You know how fanatical he is about any policy that would help poor people. He and Patrick Sullivan voicing displeasure over it in the comments section at Money Illusion.
"Piketty would learn more about ‘capital’, than is in his book, by listening to the five minute audio at the top of this article;
http://www.themoneyillusion.com/?p=26861&cpage=1#comment-350949
So we hear every time the MW has been raised.
Still 'even' the allegedly liberal-but mostly neoliberal-Slate had this to say:
"But while the fight for $15 has made for great politics—in Seattle, both mayoral candidates only adopted the idea last year after it waspopularized by a socialist city council candidate, Kshama Sawant, who ultimately won her race—it’s built on dubious economics. The truth is, nobody has any idea what would happen if the minimum wage jumped that high. But there are good reasons to worry that results would be ugly.
http://www.slate.com/articles/business/moneybox/2014/05/seattle_might_raise_its_minimum_wage_to_15_this_is_not_a_good_idea.html
I mean we've had the MW 'jump that high' in the past. The sky didn't fall then why should it fall now? In the 30s we had a MW after having none and the MW went from $5.15 to $8 in a few years starting in 2007. The sky didn't fall then either. As a percentage the move in Seattle is actually smaller than the move in the MW that started in 2007.
UPDATE: I say this because the 2007 to 2009 move was 60 percent while the proposed Seattle move is about 52 percent or so.
"The research literature on whether minimum wage increases kill jobs is decidedly mixed. Some economists have found that hikes lead to small job losses among teens and in industries like fast food. Others have found that losses are nonexistent, or at least negligible. In the end, I tend to argue that even if you assume reasonable job losses, middle-class and poor families come out ahead in the bargain. Though some workers end up unemployed, enough get raises to make the tradeoff worthwhile."
As he admits this, there's little reason to worry that the Seattle hike will be any less worthwhile. Yes it does seem a big raise but as a percentage it isn't all that larger then the move in the national MW from $5.15 to $8 we saw from 2007 to 2009. Then we had 1936 just after the MW had been instated the first time across the country-again the world didn't end.
What Seattle's move does do is perhaps clearly demarcate a national trend as well towards a higher MW. As I've previously noted, social progress mercifully doesn't always wait for the economist. In fairness to Weisman who I kind of taint as being Neoliberal, he does at least admit that this is a great opportunity to that rarest of rare birds in economics-the natural experiment."
"The nationwide push for a $15 minimum wage that began with striking fast food employees has been a masterful public relations stroke. Its sheer audacity grabbed the media’s attention and has arguably reset the terms of the entire debate about worker pay. It has certainly made the proposal by congressional Democrats and President Obama for a $10.10 federal minimum look reasonable by comparison."
There's the rub. As it will 'look more reasonable' it will become the more politically feasible. What Seattle does politically is move the debate on the MW to the Left and reframe what's reasonable. The $10 MW has been derided as tremendously unreasonable by Sumner and friends. However, now even conservatives may need to offer a lower MW to stop liberals from instituting a higher one. Listen to Sumner's snark here:
"This headline caught my attention:
"Piketty would learn more about ‘capital’, than is in his book, by listening to the five minute audio at the top of this article;
‘
"As the Seattle City Council continues to debate a plan to phase in a $15 minimum wage, and as minimum wage advocates gather signatures to put an even stronger measure on the November ballot, businesses in the city are finding themselves in an uncomfortable position: in limbo."
‘Many businesses report putting off hiring, expansion or investment decisions until the outcome of the minimum wage debate is clear."
‘“People are just scared and they don’t know what’s going to happen,” said Angela Stowell, who co-owns 10 restaurants in the city. “They’re paralyzed by the uncertainty.”’
"That’s the reality of investing; you could lose your investment. If that prospect is strong enough, you don’t invest."
http://www.themoneyillusion.com/?p=26861&cpage=1#comment-350949
So we hear every time the MW has been raised.
Still 'even' the allegedly liberal-but mostly neoliberal-Slate had this to say:
"But while the fight for $15 has made for great politics—in Seattle, both mayoral candidates only adopted the idea last year after it waspopularized by a socialist city council candidate, Kshama Sawant, who ultimately won her race—it’s built on dubious economics. The truth is, nobody has any idea what would happen if the minimum wage jumped that high. But there are good reasons to worry that results would be ugly.
http://www.slate.com/articles/business/moneybox/2014/05/seattle_might_raise_its_minimum_wage_to_15_this_is_not_a_good_idea.html
I mean we've had the MW 'jump that high' in the past. The sky didn't fall then why should it fall now? In the 30s we had a MW after having none and the MW went from $5.15 to $8 in a few years starting in 2007. The sky didn't fall then either. As a percentage the move in Seattle is actually smaller than the move in the MW that started in 2007.
UPDATE: I say this because the 2007 to 2009 move was 60 percent while the proposed Seattle move is about 52 percent or so.
"The research literature on whether minimum wage increases kill jobs is decidedly mixed. Some economists have found that hikes lead to small job losses among teens and in industries like fast food. Others have found that losses are nonexistent, or at least negligible. In the end, I tend to argue that even if you assume reasonable job losses, middle-class and poor families come out ahead in the bargain. Though some workers end up unemployed, enough get raises to make the tradeoff worthwhile."
As he admits this, there's little reason to worry that the Seattle hike will be any less worthwhile. Yes it does seem a big raise but as a percentage it isn't all that larger then the move in the national MW from $5.15 to $8 we saw from 2007 to 2009. Then we had 1936 just after the MW had been instated the first time across the country-again the world didn't end.
