Real Economists on Raising the Minimum Wage

[Andrew D]

Well, we are feeling a bit snarky this afternoon, aren't we?

The facts of the matter remain:

(1) Empirical evidence shows that raising the minimum wage does not increase unemployment; and

(2) A huge mass of genuine economists agree that raising the minimum wage does not increase unemployment.

[Rick]

Surveys are what surveys are and empirical by view is just that...

Surveys of economists

Until the 1990s, economists generally agreed that raising the minimum wage reduced employment. This consensus was weakened when some well-publicized empirical studies showed the opposite, although others confirmed the original view. Today's consensus, if one exists, is that increasing the minimum wage has, at worst, minor negative effects.[76]

According to a 1978 article in the American Economic Review, 90 percent of the economists surveyed agreed that the minimum wage increases unemployment among low-skilled workers.[77]

A 1992 survey by published in the same journal revealed 79% of economists in agreement that a minimum wage increases unemployment among young and unskilled workers.[78]

A 2000 survey by Dan Fuller and Doris Geide-Stevenson reports that of a sample of 308 economists surveyed by the American Economic Association, 45.6% fully agreed with the statement, "a minimum wage increases unemployment among young and unskilled workers", 27.9% agreed with provisos, and 26.5% disagreed. The authors of this study also reweighted data from a 1990 sample to show that at that time 62.4% of academic economists agreed with the statement above, while 19.5% agreed with provisos and 17.5% disagreed. They state that the reduction on consensus on this question is "likely" due to the Card and Krueger research and subsequent debate.[79]

A similar survey in 2006 by Robert Whaples polled PhD members of the American Economic Association. Whaples found that 37.7% of respondents supported an increase in the minimum wage, 14.3% wanted it kept at the current level, 1.3% wanted it decreased, and 46.8% wanted it completely eliminated.[80]

Another survey in 2007 conducted by the University of New Hampshire Survey Center found that 73% of labor economists surveyed in the United States believed 150% of the then-current minimum wage would result in employment losses and 68% believed a mandated minimum wage would cause an increase in hiring of workers with greater skills. 31% felt that no hiring changes would result.[81]

Surveys of labor economists have found a sharp split on the minimum wage. Fuchs et al. (1998) polled labor economists at the top 40 research universities in the United States on a variety of questions in the summer of 1996. Their 65 respondents were nearly evenly divided when asked if the minimum wage should be increased. They argued that the different policy views were not related to views on whether raising the minimum wage would reduce teen employment (the median economist said there would be a reduction of 1%), but on value differences such as income redistribution.[82] Daniel B. Klein and Stewart Dompe conclude, on the basis of previous surveys, "the average level of support for the minimum wage is somewhat higher among labor economists than among AEA members."[83]

In 2007, Klein and Dompe conducted a non-anonymous survey of supporters of the minimum wage who had signed the "Raise the Minimum Wage" statement published by the Economic Policy Institute. They found that a majority signed on the grounds that it transferred income from employers to workers, or equalized bargaining power between them in the labor market. In addition, a majority considered disemployment to be a moderate potential drawback to the increase they supported.[84]

of course it's just wiki

For the record I don't care one way or the other however raising minimum wage ostensibly should also raise tax revenue on which my salary depends and I haven't had a REAL COLA in over 5 years and my job responsibilities have increased due to reduced staffing because of tax revenue shortfalls.

Yes I'll have some cheese with that whine...

[rubato]

The empirical evidence has been clear for a long time. When the minimum wage was increased unemployment did not go up; not even among low-skilled workers. It remains possible that if it were raised by some larger amount that effect might occur but it has not been shown in practice. As a good empirical scientist I would raise the minimum wage by enough to determine where that threshold is so that we can know for a fact where it is rather than listen to people whine about it.

The plain fact is that it requires a certain mimimum of income to sustain an individual "decently" in our society and when wages are below that level the difference amounts to a subsidy of that employer.



yrs,
rubato

[Long Run]

If I am not mistaken, that long list of economists, who still make a minority of economists, issued this statement in 2006, saying the last bump in 1997 had been fully eroded, so that it was irrelevant (since the economic minimum wage was higher during this boom in the economy than the then $5.15 legal rate). They got their wish in 2007, and the minimum wage was bumped up in three stages to $7.25 by early 2009. Unemployment when this was enacted in 2007 was 4.6%. The unemployment rate today is about 8%, and if you count the number of people who aren't even looking for work who were in the job market in 2007, the unemployment rate is 12%, nearly three times as high as after the passage of this minimum wage. Note that there are state minimum wages higher than $7.25. Wonder how many economists are willing to prevent job creation with an untimely increase in the minimum wage now?

[Andrew D]

Economists support promoting job creation with a long overdue increase in the minimum wage. This:

Wonder how many economists are willing to prevent job creation with an untimely increase in the minimum wage now?

is a question entirely divorced from reality.

[Andrew D]

The unemployment rate today is about 8% ....

And it would be a lot lower if the Republicans in Congress were not so assiduously promoting tax breaks for corporations that send jobs overseas.

