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Seattle’s Minimum Wage Hike May Have Gone Too Far

Quixzlizx

Member
Or we could maybe increase the minimum wage so that wealth doesn't grow increasingly concentrated in the hands of the few.

WalMart makes how much? WalMart employees costs taxpayers 6.2 BILLION (with a B) dollars in welfare. Why are we paying for WalMart's employees? WalMart can certainly afford to do so.

It makes more sense to tax the 1% and redistribute the money than it does to start arbitrarily messing with the economy.

Of course, that is predicated on the US actually implementing UBI and UHC at some point.
 
Seriously? The cult of having employers pay their employees a high enough salary so that if they work 40 hours a week they don't need public assistance?

presumably, the cult of absolutely goddamn everything being framed in the context of having a stable job with a 40-hour workweek when that context is increasingly becoming untenable
 

kirblar

Member
presumably, the cult of absolutely goddamn everything being framed in the context of having a stable job with a 40-hour workweek when that context is increasingly becoming untenable
For example, if we have a strong social safety net where healthcare's through the government- Uber's setup (ignoring their own corporate issues) is perfectly fine- "Work whenever you want!" is a great idea!

But because US healthcare is tied to employment, it completely screws up what should be a great "opt in for extra cash" employment setup.

People in the US do not generally realize how f'd up the concept of employer sponsored healthcare is.
 

otake

Doesn't know that "You" is used in both the singular and plural
I understand some of the reasons for wanting a higher minimum wage. However, it seems to me better benefits would be far more useful than $3 more per hour.

I could get a lot more out of better healthcare coverage and higher 401K match. The real value is in the benefits not hourly wage.
 

B-Dubs

No Scrubs
I understand some of the reasons for wanting a higher minimum wage. However, it seems to me better benefits would be far more useful than $3 more per hour.

I could get a lot more out of better healthcare coverage and higher 401K match. The real value is in the benefits not hourly wage.

Part-time workers generally don't get benefits. If they did then healthcare wouldn't really be an issue outside the unemployed or those looking to start their own businesses.
 

kirblar

Member
I understand some of the reasons for wanting a higher minimum wage. However, it seems to me better benefits would be far more useful than $3 more per hour.

I could get a lot more out of better healthcare coverage and higher 401K match. The real value is in the benefits not hourly wage.
In the US, healthcare benefits have been eating wage increases for a long time. A full-time worker at $15/hr costs a LOT more than $15/hr to their employer because of their mandated employee healthcare benefits.

I know through my job there's at least $4-6K in hidden benefits just w/ health care premiums alone per year.. If I max out my deductible and max OOP w/ how its structured? Another 7200.

The issue is not that people shouldn't have these, it's that they shouldn't be tied to employment, because all this extra money on the margins warps decisions for employers and employees alike.
 

otake

Doesn't know that "You" is used in both the singular and plural
In the US, healthcare benefits have been eating wage increases for a long time. A full-time worker at $15/hr costs a LOT more than $15/hr to their employer because of their mandated employee healthcare benefits.

I know through my job there's at least $4-6K in hidden benefits just w/ health care premiums alone per year.. If I max out my deductible and max OOP w/ how its structured? Another 7200.

The issue is not that people shouldn't have these, it's that they shouldn't be tied to employment, because all this extra money on the margins warps decisions for employers and employees alike.

No disagreement there but we are living it fantasy land if we think we will see health care uncoupled from employers in our lifetime. I know this situation is wrong but look at what's happening in the senate this week! I think we should be arguing for benefits for part time workers instead of wage hikes.
 

Valhelm

contribute something
Disagree. Its just like universal healthcare. Access to housing and food should be similarly universal regardless of employment. This isn't about "relying on government aid" it's about the larger picture of decoupling sustenance from employment

We absolutely need a strong welfare state, but this should be paired with a living minimum wage. Right now, government assistance is an "out" for the most inhumane employers to pay their workers next-to-nothing.
 
? Of course there should be upper level job gains. This has been shown with every valid minimum wage increase study in history that I have seen.

think the point's that there shouldn't be upper level job gains of that magnitude, that far above the new minimum wage level, being attributed to the minimum wage increase
 

Ether_Snake

安安安安安安安安安安安安安安安
Need less wage regulation, less shifting of responsibilities for quality of life to businesses, stronger social safety net for all.

