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This is the first in a series of articles funded by a grant from the Northwest Area Foundation.
One of the headline battles of the upcoming legislative session will be whether — and how much — to raise Minnesota’s minimum wage.
Similar debates are getting a lot of traction around the nation and promise to be a key political issue at least through the fall elections.
Democrats, for example, see raising the minimum wage as a good election-year issue for them and plan to place raising the minimum wage on several state ballots in an attempt to boost turnout and help win hotly contested congressional races.
That ballot approach is a strategy that’s worked well in the state of Washington, and below we’ll take a look at some of the minimum-wage dynamics that make the Evergreen State experience a good case study for Minnesota leaders to review.
President Barack Obama, too, is throwing his support behind congressional Democrats’ proposal to raise the federal minimum wage to $10.10 and peg it to inflation, more than a dollar higher than the $9 proposal he made in his State of the Union address last February.
Many anti-poverty groups are saying raising the wage is among the most effective initiatives government can do to help people get out of poverty.
Others argue, though, that the national debate needs to aim much higher, closer to a so-called “livable wage” of about $15 as an essential way to improve the quality of life for millions living on the margins of society.
Studies clearly show that the gap between the nation’s rich and poor is growing. Stats such as these are topics of discussion among people of all political persuasions: 20 percent of Americans now own 85 percent of the nation’s wealth, and the top 1 percent have 40 percent of the wealth.
In coming weeks and months, MinnPost will report stories that examine these issues — and many more — including the economic and social impact of efforts to raise the minimum wage in Minnesota.
One traditional argument against raising Minnesota’s current $6.15 level is the contention that increasing the minimum wage will cost jobs and harm the economy. (It should be noted that most minimum wage workers receive the federal minimum of $7.25 and even the state’s Chamber of Commerce supports that base, with caveats.)
Losing jobs because of a high minimum wage certainly hasn’t been the experience in the state of Washington, which has the highest minimum wage in the nation.
Case study: Minnesota vs. Washington
In many ways, Washington would seem to be a good case study for Minnesota, because the two states share many similarities (less a few mountains and an ocean).
Both have diverse economies, and both weathered the recession better than the nation as a whole.
In both states, the majority — 60 percent — of the population resides in a single metropolitan area.
Both states are affluent, compared with the rest of the nation. In Minnesota, the median household income is $59,126. In Washington, the median income is $57,573. (The national median is $51,371.)
Even the poverty rates are similar: 11.2 percent in Minnesota, 11.9 percent in Washington. (The national rate is 16 percent.)
But there’s one glaring difference: the minimum wage. Washington has the highest minimum wage in the country. It increased to $9.32 on Jan. 1.
Minnesota has its split-level rates: the $6.15 level, paid almost exclusively by very small operations not involved in inter-state commerce, and the $7.25 federal level. That $6.15 rate is third lowest in the nation, ranking ahead of only Wyoming and Georgia. The rate hasn’t been increased since 2005.
The reason for Washington’s outlier status is simple: Its legislature was never involved in setting the wage.
| WA | MN |
|---|---|
| Minimum wage | |
| $9.32 | $6.15 |
| That’s | |
| 129% | 85% |
| of the current federal minimum wage of $7.25/hr. | |
| Year last raised | |
| 2014 | 2006 |
| Number of increases since 1968 | |
| 17 | 9 |
| Unemployment rate | |
| 6.8% | 4.6% |
| Poverty rate | |
| 11.9% | 11.2% |
Instead, in 1998, Washington voters passed Initiative 688, which called for the minimum to be raised from $4.90 to $5.70 in 1999, to $6.50 in 2000 and thereafter be increased based on the federal cost-of-living index.
The impact of the minimum wage increase has been real, according to the nonpartisan Economic Opportunity Institute in Seattle. According to that organization’s stats, in the 20 years prior to the voter-pushed minimum wage increase, the bottom 10 percent of wage earners in the state had seen a decline of “real income” of 8 percent. In the years since, “real income” has increased by 20 percent.
Minnesota does not allow such citizen initiatives.
“The [Washington] legislature would not have done this,” said Rich Hadley, who heads the Spokane Chamber of Commerce. Instead, he said, the referendum passed because of heavy support from voters in the Seattle area.
