There were 3,216 Wal-Mart employees who were enrolled in Wisconsin public health care programs
According to mystore411.com there are 85 stores in Wisconsin. (I don't know how up to date it is, if its not recent then there are probably more).
According to statisticbrain.com Walmart has 2mil employees and 4253 stores which would mean just over 470 employees per store (presumably including out of store employees). According to Wikipedia's data there are "8,500 stores in 15 countries, under 55 different names" and 2.2 million employees, which would mean 256 employees per store. They might both be correct with one counting only Walmart operations and the other counting Sam's Club, and various other outlets that Walmart might own in the US or overseas.
With the lower of those numbers, you would get 21,760 Wisconsin employees. Taking the higher figure, would imply close to 40k Walmart employees in the state. A strong majority of Walmart employees in the state aren't enrolled.
For those who are -
1 - Walmart reduces the public assistance they receive by employing and paying them.
2 - Walmart isn't making anyone pay the assistance. Its the state and federal government's decision to do so. There decision to do so, doesn't justify control over wages.
3 - Raising the minimum wage significantly would make Walmart, and probably to a greater extent other employers, hire fewer people.
If this were true, then there would be a wave of bankruptcies every time there was a minimum wage increase.
If its uneconomic to create or expand a business with the higher wage rates, it doesn't imply it makes no sense for an existing business to stay open. Also existing businesses (both those who really can't afford to pay their current employees much more and those who can) can get cut staff, or cut hours.
Only employers at the margin would be unable to afford higher wages (and they may get by with fewer hours worked), most employers would not be at the margin, for any modest increase. But jump up to what many people call for as "living wages" (as high as $22/hour, more commonly $15, $11 is one of the lower figures I've seen a lot about lately), and more employers would be at the margin here. (Even $11 is over a 50% increase). Increase it to say $8.50 or Obama's idea of $9 and you have far less effect on employment. Of course then you also have a much smaller increase for people, less potential good to go along with the harm.
As for studies the majority do show harm (esp. those that take in to account that the impact on future hiring and expansion will be greater then on existing operation and employment).
As for Card and Kruger (which famously said otherwise)
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But analysis by independent researchers revealed the Krueger-Card report, which was based on a phone survey in which fast food restaurant managers and assistant managers were asked about their staff size, to be deeply flawed. The Employment Policy Institute analyzed the phone survey results against actual payroll data from the restaurants and concluded that “the data set used in the New Jersey study bears no relation to numbers drawn from payroll records of the restaurants the New Jersey study claims to cover.”
According to the Krueger-Card data set, a Burger King in New Jersey went from zero to 29 full-time workers after the minimum wage hike between February and November of 1992, while a Wendy’s in Pennsylvania reduced its workforce from 30 to zero full-time workers during the same nine-month period. Truly radical — indeed, implausible — shifts in a business’s employment strategy. When compared to actual employment records, the EPI analysis found that in one third of the restaurants surveyed, Krueger-Card even got the direction of employment change (whether staff was cut of added) wrong.
A subsequent analysis published by the National Bureau of Economic Research based on payroll records of fast-food restaurants during the same period revealed that Garden State workers experienced a 4.6 percent decrease in employment after the minimum wage hike compared to the Pennsylvania control group. In other words, they confirmed the commonsense economic principle that when something costs more, people can afford less of it. Or in the case of a minimum-wage hike, when workers cost more to employ, businesses can afford to hire fewer workers.
nationalreview.com
One famous study by Card and Krueger showed a positive effect of an increase in the minimum wage. The logic used by Card and Krueger to understand how this could happen suggests that things are different now.
Their logic is basically that firms can choose to pay a low wage and have a high quit rate and take a long time to fill vacancies or pay a high wage and have fewer quits and fill vacancies more quickly. If they are forced to pay the higher wage, their desired level of employment will be lower, but that level is the sum of employment plus vacant jobs. A binding minimum wage can reduce the number of vacant jobs by more than it reduces the sum of employment plus vacant jobs. Thus more employment.
I think this is not relevant to the current situation. There are very few vacant jobs. Quit rates are low. According to their logic, the effect of the minimum wage on employment depends on the unemployment rate. The evidence of a small effect is almost all from periods of unemployment far below 10%. I don't think it is relevant to the current situation.
rjwaldmann.blogspot.com
Upon closer inspection, however, those who build their support for the minimum wage on the findings of Card and Krueger might discover that the foundation of their argument is less than sturdy. The problems with the Card and Krueger study are, unfortunately, too numerous to list here—and include everything from highly ambiguous survey questions to a total failure to adjust data for seasonal variations in fast food industry hiring practices—but a brief survey of the most substantial issues is in order.
For one thing, subsequent independent analyses have found it difficult to reproduce the results of the Card and Krueger study—a death knell in the world of scientific publication—even when they work from lists of restaurants that overlap by at least 25 percent with the list used in the original Card and Krueger study. In 1995, for instance, the conservative Employment Policies Institute compared Card and Krueger’s survey data with actual payroll data for fast food restaurants in the same location and over the same time period. The study found that, far from any increase in employment, the far more reliable payroll data indicated that the minimum wage hike had actually resulted in an estimated 5 percent decrease in employment.