Of course the unemployment rate is going up: Congressional Republicans are going out of their way to make it so.

[Andrew D]

You want the employment rate to go up?

Start forcing corporations to pay living wages to their employees.

[Rick]

And it would be a lot lower if the Republicans in Congress were not so assiduously promoting tax breaks for corporations that send jobs overseas.

You want the employment rate to go up?

Start forcing corporations to pay living wages to their employees.

If production is up employment can't really be down now can it?

If corporations actually started paying living wages to their employees US workers would probably be back in demand is actually your insistence isn't it?

NAFTA was Slick Willies deal now wasn't it?

So to make the difference we should make it up with some kind a fee on foreign products right, then we could continue to support the folk out of jobs...

[Andrew D]

If production is up employment can't really be down now can it?

If corporations actually started paying living wages to their employees US workers would probably be back in demand is actually your insistence isn't it?

Huh? Production is a function of the number of people employed and the productivity of each employee. Thus, production can go up while the number of employees goes down.

And the right-wingers want all of the increased value produced by increasingly productive employees to inure entirely to the benefit of the employers -- none to inure to the benefit of the employees whose increasing productivity brings about that increased value.

NAFTA was Slick Willies deal now wasn't it?

I opposed it then; I oppose it now.

So to make the difference we should make it up with some kind a fee on foreign products right, then we could continue to support the folk out of jobs...

Huh?

Yes, we could and should support American jobs by making it more profitable for US companies to employ US workers than to outsource American jobs.

Is that what you were driving at?

[Rick]

Well if increasing minimum wage makes out of towners look more popular wouldn't they then get the jobs?

I don't think it's as simple as raising the min wage even if it was raised to Rubatos default levels, if there is cheaper labor doing the same thing elsewhere. Or folks willing to come here and do it cheaper.

Doesn't really matter how long the list you post is.

Wealth transcends party lines ALL politicians know this.

Raise the wage who cares?

In the long run it won't change a thang the Yellow Tide will prevail, it's just time...

[Andrew D]

As Gob informs us, Australia's minimum wage is $16.45 in US dollars.

We should do the same. It would be good for every American who actually works for her or his income. It would harm only those Americans who do nothing but leech off of what working Americans produce.

[Rick]

It would harm only those Americans who do nothing but leech off of what working Americans produce.

What would that be?

[rubato]

_______________________
http://www.angrybearblog.com/2013/02/le ... ry+Bear%29
" Leading Economists Vote on Raising the Minimum Wage: I’m delighted to see the U Chicago IGM Forum ask a really useful, non-softball question.

The panelists are evenly split on whether an increase to $9 would make it “noticeably harder for low-skilled workers to find employment.”

A 4:1 majority thinks that weighing the costs and benefits, “this would be a desirable policy.”

I note how many who commented bring up the EITC, suggesting that an increase in that support might be better than a minimum-wage increase. I note further that they apparently haven’t read the very good reasoning and research suggesting that the two together very effectively address the problems of each. But Paul Krugman has. And his surprise helps explain why the others haven’t thought about this:

Second — and this is news to me — the usual notion that minimum wages and the Earned Income Tax Credit are competing ways to help low-wage workers is wrong. On the contrary, raising the minimum wage is a way to make the EITC work better, ensuring that its benefits go to workers rather than getting shared with employers. This actually is Econ 101, but done right. ... "

_______________________________



One problem with the EITC is that it can function as a subsidy to low-wage employers. (The fact that low-wage employers are being subsidized is a factor I keep mentioning but which no Republican apologist has had the wit to address.)


yrs,
rubato

[rubato]

Having an unnaturally low minimum wage is just a way of subsidizing people making $230,000 + per year using the taxes of low and middle-income people.:


____________________________
http://wiki.answers.com/Q/What_is_the_A ... net_profit

Answer:
The average sales volume per McDonalds Franchise in 2008 was $2.3 million per year, per the 2009 McDonalds FDD Franchise Disclosure Document. The highest performer in 2008 was 9.5 million. The lowest had sales of $491,000. Average profit margin per Franchise runs about 10% of sales per Mr. Franchise of Franchise Foundations, a Professional Corp.


see http://www.franchisefoundations.com/mcd ... chise.html
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[Guinevere]

More than 1/3 of the states (20 by my count) already have minimum wages above the federal level. Washington State just raised their minimum to $9.19 -- even above the proposed federal increase. Check and see how their economies are doing, I'd bet none of them are in the tank.

[Crackpot]

The issue I have with that line of reasoning Is that it assumes a uniform cost of living across the country.

[Guinevere]

The issue I have with that line of reasoning Is that it assumes a uniform cost of living across the country.

So does a federal minimum wage and poverty level.

[Crackpot]

That I don't argue

[rubato]

San Francisco's minimum wage is $ 10.55 /hr and there is no mass unemployment.

yrs,
rubato

[rubato]

Santa Cruz just authorized an $11 / hr minimum wage.

yrs,
rubato