People need to stop trying to put the responsibilities the government should have in the hands of businesses. Instead of minimum wage, provide necessary income or cut costs to those in need directly. It will take a long time still for people to accept that trying to force businesses to provide a social safety net through their own direct means is counter productive, it's for the government to do so.

If we had UBI and UHC, then people wouldn't have to take jobs that provide inhumane conditions.

Exactly, you would have an ACTUAL "free market" backed by a strong social safety net, which is the only way both can actually be sustained to begin with. There is no need for a living wage in that context at all.

It's the inevitable future anyway, but it's too bad people are missing the forest for the tree.
 

Quixzlizx

Member
We absolutely need a strong welfare state, but this should be paired with a living minimum wage. Right now, government assistance is an "out" for the most inhumane employers to pay their workers next-to-nothing.

If we had UBI and UHC, then people wouldn't have to take jobs that provide inhumane conditions.
 

MrDenny

Member
Wasn't Hillary heavily criticized at the debates because she wanted to start the federal min wage at 12$ instead of 15$ all across the board.
 

Tylercrat

Banned
Though there should be a reasonable $10-$11 minimum wage in bigger cities. A very high minimum wage is not going to solve the working poor's problems. We need a Basic Income in this country. That is the only true solution to poverty.
 

Lathentar

Looking for Pants
For example, if we have a strong social safety net where healthcare's through the government- Uber's setup (ignoring their own corporate issues) is perfectly fine- "Work whenever you want!" is a great idea!

But because US healthcare is tied to employment, it completely screws up what should be a great "opt in for extra cash" employment setup.

People in the US do not generally realize how f'd up the concept of employer sponsored healthcare is.

If we had UBI (that was actually "livable") and UHC, I'd be all for cutting minimum wage entirely. We should try to move toward that as much as possible, but you can't think in absolutes like that.
 

oneHeero

Member
The Washington researchers also had to exclude many multilocation businesses, which means their sample could leave out major low-wage employers such as fast-food chains. Reich, in a letter to Seattle’s mayor responding to the study, called the findings “not credible” in part because they differed so much from those of past research.

Am I reading this correct? Chain stores were excluded? Wouldn't chain stores make up the majority of minimum wage? IE. grocery stores, gamestops, etc

I mean, I would think that's a HUGE factor.
 

kirblar

Member
If we had UBI (that was actually "livable") and UHC, I'd be all for cutting minimum wage entirely. We should try to move toward that as much as possible, but you can't think in absolutes like that.
Im not advocating cutting it entirely, don't worry. I just am very much on the "please be conservative with raises relative to history" train.
 

Foffy

Banned
Disagree. Its just like universal healthcare. Access to housing and food should be similarly universal regardless of employment. This isn't about "relying on government aid" it's about the larger picture of decoupling sustenance from employment

This is the takeaway. Baseline needs should not depend upon employment, for it creates a binding problem. One clings to jobs for benefit status, and the job may in fact find ways to "game" the allowance of said benefits. After all, how many simply fail to produce healthcare or give their worked one hour less than what's required by law for them to get coverage from the company?

This gamification is one of the reasons people are in precarious situations. This should have been our Great Decoupling.
 

Briarios

Member
You also have a situation that at the beginning of an increase, you see a lowering of hours and workers before the additional spending power of those who got increases kicks in. Restaurants and the like can easily shift hours - they can cut back and staff up on a whim.
 

Mr.Mike

Member
Am I reading this correct? Chain stores were excluded? Wouldn't chain stores make up the majority of minimum wage? IE. grocery stores, gamestops, etc

I mean, I would think that's a HUGE factor.

Well, the Washington study found that earnings fell, so I'm not really sure where you'd expect greater spending to come in.

Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees' earnings by an average of $125 per month in 2016.

Am I reading this correct? Chain stores were excluded? Wouldn't chain stores make up the majority of minimum wage? IE. grocery stores, gamestops, etc

I mean, I would think that's a HUGE factor.

Previous studies on the effects of minimum wage excluded everything but restaurants, which is even worse. But yeah, more data would be good. The data this study is working with is data provided to them by City of Seatle and isn't accessible to most researchers for confidentiality reasons.

