They keep saying that a "large" increase in minimum wage results in a 4.6% increase in case rate. But they don't [d̶e̶f̶i̶n̶e̶ ̶"̶l̶a̶r̶g̶e̶"̶ ̶(̶e̶s̶p̶e̶c̶i̶a̶l̶l̶y̶ ̶v̶s̶.̶ ̶"̶s̶m̶a̶l̶l̶"̶,̶ ̶w̶h̶i̶c̶h̶ ̶t̶h̶e̶y̶ ̶p̶o̶i̶n̶t̶ ̶o̶u̶t̶ ̶l̶e̶a̶d̶s̶ ̶t̶o̶ ̶l̶o̶w̶e̶r̶i̶n̶g̶ ̶c̶a̶s̶e̶ ̶r̶a̶t̶e̶)̶,̶ ̶n̶o̶r̶ ̶d̶o̶ ̶t̶h̶e̶y̶] point out a margin of error or a noise floor early enough in the paper for a non-paying reader to see.
They also say that they "do not find evidence that capital-labor substitution could be behind the findings", but its again not within the scope of the free article to show how they were looking for such evidence, and what defined "capitol-labor substitution". Were they looking purely for "it costs $5k a year to provide everyone with safety glasses, but operating costs just increased by $50k on what used to net $60k of profit, so I guess we're not doing safety glasses anymore" or if the same reasoning was used on $600k of profit. The former is clearly capitol-labor substitution, the latter is being cheap out of spite.
Maybe these questions are being answered in a satisfactory manner, but the fact that they use a blend of wiggle words and hard numbers, with no clarifying context even in the abstract, suggests to me that this does not actually support the strawman everybody seems to be getting from it, which is "see, paying the person at McDonalds enough to actually make rent this month might get them killed! You don't want to pay them so much they might die, right?"
The compensation package for a job includes a certain mix of "how hard do we make you work, how nice are the conditions, how much do we pay". Minimum wage keeps you from trading those off. Now you get paid more but you have to hustle to earn it, no perks, and less budget for the safety committee.
so, p-hacking, or following a meaningful wage increase, employees are more likely, or more able to report an injury, and the actual rate of injury didn't change?
Or am I missing another more obvious conclusion here?
That was my thought too. I just scanned the paper but I didn't see them discussing controlling for changes in reporting based on pay increases. If you beat someone constantly they just whimper. If you hit them only once they will scream loudly. I think there is a chance that is happening here.
I immediately think of line cooks, who are perennially underpaid and extremely replaceable and are expected to tough out any injury short of a hospital visit.
Having started at the bottom, I think the most important thing for people in this situation is to be able to get the next higher paying job, then the next higher paying job. Minimum wage should be temporary - so this study is kind of stupid.
In my experience, my worst enemies were exhaustion, the crab-in-the-bucket attitude of my peers, and an inability to build a resume and to network out to the people who wanted what I could do. Ultimately I couldn't escape poverty until I could buy enough gear to work up north. That money made it possible to pay for an education.
To help the poor, make it easy for them to climb the economic ladder. If safety makes this harder, I would prioritize job-mobility over safety.
> Minimum wage should be temporary - so this study is kind of stupid.
I see this type of attitude/comment frequently whenever the minimum wage comes up, but I've never seen any kind of justification for it.
If these aren't "real jobs" that deserve "real pay" then why are there billion(trillion?) dollar corporations built entirely on top of employing millions of people at minimum wage?
If you have a minimum wage job, your priority should be to find a better paying job. There is no fairness here and nobody cares about your problems like you do. Don't let the political attitudes or fashionable views of your friends effect your own agency, you need to look out for your own economic interests right now.
I think the study is kind of stupid, since the minimum wage category is a temporary category with extremely high variability, it's not a fixed target. So the base assumption that it stays put long enough to study doesn't hold water for me.
