Does Raising the Minimum Wage Increase Unemployment?

[SassySue]

A look at historical minimum wage increases and unemployment shows no relationship between the two. There are instances of unemployment both rising and falling after or during such increases. We see instances of the minimum wage being raised during a time when unemployment was either rising or falling, and see no change after the increase. Of course, one could cherry pick a point in history in order to argue a preconceived point of view, but on aggregate, it would appear that these increases have zero bearing on the unemployment rate.


Full article:

http://www.factandmyth.com/minimum-w...oyment-economy

And there we have it.

[LexusLover]

Of course it doesn't affect employment .....

Today I employee 10 employees in my fictitious fastfood hamburger joint at $8.00 an hour and they work a 40 hour week, with $12 an hour overtime. So without any overtime my weekly overhead for just payroll (not including added payroll, uniforms, various employment taxes, and health insurance) = 400 hours X $8 or $3,200. At $5 a pop that equals 640 hamburgers to get the gross for the 10 employees at 40 hours a week.

Tomorrow the minimum wage goes to $15 an hour. Now my weekly salary overhead for the 10 employees = $6,000. Now I have sell 1,200 hamburgers a week to get enough gross revenues to pay the salary overhead without any expenses for payroll, uniforms, various employment taxes, and health insurance. If I can't generate enough revenue to cover the weekly salary overhead I have to reduce hours or reduce employees to lessen the overhead burden so I can at least keep some of the employees working!

[I B Hankering]

"The General Theory [Keynes (1936)] argues that workers strongly resist cuts in nominal contractual wage levels. Because of this, after a shock to the economy which reduces the equilibrium level of nominal contractual wages, the contractual wage remains above the equilibrium level and unemployment results."

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[SassySue]

Originally Posted by I B Hankering

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You both did not read the whole article or look at the graphs. Too bad.

[I B Hankering]

Originally Posted by SassySue

You both did not read the whole article or look at the graphs. Too bad.

Read the more revered Keynes, and you didn't:

[LexusLover]

Originally Posted by SassySue

You both did not read the whole article or look at the graphs. Too bad.

I've owned my own business longer than you have! And on top of that I have a lot more experience than you do in doing annual budgets, budget proposals, and budget oversight ..... with hiring and firing of more employees than you have, which includes scheduling shifts and maintaining staff levels to meet the demands, along with increases in hourly wages (with no employees EVER having to ask for a raise ... except one that I can recall.... who I recommend go find a position that suited her credit card addiction and excessive, uncontrolled lifestyle ... who was back in six months wanting a job ....)

Little girl .... that's just the beginning!

It's like you and PV! Get your head out of the tourist brochures!!!!

[lustylad]

Originally Posted by SassySue

You both did not read the whole article or look at the graphs. Too bad.

Ok, I read it. Who is the author? I can't find a name. Is he/she an economist?

The first two graphs do NOT support the author's conclusions. Just because overall employment and/or GDP may sometimes continue to rise following a minimum wage increase, it DOES NOT FOLLOW that the MW hike had no impact. The proper question to be analyzed is - would employment/GDP have risen faster without any MW increase?

This link between MW and low-skilled worker unemployment is one of the most thoroughly researched questions in economics. There are even studies that attempt to summarize the findings of all previous studies. But before I show them to you, SassySue, please tell me who the author of your link is and what are his/her economic credentials.

[gfejunkie]

I have never understood why anyone is willing to settle for minimum wage anyway.

Not a whole lot of ambition there.

[LexusLover]

Originally Posted by gfejunkie

I have never understood why anyone is willing to settle for minimum wage anyway.

Not a whole lot of ambition there.

#1: They have to settle for minimum wage.
#2: They don't need "ambition" if the government gives them a meritless raise.

[LexusLover]

Originally Posted by lustylad

....Just because overall employment and/or GDP may sometimes continue to rise following a minimum wage increase, it DOES NOT FOLLOW that the MW hike had no impact.

The Clintons and Obaminable have demonstrated the "value" politically of manipulating the BLS data to suit their "scenario" for the upcoming elections.

In the ramp up to 2000 elections the Clinton administration/BLS used the September stats for October's report to "cook the books" and make it appear as though the job market wasn't cratering .... and by December the AFL-CIO was screaming bloody murder and posting their own stats on their website. (Remember Bill going ballistic when Cheney was talking in December about their first order of business was to address the downturn in the economy?).

The current Administration uses BLS part-time employment stats to claim a full time position ... in other words ... if "John" loses his full time job and gets two part-time jobs to make up for it ... they count that as "two jobs" gained! Additionally, employees are getting cut to 30 hours to avoid work-health insurance and they are still counting that as "full time" when it's not be definition for health care requirements. And "John" gets a 2nd job to make up the short fall, then that's a new job even though it is part-time.

To get a real picture one has to look at increased wages per capita in a field.

They do the same shit with health coverage ... someone loses their pvt coverage and gets some through the portal .... that's not a wash that's an increase of one for their pr/propoganda.

[i'va biggen]

Originally Posted by gfejunkie

I have never understood why anyone is willing to settle for minimum wage anyway.

Not a whole lot of ambition there.

Not everyone is as equipped as you, or is able to sit behind a computer and code, work the stock exchange, sell real estate. even work a warehouse.

[LexusLover]

Originally Posted by i'va biggen

Not everyone is as equipped as you, or is able to sit behind a computer and code, work the stock exchange, sell real estate. even work a warehouse.

Correct. And a "problem" is that those same jobs go for 15 cents an hour overseas while the do-nothings are voting for candidates who will "grant" them $15 an hour here in this country .... which means .... the jobs get sent overseas!

Then the "do-nothings" can get unemployment compensation based on what?

$15 an hour!!!!

Or even better ...... Disability Checks!!!!!

[JD Barleycorn]

in 2006 the Kansas City Star ran several stories supporting a minimum wage increase. It won. Afterwards the Star ran stories about how many jobs were being lost because of the increase. The short answer is YES, raising the minimum wage cost jobs.


Why did the unions support the increase? Because some unions attach their wages to the minimum wage PLUS the union adjustment. Minimum wage PLUS 10 dollars an hour. Raise the minimum, instant union pay raise! Neat...

[dilbert firestorm]

government should not have that kind of power to raise wages. it is a form of price control, in this case wage control. it does not work.

the wage control makes assumptions that all businesses are the same which is not the case. every business is different when it comes to hiring, budgeting & pricing. making wage increases has a way of screwing things up for these business.

[dilbert firestorm]

Originally Posted by LexusLover

I've owned my own business longer than you have! And on top of that I have a lot more experience than you do in doing annual budgets, budget proposals, and budget oversight ..... with hiring and firing of more employees than you have, which includes scheduling shifts and maintaining staff levels to meet the demands, along with increases in hourly wages (with no employees EVER having to ask for a raise ... except one that I can recall.... who I recommend go find a position that suited her credit card addiction and excessive, uncontrolled lifestyle ... who was back in six months wanting a job ....)

Little girl .... that's just the beginning!

It's like you and PV! Get your head out of the tourist brochures!!!!

business keep taking it on the chin when it comes forced wage increases.

why don't they challenge the consitutionality of the minimum wage?