Impact on states’ job losses?
Hadley’s Spokane is relevant because it snuggles up to Idaho, where the minimum wage is $7.25. One of the arguments of those opposed to increasing the minimum wage in Minnesota is that a higher minimum would chase jobs to neighboring states.
Has eastern Washington lost jobs to Idaho because of the differential in minimum wages?
“It’s impossible to take one item and make judgments on where jobs go,” Hadley said. “We may have the highest minimum in the country, and it does cause business to complain, but Idaho has a state income tax — we don’t.”
(Minnesota, of course, has a state income tax with rates that are often the source of political — and economic — debate.)
Hadley seemed to have a hard time coming up with many negatives about the high minimum wage in his state.
Perhaps, he said, its greatest negative impact is on small businesses in remote areas of the state. But he is quick to add that these are good times for Washington as a whole and the Spokane region in particular.
Spokane, he said, isn’t really interested in attracting the sort of businesses that would pay minimum wage. It’s attracting businesses in search of a well-educated workforce, a strength of the region, he notes.
“I’m not saying we’d rather not be No. 1 in the country when it comes to the minimum wage,” Hadley said, “but the fact is, our economy is robust.”
Luis Fraga, a political science professor at the University of Washington in Seattle, agrees with that “robust” assessment. Rapid growth of Amazon and Google, sustained growth of Microsoft and boom times for Boeing all have turned the high minimum wage into an economic footnote.
Fraga said that business interests always have floated the idea that high minimums would close the door on teens and others looking for low-entry points into the workplace.
“But these theoretical arguments that you always seem to hear don’t stand up to reality,” Fraga said. “I have seen no reports that the high minimum has made it more difficult for teens or low-skilled workers to get jobs.”
Have those at the bottom been helped by the high minimum?
“Every penny helps,” replies Fraga.
That statement appears to be true. A recent study by University of Massachusetts economist Arin Dube shows that raising the minimum wage reduces poverty. In his major paper — Minimum Wages and the Distribution of Family Incomes — he says that a 10 percent increase in the minimum wage reduces poverty by 2.4 per cent.
Impact on states’ growth?
Both Washington and Minnesota share confidence about future growth — and in neither case does that optimism have much to do with the minimum wage. The simple fact is that states aren’t looking to lure minimum-wage businesses.
Washington is a high-tech mecca; Minnesota, a center of medical technology. Both are future-oriented areas that bode well for the states.
But much of Washington’s optimism also is based on a new contract signed with great reluctance by Boeing workers. The contract is filled with concessions, but it keeps Boeing in the state for at least the next eight years.
Building airplanes in Seattle sends positive ripples across the state, especially in the well-paying aerospace-related industries, according to Spokane’s Hadley. Most of those jobs require skilled workers.
“The No. 1 thing we have is the educated labor force companies are looking for,’’ said Hadley.
Minnesota economists long have said that a highly motivated, highly educated workforce has been crucial to the state’s above-average national economic performances.
At a Minnesota legislative hearing a year ago headed by DFL Rep. Paul Marquart, a number of the state’s top employers/thinkers testified to the need for Minnesota to attract a highly skilled workforce if it is to continue to be an above-average performer.
Many of the high-tech executives who spoke at the hearing — billed as the “World’s Best/Smartest Workforce” — predicted that by 2018, 70 percent of the state’s jobs will require some education/training beyond high school.
The state’s longtime state economist Tom Stinson, who has since retired, put it bluntly: “Unlike any time in history, labor and talent will be the scarce resource that all will be seeking.’’
But even if the future is all about education, the minimum wage plays an important role for those left at the bottom, according to John Burbank of Washington’s Economic Opportunity Institute.
“The minimum wage is the floor,” Burbank said, adding that a high minimum has become more important with the huge decline of unions.
Minnesota’s minimum-wage fight
In Minnesota, both proponents of a minimum-wage increase — which include most DFLers, organized labor and other progressive organizations — and opponents — which include Republicans and business organizations — have been preparing for this conflict for months.
