Will Biden's $15 minimum wage cost jobs? The evidence, explained.

[DonViejo]

There’s still disagreement. But it looks like in many cases, pay raises swamp any lost jobs.

By Dylan [e-mail] Updated Jan 22, 2021, 8:32am EST

For at least the last 25 years, labor economists have been compiling reams of evidence trying to answer one big question: Do minimum wage laws cost jobs?

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The obvious concern raised by Republican critics is that the move will cost jobs at a time when the economy can ill afford it. “Forcing a $15 minimum wage into a coronavirus relief bill would do nothing but shutter the millions of small businesses already on life support, and would force those that survive to lay-off employees,” Sen. Tim Scott (R-SC) warns.

In introductory economics courses, students are typically taught that setting price floors — be it milk, oil, labor, or whatever else — causes supply to exceed demand. In the case of labor, what that means is that if there’s a minimum wage, employers’ demand for workers falls (because they cost more), and the supply of workers increases (because they’re promised more money) — causing unemployment, with all the costs and suffering that entails.

For a long time, that’s how the theory went. But in 1993, economists Alan Krueger and David Card brought hard data to bear on the question and published a groundbreaking paper that forced economists to reconsider the issue. They surveyed more than 400 fast-food restaurants in New Jersey and eastern Pennsylvania to see if employment growth was slower in New Jersey following an increase in the minimum wage. They found no evidence that it was.

more
https://www.vox.com/future-perfect/2019/11/20/20952151/should-minimum-wage-be-raised

[marble falls]

1. Why would those small buisnesses die if a living wage puts more money in circulation?

[Bettie]

2. Putting more into the pockets of those who spend their money

drives the economy. That's why giving the super rich a huge tax break didn't help, they already spend what they do, giving them more just takes it out of circulation.

Give that to the working poor and they exchange it for goods and services.

It makes me laugh when the right wingers say that the rich are the job creators.

Jobs are created by economic activity, by people spending money. The job creators are us.

[PoindexterOglethorpe]

3. It's actually been clear since at least the 1970s that raising the minimum

wage has little or no effect on overall employment.

Henry Ford was roundly criticized when in 1914 he started paying his workers five dollars a day, double their previous wages. He understood that the workers needed to be able to buy the cars they were building. Fellow car makers only wanted to keep all the money to themselves. Fortunately, Ford's thinking prevailed for a long time.

[Wounded Bear]

4. Higher wages attract more workers...

[OneGrassRoot]

5. No one asks if paying execs $100M a year will affect prices...

As wages for the average worker have stagnated, the price of goods have gone up along with exec pay/bonuses.

What a crock of shit people have bought into for decades.

[AmyStrange]

6. It also keeps more money in each state rather than going for dividends...

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It's kind of a sneaky capital gains tax, and I love it.

I've also studied that very problem here in Washington. We've had many minimum wage increases over the last decade, and
RW radio here always made that same complaint.

I compared the unemployment rate before and after each increase, and in only one case did unemployment rise afterwards, but it went back down to normal two months later, and in one case even went down a little.

I have no documentation, because it was an informal research project, so you'll just have to take my word for it, but it seems Krueger and Card backs me up.

Anyway, thanks for sharing.
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