Study: Increasing minimum wage does not reduce jobs
Study: Increasing minimum wage does not reduce jobs
A new report shows minimum wage increases have had little effect on the number of jobs in Maryland and nationwide. While the rhetoric around increasing the minimum wage often comes with the caution it will reduce low-wage employment, a new review of decades of research showed most studies found no ...
This has been studied over and over and always with the same results. The economy isn't hampered, jobs aren't replaced by machines and overseas workers, the cost of goods doesn't go up, and factories don't close. The main impact is that quality of life increases, health spending increases (now that people can afford to take their kids to the doctor), and corporate profits decrease very slightly.
Especially in this economy of runaway corporate greed, we need a meaningful increase in wages
corporate profits decrease very slightly
This is the thing that people will reflexively point to, but this:
quality of life increases
This is the real issue. If quality of life increases, workers are less desperate, and are less willing to put up with their employers BS. Moreover, if other jobs are also paying a living wage, it's much easier to quit.
We have seen, over and over, that businesses are willing to spend money to exert control over workers. They'll do it even if it means a decline in profits, or even in revenue. Because at the end of the day, if you have your needs met, any money left over is just power, and power is meant to be used to control others.
Especially in this economy of runaway corporate greed, we need a meaningful
increase in wagesrevolution to eliminate those corporations and the systemic rewarding of greed.The fact that they could increase wages and still make money while improving society but don't, is why they don't deserve any more benefit of the doubt, or room to continue hoarding wealth and power as they are, because a system that craves constant growth at any cost will never stop on its own (nor provide paths for reform).
Oh jobs are replaced by machines, it just has almost nothing to do with minimum wage. Machines cost pennies on the dollar for production value compared to humans. The human wage is pretty meaningless at that point, even forced labor is less profitable.
I think part of the issue is how business accounting practices work. When you buy a machine, you can call it a capital investment and count its value as an asset. When you hire a person and cultivate them for years, from an accounting perspective their salary is strictly a liability / expense. Even though that person is an asset in every other way, our standard accounting practices don't reflect that.
But, the line must go up…
All of those things do happen, they just happen irregardless of minimum wage being raised. Like, the machines are coming for all jobs eventually, that's not a reason to not raise the wage for living workers.
Increasing minimum wage puts more money in the economy which people will spend which puts more money in businesses so they can pay their people more putting more money in the economy.
The only reason the wealthy don't like this is because their money passes through the hands of the unclean masses instead of going directly into their offshore tax haven accounts.
Yep.
Give a rich man a dollar and all you've done societally is remove a dollar from the economy. If you instead make him give that money to his employees things change, but cause poor people actually need money and will spend it.
You give a poor person that dollar through increased minimum wage and they spend it at a business. That business now makes more money, which is passed on to its employees through the increased minimum wage, and they spend that dollar again.
And again.
And again.
That dollar you took from the rich and gave to the poor drove a lot more than a dollar's economic activity.
OH - and it's also taxed every time it changes hands, so it also brings in more than its initial value in tax revenue.
In Brazil, a LinkedIn "influencer" was roasted because he said the if you a 100 to a rich person they would invest it and "make it" into 120 in a year, while of you give the same 100 to a poor person, that money is "lost" immediately.
Maybe an analogy makes it clearer: the economy is the blood flow, formed by services and products. Money if the fat in the blood. It's necessary for the system and without it it doesn't work right. But if it forms a clot then there a problem.
The only reason the wealthy don't like this is because
theirour money passes through the hands of the unclean masses instead of going directly into their offshore tax haven accounts.Ftfy
Well corrected.
Where I live, Washington, the minimum wage is $16.28 p/hour. Across the border in Idaho, the federal minimum applies — $7.25.
Businesses on the higher-wage side of the border are doing fine, and Spokaners do not drive across the border into Coeur d'Alene for cheaper groceries or a half-price Big Mac.
Spokaners do not drive across the border into Coeur d’Alene for cheaper groceries or a half-price Big Mac.
I actively boycott any and all ID businesses, because of the state's shitty labor and reproductive-rights laws and its nurture of Christofascism. They can Gilead all they want but it won't be with my financial support.
Yeah. I live in Seattle and had to travel a lot for work. Going out to eat was about the same price everywhere. The only thing that was really cheaper I could see was gas.
California recently increased minimum wage, and despite this, people still live there.
More than that, California (last I checked) had the fifth largest economy in the world when comparing to entire countries.
I think they'll do just fine.
Economic models keep most numbers fixed to simplify their math. They call it ceteris paribus.
So when economists claim that increasing wages will reduce the amount of jobs, they came to that conclusion by keeping corporate profits fixed while doing their math. So any business expense is paid for by reducing workers or wages.
In the real world corporate profits are not fixed and have grown faster than wages for decades.
Keep that in mind if an economist ever tries to claim increasing wages will reduce the quantity of jobs.
Right. The problem is, CEOs maintain that as “responsibility to their shareholders” to ensure their Q4 earnings reports prove continuous growth. So prices will inevitably increase, or overhead will be reduced to maintain those margins.
Economists are also very aware of what they choose to keep fixed and what they choose to allow as a variable. It's a science that's incredibly easy to corrupt the results in. Which is why people really need to pay attention to who it's giving the results.
Have we not known this for years?
Card & Kreuger has been held up by right wingers for ages as evidence to the contrary but it's a very bad study
None of the people uttering that lie will care about this news.
Our corporation funded a study that says this study is wrong. /s
Corporations were bragging about record profits not that long ago, and then basically admitted to price gouging. Folks are extremely underpaid in most areas. Not shocked at all.