Last session, the effort to increase the minimum fizzled in the final days, with the House supporting a measure pushed by DFL Rep. Ryan Winkler. His measure would have increased the minimum to $9.50 by August 2015, from its current $6.25 base. (Despite that low rate, most minimum wage workers in the state receive the federal minimum, $7.25.)
In the Senate, DFLers were much more shy. In an effort to protect newly elected “business-friendly” DFLers from the suburbs, the Senate passed a bill that would have increased the minimum to only $7.75.
The two bodies could not reach agreement in conference committee, resulting in no action. That means that Minnesota remains just one of four states — with Georgia, Wyoming and Arkansas — having a base minimum lower than the federal standard.
This time around, the debate likely will become more heated, especially for those supporting an increase.
DFL Rep. Tom Anzelc, a supporter of raising the minimum, talks about “a growing, bubbling cauldron of discontent” over both the wealth disparity and the inability of politicians to address basic problems.
He said: “I came home from the session and I heard, ‘We elected Democrats in the House, Democrats in the Senate and a Democrat for governor and you couldn’t raise the minimum wage? What hope is there?”
Winkler is back again, this time “more determined and more organized than ever.” Additionally, he expects the opposition “to be somewhat circumspect,” but that doesn’t mean passing a significant increase will be an easy task.
The Minnesota Chamber of Commerce comes into the session on what seems to be a relatively positive note. It would support raising the Minnesota minimum to the $7.25 federal level.
But … the chamber wants all sorts of caveats in its ideal minimum wage bill: a separate youth wage for those under 18, a tip credit, a “training wage” and regulations preventing cities from setting their own wage scales.
According to Ben Gerber of the state chamber, businesses will argue that raising the minimum wage above the federal level would be an incentive for businesses to leave for surrounding states. Additionally, the chamber argues that raising wages at the bottom of the economic ladder to levels proposed by Winkler would only serve “to squeeze” wages of those in the middle class.
The chamber argument pits the poor against the middle class, not the lower classes against the rich.
And in the past, business groups have won the day, despite public opinion polls. That’s because the Capitol serves as an echo chamber, people such as Winkler believe.
The problem, he says, “is that legislators get confused with things that are controversial with lobbyists, versus issues that are controversial with the public.”
Lack of action in Minnesota is hardly unique. Across the country, legislative bodies have found safety in doing nothing regarding an increase in the minimum wage.
Typically, it has been direct action by people, bypassing their legislatures, that has created minimums higher than the federal standard.
And that explains why Anzelc is ready to push a constitutional amendment that would raise the state’s minimum wage to $10 an hour by 2015 if the Winkler bill again appears headed toward a chamber/Senate shredding.
Anzelc admits that the DFL leadership is not exactly thrilled with his plan. After all, most believe Republicans lost control of the House and Senate with their efforts to govern with constitutional amendments.
His response: “I’ll simply say, ‘Let the people decide.’ ”
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The “nonpartsian” Economic Opportunity Institute
Of course, the Economic Opportunity Institute is “nonpartisan.” Why would they be connected to a political party?
This is the label folks at your former stomping grounds at the Star Tribune use in news stories when they don’t want to tell readers the organization they are writing about is liberal.
You are certainly among friends at MinnPost, so go right ahead and tell us the organization your are mentioning is as liberal as they come. Trust me, it will not change the thinking of committed MinnPost readers.
My word
Is there any saw as old as “Don’t like the news, blame the messenger”? Care to dispute the findings, have any citations to show another outcome, care to even voice an opinion on the topic at hand? No of course not, better to play the victim of the “vast left wing conspiracy”, it makes it so much easier to offer nothing at all in the way of solutions or commentary.
Sure, I’ll dispute it. . .
With simple economics. Raising the cost of low skilled workers results in those workers being fired.
“The minimum wage sounds nice on the surface: workers earning $8 per hour would certainly be better off if they were earning $12 per hour instead. But economics professor Antony Davies explains that this view of the minimum wage overlooks an important detail: The minimum wage does not force employers to pay a particular wage to every worker; it forces employers to pay a particular wage to every worker they choose to keep. While the minimum wage may be well-intentioned public policy, it often huts the very workers most in need of our help.”
http://www.youtube.com/watch?v=Ct1Moeaa-W8
Comparison
Since the current Washington rate took effect just this month any impact positive or negative is a long time from manifesting itself. It would be helpful to know what has the rate been for the last year or so without trying to infer it from the statistics in the table.
