Talk Elections

https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.46e91741ffcb (https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.46e91741ffcb)

Muh demand creates jobs.

Didn't  this study basically a "control" out of its ass?

Then again, our unemployment rate is 2.9% so... ¯\_(ツ)_/¯

Actually, the study found something that should interest liberals greatly. Though, it hasn't even been peer reviewed yet.

()

So the study concludes that the rise in the minimum wage ended up creating more higher wage jobs.

Why is "very credible" in quotes?

Ummm, that is NOT what the study concluded.

First off, why would the government mandating wages be 13/hour cause an employer to increase it even more?

Here is the 538 blog succinctly putting it.

This is good news objectively, but does little to help low-skilled workers $15 minimums are supposed to help. (I'm agnostic on the matter personally. Think it's a wash either way)

lol

Here's a breakdown of Seattle's unemployed population:

()

Those demographics don't fit the narrative of young inexperienced workers being unable to find work because of the minimum wage requirements.

That's how synthetic controls work. It's a pretty common and recognized method for studying discrete policy changes. The methodology is pretty solid.

But is there a Seattle in Seattle? They couldn't have done San Fransico?

Anyways, it would be interesting to see how this automates low wage industries and how that effects employment in technology and how it effects undercapitalized entrapanuers. Would productivity go up if undercapitalized business owners became employees that had similar compensation?

The federal government should subsidize the minimum wage increase to $12 - $15 so it doesn't hurt small businesses or cut jobs.

Solved.

Or we could just scrap the minimum wage and implement an NIT. It would be far more efficient and solve the same problem.

NIT?

https://en.wikipedia.org/wiki/Negative_income_tax

Isn't that just welfare?

It is my opinion that the King County Minimum Wage Ordinance was completely irrelevant for almost the entire population of Seattle, Washington and surrounding areas within King County, Washington.    

First, the vast majority of employers would not have had to cut jobs, because employees already receive salaries that exceed the minimum wage/compensation guidelines in the new ordinance. When you take a look at the average salaries provided to employees in each industry, and even the employees earning salaries in the 25th percentile of employees in a particular job, you'll notice that all jobs/positions paid above minimum wages in 2013. Thus, an increase in minimum wage would not have any effect on the vast majority of people.  

Second, employers could count tips in calculating salaries, so small business (<500), where tips to employees are prevalent (restaurants), would not have had to increase salaries if Employees could make $13 an hour with tips.  As of 2017, a small business employer in Seattle is only obligated to a minimum wage of $11.00, but must pay a total compensation of $13.00 to employees.  Eventually all employers will have to pay $15.00 an hour, but the interesting part of the analysis is when salaries increase based on the consumer-price index (CPI) for Seattle area.  

Third, unemployment has decreased throughout the United States.  Both the United States and the Seattle area saw .08% decrease in unemployment from April 2016 to April 2017.  

We need to see what happens in a several years from now when all businesses are paying >$15 per hour.  

Yes!

Also, can't two different study methodologies (both reasonable in their own right) just produce different results?  Below the author of the Berkley study critiques the UW methodology.  Though I'm sure both could agree to disagree.

http://irle.berkeley.edu/files/2017/Reich-letter-to-Robert-Feldstein.pdf

I think I once remember reading a quote that was something like "You can get an economist to find any conclusion you like".  I'm sure there are so many conservative groups out there that could sponsor a study that shows Seattle is doomed.  

University academic studies produce conflicting results all the time.  It's kind of hard to make clear cut determinations of which one is "right" and which is "wrong".

It is not peer reviewed & I don't why it should even be discussed. Forget the good aspects,non-peer reviewed studies are largely considered junk in the academic world! This isn't credible by any standards !

Edit - Also unsurprisingly WaPo posts this. Jeff Bezos who owns Amazon has a huge share of minimum wage workers in warehouses & what not. What a clear conflict of interest in pushing through a non-peer reviewed study as a "Very Credible new" study !

I don't know the details of either of these studies, but in general in economics a great deal of the equations depend on the assumptions behind the numbers.  I've linked here before to the CBC Radio program Ideas' It's the Economists, Stupid which discussed this with left leaning Australian economist Richard Denniss and he said something like "Many times when an economist - especially one with an ideological agenda - tells you that his the numbers in the equations are 'best guesses' what they really mean is 'we made the numbers up.'"

Edit:  CBC usually takes episodes of their radio programs down after awhile, so I assumed it was no longer available, but here it is: http://www.cbc.ca/radio/ideas/it-s-the-economists-stupid-1.3219471

It says the episode first aired in September of 2015 and I heard it sometimes in early 2016, so this was, at least, the third airing of this program.

Coming from a country that has a minimum wage of 13.83 USD, I find it laughable that the US is still having an argument over whether a high min wage is a good thing...
(Hint, it is.)