No shit
From the abstract of the actual study
We find that most studies to date suggest a fairly modest impact of minimum wages on jobs: the median OWE estimate of 72 studies published in academic journals is -0.13, which suggests that only around 13 percent of the potential earnings gains from minimum wage increases are offset due to associated job losses. Estimates published since 2010 tend to be closer to zero.
Card and Kreuger found this out when they did a large study back in the 90s when each state could finally set its own minimum wage.
If its a real business and not a grift or privtization of gains/socialization of losses, they will pay closer to the right wage to have the right people fill the chair
The only thing increasing minimum wage must do is take money out of the wealthiest pockets.
And that's why wages stay stagnant.
Every other argument is a red herring.
Raise minimum wage? No, tax cuts for only certain low wage jobs instead. What are you gonna do, vote for the other parties we've forced off the ballots?
The root cause isn’t minimum wage. While that can be important it does affect a lot of small business. With that said the root cause is corporations using profits to line their pockets instead of helping the economy by paying their employees.
We need to stop skirting around the issue that is corporate America. we need to tax the fuck out of corporate profits BEFORE they hide it all in investments or stock buybacks.
That "Adobe Stock" photo from the article is just some generic AI crap.
The door is wide open for a stock photo business right now, I guess.
Hop on Adobe stock right now and search for something. Half of the results will be AI-generated. There's a search filter that can exclude them.
Isn't that kinda what AI images should be used for? Meaningless stock images? Like, if the article was about a specific person, or an interesting activity or place, then yea that's not for AI. But a generic article about "jobs" seems fine.
No?
People are paying for those pictures, either as a subscription or per-use basis. They're paying a rate to reflects work; photographers, models, rights - all kinds of different costs up front. None of that exists with AI.
It's sort of like sitting down to a restaurant, ordering and paying, and then getting served food from your own home. Some horseshit Kraft mac and cheese and fish sticks.
As an employer, I hire when I have the work an employee can do at a profit I feel makes it worth my time to get the work and manage them. That’s the whole calculus of hiring.
Joke's on us, fast food jobs were replaced by touch screens anyway.
The study is talking about overall numbers of jobs, not specific companies. Get fired from McDonalds closing a location, get a job with higher pay somewhere else that's paying the new minimum wage, is a net zero result.
McDonalds is gutted that their 2024 earnings are on track for only a 5% increase over 2023, which saw a 10% gross profit increase for the year.
Remember when there was a "shoplifting crime wave" that it turned out was just profits were down so they had to blame something?
Ff is down because they got greedy and raised prices so that their food wasn't exceptionally cheaper than the other options anymore which is the main reason people eat there. If people can't afford the food anymore, that's not the employee compensation, that's bad business decisions. There was plenty of profit to cover the wage increases and still have huge profits if sales had stayed the same.
Fast food realized humans could be replaced by screens so the worker reduction trend was there long ago.
We've been having fewer and fewer cashiers at McD in my country for the past 5-10 years. Minimum wage HAS been increasing, but McD costs about the same as a real meal at a real restaurant anyway, and they're constantly full.
Who even gets paid minimum wage? My kids started at fast food for several dollars above minimum, to where I'm not even sure what the point is.
You're observing a snapshot period and confusing it for the whole.
Wages don't go down though, or at least I've never seen it. And rarely have I seen wages sit at minimum, indicating that the market wage isn't linked to the federal minimum wage. I understand that this may be different in other parts of the country. This is just my experience.
Basically every "tipped" job gets paid minimum wage (or below).
Yeah that's true, but with tips they actually do pretty well so it's tough to count that in discussions about minimum wage.
People are bad at saving money, increase minimum wage and they'll just spend the extra, increasing companies revenues, allowing them to pay the higher minimum wage. In the end the employee is able to afford more stuff, the company doesn't feel the impact, everyone is happy!
Even the most skilled money saver in the world, when their income is barely above their necessary life expenses, will fail to save much. Savings is a luxury only the rich can afford much of.
But you're right, putting money into the hands of people living paycheck to paycheck, or barely able to save is great for the economy as well as those people personally. Even if they save 10% and spend 90%, it's tremendously more beneficial than that money going to a wealthy multimillionaire who won't even notice saving it. For everyone except the multimillionaire, who really isn't negatively impacted.
Even when putting more money in the hands of people who make way more than what they need to afford the basics will result, in most cases, in them spending it instead of saving. You see it very clearly in regions that rely on industries like mine, people's personal finances boom and burn... They have jobs making 150k/year and buy a big house, a truck, a quad, a snowmobile, a sports cars, motorcycles, name it, the second things slow down they can't afford to make payments on any of that because they never saved a cent.
Or the working class can't afford everything it needs. So a raise goes towards buying more necessities.
It's kind of hard to save when every dollar is accounted for in food, shelter, and utilities.
Minimum wage goes up -> Prices go up
The gap between wage and costs isn't changing.
Not everyone is min wage, so the price increase will never be as high as the wage increase. Unless a products entire supply chain is only min wage workers.
What's actually driving the price increase? Employees or corporate profit?
Suppliers will charge whatever gives them the highest profit, and if their costs go up by x, said optimal pricepoint goes up by x/2, assuming a linear correlation between price and demand.
You just blow in from stupid town or what?
I also repeat conservative talking points when I have no idea what I'm talking about.
Wait wait, I'm wrong. I'm not an idiot.
No, but it makes business owners more likely to outsource or replace with AI.