I think a lot of the confusion here comes from a conflict between people talking in personal mode and societal modes. As an individual, you absolutely want minimum wage to be temporary, and if you are smart and lucky you can usually make this happen.
You're taking more a societal point of view. At this level, I think you're missing the point of minimum wage. It doesn't provide a family with a living wage; it's just a limit on the monetary abuse that an above board company can dish out, just like we have labor laws that limit other types of abuse (like excessive hours for example). Whether and how our society should be ensuring living wages is kind of another discussion, much more complex. As they currently stand, minimum wages are probably a net good.
>>It's not intended to provide a family with a living wage;
Maybe not family but definitely the individual, FDR on minimum wage:
Ultimately, he hoped to mandate that all workers would be paid "living wages" as described in his 1933 speech on the National Industrial Recovery Act, "It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By 'business' I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white-collar class as well as the men in overalls; and by living wages, I mean more than a bare subsistence level-I mean the wages of decent living."
I don't see any particular reason to pay attention to century-old rhetoric. I think "intended " was a poor word choice; see my other response. Also, I could live on minimum wage today but I'd hate it.
I'm just making an observation in the sense of "the purpose of system is what it does", not writing a treatise on the history of rhetoric around minimum wage. Maybe "intended" was a poor word choice on my part. Minimum wage can't easily feed and house 3 dependents in many places as it stands today.
"In my [Franklin D Roosevelt] Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By “business” I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living."
Increased job-mobility won't increase the number of higher paying openings though. Even if everybody at the bottom of the pyramid is laser-focused on making it up, the number actually succeeding won't really change, except perhaps through indirect effects. If anything, making people more content at the bottom would make it easier to raise for those who do want.
The number of people actually employed at minimum wage is quite small (usually low single digit percentage of total employment), though it does vary by location. If you add in some amount over minimum wage the number goes up (significantly), but if you add in tips and the like it goes down a lot. From what I've seen, the median amount of time people spend in that salary range is less than six months (of continuous employment).
> To help the poor, make it easy for them to climb the economic ladder.
This. The same or more attention should be paid to ensuring there are plentiful, affordable homes, and a ladder of jobs from one level to another, as is paid to social safety nets.
This is great, until they receive a debilitating injury that puts them on disability for the rest of their lives, get a mountain of medical debt, or lose the breadwinner.
> If safety makes [job mobility] harder, I would prioritize job-mobility over safety.
I'm sorry, what?! Given the options between, opportunity for a promotion at some point, and not being injured by your job. You would prioritize maybe promoting people over preventing people from getting injured?
First, when given two options, and asked to decide, the first thing every engineer should do is ask, "why not both?". But also, Perhaps you should consider listening to fewer podcasts from Lord Farquaad?
"To help the poor, make it easy for them to climb the economic ladder"
There is no "the poor"... rather its just people that do not have any other options. Primarily, higher education or certified skilled trades are the only effective way out of minimal income survivor economics.
In my opinion, people working at fast food chains making the minimum legally allowable wage work harder than any CEO or academic I've met over the years.
I would recommend this book as it quantifies how income disparity impacts young Americans development:
"Outliers: The Story of Success Paperback" (Malcolm Gladwell, 2011)
Notably, naively explaining passive income from assets to minimum wage workers is not usually a productive conversation. Rather, folks are just projecting their own perspective on people in a different situation. =3
I did look, of course. High minimum wages, serious social support for unemployed or unemployable, high taxes, generally a more collectivist mindset among citizens than what we have in the US.
Additionally, the US has a very backwards system of social support, which cuts off benefits abruptly, so earning slightly more makes you suddenly quite worse off, instead of weaning you off the support smoothly as your income grows. It's literally a trap. Raising the minimum wage may trigger this for some, too, so staying at the same job at a higher hourly rate results in a lower total income than being unemployed and living entirely off benefits.
I see. But not touching the minimum wage, and instead making the same amount of benefits provided gradually instead of having a sharp boundary (as now) would go a long way.
