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Yes Virginia, higher minimum wage kills jobs...

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  • #16
    Originally posted by Darth Executor View Post
    Big macs in the US are a lot less than 6.73. Actually just about everything is a lot cheaper in the US compared to australia, where everything's hideously expensive. So these comparisons make little sense.
    $6.73 is closer to the price of a combo meal. A Big Mac by itself is around $3 to $4.
    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

    Comment


    • #17
      Originally posted by Mountain Man View Post
      There's a reason America is the economic powerhouse of the world.
      It's not really. GDP per capita in the US is reasonably high but not the highest around. Its population is bigger than other Western countries, so it wins out in total GDP for any country. But if you compare it to something like the EU, the EU has a bigger economy than the US.
      "I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
      "Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
      "[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein

      Comment


      • #18
        Originally posted by Mountain Man View Post
        $6.73 is closer to the price of a combo meal. A Big Mac by itself is around $3 to $4.
        And if McDonald's had to start paying a minimum of $15/hour the cost of the big mac would probably go up to around $6.73. So they would make more money but not be able to buy more stuff.

        Comment


        • #19
          Why not make the minimum wage $15 in a place like California for 5 years and measure the impact?
          If it turns out to be a problem then roll it back.

          I think we should run some tests before implementing a FEDERAL minimum wage - which seems to me to suffer from several inherent problems, not the least of which is that $10 in Alabama is much closer to a living wage (Rent: $600 per month) vs. California (Rent: $1700 per month).
          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

          Comment


          • #20
            Originally posted by Meh Gerbil View Post
            Why not make the minimum wage $15 in a place like California for 5 years and measure the impact?
            If it turns out to be a problem then roll it back.

            I think we should run some tests before implementing a FEDERAL minimum wage - which seems to me to suffer from several inherent problems, not the least of which is that $10 in Alabama is much closer to a living wage (Rent: $600 per month) vs. California (Rent: $1700 per month).
            1. California can already do that if they want.
            2. We already have a federal minimum wage ($7.25) - but states are allowed to increase that to whatever they want. The idjuts are wanting to make the federal minimum to be $15/hour which is too high for many parts of the country.

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            • #21
              Originally posted by Darth Executor View Post
              Big macs in the US are a lot less than 6.73. Actually just about everything is a lot cheaper in the US compared to australia, where everything's hideously expensive. So these comparisons make little sense.
              The $6.73 was not in American dollars. Tabibito was saying that if you were to take the American prices for Big Macs and adjusted it to Australian dollars, it would be $6.73 AUD, which was less than how much they cost in Australia ($5.90 AUD).

              Although, I question the math. I don't really eat McDonald's so I don't know the exact prices, but looking online it seems like Big Macs are $3.99 in the US (though they may be cheaper or more expensive depending on the specific area), and if I convert that to Australian dollars via xe.com, that's $5.30 AUD, meaning that the Big Macs are cheaper in the US.
              Last edited by Terraceth; 04-20-2017, 06:35 PM.

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              • #22
                Originally posted by Starlight View Post
                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)
                That last bit (I bolded) has the first appearance of sounding reasonable. But consider the story of the store owner catching a thief stealing cash, and the thief says, "Don't worry, this is going to benefit you too, because I'm going to spend it all at your store." Same thing for businesses in general. It's also similar error as in the broken window fallacy (http://www.investopedia.com/ask/answ...ow-fallacy.asp).

                Some people (consumers and/or entrepreneurs) must be paying more to those getting paid more, so those payers have, in total, the same amount less money to spend on other goods. There's no net more money to be spent. But at least some prices are higher, so that same amount of money is unable to purchase as much.

                And even if you were to ignore the rise in prices, and assume that total demand for labor is the same, assuming spending were just diverted to other businesses, it still doesn't solve the problem. It would be a diversion of spending from those businesses/industries that were hiring low-skilled workers to those businesses/industries that don't. The latter will have no new incentive to hire lower skilled workers than they were before. So we should still have the same expectation: that the higher minimum wage increases unemployment among the low skilled.

                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.
                Zero change? Awesome! Then let's hike the minimum wage to $1000 per hour. Why not a million? After all they've scientifically shown that it would cause, on average, no net job loss, right?

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                • #23
                  Originally posted by Joel View Post
                  Zero change? Awesome! Then let's hike the minimum wage to $1000 per hour. Why not a million? After all they've scientifically shown that it would cause, on average, no net job loss, right?
                  Inflation. Obviously raising the minimum wage to near or above the median wage is just going to cause inflationary processes to trigger as wages and prices move towards new price points and settle there.

                  I am amused though that you commit the usual libertarian error of "I see your scientific evidence and raise you a BS thought experiment, so QED!" Dude the whole reason science is superior to philosophy in the first place is because empirical evidence is a better kind of evidence than wacky thought experiments are.
                  "I hate him passionately", he's "a demonic force" - Tucker Carlson, in private, on Donald Trump
                  "Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic socialism" - George Orwell
                  "[Capitalism] as it exists today is, in my opinion, the real source of evils. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy" - Albert Einstein

                  Comment


                  • #24
                    Originally posted by Meh Gerbil View Post
                    Why not make the minimum wage $15 in a place like California for 5 years and measure the impact?
                    If it turns out to be a problem then roll it back.

