(no subject)

[lsanderson]

Would cutting the minimum wage raise employment?

It seems that more and more Serious People (and Fox News) are rallying around the idea that if Obama really wants to create jobs, he should cut the minimum wage.

Would cutting the minimum wage raise employment? - Paul Krugman Blog - NYTimes.com

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Comments

Re: When does Krugman get to be president like Bartlet?

[dd-b.livejournal.com]

The claim is that more people would be employed if the minimum were lower. It's not clearly either true or false yet, despite decades of claims and studies.

If it's true, lowering the minimum would make people currently getting the minimum worse off, but would make some people currently unemployed better off (by being employed). Plus it would have some effects, even harder to predict, in surrounding groups.

Trying to balance out those two and decide if it's worth it for society is certainly not trivial or obvious. The numbers in each group would matter a lot.

[also-huey.livejournal.com]

I keep reading claims like this, but nobody ever points at any data. So, I ask Google for some numbers, and make a pretty table, and wind up with this:


So the answer to the question Would cutting the minimum wage raise employment? would appear to be "doesn't much look like it, no".

Si!

[lsanderson.livejournal.com]

Ittsa bogus claim for repugs to hire cheaper servants and burger flippers.

Re: When does Krugman get to be president like Bartlet?

[buttonlass.livejournal.com]

I understood the claim. I object to speaking about it in hypothetical terms when real people aren't eating.

Also I think it is clearly false. I have yet to encounter a business that wasn't always trying to improve their bottom line. If they are currently getting by with a set number of employees they will not hire more, they will pocket the difference.

I actually do think it's obvious.

Re: When does Krugman get to be president like Bartlet?

[dd-b.livejournal.com]

I acknowledge that real people aren't eating, and that that's an important point. But, again, I point out that those not eating include those unemployed as well as those currently making minimum wage. Ignoring either group makes it impossible to reach a valid conclusion. (I don't, as I said before, know how to balance harm to one vs. harm to the other in any case; I don't claim to be able to reach a valid conclusion, I just feel it's necessary to consider BOTH groups to have any possibility of doing so).

Of course, if the claim is false, then it is easy; if there's no benefit to anybody, then there's no conflict between different benefits, which makes it much easier to reach a valid conclusion.

I have seen businesses choose to increase employment. On one day, they were getting by with a set number of employees, and yet they chose to increase that number the next day. I've even seen them do that in situations other than when they were obviously just skirting disaster. I've seen stores increase how frequently they plowed the parking lot. I've seen them decide to bring cleaning crews through more often. I've seen businesses decide to wash the windows more often. And I'm quite certain that the cost of doing those things was one of the factors considered when they made these decisions. So, without for a moment disagreeing with your opinion that improving the bottom line is their goal, I WILL disagree with your opinion that they will never hire more people if people get cheaper.

Re: When does Krugman get to be president like Bartlet?

[sethb.livejournal.com]

So if a new employee is worth $7/hour in profit (before his salary), when the minimum wage is $7.25 he won't be hired; when it's $6.75 he will be. So in your model, reducing the minimum wage will increase employment.

A fast-food restaurant deciding whether to close earlier will compare the cost of staying open for the last hour with the income. If costs decrease, it is more likely to remain open, thereby providing employees another hour of work.