It won't make any businesses die; to the contrary, the people who won't take a slightly better job now would grow at work, and maybe eventually grow out of poverty entirely. Currently it's only possible by either taking a hit in income among the way, or by suddenly jumping to a much better job.
Big businesses are usually more efficient, even simply due to scale. They need fewer employees for the same amount of sales. Raising the minimum wage squeezes away the least-qualified employees, who are constrained in various ways (language, education, health, etc). The more qualified employees may and do of course benefit.
High minimum wages work well with a strong social security network, and higher taxes to support it. It's not what we have in the US though.
Really? Please back that up with actual data or studies. If labor costs go up equally then a business isn't at a competitive disadvantage. Small businesses also often get tax breaks and the like as part of minimum wage increases. In the end they often get helped by a minimum wage increase. At a minimum it isn't a slam dunk in any way that 'they make small businesses unviable' while it is very clear that it makes lives better for employees [1].
Finally, if a business isn't creating jobs that provide a living wage then it shouldn't be allowed to exist since those employees are likely being subsidized by taxpayers for the gap between what the business is paying and what they need to live on. Put simply, I don't want to subsidize a business so that it can avoid paying its employees.
> If labor costs go up equally then a business isn't at a competitive disadvantage
The classic low wage job is flipping burgers. Everyone with a kitchen is a competitor to this business, and if restaurants all raise prices in lock step, it stands to reason at least some people will cook at home instead.
> if a business isn't creating jobs that provide a living wage then it shouldn't be allowed to exist ... I don't want to subsidize a business so that it can avoid paying its employees.
I doubt you meant it this way, but that's a fascinating argument against progressive taxation.
> The classic low wage job is flipping burgers. Everyone with a kitchen is a competitor to this business, and if restaurants all raise prices in lock step, it stands to reason at least some people will cook at home instead.
And meanwhile there will be more people with more money in their pockets able to now go out and get a meal somewhere. The secondary effects are many and you can't isolate price increase without looking at the new demand created. It may seem odd, but when you pay people more they end up spending more. [1]
Additionally, part of the problem here is the perception that 'The classic low wage job is flipping burgers.' with the implication that that is just for high school kids so not a real job. Unfortunately this whole country runs on gig and minimum wage jobs (or worse). Enabling these jobs is just a route to funneling money up and increasing the wealth gap. People are doing an honest day's work and should be paid enough to live on that. Any argument to short-change them is an argument that society has to pick up for the slack of the employer. Are you suggesting we increase taxes to pay for that gap? Because that is what actually happens. So, why not. But instead of taxing me for a bad employment model, let's instead put a huge wealth tax on businesses that pay less than a minimum wage and then use it to pay for all the social programs that are needed to keep that workforce alive. I don't personally like that idea but at least then the costs of cheap labor would be put onto the places abusing it and not me.
Instead of subsidizing a business that provides some value and pays some wages, we then end up without the business, and with unemployed folks. These folks don't cease to exist, we don't want to tell them "go away and die", do we? So now the taxpayer pays the whole cost of keeping these folks alive, instead of a part of it, and the folks are possibly worse off, unless they find something to do with their time to earn an extra buck. And that something is usually not a legal employment.
Your assumption that the business will fail was the assumption I initially challenged. That assumption isn't well backed by data. As I pointed out, small businesses often actually get benefits from a minimum wage increase and people that get wage increases spend more money so it isn't a slam dunk that small businesses will be worse off much less automatically fail.
Yeah. Economic effects are rarely cut and dry and the actual impact of a minimum wage increase is highly dependent on a lot of factors so pretty hard to say one way or another. But one thing is clear, minimum wage increase do help the employees. So we have one clear benefit to employees, no clear benefit or detractor to employers and a clear benefit to me personally (which is what I really care about) in that I don't have to subsidies bad businesses. With all that in mind it looks clear to me that increasing the minimum wage to a living wage is the right answer.