Also why no mention of the attempt to raise the rate to $15 around SeaTac?
Status Quo
It is similar to when folks here claim that MN’s success is because of the Dayton/DFL changes that occured last Spring. It makes no sense but they are apparently applying motivated reasoning.
It will be interesting to see the impact on Washington over several years. Their much higher unemployment rate seems telling by itself.
Black teen unemployment
Apparently the people who are pushing this don’t care about the fact that black teen unemployment is now at 41.6%, because raising the required wage for low skilled or unskilled labor will make it even worse.
But hey, the trade unions will be happy and that’s all that matters.
Would be relevant
If the opposition to raising the minimum wage cared about that statistic for any reason other than its use as a flamethrower in rhetorical debates. They don’t of course, any more than they care about the plight of any poor person, African American or otherwise.
I hope you’ll
identify the industries in which the minimum wage is typically found, in order to address the claim that businesses will move elsewhere. Service jobs, one of the largest sectors of our economy, aren’t portable. They’re directly tied to where the customers live.
It won’t be just the minimum wage jobs that are affected. Pay rates for some jobs are based on a multiple of the minimum wage. When the minimum rises, so do rates at those other jobs. You’ll need to look at those industries too. Also, when the pay for a low-skill job goes up, those doing slightly higher skilled jobs will be demanding more.
Higher unemployment and poverty rates in Washington
What’s not to like? Isn’t Washington’s unemployment rate also higher than the national rate? Hopefully the latest increase in their minimum wage corrects these differences so we can jump on board. Thanks for the comparison, it is quite valuable as a learning tool.
If the shoe fits
After looking at the source of the grant, one can only expect to hear one side of the story.
http://www.nwaf.org/
If the following is true, why does Washington have a 6.8% unemployment rate compared to MN’s 4.6%?
“Losing jobs because of a high minimum wage certainly hasn’t been the experience in the state of Washington, which has the highest minimum wage in the nation.”
I am not sure why the writer is unaware of the problems that a higher minimum wage would likely cause for both the poor and middle class.
“The chamber argument pits the poor against the middle class, not the lower classes against the rich.”
I mean if one raises the cost of employing low skilled low educated personnel, it makes it much easier to cost justify automation and out sourcing. Some easy examples are the easy park kiosks out at the MSP airport. No parking attendants required. Or the AMC theater ticket ATM’s, no personnel required. And if the businesses do not automate the jobs, it is the customers that will pay more for the product or service. Sorry… The wealthy won’t notice a difference.
Automation will happen anyway
If businesses can save $1 in the long run by automating, they will do it. So raising the minimum wage for low-skill workers will not change that dynamic. If a $10 an hour job is going to be lost by automation, a $7 job is just as likely to be lost that way.
Perhaps without meaning to, John, you’ve actually identified a tremendous problem our economy faces over the next generation or two. Automation will to continue to permanently destroy entire classes of jobs. Fewer people will be required to run the machines. It’s going to introduce a huge and intractable source of job loss. It will also affect more skilled workers, as machines and computers gain the capacity to do tasks that formerly required some higher reasoning by humans.
This systemic job loss is far more threatening to our economy and society than giving hard-working poor people an extra couple bucks per hour.
Marginal cost matters
Automation will continue to happen, there is no doubt about that. The rate at which it happens though is directly related to the cost of labor. That extra $2 dollars per hour times the number of hours per year likely makes a significant difference in many automation cost benefit analysis. As you said, “If businesses can save $1 in the long run by automating, they will do it.” Now we are giving them more reason to do it.
Why do they automate?
“If businesses can save $1 in the long run by automating, they will do it.” Liberals will blame businesses for automating and/or off shoring, yet they seem to forget that they and other Americans are equally at fault.
