Monday, March 16, 2015

Maxi-Minimum Wage: Jobless in Seattle

Angus and I agree on many things.

One thing we agree on is the minimum wage. Angus has made the case.  We just don't know much about the effects of minimum wages, in the neighborhood of the existing wage.  I was a bit more intemperate, but that's not surprising.

And we agree that the usual retort, "Well, if raising the minimum wage a little is good, why don't you want to raise it a LOT?"  That's idiotic.  It just doesn't follow.  If I have a headache and take two Tylenol, it doesn't mean that I think that taking the whole bottle would be better.  No one is advocating that.

Unless they are.  Then we also agree that it is clearly possible to raise the minimum wage too high.  And Seattle may have done that. "Mysterious."  Good one, JS.


Anonymous said...

Angus isn't much of a fortune teller, is he?

Dirty Davey said...

There is not a lot of evidence that there is anything more than the usual cycle of opening and closing restaurants. In fact, the original Seattle Magazine article apparently lists more restaurants opening or about to open than it lists restaurants closing.

Angus said...

LOL, sorry anon. the Dems did NOT take back the congress, did they.

Anonymous said...

Now, now: That sentence says "IF..." Everything that follows is contingent. Angus never said the Dems would take the House. He said IF they did, AND if there was a proposal to go $20 on us, THEN he would join you people on the ramparts.

Pelsmin said...

The part I don't get is your passive view towards the minimum wage. If, as you say, "We just don't know much about the effects of minimum wages," why do you err on the side of government bureaucratic meddling? What DO we know for sure? We know that a wage is the result of two parties setting a contract to exchange services for a price they both accept. Then the government steps in and voids the deal...

Ok, the higher wage might not cause more unemployment. And it might. Basic economics suggests it will, on the simplest of terms. (Set a price floor and quantity demanded drops, etc.) But how could you be so accepting of some bureaucrat setting the wage? Even a blue-ribbon panel of Economists From The Finest Institutions?

OregonGuy said...

If the value of your labor is between zero and fifteen dollars an hour, you are now a part of the permanently unemployed.

Nice policy you got there.

Anonymous said...

Isn't the point of a reductio ad absurdum that it's absurd?

In other words, duh, of course no one advocates a million dollar minimum wage. But some people do believe there would be no effects other than higher wages of an increase.

Jim Oliver said...

1. I think that a higher min wage will be good for people like me because I think that the worst employees in restaurants and hotels will be replaced with better employees yielding better service.

2. It is already true that many people in the USA work for less than minimum wage. I think we will get more of that.

3. I am not willing to trade very small employment effects for fairly large income increases for low income people because I think there are large non-monetary benefits from work in the taxed sector, and that despite that fact that I think a $15 min wage would be a positive for people like me with high income.

4. I wish Seattle would get the min wage to $15 faster so we can better measure the effects (because I might be wrong in not supporting the minimum wage). The ramp up is very slow.

TM Lutas said...

Political one way ratchets are incredibly dangerous. If there is a mistake and we are hurting poor people with a too high minimum wage, there should be a practical method to bring the minimum wage back down without creating a general inflation that hurts almost everybody.

When we have a practical way to undo policy mistakes by setting the minimum wage too high, the consequences of a too high wage become a manageable issue resolvable by the normal political process. Until then, the minimum wage should not be raised.

Jack PQ said...

Aren't most restaurants exempt from the minimum wage anyway because employees make tips? And with tips, they make more than $15 an hour on average?

However, tipping-free restaurants such as fast food chains would be affected.

Triclops said...

I think the, "why not make minimum wage $100/hr?" can be quite valuable.
IMO, it often exposes how arbitrarily the "right" minimum wage is chosen.
It also weeds out the less thoughtful, as they will have no answer to the question except rage. Then you can debate the people who have more thought behind their argument.
Think of it as a basic economic competency quiz.

Brad said...

The owners of the restaurants referenced in the original story say the closings had nothing to do with the increase in the minimum wage, and were never even asked if that was the case:

In fact, I am surprised anyone would think four restaurants closing over a few months in a city of three quarters of a million people was anything surprising. Hell, 27 restaurants opened last year on my old neighborhood of Capitol Hill alone!

Also, WA state doesn't have the trip credit, so servers make minimum wage as well as tips in WA.