I'd be interested in some of the speculated causation here, do folks think that because they're getting paid more then they are expected to work 4.6% harder therefore get injured at that higher rate?
1) Companies barely scraping by start cutting corners when labor gets more expensive. The work environment becomes more dangerous.
2) Companies paying more for labor set higher output demands for that labor. The job gets harder.
3) Companies paying more for labor are hesitant to hire more, given the increased costs/risks of adding FTEs. They instead ask existing workers to work more. The hours get longer.
4) Employees getting paid more feel empowered to report accidents that previously would have been hidden. The workers become more outspoken.
Ironic, since the intent of minimum wage was make human capital expensive enough to promote automation and prevent human slaughter in the factories of the early 1900s
> Our findings indicate that, on average, a large minimum wage increase results in a 4.6 percent increase in the total case rate.
...
> We provide suggestive evidence that small minimum wage increases might reduce injury rates, highlighting the potential heterogeneity in the impact of minimum wage changes.
> Prior studies document that financial constraints reduce safety investment and thus increase injuries...
I mean, maybe, but that goes both ways.
Someone with a bit more financial security might be more able to seek treatment, too. $500 in savings makes it easier to miss a shift to go to urgent care.
Yet another reason why the minimum/living wage treadmill isn't the right solution, and labor activist should push more seriously for UBI. The fact of the matter is that many people's labor isn't worth a living wage, and especially not for ethical working conditions.
The goal of every job paying enough to be comfortable is missing the forest for the trees, because it will always fail to account for the cost of the stress of working, and always be at odds with safety. The actual goal should be that people should be able to survive comfortably no matter their ability to get a "good" job, because as we automate more, it's just a simple fact that "good" jobs will continue to get harder to come by.
Absolutely this. Rather than having minimum wage be $15, UBI should be $15/hour, and then there need be no floor for the amount on top of that that employers are allowed to pay for labor. (Probably there will be a floor to what laborers will accept, because of how much less desperate they will be, resulting in a higher wage share of income overall, and generally reduced wealth inequality across society).
Minimum wage is a way to avoid total exploitation. The poor have very little bargaining power. But we also need to reduce the supply of labor to keep reasonable wages.
It is not true. The minimum wage was primarily an eugenic measure introduced during the progressive era. The idea was to prevent Chinese and other immigrants from undercutting white labour.
The people arguing for it back then understood the effect of minimum wage very well. They just had different motivations.
They keep saying that a "large" increase in minimum wage results in a 4.6% increase in case rate. But they don't [d̶e̶f̶i̶n̶e̶ ̶"̶l̶a̶r̶g̶e̶"̶ ̶(̶e̶s̶p̶e̶c̶i̶a̶l̶l̶y̶ ̶v̶s̶.̶ ̶"̶s̶m̶a̶l̶l̶"̶,̶ ̶w̶h̶i̶c̶h̶ ̶t̶h̶e̶y̶ ̶p̶o̶i̶n̶t̶ ̶o̶u̶t̶ ̶l̶e̶a̶d̶s̶ ̶t̶o̶ ̶l̶o̶w̶e̶r̶i̶n̶g̶ ̶c̶a̶s̶e̶ ̶r̶a̶t̶e̶)̶,̶ ̶n̶o̶r̶ ̶d̶o̶ ̶t̶h̶e̶y̶] point out a margin of error or a noise floor early enough in the paper for a non-paying reader to see.
They also say that they "do not find evidence that capital-labor substitution could be behind the findings", but its again not within the scope of the free article to show how they were looking for such evidence, and what defined "capitol-labor substitution". Were they looking purely for "it costs $5k a year to provide everyone with safety glasses, but operating costs just increased by $50k on what used to net $60k of profit, so I guess we're not doing safety glasses anymore" or if the same reasoning was used on $600k of profit. The former is clearly capitol-labor substitution, the latter is being cheap out of spite.