This data does seem super rocky. I'm not going to particularly give it consideration

The data is probably fine, if a bit lacking. The problem is that it's very difficult to isolate one factor (the minimum wage) from everything else. And how do you do a control group?

There are ways, but econometrics is hard. It doesn't help that these studies are heavily politicized (see normative arguments in this thread).
 

Chumly

Member
Well, the Washington study found that earnings fell, so I'm not really sure where you'd expect greater spending to come in.





Previous studies on the effects of minimum wage excluded everything but restaurants, which is even worse. But yeah, more data would be good. The data this study is working with is data provided to them by City of Seatle and isn't accessible to most researchers for confidentiality reasons.



The data is probably fine, if a bit lacking. The problem is that it's very difficult to isolate one factor (the minimum wage) from everything else. And how do you do a control group?

There are ways, but econometrics is hard. It doesn't help that these studies are heavily politicized (see normative arguments in this thread).
Previous page points out why this study is flawed. Honestly reading those arguments makes the Washington study completely bunk.
 

iamblades

Member
Price controls are one of the worst economic policies ever devised. It should be obvious by this point that you can't just decree a certain price and not have drastic consequences. We've known it since Diocletian, though to be fair price ceilings tends to have much more deleterious effects on the economy than price floors. There will always be an effect though.

As for the study in the OP, it is the only way things can work, especially given the tiny profit margins that most businesses that pay minimum wage have(retail, fast food etc.).

Any increase in the minimum wage will result in some combination of increased prices, decreased employment via automation or labor substitution for higher wage more productive workers. Businesses aren't just going to eat the increased labor costs, especially retailers like Walmart who are lucky to make 3% profit in a good year.
 
This explains why the UW study was flawed pretty well:

The first study, led by Michael Reich and Sylvia Allegretto based at the University of California, Berkeley, concludes that the 2015 and 2016 increases to $11 and $13 an hour had the intended effects of raising incomes for low-wage workers without having discernible impact on the number of jobs. These findings are consistent with the bulk of economic studies of minimum wage increases over the past couple of decades.

In the second, a University of Washington team concluded that the 2016 wage increase reduced the number of low-wage jobs by 9% and actually lowered the incomes of low-wage workers. This diverges from the majority of economic research. Across the U.S., city, state, and federal governments have changed minimum wages dozens of times over the past two decades. Multiple economists from across the ideological spectrum have studied these changes, and even opponents of minimum wage increases have not found impacts anywhere near the scale of the UW team.

The UW’s counter-intuitive findings underscore several methodological flaws:

They limit their study only to single-site establishments, because their data could not distinguish whether employees of multi-site chains – think Molly Moon’s, Mud Bay, Mod Pizza, Starbucks – actually worked inside or outside the city limits. That leaves 40% of workers excluded from their study. It also means that leaving a job at small business for a job at a larger company counts incorrectly as a job loss.

The UW team created a control by comparing Seattle’s employment statistics with other parts of the state. But there is no place in Washington that has a similar economy to Seattle. Seattle has an economy more like San Francisco or New York than Everett or Spokane. The Berkeley team used the more accepted methodology of generating a control from similar areas across the country, rather than just the state. Moreover, the Berkeley team compared numbers for the previous 5 years, while the UW only looked at the previous 9 months.

The UW study focused on jobs paying $19 an hour or less, making the assumption that fewer jobs in this bracket meant lost opportunity for workers who used to be in this pay range. But what we’re seeing in Seattle is that jobs that used to pay $18 an hour now pay $20 due to competition for employees. In the UW study, this was unaccounted for and incorrectly counted as job loss.

That last point is especially egregious. How could you do a minimum wage study but not account for rising wages of other workers?
 

Big-E

Member
This explains why the UW study was flawed pretty well:



That last point is especially egregious. How could you do a minimum wage study but not account for rising wages of other workers?

You telling me raising the minimum wage leads to increased wages to other workers? Sounds like socialism.
 

watershed

Banned
My takeaway is that governments at all levels need to find ways to make a higher minimum wage work for their economies because current wages are simply too damn low and income inequality is only going to grow. The deck is already extremely stacked against the poor and in favor of the rich.
 
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