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Thread: Yes Virginia, higher minimum wage kills jobs...

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    tWebber seer's Avatar
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    Yes Virginia, higher minimum wage kills jobs...

    No Duh!

    San Francisco's higher minimum wage is causing an increasing number of restaurants to go out of business even before it is fully phased in, a new study by the Harvard Business School found.


    The closings were concentrated among struggling, lower-rated restaurants. The higher minimum also caused fewer new restaurants to open, it found.

    "We provide suggestive evidence that higher minimum wage increases overall exit rates among restaurants, where a $1 increase in the minimum wage leads to approximately a 4 to 10 percent increase in the likelihood of exit," report Dara Lee and Michael Luca, authors of "Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit." The study used as a case study San Francisco, which has an estimated 6,000 restaurants in the Bay Area and is ratcheting up its minimum wage. Restaurants are one of the largest employers of minimum wage workers.

    http://www.washingtonexaminer.com/hi...rticle/2620454
    Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit

    Abstract
    We study the impact of the minimum wage on firm exit in the restaurant industry, exploiting recent changes in the minimum wage at the city level. The evidence suggests that higher minimum wages increase overall exit rates for restaurants. However, lower quality restaurants, which are already closer to the margin of exit, are disproportionately impacted by increases to the minimum wage. Our point estimates suggest that a one dollar increase in the minimum wage leads to a 14 percent increase in the likelihood of exit for a 3.5-star restaurant (which is the median rating), but has no discernible impact for a 5-star restaurant (on a 1 to 5 star scale).
    https://papers.ssrn.com/sol3/papers....act_id=2951110
    The settled happiness and security which we all desire, God withholds from us by the very nature of the world: but joy, pleasure, and merriment, He has scattered around. We are never safe, but we have plenty of fun, and some ecstasy. It is not hard to see why. The security we crave would teach us to rest our hearts in this world and pose an obstacle to our return to God” C.S. Lewis

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    tWebber Mountain Man's Avatar
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    Restaurants have the slimmest profit margins and are always the hardest hit by arbitrary wage increases.
    Some may call me foolish, and some may call me odd
    But I'd rather be a fool in the eyes of man
    Than a fool in the eyes of God


    From "Fools Gold" by Petra

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    Troll Magnet Sparko's Avatar
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    Pretty much the outcome we said back when we were arguing with the liberals about the hike.

  5. Amen Bill the Cat amen'd this post.
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    tWebber Meh Gerbil's Avatar
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    It is San Francisco so it is liberals who voted for that type of thing living with the results of their own foolishness.
    I'm okay with people living with the results of their own ideas - as long as it stays there I think that is fine.
    Actually YOU put Trump in the White House. He wouldn't have gotten 1% of the vote if it wasn't for the widespread spiritual and cultural devastation caused by progressive policies. There's no "this country" left with your immigration policies, your "allies" are worthless and even more suicidal than you are and democracy is a sick joke that I hope nobody ever thinks about repeating when the current order collapses. - Darth_Executor striking a conciliatory note in Civics 101

  7. Amen Bill the Cat, Sparko amen'd this post.
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    Professor Catholicity's Avatar
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    increase wage=increase food price
    A happy family is but an earlier heaven.
    George Bernard Shaw

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    Evolution is God's ID rogue06's Avatar
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    Quote Originally Posted by seer View Post
    No Duh!
    Not to mention that those who stay open will get by with a smaller staff.

    I'm always still in trouble again

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    tWebber Starlight's Avatar
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    The OP study is misleading. A higher minimum wage tends to create as many new jobs as it kills old ones. The study only tells half the story because it found that it killed a few restaurant jobs. It didn't study what new jobs were created. (The people getting paid more money then spend that money on goods, which means other companies employ more staff to cover the increased demands for services and products)

    As I've posted before, whether minimum wage does or doesn't kill jobs is something that has been heavily studied, and here is a graph from a meta-analysis (that summed up other studies):


    Each dot on that graph represents a scientific study done on the subject, with the more accurate studies higher up the y-axis, and job losses / gains observed on the x-axis. It turns out the distribution is centered around zero change in the job market, with all the most accurate studies giving that result.

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    tWebber Mountain Man's Avatar
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    So at best, raising the minimum accomplishes nothing, and at worst, it puts people out of work. Now there's a ringing endorsement.

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    tWebber Starlight's Avatar
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    Quote Originally Posted by Mountain Man View Post
    So at best, raising the minimum accomplishes nothing, and at worst, it puts people out of work.
    At best it causes people on the low end of the economy to earn enough to live on, and stimulates economic growth. At worst it causes a little bit of inflation. There's not really any downsides to raising the minimum wage. As Australia has shown you can pretty much push the minimum wage through the roof without serious consequences.

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    tWebber Meh Gerbil's Avatar
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    Quote Originally Posted by Starlight View Post
    At best it causes people on the low end of the economy to earn enough to live on, and stimulates economic growth. At worst it causes a little bit of inflation. There's not really any downsides to raising the minimum wage. As Australia has shown you can pretty much push the minimum wage through the roof without serious consequences.
    What is the minimum wage in Australia?

    I've relatives (on the wife's side) from Norway that came over and talked about minimum wage over there. Apparently you can make a good living just being a waiter in a restaurant. As nice as that is they also talked about how a pizza and 4 beers costs them $60.00. Over here I could get that half that price.

    If I could make what I make now while just being a waiter I'd quit I.T. work and be a waiter.
    I don't need the stress of I.T.
    Actually YOU put Trump in the White House. He wouldn't have gotten 1% of the vote if it wasn't for the widespread spiritual and cultural devastation caused by progressive policies. There's no "this country" left with your immigration policies, your "allies" are worthless and even more suicidal than you are and democracy is a sick joke that I hope nobody ever thinks about repeating when the current order collapses. - Darth_Executor striking a conciliatory note in Civics 101

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