Maybe these questions are being answered in a satisfactory manner, but the fact that they use a blend of wiggle words and hard numbers, with no clarifying context even in the abstract, suggests to me that this does not actually support the strawman everybody seems to be getting from it, which is "see, paying the person at McDonalds enough to actually make rent this month might get them killed! You don't want to pay them so much they might die, right?"
They do define "large".
> We focus on large minimum wage increases (≥ $1 per hour), which are likely to be binding (Clemens and Strain, 2021, Fone et al., 2023).
Thanks! I did not see that previously. Going to edit my post now...
The compensation package for a job includes a certain mix of "how hard do we make you work, how nice are the conditions, how much do we pay". Minimum wage keeps you from trading those off. Now you get paid more but you have to hustle to earn it, no perks, and less budget for the safety committee.
so, p-hacking, or following a meaningful wage increase, employees are more likely, or more able to report an injury, and the actual rate of injury didn't change?
Or am I missing another more obvious conclusion here?
That was my thought too. I just scanned the paper but I didn't see them discussing controlling for changes in reporting based on pay increases. If you beat someone constantly they just whimper. If you hit them only once they will scream loudly. I think there is a chance that is happening here.
I immediately think of line cooks, who are perennially underpaid and extremely replaceable and are expected to tough out any injury short of a hospital visit.
Really almost anyone paid hourly. Time spent dealing with injury is time spent not working which is time spent NOT getting paid.
Having started at the bottom, I think the most important thing for people in this situation is to be able to get the next higher paying job, then the next higher paying job. Minimum wage should be temporary - so this study is kind of stupid.
In my experience, my worst enemies were exhaustion, the crab-in-the-bucket attitude of my peers, and an inability to build a resume and to network out to the people who wanted what I could do. Ultimately I couldn't escape poverty until I could buy enough gear to work up north. That money made it possible to pay for an education.
To help the poor, make it easy for them to climb the economic ladder. If safety makes this harder, I would prioritize job-mobility over safety.
> Minimum wage should be temporary - so this study is kind of stupid.
I see this type of attitude/comment frequently whenever the minimum wage comes up, but I've never seen any kind of justification for it.
If these aren't "real jobs" that deserve "real pay" then why are there billion(trillion?) dollar corporations built entirely on top of employing millions of people at minimum wage?
If you have a minimum wage job, your priority should be to find a better paying job. There is no fairness here and nobody cares about your problems like you do. Don't let the political attitudes or fashionable views of your friends effect your own agency, you need to look out for your own economic interests right now.
I think the study is kind of stupid, since the minimum wage category is a temporary category with extremely high variability, it's not a fixed target. So the base assumption that it stays put long enough to study doesn't hold water for me.
I think a lot of the confusion here comes from a conflict between people talking in personal mode and societal modes. As an individual, you absolutely want minimum wage to be temporary, and if you are smart and lucky you can usually make this happen.
You're taking more a societal point of view. At this level, I think you're missing the point of minimum wage. It doesn't provide a family with a living wage; it's just a limit on the monetary abuse that an above board company can dish out, just like we have labor laws that limit other types of abuse (like excessive hours for example). Whether and how our society should be ensuring living wages is kind of another discussion, much more complex. As they currently stand, minimum wages are probably a net good.
>>It's not intended to provide a family with a living wage;
Maybe not family but definitely the individual, FDR on minimum wage:
Ultimately, he hoped to mandate that all workers would be paid "living wages" as described in his 1933 speech on the National Industrial Recovery Act, "It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By 'business' I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white-collar class as well as the men in overalls; and by living wages, I mean more than a bare subsistence level-I mean the wages of decent living."
From: https://publicpolicy.pepperdine.edu/blog/posts/what-did-fdr-...
I don't see any particular reason to pay attention to century-old rhetoric. I think "intended " was a poor word choice; see my other response. Also, I could live on minimum wage today but I'd hate it.
