businesses.

Not true: Academic research has shown that higher wages sharply reduce employee turnover which can reduce employment and training costs.

Myth: Increasing the minimum wage is bad for the economy.

Not true: Since 1938, the federal minimum wage has been increased 22 times. For more than 75 years, real GDP per capita has steadily increased, even when the minimum wage has been raised.

Myth: Small business owners can't afford to pay their workers more, and therefore don't support an increase in the minimum wage.

Not true: A July 2015 survey found that 3 out of 5 small business owners with employees support a gradual increase in the minimum wage to $12. The survey reports that small business owners say an increase "would immediately put more money in the pocket of low-wage workers who will then spend the money on things like housing, food, and gas. This boost in demand for goods and services will help stimulate the economy and help create opportunities."

Come on, folks. Don't let people feed you big corporation BS. Look up some facts. Lots of facts right at your fingertips.

At 9:39 AM, Blogger Fred Mangels said...

"Since 1938, the federal minimum wage has been increased 22 times. For more than 75 years, real GDP per capita has steadily increased, even when the minimum wage has been raised."

And yet we're still told we need to increase the minimum wage even more. As I've wrote here before. Increasing minimum wage really does nothing as those wage earners always end up back at square one.

At 9:46 AM, Anonymous Anonymous said...

Dude,have you not heard of inflation? Come on. This isn't a joke. We had SLAVE labor just over 100 years ago and we routinely use semi slave labor today. Paying people an honest wage requires an honest employe. The deadbeat business owners who refuse to pay a fair wage are the problem, not the solution.

At 10:00 AM, Blogger Bob Wallace said...

" Increasing minimum wage really does nothing as those wage earners always end up back at square one."

There is a very simple solution. Just index the minimum wage to inflation.

It's clear that increasing the minimum wage does not cause inflation. The problem is that people who work for the minimum wage get left behind as the cost of stuff goes up.

At 11:07 AM, Blogger Fred Mangels said...

"There is a very simple solution. Just index the minimum wage to inflation."

There would still be someone at the bottom of the pay scale, no matter hwo much you account for inflation. Workers in other jobs that command higher wages will always make sure their pay keeps its distance above minimum wage- unions being among the first.

No one has ever entered the middle class because of increases in the minimum wage because of that. The way into the middle class and out of the minimum wage is to weasle your way into a higher paying job. To be sure, some are incapable of doing that.. and probably never will be if they keep counting on minimum wage increases to improve their lot.

At 12:42 PM, Blogger Bob Wallace said...

Yes, there will always be someone at the bottom of the pay scale. I don't know if you've ever been there, Fred, but I have. I've worked as a store clerk, a construction grunt, and a janitor. These are not jobs where you sit in your cubicle and surf the web when the boss isn't looking. These jobs are (generally) hard work. Lawn care, cleaning, food prep in a fast food joint.

Now ask yourself something. If someone is willing to work 40 hours a week at a fairly demanding job shouldn't they earn enough to live in decent apartment and buy their groceries? I'm not talking about owning a new car or flying to resorts for vacations. Just the basics.

I cannot think of any reason why someone who is willing to work should have to depend on housing assistance and food stamps just to get by.

Next step, those of us who own a few dollars more an hour more than minimum wage, why should we get left behind by inflation?

The largest economic problem our country has right now is the huge and increasing difference from what the rich earn and what the rest of us earn, especially those in the lower middle class and the working class.

Roger Ailes got fired for sexually abusing employees for decades. And they gave him a $40 million parting gift.

Is this how things should work? Should bosses made hundreds as times as much per hour as the people doing the real work in a company?

$12.50 an hour in today's dollars. Lock it in. For a half hour's work you could go to grocery store and buy enough food for a couple of meals. In 2020 and 2030 and 2050 you should be able to buy enough food for a couple of meals for a half hour's work. You shouldn't have to work an hour or three hours for it.

At 3:50 PM, Blogger Fred Mangels said...

" I don't know if you've ever been there, Fred,"

Yep, if you look back in my archives you may find my post about working in a gas station here in Eureka. I also worked in a couple restaurants in my day.

I moved on from both of those jobs.

At 3:50 PM, Blogger Fred Mangels said...

Oh, and I forgot my more recent post about working at the Costa Mesa Car Wash.

At 5:00 PM, Anonymous Anonymous said...

Most people do not realize that inflation is a tax.

At 5:51 PM, Blogger Bob Wallace said...

Inflation can act something like a tax. But it's not the same.

If you own an asset (real estate) the value goes up with inflation.

If you owe a debt (mortgage on that real estate) the value in current dollars goes down with inflation.

Inflation can help a government. Money borrowed gets paid back with deflated dollars. If we float a bond to build a new bridge and the bond pays back at 3% interest the interest is nullified by 3% inflation. But inflation can also hurt governments because it can slow economic activity and lower tax revenues.

At 6:14 PM, Blogger Fred Mangels said...

Yep, inflation exists, but it affects everyone. Minimum wage earners and everyone else.


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