I mean if you have a 401K, IRA, ROTH IRA or own any company stock, I assume you are happy when the equity values and your investments increase. Most people strive to invest in the fund with the best return. And since company values only go up as profits increase, we “owners” drive the desire for company profits. Or maybe you are the one who looks to invest in a company that is losing money….
And don’t forget the American consumers obsession for buying high quality at low cost. Rarely do I find folks who are happy to pay more to support American designed and manaufactured products. Folks on the left say they want to support the American workers while they are buying the lowest cost, highest quality or trendy product.
If you want to raise American wages, deport the illegal immigrants and start “Buying American”. Of course then we need to find legal citiens who are willing to those jobs at any wage. Or of course maybe we can get a machine to do it.
Numbers
I wonder if anyone noticed that Washington state has a significantly higher unemployment and higher poverty rate. Is it possible that those numbers are partially the result of high minimum wage? Most likely so. Especially telling is the higher poverty rate: Can anyone explain how come their high minimum wage did not reduce poverty? Is this what we want in Minnesota?
numbers for the hungry
I’m sure they like ledgers as much as accountants do. So the GOP and big business is concerned, not for the people that will be replaced by automation, but about the cost of automation. Keep an adult working for $750 a month after taxes and they are just fine with that. Any idea what you can rent for $750 for housing? What about food? Walmart’s help line for their employees suggests food stamps for their employees. However the GOP would get rid of food stamps if they could. Does anyone assume that a minimum wage worker could possibly save up enough money to get trained in a trade skill? Skills which we lack in this state according to big business. Which trades are we talking about? Manufacturing? Those jobs we’ve sent overseas? Most people learning a trade skill will find themselves working on a Contractual basis. They will be ‘temp’ workers. Most won’t find work so now they’ll have to retrain in another trade? Where is that money coming from? And talk about buying American? Name a few ‘important’ products made here that a minimum wage person can purchase. Name a car and I’ll laugh you out of the state.
Your solution?
I assume this means you think that government mandated cost/price controls will work well. I personally have no problem with raising the minimum wage. I don’t work in that economic space, my job would be real hard to automate, I have extra disposable income and I own assets that appreciate with costs.
The people that will be hurt by the cost increase cycle will be the poor and middle class. Arbitrarily forcing costs into the bottom end of the system should drive some inflation, automation and/or more off shoring.
What is your rationale for thinking it will not happen?
Let’s think, we are going to artificially raise the costs of American products and people will buy more American product? Does this really make sense?
Do you envision paying those fast food workers more than the market requires, and the prices on the menu board staying the same?
As for products, take your pick. Buying Apple and Motorola cell phones supports more American employees than buying Samsung, LG or Nokia. Buying Betty Crocker cookies supports more than buying Nestle products. Buying Proctor and Gamble rather than Unilever products. Buy local beers instead of Bud, MGD, etc. Small things matter.
And cars… Support people who buy domestic brands by buying used cars that are domestics.
Yeah
Except that your approach leads to permanent underclass forever unable to escape the clutches of poverty. Whether or not the market bears the cost of increased wages is irrelevant. The people affected still need eat, be housed, receive medical treatment, and education. Would you rather this be funded through the private sector, by requesting that employers take hit to the bottom line, or would you rather be forced through taxation to pay for it in the form of social programs. Fact of the matter is, barring a major catastrophe (war, plague, natural disaster) there will forever be a labor surplus, particularly on the lower end of the skill spectrum. As simply saying “too bad, you’re on your own, work for slave wages or starve” isn’t really a realistic plan for those with a conscience, which payment plan do you prefer?
Spend Your Conscience
Personally I keep hoping that Americans will start supporting their friends, neighbors and fellow citizens with their personal exenditures, as I have said for many years.
http://give2attain.blogspot.com/2014/01/minimum-wage-arguments.html
The challenge is that many people who are pro-minimum wage increases, pro-union, pro- tax the rich, pro-American jobs, etc don’t hesitate to spend their money wreaking havoc on these things they say they stand for.
I mean buying products and services with low domestic content has pretty much decimated the Unions these folks say they support, sent money to other countries to be taxed, decreased the demand for and cost of American labor, etc.