We pay lip-service attention to the two-century-old rhetoric of Jefferson, Adams, Hamilton, and others who drafted the first constitution.
not intended by who? when the minimum wage was introduced it was talked about as a living wage intended to be enough to raise a family on.
I'm just making an observation in the sense of "the purpose of system is what it does", not writing a treatise on the history of rhetoric around minimum wage. Maybe "intended" was a poor word choice on my part. Minimum wage can't easily feed and house 3 dependents in many places as it stands today.
>> why are there billion(trillion?) dollar corporations built entirely on top of employing millions of people at minimum wage?
There aren't any such corporations. There are under a million people earning the federal minimum wage in the US: https://fred.stlouisfed.org/series/T16OC2.
That's $7.25, to be clear. In 30 states, that's illegally low.
Isn't that entirely because several states have a higher minimum wage than the federal one?
I ask as an outsider and have to wonder why this didn't occur to an American.
"In my [Franklin D Roosevelt] Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By “business” I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living."
Emphasis mine.
Increased job-mobility won't increase the number of higher paying openings though. Even if everybody at the bottom of the pyramid is laser-focused on making it up, the number actually succeeding won't really change, except perhaps through indirect effects. If anything, making people more content at the bottom would make it easier to raise for those who do want.
The number of people actually employed at minimum wage is quite small (usually low single digit percentage of total employment), though it does vary by location. If you add in some amount over minimum wage the number goes up (significantly), but if you add in tips and the like it goes down a lot. From what I've seen, the median amount of time people spend in that salary range is less than six months (of continuous employment).
> To help the poor, make it easy for them to climb the economic ladder.
This. The same or more attention should be paid to ensuring there are plentiful, affordable homes, and a ladder of jobs from one level to another, as is paid to social safety nets.
> I would prioritize job-mobility over safety.
This is great, until they receive a debilitating injury that puts them on disability for the rest of their lives, get a mountain of medical debt, or lose the breadwinner.
> To help the poor, make it easy for them to climb the economic ladder.
Someone still has to be at the bottom of the ladder.
> If safety makes [job mobility] harder, I would prioritize job-mobility over safety.
I'm sorry, what?! Given the options between, opportunity for a promotion at some point, and not being injured by your job. You would prioritize maybe promoting people over preventing people from getting injured?
First, when given two options, and asked to decide, the first thing every engineer should do is ask, "why not both?". But also, Perhaps you should consider listening to fewer podcasts from Lord Farquaad?
"To help the poor, make it easy for them to climb the economic ladder"
There is no "the poor"... rather its just people that do not have any other options. Primarily, higher education or certified skilled trades are the only effective way out of minimal income survivor economics.
In my opinion, people working at fast food chains making the minimum legally allowable wage work harder than any CEO or academic I've met over the years.
I would recommend this book as it quantifies how income disparity impacts young Americans development:
"Outliers: The Story of Success Paperback" (Malcolm Gladwell, 2011)
https://www.amazon.ca/Outliers-Story-Success-Malcolm-Gladwel...
Notably, naively explaining passive income from assets to minimum wage workers is not usually a productive conversation. Rather, folks are just projecting their own perspective on people in a different situation. =3
> If safety makes this harder, I would prioritize job-mobility over safety.
Climbing any ladder - physical or economic - is much harder with injuries.
The U.S. could of course just have automatic cost of living adjustment s to minimum wage, like it does for social security payments.
[flagged]
You should really look at what happens in countries with miniman wage. It's not really like you fear.
I did look, of course. High minimum wages, serious social support for unemployed or unemployable, high taxes, generally a more collectivist mindset among citizens than what we have in the US.
Additionally, the US has a very backwards system of social support, which cuts off benefits abruptly, so earning slightly more makes you suddenly quite worse off, instead of weaning you off the support smoothly as your income grows. It's literally a trap. Raising the minimum wage may trigger this for some, too, so staying at the same job at a higher hourly rate results in a lower total income than being unemployed and living entirely off benefits.