                    I think we should run some tests before implementing a FEDERAL minimum wage - which seems to me to suffer from several inherent problems, not the least of which is that $10 in Alabama is much closer to a living wage (Rent: $600 per month) vs. California (Rent: $1700 per month).
                    Some cities have already tried raising the minimum wage to $15/hr, and it always results in lost jobs and closed businesses. Actually, this happens every time minimum wage increases regardless of the amount until the economy has time to correct itself, and the people making minimum wage find themselves right back where they started.

                    More simply: minimum wage = minimum spending power, and raising the minimum wage doesn't change that.
                    Last edited by Mountain Man; 04-21-2017, 05:19 PM.
                    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

                    Comment


                    • #25
                      Originally posted by Dimbulb View Post
                      Inflation. Obviously raising the minimum wage to near or above the median wage is just going to cause inflationary processes to trigger as wages and prices move towards new price points and settle there.
                      The notion that you can raise the minimum wage by any amount without causing inflation is a liberal fantasy. It's like trying to improve the economy by printing more money.
                      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

                      Comment


                      • #26
                        Originally posted by Starlight View Post
                        Inflation. Obviously raising the minimum wage to near or above the median wage is just going to cause inflationary processes to trigger as wages and prices move towards new price points and settle there.
                        The minimum wage itself doesn't increase the supply of money. You want to say that it would just cause higher prices, with everything else continuing much as before. But with the same money supply chasing approximately the same quantity of goods, and other preferences remaining about the same, that will prevent prices from generally rising.

                        Now if we suppose that it did just cause a general price inflation, wouldn't that defeat the supposed benefits of the minimum wage? And why wouldn't inflation happen with smaller minimums?

                        Now I do think minimum wage could result in inflation, but not with things remaining about the same: demand for labor would fall, production in general would fall, and the same quantity of money would be chasing fewer goods, thus general price inflation.

                        I am amused though that you commit the usual libertarian error of "I see your scientific evidence and raise you a BS thought experiment, so QED!" Dude the whole reason science is superior to philosophy in the first place is because empirical evidence is a better kind of evidence than wacky thought experiments are.
                        A graph such as yours necessarily contains numerous assumptions and choices as to how to categorize and analyze data. For example, are we talking about all jobs in the economy? Or only the lowest skilled labor? The latter is what would be relevant. And how is low-skill quantified and the threshold chosen? Without knowing all such assumptions, it's perfectly reasonable to sanity-check the conclusions being drawn from the graph.
                        Last edited by Joel; 04-21-2017, 08:41 PM.

                        Comment


                        • #27
                          As an aside, I've only been to the US about 3 times, and in each case I've greatly resented the tipping system you have over there. We have tips too- in a restaurant if the food & service is good you leave a tip- if it's pants you don't. And you're not looked down upon if you don't (and I'd argue the toss with anyone who worked there who claimed otherwise).

                          However, in the US it seems it's down to me to subsidise the waiters low pay? It's not like the food is particularly cheap, and the tips can get astronomical (another point of confusion for those not used to it- it's not always explicitly stated how much extra you have to pay for no real reason).

                          I was shown a room in a hotel for some reason (I had the room number, it's not like I couldn't find it) and the chap stood at the door waiting for a tip. Didn't realise at the time that's what he was after so I thanked him & closed the door. After that the service I received was pants and it wasn't until someone explained it to me that I realised what their problem was. As far as I could tell he was simply doing his job- essentially the reason he was employed there to begin with, so not sure why I had to give him more money for fulfilling his purpose.

                          Dunno, it's just confusing unless you're used to it I guess.

                          Comment


                          • #28
                            I was born and raised in America, and even I don't entirely understand or agree with our tipping tradition. This is one of the few things I think Europe has gotten right.
                            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

                            Comment


                            • #29
                              Originally posted by EvoUK View Post
                              As an aside, I've only been to the US about 3 times, and in each case I've greatly resented the tipping system you have over there. We have tips too- in a restaurant if the food & service is good you leave a tip- if it's pants you don't. And you're not looked down upon if you don't (and I'd argue the toss with anyone who worked there who claimed otherwise).

                              However, in the US it seems it's down to me to subsidise the waiters low pay? It's not like the food is particularly cheap, and the tips can get astronomical (another point of confusion for those not used to it- it's not always explicitly stated how much extra you have to pay for no real reason).

                              I was shown a room in a hotel for some reason (I had the room number, it's not like I couldn't find it) and the chap stood at the door waiting for a tip. Didn't realise at the time that's what he was after so I thanked him & closed the door. After that the service I received was pants and it wasn't until someone explained it to me that I realised what their problem was. As far as I could tell he was simply doing his job- essentially the reason he was employed there to begin with, so not sure why I had to give him more money for fulfilling his purpose.

                              Dunno, it's just confusing unless you're used to it I guess.
                              It's confusing even when you're used to it. The rules are all over the place, and the wage laws explicitly allow employers to pay lower wages because of tips. It's a moronic system.
                              I'm not here anymore.

                              Comment


                              • #30
                                Originally posted by tabibito View Post
                                Yes, Virginia, there is a Santa Claus ... and yes, Virginia, higher wages kill jobs.
                                Why, as at March this year, Australia has a 5.9% unemployment rate - and America has only 5%. (Of course, both governments are massaging the figures, and I don't know which one is doing so more successfully.)
                                This comparison doesn't work. There are a lot more factors that go into unemployment rates than just minimum wages. America might have lower unemployment if people were trained to the current vacancies, for example. Instead we see people with college degrees in fields with no demand while high demand fields have no one learning how to do them.
                                I'm not here anymore.

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