These same folks are often for making the illegal aliens into legal citizens instead of deporting them. That sure isn’t helping the low income folk…
Search for the Kogod auto index if you want to know how little every Subaru, VW, BMW, Hyundai, Kia etc contributes to America and it’s workers.
No such thing as a “Permanent Underclass”
As usual, even thinking there could be, given what we know of economics, shows a distinct lack of reason and a tenuous grasp on the reality of a free market system by the believer. The ‘poor’ of 30 years ago are not the same people who constitute the ‘poor’ of today. Progressives still erroneously believe that the amount of wealth is stagnate so one can only get rich by making another poor. This is patently not true as wealth can be created. But let’s do what liberals hate and look at actual facts:
“Are the rich getting richer while the poor get poorer? Prof. Sean Mulholland uses several statistical measures and finds that this common perception may not be accurate. A surface-level examination of statistics may indicate that the poor are getting poorer, but a more thorough study shows that there is more income mobility in the United States than many might think. Prof. Mulholland highlights data showing household income by quintile adjusted for inflation and even uses data that follows specific households over time. For example, if we look at households in the bottom quintile in 1987 and follow those individual households until 1996, about 45 percent of them have moved up to a higher quintile. In the next 10-year period, about 40 percent of households move up. Watch the video to see Prof. Mulholland’s findings about income mobility for the top 20 percent of income earners over time and for U.S. households across generations, too. Prof. Mulholland says this data provides “evidence that the possibility of upward mobility in the United States is still very real.”
http://www.youtube.com/watch?v=UbueX92CKPk
hmm
Dirt poor to kinda dirt poor is hardly much of an improvement. You rail against the belief that wealth is finite, yet persist in the belief that it’s infinite, that growth will always occur. As we have seen in recent years growth may occur for a few ( even this will end when resources are exhausted) and while your intellectual exercise might serve to allay your conscience over the plight of the poor, it does very little to improve the lot of those marginialized by automation, globalization, and plain old capitalistic greed. The problem with turning society into a vast swath of competing statistics is that it makes it too easy to forget those numbers are real people with hopes, dreams, kids, grandparents, and real, difficult, problems. But then I digress, I forget we are supposed to exist in a state of cold rationality, impervious to emotionally compelling arguments. We wouldn’t want to let our humanity get in the way of superbly efficient, mathematically precise, number crunched profitability.
Intent Matters
As I have said, I have no problem with raising the minimum wage. I am just pointing out that it is part of a cycle and may not give you or the poor what they really want. Per the video, it will just push the quartiles all up and make American products and services more expensive relative to the rest of the world.
What typically frustrates me is a Liberal tendency to blame “the rich”, “the managers, “the business”, etc for bad intent. While ignoring their role in the problem.
Investors want good returns, consumers want the best quality/ lowest cost, employees want higher pay whether their capabilities / responsibilities have increased or not, etc. Meaning that we are all “greedy capitalists” in our personal lives.
I mean if there are 2 restaurants next to each other and one costs more for the same food/atmosphere, who goes to the expensive one? Of course the owners need to minimize cost and maximize value, otherwise us Americans will not shop there and the business will close.
This is the same for products and jobs flowing over seas. If Americans start telling business they will not buy high foreign content items, they will start moving the jobs back here. It is our choice.
Of Straw Men and Emotional Fallacies. . .
Obviously, Matt didn’t understand the data presented. Not surprising. To believe in Progressive Liberalism is to forsake reason, misunderstand economics and dismiss historical fact.
Seeing how the ACTUAL data from the past 40 years proves his assertions to be wrong, he throws up a strawman that I claim wealth is infinite. Since the universe is probably finite, then so is wealth. But there is far more on our planet than exists today. If the Left’s assertion is true that the pie is only so big, explain how the world has become wealthier today than it was 1000 years ago? That our standard of living is better? With billions more people alive today, shouldn’t we all have so much less than a person did then? This is the type of non sequitur one must believe to be a liberal.
He also makes a broad assertion about the economy based solely on the past few years implying that because things are a certain way right now, that’s how they have always been and always will be. A fallacy, of course, and an easy one to spot and ignore. Just as Matt has ignored the fact his primary assertion has been blown away, he now changes the subject to knock down a straw man he attributes to me. The only intellectual exercise going on here is being done by Matt. By making assertions based on the past few years while dismissing the data of decades because they destroy his assertions.