What Seattle's move does do is perhaps clearly demarcate a national trend as well towards a higher MW. As I've previously noted, social progress mercifully doesn't always wait for the economist. In fairness to Weisman who I kind of taint as being Neoliberal, he does at least admit that this is a great opportunity to that rarest of rare birds in economics-the natural experiment."
"The nationwide push for a $15 minimum wage that began with striking fast food employees has been a masterful public relations stroke. Its sheer audacity grabbed the media’s attention and has arguably reset the terms of the entire debate about worker pay. It has certainly made the proposal by congressional Democrats and President Obama for a $10.10 federal minimum look reasonable by comparison."
There's the rub. As it will 'look more reasonable' it will become the more politically feasible. What Seattle does politically is move the debate on the MW to the Left and reframe what's reasonable. The $10 MW has been derided as tremendously unreasonable by Sumner and friends. However, now even conservatives may need to offer a lower MW to stop liberals from instituting a higher one. Listen to Sumner's snark here:
"This headline caught my attention:
Romney Wants GOP to Be the Party of Jobs and a Minimum Wage Hike
Just imagine how much higher the minimum wage would be if the GOP had won the election in 2012.
"Thank God for Mr. Obama."
Checking out Sumner's link the reason for his consternation is clear:
"Acknowledging that many in his party feel otherwise, 2012 Republican presidential nominee Mitt Romney said in a Thursday morning interview on MSNBC, “I think we ought to raise it,” referring to the minimum wage. “Because frankly, our party is all about more jobs and better pay.” He noted that the GOP will only further alienate minority votersby opposing increases to the minimum wage floor."
"Romney’s break with Republican orthodoxy comes at an important moment in the U.S. economic recovery. Even though job creation is not as sluggish as it was during the cold winter months, the level of long-term unemployment remains high, and wage growth continues to be stagnant. He argued that income inequality has only grown worse under Democratic leadership."
"In general, economists believe that lifting the lowest legal pay is worth the fallout, including lower levels of job creation. This January, 600 economists signed a letter, published by the Economic Policy Institute, that argued it was time to increase the federal minimum wage to $10.10 per hour and index it to inflation. Signing that letter were seven Nobel laureates; Robert Reich of the University of California, Berkeley; several Brookings Institution scholars; and Paul Swaim of the Organization for Economic Co-operation and Development."
Read more: http://wallstcheatsheet.com/politics/romney-wants-gop-to-be-the-party-of-jobs-and-a-minimum-wage-hike.html/?a=viewall#ixzz33YsPuejb
Interesting that this article says that in general economists are for this-in the past the Sumners and Bob Murphys of the world would always begin their complaint by declaring that most economists are opposed to a high MW-or one at all for that matter.
It will be interesting if the 2016 GOP candidate runs on a higher MW-Jeb Bush? In any case, regardless of what the Sumners or the Morgan Warstlers of the world may think of it, the a higher MW is sounding more and more like an idea whose time has come.
"Seattle’s plan has little global precedent, either. As Tim Fernholz at Quartz notes, the city is essentially considering adopting the highest minimum wage on the globe. That may come as a surprise, if you’ve ever read about Australia’s roughly $15 minimum. But once you adjust for purchasing power, the wage floor down under, as well as in high-pay countries like Belgium and France, is closer to $10, according to the Organization for Economic Cooperation and Development. If the Swiss vote to raise their minimum to $25, as they are considering, Bloomberg reports it would be worth just $14 on a purchasing power basis."
Ok. so if Seattle is raising their MW higher than the Swiss it just means they're setting the bar. Maybe the Swiss will have to raise it higher than $25 just to keep up. You go Seattle.
P.S. Obama's support for a higher MW has certainly helped move the debate in this direction too. You could argue that it's one of the factors that lead both candidates in last year's mayoral race in Seattle to support such a high MW. After Obama announced his intention for a $10 MW, GAP-among other companies-declared it would pay no one less than $10 an hour.
http://money.cnn.com/2014/02/20/news/companies/gap-minimum-wage/
Costco calls for a MW higher than $10.
http://www.huffingtonpost.com/2013/03/06/costco-ceo-minimum-wage-craig-jelinek_n_2818060.html
I know that there will be bleeding hearts like Sumner who will tell us that he's worried about what this will do to American workers. As a worker who has worked for crummy wages I don't think his help actually helps me very much.
'You know how fanatical he is about any policy that would help poor people.'
ReplyDeleteAt least we don't have to bother reading Mike's entire drivel, he gets his biggest fraudulent claim into his first sentence! We oppose any barrier to flexibility in pricing because it hurts the poor. It hinders their ability to get that first foot onto the economic ladder.
Just listen to the small businessmen in that KUOW--as fashionably leftist a radio station as there is in the country--article's audio clip. The $15 minimum is ALREADY having disemployment effects and it isn't even law yet.
'...Though some workers end up unemployed, enough get raises to make the tradeoff worthwhile.'
ReplyDeleteWhy do you hate the poorest of the poor? Seems kinda cruel of you.
Mike, there's a difference between a rise in the minimum wage that leads to workers at the previous minimum who have jobs getting laid off and a rise of the minimum slowing down the rate of NEW hires. All of the "new" minimum wage literature studies the first, but not the second. Thats why I think a rise of the MW is a bad idea, even if incremental raises don't result in people getting fired
ReplyDelete