Perhaps others here have read of the recent study of the impacts of raising the minimum wage in Seattle, if not, http://marginalrevol...wage-study.html provides a good summary. I wonder, does that surprise anyone, and why?
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Posted 28 June 2017 - 12:33 AM
That study has been criticized on methodological grounds. The data they published actually showed a big increase in just-above-minimum-wage hours as well as a big drop in unemployment rates in the area, resulting as one would expect, in upward wage pressure.
What that means is that there was *not* a loss of jobs, and in fact people actually were paid more than minimum. What's ironic is that their own data shows it so well.
This study came out right after another study came to the opposite (and apparently correct) conclusion that no, the wage increase did not put people out of work.
What most people miss in this argument-and I can verify as an employer-is that businesses hire however many people they need to in order to meet demand. If you don't, you'll have bad service and customers will go to your competitors. If all competitors have to work in the same environment (i.e. in this case, a $15 min wage), they all raise prices in tandem to find their demand equilibrium.
Will those increased prices reduce demand? Sure, but in an expanding economy (which Seattle most definitely is), it's actually probably not much of a drop, and likely to disappear pretty quickly.
What it will do more than anything else is shake out those employers who are taking "excess profits," which is a good thing for both consumers as well as employees.
Despite the occasional popularity of pure Lassez Faire economics, government has a key role in maintaining fair and equitable markets, and the minimum wage is an excellent example of one that is needed especially in our current period of weak organized labor.
I would have worked with the devil himself if he'd been for the six hour day and worker control of the hiring hall,
Posted 28 June 2017 - 03:44 AM
Posted 15 February 2019 - 01:00 PM
In extreme rightist capitalist countries, laws are enacted to unduly influence the laws of supply and demand. Right to work laws is a good example of putting downward pressure on wages, under the guise of 'right to work'.
And another example is outlawing unions or limiting the right of workers to organize and withdraw their services. In some cases, outlawing unions and enacting the 'right to work' laws are the same thing.
Capitalism differs widely between 'capitalist' countries. Socialism or social responsibility of government can prevent the abuse of departing from the law of supply and demand.
When minimum wage laws become necessary there is always a reason why that influence must be placed on the laws of supply and demand.
Everyone must have a 'right' to ask for and then demand fair wages. And every employer has the right to pay what he/she chooses. Socialism subscribes to that theory while capitalism doesn't.