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Politics : Formerly About Advanced Micro Devices
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To: tejek who wrote (785878)5/22/2014 1:00:37 AM
From: i-node1 Recommendation

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FJB

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>> This suggests that the relationship between a high minimum wage and job creation needn’t be inverse. If anything, it suggests that relationship is direct.

I think anyone who is remotely familiar with basic inferential statistics recognizes the fallacy in thinking.

>> A classic study of fast-food employment by former White House economic adviser Alan Krueger and Berkeley economics professor David Card demonstrated that raising the minimum wage does not lead to an appreciable decline in employment.

There is likely no more heavily studied area of economics than the minimum wage. There are hundreds, probably thousands of studies since the minimum wage was adopted. Citing a single study makes no sense whatsoever.

Those articles that have surveyed the relevant literature have found that most research suggests some degree of negative effect on employment. It varies by demographic, but there is a general opinion that young people are damaged most. Something like 75% of economists believe that employment is negatively affected by the minimum wage.

>> What critics of a higher minimum wage ignore is that, by putting more money into the pockets of the working poor — a group that necessarily spends nearly all its income on such locally provided basics as rent, food, transport and child care — an adequate minimum wage increases a community’s level of sales and thereby creates more jobs.

It is ignored because it is nonsense. A higher minimum wage means higher prices for the same goods. It ripples throughout the economy -- the tomatoes you buy at the grocery store will cost more, but so will those that go into Pizza Hut pizzas. And at the end of the day, the increased spending is offset by the increased wages, productivity is unchanged, and no one is helped by it. At the same time, jobs are lost leaving the poor poorer. It is a dumb idea and always has been.
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