If there's one thing the business community and the econ think tanks it funds can all agree upon it's that any policy that involves sacrificing profits is Bad. Global warming denial and this both come from the same source.
That's not a convincing rebuttle. Saying that "drinking water is healthy" is controversial because "drink 1000 litres in a day and see how that goes" does not help the conversation.
That’s a perfectly fine response when the entire counter argument is “raising minimum wage is fine because everyone magically does better business to support it”.
That’s ridiculous on its face because there isn’t any higher level of productivity so someone in the economy is eating that loss.
I don't think it is that clear-cut, though. People who are well-fed, well-rested, free from stress and have good healthcare do tend to be more productive.
You're ignoring all the people that lost their jobs and had their hours shortened. If 1000 people earn minimum wage, raising it, some of them make more money, some lose money because their hours are shortened, some lose money because the jobs disappear. Whether that's a net positive overall is what's debated.
>You're ignoring all the people that lost their jobs
Because Dube, Lester, Reich says that they don't exist. Businesses pay for almost all hikes by dipping into their profit margins. A small % raise prices. A negligible number let people go.
It’s not really clear. First, a lot of the criticism that restaurants are closing are from restaurants that would have closed anyway [1].
> The biggest expense Rubio’s has been facing is debt — a burden that has grown since the chain was acquired in 2010 by the private equity firm Mill Road Capital
There’s an argument to be made that maybe the number of jobs in the fast food sector has decreased. But that’s also a myopic view since we need to know the labor situation statewide. Someone not in a fast food job might have found employment elsewhere which isn’t a bad thing, especially since the workers who do have those jobs are being paid a livable wage.
Same for your water example. At some point, water stops being healthy, without knowing at what point, you can't just ask people to just drink more water, otherwise they may die. In fact people have died for that reason.
At some point, increasing minimum wage will cause unemployment and destroy companies. Maybe we are at that point, or maybe not, without a bound, there is no way to tell.
Well we're not at that point right now, and in 2009 $7.25/hr also wasn't at that point either. So surely we can bump to $10.83 pretty darn safely since it's the same in real dollars.
On the other hand, experiments with $20+ minimum wages in places like Seattle are creating an unsustainable drop in revenues for a lot of restaurants and the tips that employees expected.
It is a curve, and price discovery is definitely a thing that the government can’t ignore. In Seattle they are in the awkward phase where the politicians admit the problem but walking back the minimum wage policy, which ratchets upward every year, is not something they want to consider politically.
I have close friends in the food service industry in Seattle that have become quite against the minimum wage increases (which they earn as base pay) because it is costing them a lot of money in real terms and they foresee future reductions in employability, which puts them at risk economically.
This coming from an era when competent service employees were so in demand that employers would make concessions that even tech employees don’t get. They weren’t paid as much but they were given flexibility that most people would envy.
I doubt your friend base is predominantly min wage. Mine is, and universally, every single person’s opinion has been gratitude bordering on disbelief that as gen Z we can get by. “They were given flexibility that most people would envy”…then you leave tech to work at McD’s. Yes the restaurants are expensive but they haven’t been for the working class since the automat anyway.
IIRC, retail and restaurants are way overbuilt in the USA. Plus, disposable income is declining. Plus, decline in revenue and inflation is causing a die off. (Of course, labor has to be scapegoat.)
Also, holding up restaurant workers as the token reason for opposing living wages for all workers is a bit disingenious. Like using family farms to argue against inheritence taxes.
Is this evidence of a bubble predicated on suppressed wages though?
When lending costs were near-zero, housing was doing "great". That doesn't mean it's a smart or sustainable policy, even if we had gotten used to that as the norm.
I sometimes wonder if the same applies to restaurants. Consumers got used to lower prices predicated on lower labor costs. Many got used to eating out very often and to a certain extent the economy responds with more restauranteurs. But it couldn't sustain that once the service cost "bubble" popped. Maybe those low labor rates are not the norms we should accustom ourselves to.
Hey. Remember that time a bunch of economists and politicians got together and decided we'd brick domestic manufacturing and switch to a service economy? Well this is what a service economy looks like.
In the UK, that "new economy" was even explicitly motivated by strong unions in industrial labor, and Thatcher really hated unions. It's not that far-fetched that something similar happened in the US.
Segments of the working class who would have in decades past done modestly well for themselves in the industries we're currently missing are now stuck trying to get by on jobs that were intended to give teenagers something useful to do. Seems pretty relevant to a discussion of minimum wage. That is what we're talking about, right?
It's "debated" because raising the minimum wage hikes usually come out of profit margins: https://cepr.net/documents/publications/min-wage-2013-02.pdf
If there's one thing the business community and the econ think tanks it funds can all agree upon it's that any policy that involves sacrificing profits is Bad. Global warming denial and this both come from the same source.