We have not forgotten that the society is real people, but it is a gross mistake to make sweeping decisions, determinations or policy based on anecdotal evidence, or worse, specious arguments. But that is precisely what proponents of an arbitrary minimum wage are doing. There is no permanent underclass in a free market, the data (not an intellectual exercise) shows that income mobility is still very much alive and well in America and all the arguments of Chicken Littles on the left don’t hold water when we look at the actual data from past decades, not their assertions about them.
Matt is correct that we should be concerned with helping the poor, it’s just that his (and the left’s in general) ideas won’t help them, but will actually hurt them. Charity begins at home, not the government welfare office. While it is appropriate for individuals to be moved by ’emotionally compelling arguments’ it is a disastrous mistake to base government policy or societal norms on them.
As usual, Matt evokes the time-honored ploy of the Liberal: an Appeal to Emotion – a common argument fallacy which manipulates an emotional response in place of a valid or compelling argument. It goes like this:
Appeals to emotion include appeals to fear, envy, hatred, pity, guilt, and more. Though a valid, and reasoned, argument may sometimes have an emotional aspect, one must be careful that emotion doesn’t obscure or replace reason. Luke didn’t want to eat his sheep’s brains with chopped liver, but his father told him to think about the poor, starving children in a third world country who weren’t fortunate enough to have any food at all.
That right there shows Matt’s already bankrupt of actual ideas or valid arguments. But regarding the poor, history and human nature have shown the wisdom of Ben Franklin who so aptly pointed out:
“I am for doing good to the poor, but…I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. I observed…that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”
We do not help people by making it easier for them to stay in minimum wage jobs as a career. These jobs were never meant to be a career, but a way to gain experience and use that to earn a better wage. Matt and those like him would have us all artificially ease the burden of a minimum wage job and in doing so, skew the market and take away the incentive of the worker to improve and earn a better wage, thus improving their life. Far from OUR policies creating a ‘permanent underclass’, Matt’s policy would do so by stagnating people and destroying the free market. Self-fulfilling prophesy. Of course, they’d blame it on capitalism, cry about how the poor can only afford one flat screen TV and eating out once a week while the ‘evil rich’ have many tv’s and eat out often. Thus, we must do more to ‘close the income gap” and to address ‘wealth inequality.’ LOL It’s all a sham, but that’s liberalism for you. You’ll see much of this during the campaigns this year.
As for the qualities of wealth, it is clear that Progressive liberals are intellectually and emotionally children. Matt sees wealth like a child sees candy. He has no idea where it comes from, what it takes to create it or how it arrives at the store. All he knows is that he wants all he can get and it’s not ‘fair’ that someone might have more than he does. To be a liberal is to be a child with a child’s view of the world.
Reminds me of two quotes I love: “Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow citizens. … When you subsidize poverty and failure, you get more of both.”
– Oscar Wilde
“At the core of liberalism is the spoiled child – miserable, as all spoiled children are, unsatisfied, demanding, ill-disciplined, despotic and useless. Liberalism is a philosophy of sniveling brats.”
– P.J. O’Rourke”
Why thank you for crystallizing conservativism so eloquently
Shall we speak of straw men now? Or perhaps just vast generalizations since you managed tic off every one. Let’s see now, Liberals wish to 1. Keep the poor in poverty by making it “easy” in them, hey you even managed an echo of the “welfare queen” with your flat screen TV quip. No, we simply refuse to believe that there should BE poverty in the richest country in the history of the world. Conservatives refuse to take the steps necessary to get there because it may cause them personal hardship. Charity is wonderful, but inadequate at addressing the needs of the poor. There is no societal problem that has been solved charity alone, (or by conservative economic theory for that matter). Perhaps you see the increased mobility you cite as a some wonderful achievement, I see it as evidence of a much larger proportion still stuck in place, hopelessly mired in their societal position by forces outside their control.