But the EPI report doesn’t end there. The numbers used in the Card and Krueger study, it argues, rarely reflect the payroll data. In fact, in a third of cases, the Card and Krueger study mistakenly lists job losses as job gains and vice versa. A subsequent 1996 report from the same institution thus complained of the Card and Krueger study: “The depth of the flaws is shocking.” “Not only are the Card-Krueger numbers wrong,” the report went on, “they are often catastrophically wrong.” Independent economists David Neumark and William Wascher confirmed the findings of the EPI, concluding, “The payroll data from the New Jersey-Pennsylvania minimum wage experiment are consistent with the prediction of the standard competitive model that minimum wage increases reduce employment of low-wage workers.”
There’s more. The variability of the employment change data in the original Card and Krueger study is, upon further inspection, almost nonsensical. Neumark and Wascher argue that such a degree of variability—which somehow shows, for starters, one fast food restaurant moving from six full-time workers to 29 full-time workers and another moving from 50 full-time workers and 35 part-time workers to just 15 full-time workers and 18 part-time workers, all in the span of just eight short months—“raises serious doubts about the quality of their data.” The EPI concluded that such statistics, along with equally absurd data on product price fluctuation, “defy reasonable explanation.”
dukechronicle.com
Card and Krueger were looking for their evidence in the wrong place. A mistake which I would and do argue means that whatever they found where they were looking the result just isn’t either interesting or important. Brave words from someone like me about the academic research done by someone who has just been appointed Chair of the Council of Economic Advisers but bear with me a moment.
It isn’t actually correct to regard the fast food chains (which is what Card and Krueger studied) as the fast food industry. There are two very different groups that make up that industry as a whole.
Firstly there are the chains, yes. The Burger Kings, Arby’s and the like which were studied. Then there’s the other part, the independents. The delis, Mom and Pop stores, meatball and subs places, these make up the second part of the fast food industry.
Now, something that might not be obvious from the outside but is very much so from those who have worked in the industry (yes, that would be me) is that the independent sector is much more labour intensive than the chain sector. The chains are better equipped, differently supplied (things as seemingly trivial as buns for hamburgers arriving pre-cut instead of having to be sliced open in store) and labour as a portion of turnover is much lower (and capital correspondingly higher) than in that independent sector.
So, if the price of labour rises, we would traditionally say that the amount of labour used in the entire sector, independents and chains, would decline. However, we would expect the use of labour to decline more in the independent, the more labour intensive, sector than in the chain, the capital intensive sector. In fact, we can construct entirely believable models which show employment rising, falling or staying stable in the chain sector while labour employed in fast food as a whole declines from the rise in the cost of labour.
For example, the rise might be sufficiently severe that a goodly portion of the independent sector simply goes out of business. This could increase the trade of the chain sector sufficiently that labour demand there rises despite (or even because of) the rise in labour costs.
Please note, I’m not saying that is what happened: only that it is possible and entirely consistent with simple basic economic understanding. By studying only one part of the sector we don’t in fact find out anything useful at all about the entire sector’s response to a change in the minimum wage. By looking only at the response of the capital intensive part we are ignoring the response of the labour intensive part. It really is possible that a minimum wage rise will increase the demand for labour in the capital intensive, chain, sector while reducing it by more in the labour intensive, independent, sector.
Which leads to an interesting conclusion: it doesn’t actually matter whether the chain restaurant employment rose or fell as a result of the minimum wage rise. Doesn’t matter whether Card and Krueger were right or wrong in their original findings. As they weren’t looking in the right place, employment across the entire fast food sector, they couldn’t find the answer we wanted. Does a rise in the minimum wage reduce the number employed in minimum wage jobs?
That is what we want to know but unfortunately the original study structure makes it impossible to derive an answer to that question from the study.
Comments
michaelsondergard 2 years ago
The minimum wage in 2007 was $5.15. In 2009 it was $7.25. Teen employment dropped by 6.9% and teens with less than 12 years of education saw their employment rate drop by 12.4% (Wm. Even-Miami Univ. Ohio and David Macpherson-Trinity Univ. 2010). Black teen unemployment rose from 29% to 42%.
So, “does a rise in the minimum wage reduce the number employed in minimum wage jobs?” Humm, I’m going to say YES!!
forbes.com
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Also note that even in Card and Kruger was correct (and also their claims generalized from fast food chains at one time period in two states for a specific minimum wage increase, to all employers of low wage labor at any time, in any state, even with higher unemployment and weaker economy) that there would still be people forced out of jobs by the higher minimum wage, its just that some employees would be more able to find jobs that they would accept and so would leave voluntary unemployment.
There contention is that the the fast food chains in two states had monopsony power and held wages below the market clearing rate, resulting in a shortage of low end labor supply. That's somewhat implausible even for the time period and area they studied, much more so nationally and as a general rule of what happens (rather then in a specific time and place), or under the softer job market we have now. |
