Actually it kind of looks like it had a short-term negative impact, but no long-term impact, though the question is always a case of what-would-have-been-otherwise.
I have heard convincing arguments that a high-minimum wage makes it much more difficult for teenagers and seniors to get part-time work. They tend to be less capable and the minimum prevents them from doing work at a lesser rate, which they might want to do. That's theoretical, of course.
The suggestion that minimum wage hikes hurt small businesses, is generally wrong though, very few small businesses actually pay their employees minimum wage. The exception normally being franchise owners. Most other small businesses pay their employees more than minimum wage.
The argument that minimum wage doesn't affect employment levels is at it's core untrue (if it weren't we'd just raise the minimum wage to $100 dollars and everybody would be rich), and smacks of idealistic tunnel vision. Raising the income of a large section of the population, who also happen to be the people most likely to frequent fast food restaurents, however, can have a counter-acting influence to the depressing effect of the minimum wage hike. If you costs go up 10% but so do your sales, you're making more money than you were before.
Employment rates are affected by many inter-dependent factors.
There's also the question of whether it has real benefits or not. If raising the minimum wage causes a rise in the inflation rate which eats up the value of the raise, then have you really accomplished anything?
"There's also the question of whether it has real benefits or not. If raising the minimum wage causes a rise in the inflation rate which eats up the value of the raise, then have you really accomplished anything?"
Inflation always has more than one cause, so this argument doesn't hold water.
urban_homestead suggested that a better response is to separate jobs for kids (or seniors) from jobs that people are actually living on. That makes sense to me.
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Lies, Damn Lies and Statistics?
Date: 2007-01-05 06:15 pm (UTC)I have heard convincing arguments that a high-minimum wage makes it much more difficult for teenagers and seniors to get part-time work. They tend to be less capable and the minimum prevents them from doing work at a lesser rate, which they might want to do. That's theoretical, of course.
The suggestion that minimum wage hikes hurt small businesses, is generally wrong though, very few small businesses actually pay their employees minimum wage. The exception normally being franchise owners. Most other small businesses pay their employees more than minimum wage.
The argument that minimum wage doesn't affect employment levels is at it's core untrue (if it weren't we'd just raise the minimum wage to $100 dollars and everybody would be rich), and smacks of idealistic tunnel vision. Raising the income of a large section of the population, who also happen to be the people most likely to frequent fast food restaurents, however, can have a counter-acting influence to the depressing effect of the minimum wage hike. If you costs go up 10% but so do your sales, you're making more money than you were before.
Employment rates are affected by many inter-dependent factors.
There's also the question of whether it has real benefits or not. If raising the minimum wage causes a rise in the inflation rate which eats up the value of the raise, then have you really accomplished anything?
Re: Lies, Damn Lies and Statistics?
Date: 2007-01-05 06:54 pm (UTC)Inflation always has more than one cause, so this argument doesn't hold water.
Re: Lies, Damn Lies and Statistics?
Date: 2007-01-05 07:33 pm (UTC)Re: Lies, Damn Lies and Statistics?
Date: 2007-01-05 07:48 pm (UTC)