Christ, there's a lot of ignorance of academic economics is this thread.


This is so incredibly wrong it makes my head hurt. Working papers (especially NBER working papers, which this was) are the most commonly discussed and covered type of economic paper, mostly due to the fact that they tend to be very high quality and publishing in economics takes forever. From the time a paper is done being written to publication can take years in economics; journals take forever even on the most basic desk rejection. Econ working papers are often better than the published versions of the same paper and receive more citations. Further, econ isn't the only field where working papers are the lingua franca; math and many of the hard sciences use extensive commenting on working papers through arXiv and the like.


The UW paper is clearly superior to the Berkeley paper given that UW replicated Berkeley's results and then showed why they painted an incomplete picture of the situation. UW simply had better data than Berkeley; their methodologies were barely any different! Berkeley's hemming and hawing is the academic equivalent of being a sore loser.

Why not $20 or 30?

I'd been meaning to respond to this, but Seattle's minimum wage hike is a demonstration that minimum wage hikes by fiat is usually not a good idea. The last minimum wage hike hurt younger workers and teenagers. I should also point out only 5% of Americans work on the minimum wage and it's far better to create economic pressure on wages via other measures (through better education, through better infrastructure).

Ideally, we would repeal the minimum wage but devote more attention to pushing measures that would actually create economic forces to push wages up. I'm thinking community colleges, trade schools, better infrastructure for rural areas.

Or $75?
We're going to get there someday, so we might as well get there sooner rather than later. And apparently there are never, ever any negative consequences to raising the minimum wage.

Ninety-four years ago, the SCOTUS handled a case called Adkins v. Children's Hospital. It was a legal challenge to a minimum wage law adopted in Washington D.C. One of the parties who challenged the law was a 21-year-old woman who had a job as an elevator operator at a hotel. It was her testimony in court that she liked her job just fine the way it was, she did not need to earn any more than what the hotel was paying her, that she did not have a set of job skills that would enable her to get any other job, but she would lose her job because of the new minimum wage law -- the hotel decided that paying her the higher amount would not be worth the labor she was performing, so they would simply do without an elevator operator. She argued to the courts that she has a right to keep a job in which she and her employer mutually agreed to the terms of her employment. The SCOTUS agreed with her, saying that the law violates the "freedom of contract" between employees, like this woman, and their employers.

The SCOTUS struck down three more minimum wage laws during the next 13 years, until finally the Court overturned the precedents in 1937, West Coast Hotel Co. v. Parish.

Of course minimum wage laws eliminate jobs. They always have and they always will.

yeah....about that... (https://www.forbes.com/sites/michaelsaltsman/2017/07/26/the-smoking-gun-emails-that-show-advocates-academics-coordinated-to-boost-15/#53802611706d)

We cant let meaningless things like facts disrupt progress.

I see a lot of discussion regarding the politics of this study and little discussion of the study itself - which is clearly flawed for reasons pointed out by Arindrajit Dube in an Upshot article. Is it possible for a "synthetic control" to be constructed when Seattle is experiencing unprecedented economic growth such that quarterly earnings per worker have increased by 20% since 2014? There's no such synthetic control in existence nor could one be constructed. The fact that when one looks at increases in employment for positions that pay up to 40 dollars an hour, there was substantial/sustained increases in all categories suggest that this study is flawed.

It's not as if economists have not studied this subject before. There are so many studies conducted on the minimum wage that a well-done meta-analysis would contain dozens of such studies. These can easily be found online - none show anywhere close to what this Seattle study shows in terms of the relationship between job loss and unemployment. "Occam's razor" suggests that the astonishing finding stems from the fact that many service employees are being paid more than the cutoff shown by the authors - this strikes me as being credible and is aligned with anecdotal experience from Seattle and the Silicon Valley.

Opponents of the movement to use the minimum wage as a social policy tool to combat poverty can rely on this study if they like - it's the only one they possess. There have been dozens of similar studies and there's a mountain of evidence from the past that suggests that the trade-offs make increasing the minimum wage worthwhile if other measures aren't feasible. More studies will be conducted in the future and in locations that aren't as unrepresentative of the country - meaning that even "synthetic control" methods are rendered useless - as Seattle. If you want to learn from a policy experiment, Seattle is your worst bet...

edit: obviously, economics is important because we like to compare "like cases to like cases" to see the effect of some action such that we can evaluate the value/merit of that action. That said, if one wants to see Seattle as some sort of horror story or if one wants to promote it as a boogeyman, one must realize that Seattle's economy is booming, that people throughout the Northwest, the US and the country are flocking there. This UW study isn't going to persuade anyone outside of the hard right against the merits of increasing the minimum wage...