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Yes Virginia, higher minimum wage kills jobs...

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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
    Atheism is the cult of death, the death of hope. The universe is doomed, you are doomed, the only thing that remains is to await your execution...

    https://www.youtube.com/watch?v=Jbnueb2OI4o&t=3s

  • #2
    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

    Comment


    • #3
      Pretty much the outcome we said back when we were arguing with the liberals about the hike.

      Comment


      • #4
        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

        Comment


        • #5
          increase wage=increase food price
          A happy family is but an earlier heaven.
          George Bernard Shaw

          Comment


          • #6
            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

            "You're by far the worst poster on TWeb" and "TWeb's biggest liar" --starlight (the guy who says Stalin was a right-winger)
            "Overall I would rate the withdrawal from Afghanistan as by far the best thing Biden's done" --Starlight
            "Of course, human life begins at fertilization that’s not the argument." --Tassman

            Comment


            • #7
              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.
              "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


              • #8
                So at best, raising the minimum accomplishes nothing, and at worst, it puts people out of work. Now there's a ringing endorsement.
                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


                • #9
                  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.
                  "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


                  • #10
                    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

                    Comment


                    • #11
                      Originally posted by Dimbulb View Post
                      At best it causes people on the low end of the economy to earn enough to live on, and stimulates economic growth.
                      Except it doesn't. Study after study after study has shown that raising the minimum wage puts people out of work and increases inflation. "Break even" is a best-case scenario.
                      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


                      • #12
                        Minimum wage here is $17.70 per hour ... Adjusted to AU$, American would earn $10.08 per hour. In addition, an Australian worker gets 4 weeks paid vacation/year.
                        Big Mac here costs $5.90 ... Adjusted to AU$, American would pay $6.73.
                        For each hour worked, a base paid Australian can get 3 Big Macs: a base paid American can't even get 2.

                        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.)
                        and of course, I don't know which of the countries has the greater number of employees working 10+ hours overtime per week. Unemployment figures here would be greatly reduced if that practice were discouraged.

                        ETA:
                        There is an equivalent to 7% or thereabouts in wages paid to superannuation funds for Australian employees as well.
                        Last edited by tabibito; 04-19-2017, 08:34 AM.
                        1Cor 15:34 Come to your senses as you ought and stop sinning; for I say to your shame, there are some who know not God.
                        .
                        ⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛
                        Scripture before Tradition:
                        but that won't prevent others from
                        taking it upon themselves to deprive you
                        of the right to call yourself Christian.

                        ⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛⊛

                        Comment


                        • #13
                          Originally posted by tabibito View Post
                          For each hour worked, a base paid Australian can get 3 Big Macs: a base paid American can't even get 2.
                          The minimum wage here in NZ buys 3 big macs per hour, while in Denmark they don't have a minimum wage but they have really strong unions and union-bargaining means a lowest paid McDonalds' employee can buy 3.5 Big Macs per hour. All those numbers are pre-tax of course, and taxation varies a bit across the different countries (high in Denmark, relatively low in Aus, NZ and the US) though typically people on minimum wages aren't taxed at very high rates, and the countries vary on what that tax gets you (e.g. in the US you still have to pay for your own healthcare, whereas in NZ, Aus, and Denmark obviously the government pays for it out of those taxes).

                          Why, as at March this year, Australia has a 5.9% unemployment rate - and America has only 5%.
                          Those sort of things fluctuate, as do exchange rates. A few years back (2011) the Aussie dollar was buying 1.1 US dollars making the Australian minimum wage equivalent to $17 USD per hour at the time, and the unemployment rate was 5.2% at that time.

                          I don't know which of the countries has the greater number of employees working 10+ hours overtime per week. Unemployment figures here would be greatly reduced if that practice were discouraged.
                          Yeah if governments really wanted to cut unemployment they could. Just mandate shorter working hours per week, e.g. less overtime or make it more expensive to pay employees overtime. This would make employers employ additional personnel to work those additional hours, rather than overworking existing employees and leaving others unemployed.

                          I've heard it claimed that the original 6-day work week was dropped to 5 days and an additional day was added to the weekend to cut unemployment in this manner (dunno how true that really is historically), and a few people have suggested that we ought to add a third day to the weekend and cut the working week to 4 days to cut unemployment further.

                          Unfortunately business interests don't particularly like having 'full employment' because it means they need to compete against each for labor and and out-bid each other on wages offered to potential employees, which leads to wages rising across the board, and the business owners don't tend to like that, so the current economic system has been fairly carefully set up by them to maintain about a 5% level of unemployment so there is always cheap labor available.

                          In addition, an Australian worker gets 4 weeks paid vacation/year.
                          Yeah this is worth mentioning because the US is really bad on minimum rights for workers. e.g. The US is one of 3 countries (along with Papua New Guinea and Suriname) that don't require employers to provide time off for new parents.

                          In NZ all workers have at minimum by law (c+p from government website): Four weeks’ paid annual holiday per year, Eleven public holidays per year, Five days’ paid sick leave per annum, Three days’ paid bereavement leave for certain family members, Up to 52 weeks’ parental leave, Rest and meal breaks must be provided - Rest break must be paid, Relevant minimum wage must be paid, Unpaid leave for jury service. Plus in practice, employers need a good reason for firing or laying off staff and need to do it professionally, as employees can appeal to a government review panel which nearly always sides with employees. And, of course, the government provides free healthcare for everyone, and we also have a system here where if you have a workplace accident you can't sue anyone but the government will pay out a fixed compensation amount based on the injury (basically it's nationalized accident insurance where instead of suing your employer for the injury and receiving a payout, the government just gives you the payout and you don't need the lawsuit, and so all the employers don't need to buy liability insurance against getting sued... it makes car insurance much cheaper here too because it applies to all accidents so car insurance only pays out for damage to the car not to people so you can't sue for millions in damages due to personal injury).
                          Last edited by Starlight; 04-19-2017, 07:39 PM.
                          "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


                          • #14
                            Originally posted by tabibito View Post
                            Minimum wage here is $17.70 per hour ... Adjusted to AU$, American would earn $10.08 per hour. In addition, an Australian worker gets 4 weeks paid vacation/year.
                            Big Mac here costs $5.90 ... Adjusted to AU$, American would pay $6.73.
                            For each hour worked, a base paid Australian can get 3 Big Macs: a base paid American can't even get 2.
                            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.
                            "As for my people, children are their oppressors, and women rule over them. O my people, they which lead thee cause thee to err, and destroy the way of thy paths." Isaiah 3:12

                            There is no such thing as innocence, only degrees of guilt.

                            Comment


                            • #15
                              There's a reason America is the economic powerhouse of the world. It's because we expect our workers to actually work.
                              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

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