This system should be fixed first.
> This system should be fixed first.
Hard if every proposed fix is met with "this would make even more small businesses unviable, and even more people unemployed" objections.
I see. But not touching the minimum wage, and instead making the same amount of benefits provided gradually instead of having a sharp boundary (as now) would go a long way.
It won't make any businesses die; to the contrary, the people who won't take a slightly better job now would grow at work, and maybe eventually grow out of poverty entirely. Currently it's only possible by either taking a hit in income among the way, or by suddenly jumping to a much better job.
Why? If customers still need those services, bigger businesses will provide them and hire the newly-unemployed.
Big businesses are usually more efficient, even simply due to scale. They need fewer employees for the same amount of sales. Raising the minimum wage squeezes away the least-qualified employees, who are constrained in various ways (language, education, health, etc). The more qualified employees may and do of course benefit.
High minimum wages work well with a strong social security network, and higher taxes to support it. It's not what we have in the US though.
Really? Please back that up with actual data or studies. If labor costs go up equally then a business isn't at a competitive disadvantage. Small businesses also often get tax breaks and the like as part of minimum wage increases. In the end they often get helped by a minimum wage increase. At a minimum it isn't a slam dunk in any way that 'they make small businesses unviable' while it is very clear that it makes lives better for employees [1].
Finally, if a business isn't creating jobs that provide a living wage then it shouldn't be allowed to exist since those employees are likely being subsidized by taxpayers for the gap between what the business is paying and what they need to live on. Put simply, I don't want to subsidize a business so that it can avoid paying its employees.
[1] https://irle.berkeley.edu/wp-content/uploads/2023/03/Small-B...
> If labor costs go up equally then a business isn't at a competitive disadvantage
The classic low wage job is flipping burgers. Everyone with a kitchen is a competitor to this business, and if restaurants all raise prices in lock step, it stands to reason at least some people will cook at home instead.
> if a business isn't creating jobs that provide a living wage then it shouldn't be allowed to exist ... I don't want to subsidize a business so that it can avoid paying its employees.
I doubt you meant it this way, but that's a fascinating argument against progressive taxation.
> The classic low wage job is flipping burgers. Everyone with a kitchen is a competitor to this business, and if restaurants all raise prices in lock step, it stands to reason at least some people will cook at home instead.
And meanwhile there will be more people with more money in their pockets able to now go out and get a meal somewhere. The secondary effects are many and you can't isolate price increase without looking at the new demand created. It may seem odd, but when you pay people more they end up spending more. [1]
Additionally, part of the problem here is the perception that 'The classic low wage job is flipping burgers.' with the implication that that is just for high school kids so not a real job. Unfortunately this whole country runs on gig and minimum wage jobs (or worse). Enabling these jobs is just a route to funneling money up and increasing the wealth gap. People are doing an honest day's work and should be paid enough to live on that. Any argument to short-change them is an argument that society has to pick up for the slack of the employer. Are you suggesting we increase taxes to pay for that gap? Because that is what actually happens. So, why not. But instead of taxing me for a bad employment model, let's instead put a huge wealth tax on businesses that pay less than a minimum wage and then use it to pay for all the social programs that are needed to keep that workforce alive. I don't personally like that idea but at least then the costs of cheap labor would be put onto the places abusing it and not me.
[1] https://cepr.org/voxeu/columns/spending-income-and-debt-resp...
Instead of subsidizing a business that provides some value and pays some wages, we then end up without the business, and with unemployed folks. These folks don't cease to exist, we don't want to tell them "go away and die", do we? So now the taxpayer pays the whole cost of keeping these folks alive, instead of a part of it, and the folks are possibly worse off, unless they find something to do with their time to earn an extra buck. And that something is usually not a legal employment.
Does it look like a win?
