Economists: Raising the minimum wage might actually be good after all.

[notyoueither]

Take BC fer instance.

Vancouver has a sky high cost of living and they've had the benefit of more worker friendly governments. So the minimum wage is relatively high compared to the neighbours.

Problem is, Vancouver is not the whole province. Young people in smaller communities have a hard time buying a job, and businesses being unwilling to hire due to costs are a factor in that.

So what do young people from the island or the interior do? If they can't get in with union jobs they leave. They make more in Alberta or Ontario, and so they leave because they can't get their feet under them at 'home'.

'Home' isn't Vancouver. Make them move and they'll be as likely to move provinces as cities.

Congratulations BC. We need all the labour we can get in Alberta.

[Sandman]

Originally posted by Kuciwalker
as opposed to the massive unfairness - and more importantly, economic distortion - of targetting a select class of businesses?

It's hardly unusual for regulations to target a select class of business - in this case, companies which use cheap labour. Someone has pay to keep those people out of poverty, and I'd rather it was the shareholders than the taxpayer.

Is it economically distorting for companies doing dangerous work to be forced to buy safety gear? Is it massively unfair that the government doesn't buy it? I'll bet that the cost of safety gear has made more than a few people unemployed in the past...

[Colonâ„¢]

Heh, funny. From the article in the OP:

Today, that consensus is eroding, and a vigorous debate has developed as some argue that boosting the wage would pull millions out of poverty.

From the Wall Street Journal:

There's a virtual consensus among economists that the minimum wage is an idea whose time has passed.

Ok, which of the 2 is it?

[Dinner]

Originally posted by notyoueither
Your area. Big country. Lots of different situations.

Solutions from top down are about as smart as the Soviets, and lead to just as much success.

True, but a great many of the major grocery store chains in the country are strictly union shops. There are a few which aren't Food For Less, Costco (which is a member only store), Whole Foods, and Henry's Market come to mind but most of the big chains are union. I understand that after last year's major lock out of union employees at several grocery stores the unions were forced to accept lower pay and retirement benifets for new hires but all in all it's still a good deal for workers.

[Kuciwalker]

Originally posted by Sandman
It's hardly unusual for regulations to target a select class of business - in this case, companies which use cheap labour. Someone has pay to keep those people out of poverty, and I'd rather it was the shareholders than the taxpayer.

It's society's obligation, society ought to pay. We shouldn't bite the hand that's feeding them. And the taxpayer paying is more economically efficient - so better off for everyone in the long run.

Is it economically distorting for companies doing dangerous work to be forced to buy safety gear? Is it massively unfair that the government doesn't buy it? I'll bet that the cost of safety gear has made more than a few people unemployed in the past...

That's not even worth responding to

[Dinner]

It is true. Such safety regulations do drive up costs. So the real question becomes one of how much we're willing to pay in order to reach a standard which society considers to be the minimal acceptable level.

[Kuciwalker]

Lefties are like Creationists - determined to stand up for their beliefs in the face of scientific consensus.

[flash9286]

Originally posted by Adam Smith
ES-202 is an area census. IIRC Murphy and Welch went back and got the actual time cards from the establishments Card and Kreuger surveyed. That's a direct test of Card and Kreuger's survey result.

Also, ES-202 reports number of persons employed but not hours worked. If adjustments take place on the intensive margin (i.e., number of people employed stays the same, but hours of work falls), as seems likely if there are explicit or implicit hiring costs, then ES-202 data would not pick up the adjustment.

Actually, your wrong about the ES-202, govts usually only release the aggregate data, but somehow C-K got access to the usual confidential establishment level data.


But your right about then hours worked.

[DAVOUT]

Originally posted by Oerdin
It is true. Such safety regulations do drive up costs. So the real question becomes one of how much we're willing to pay in order to reach a standard which society considers to be the minimal acceptable level.

Safety regulations are a surprising point. Ordinary employers, like me, does all they can to prevent accident at work; I do not want people working for me to be at risk when they work; I also want to avoid the disruption of the organisation resulting from accidents, and I want also to avoid the insurance premium increased because of the last accident. Therefore, I have proven many times that the additional cost of safety regulations is lower than the cost of accidents. The problem is that most workers are quite reluctant to apply obligations resulting from the regulations. More than once I had to convene the Safety Comitee for approval of a penalty for a regulation not applied by a worker.

[Maniac]

Originally posted by Colonâ„¢
Who work for free and who couldn't put their hands to work in other jobs, of course.

It's not like there's an overabundance of other job offers.

But if you don't want to pay for extra tax controllers, stop frauding.

What economist says that low wages are good for the economy?

Lots of them? Eg in this thread...

wage moderation => less inflation, more competitive towards other countries, more consumption
<=>
wage moderation => less purchasing power, lower prices, less consumption

In other words, it all depends IMO.

Originally posted by Kuciwalker
Lefties are like Creationists - determined to stand up for their beliefs in the face of scientific consensus.

If you're gonna start like that... my impression is that of all the people in this thread, you have the least clue what you're talking about, and this message is just you admitting you have run out of decent arguments.

[Drogue]

Originally posted by Kuciwalker
Lefties are like Creationists - determined to stand up for their beliefs in the face of scientific consensus.

As much as I hate pointing out problems in analogies, there is a glaring one here:

Lefties aren't generally people who thinking something is or isn't true, but those who choose greater equality over greater productivity. Righties generally choose the opposite. They then both try to twist facts and theories to support policies that make things more equal or more productive.

A leftie isn't defined by whether or not they believe raising the minimum wage raises or lowers unemployment, but by whether that rise in equality of pay is worth whatever other effects it has.

[Drogue]

Originally posted by Maniac
Lots of them? Eg in this thread...

Any decent economist would say that both high and low wages are bad for the economy. Wages should be equal to added value, for efficiency reasons. Lowering wages en masse won't help, neither will raising them - raising the wages of the most productive and reducing those of the least probably would, since our system smooths income over the population.

However most modern economists would also say equity and measures must be considered too, creating this murky grey area.

[Kuciwalker]

Originally posted by Drogue
As much as I hate pointing out problems in analogies, there is a glaring one here:

Lefties aren't generally people who thinking something is or isn't true, but those who choose greater equality over greater productivity. Righties generally choose the opposite. They then both try to twist facts and theories to support policies that make things more equal or more productive.

A leftie isn't defined by whether or not they believe raising the minimum wage raises or lowers unemployment, but by whether that rise in equality of pay is worth whatever other effects it has.

You make the mistake of thinking that most lefties have thought processes that complex.

[Kuciwalker]

And it still doesn't make sense, since the EITC would be just as good (better!) than the minimum wage in reducing inequality.

[Drogue]

Originally posted by Kuciwalker
And it still doesn't make sense, since the EITC would be just as good (better!) than the minimum wage in reducing inequality.

No it wouldn't. Forcing the minimum wage to be, say, $30 an hour would mean most people would earn exactly the same - great equality. However doing the same by any form of tax would still leave differences. Moreover there's a tradeoff between administration costs of EITCs and inefficiency costs of the minimum wage.

As for the general argument, targetted minimum wages in areas of huge monopsony power can work. If in an area you see one employer being the main employer for minimum wage jobs, raising it could see them employ more people, as they don't have to curtail the supply of jobs to keep wages down.