Your assumption that the business will fail was the assumption I initially challenged. That assumption isn't well backed by data. As I pointed out, small businesses often actually get benefits from a minimum wage increase and people that get wage increases spend more money so it isn't a slam dunk that small businesses will be worse off much less automatically fail.
The evidence is contradictory.
On one hand: https://minimumwage.com/2023/12/minimum-wage-hikes-are-leavi...
On the other hand: https://news.berkeley.edu/2023/03/14/even-in-small-businesse...
I suppose both effects exist, and which prevails likely depends on the kind of business, local or industry-specific tax regime, etc.
Yeah. Economic effects are rarely cut and dry and the actual impact of a minimum wage increase is highly dependent on a lot of factors so pretty hard to say one way or another. But one thing is clear, minimum wage increase do help the employees. So we have one clear benefit to employees, no clear benefit or detractor to employers and a clear benefit to me personally (which is what I really care about) in that I don't have to subsidies bad businesses. With all that in mind it looks clear to me that increasing the minimum wage to a living wage is the right answer.
Sounds like we need more safety regulations.
Or better enforcement. To widely speculate, I doubt the US will be getting either of those. /s
I'd be interested in some of the speculated causation here, do folks think that because they're getting paid more then they are expected to work 4.6% harder therefore get injured at that higher rate?
A few possibilities:
1) Companies barely scraping by start cutting corners when labor gets more expensive. The work environment becomes more dangerous.
2) Companies paying more for labor set higher output demands for that labor. The job gets harder.
3) Companies paying more for labor are hesitant to hire more, given the increased costs/risks of adding FTEs. They instead ask existing workers to work more. The hours get longer.
4) Employees getting paid more feel empowered to report accidents that previously would have been hidden. The workers become more outspoken.
Do they have a breakdown by industry? That would give some insight into what's happening. Did a wage increase cause management to try a speedup?
> minimum wage increases adversely impact workplace safety
Ironic, since the intent of minimum wage was make human capital expensive enough to promote automation and prevent human slaughter in the factories of the early 1900s
> Our findings indicate that, on average, a large minimum wage increase results in a 4.6 percent increase in the total case rate.
...
> We provide suggestive evidence that small minimum wage increases might reduce injury rates, highlighting the potential heterogeneity in the impact of minimum wage changes.
I guess since dube, lester, reich the think tank crowd has given up on trying to demonstrate that it destroys jobs and are trying a different tack.
It's worth noting that mininum wage hikes are a very profit hostile policy. This is why they tend to receive such huge pushback.
> Prior studies document that financial constraints reduce safety investment and thus increase injuries...
I mean, maybe, but that goes both ways.
Someone with a bit more financial security might be more able to seek treatment, too. $500 in savings makes it easier to miss a shift to go to urgent care.
Yet another reason why the minimum/living wage treadmill isn't the right solution, and labor activist should push more seriously for UBI. The fact of the matter is that many people's labor isn't worth a living wage, and especially not for ethical working conditions.
The goal of every job paying enough to be comfortable is missing the forest for the trees, because it will always fail to account for the cost of the stress of working, and always be at odds with safety. The actual goal should be that people should be able to survive comfortably no matter their ability to get a "good" job, because as we automate more, it's just a simple fact that "good" jobs will continue to get harder to come by.
Absolutely this. Rather than having minimum wage be $15, UBI should be $15/hour, and then there need be no floor for the amount on top of that that employers are allowed to pay for labor. (Probably there will be a floor to what laborers will accept, because of how much less desperate they will be, resulting in a higher wage share of income overall, and generally reduced wealth inequality across society).
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Minimum wage is a way to avoid total exploitation. The poor have very little bargaining power. But we also need to reduce the supply of labor to keep reasonable wages.
It is not true. The minimum wage was primarily an eugenic measure introduced during the progressive era. The idea was to prevent Chinese and other immigrants from undercutting white labour.
The people arguing for it back then understood the effect of minimum wage very well. They just had different motivations.