2. (I’ll paraphrase for sake of brevity) “I want to help the poor, by leading or driving them out of poverty”. Lead or drive them to what? This line of reasoning again is prefaced by the belief that something better exists. I use the last decade as an example because it shows the results of conservative economic theory in full flower. Globalization driving jobs to slave wage levels, corporate control dismantling labor and environmental protections, real wages front line workers stagnating while executive compensation and profitability skyrocket. This is what you are TRYING to achieve, the utter destruction of the American worker as anything but disposable chaff to the powerful. Why should those same workers expect you to improve their lot in the future? If this is what you are “leading and pushing” toward, why shouldn’t you be fought on all fronts?
3. I know exactly where wealth comes from. The backs of those employed to turn otherwise useless ideas into reality. The greatest conceit of the conservative, particularly the conservative businessman, is that they and their ideas are in some way special, that no one else in earth could every be as brilliant or any idea as innovative and wonderful as theirs. That they are powerless to utilize this vision without help escapes them, employees are not partners in bringing the vision to reality, they are lucky cogs, eternally privileged to be allowed by the “master” the honor of devoting hours of time and toil to bring such a wonderful goal to fruition. How could they possibly think that labor owns a bit of that process itself? That the conservative deigns to pay at all should be seen as an honor.
4. “Liberals want to increase the minimum wage, which will skew the market and lead to a manner of evil, lazy people staying lazy, ambitious people becoming lazy, cats and dogs, living together”
Why do people work? What would people doing they didn’t have to work? That is what your commentary books down to here. The conservative pablum states that we are all lazy at heart, only the fear of poverty drives us to do that which we would otherwise shun. Liberals on the other hand recognize that all work has merit, from the it geniuses currently in fashionable demand, to the migrant worker picking crops for harvest. Both are necessary, and as such will need to be performed. Since we are forced to play by the rules of the market one pays a salary far in excess of the other. This plays out over many different fields leaving a vast disparity. This creates poverty and all the accompanying societal ills it brings with it. Raising the minimum wage is proposed foe no other reason than to mitigate this effect, the flaw of capitalism, and lessen some of devastation poverty has wrought. Any other motivation read into the debate is done solely by the conservative side.
Cool Video Link
I thought that was an excellent analysis.
I remember my lower middle class Uncles first house. It was tiny with no garage in Lakeville. Many would not even see that as an acceptable “starter home” in our current society.
So in other words
You are saying the poor don’t have it hard enough, so therefore we should withhold any help until they do (not saying of course who determines this metric). A variation on the theme of “Poor people in the third world have it WAY harder than you do so shut up and quit complaining”. As always, tone deaf with regards to the lives of the real life people whose problems you dismiss, and useless, in terms of providing any solution to those problems. I can never decide if its because conservatives actually think it would be a good thing that American workers be forced to have a third world lifestyle (and that the society would be better off with all the changes that would entail), or that they are simply so supremely overconfident in the belief that it will only affect people they don’t care about.
Doubts?
Matt,
So you are certain that raising the minimum wage will help, and have no negative repercussions on the people you are striving to help? Then let’s go ahead and we will find out.
If more jobs disappear and the poor do end up worse off, what would you do next?
I don’t have doubts
Regarding what happens should we remain status quo. Nor do I have doubts regarding what happens should we return to the policies that put us in the mess we’re in, namely funneling money to the wealthy and powerful and trusting them to have our best interests in mind. As for real next steps, I might try what worked the last time we faced a situation like this, namely the New Deal, or at least its job creation mechanism, sadly this would be difficult to achieve as a whole generation of conservatism has been educated in the lie of its failure, and would thus fight tooth and nail against it.
The full cup
Food for thought.
http://give2attain.blogspot.com/2010/01/eulogy-exercise-methods.html
Good luck on getting the min wage raised, I hope it accomplishes what you think it will. Have a good day and stay warm.
No worries
As someone who works outdoors, I have my multiple layers in play.
Could the car be used
Or do we also have an inalienable right to brand new everything?
Raise the Minimum Wage; Abolish State Income Tax
This article makes some good points comparing WA and MN and it does mention this briefly but it seems to me that a key fact is that WA has no state income tax. If the DFL proposes raising the minimum wage to $15/hour (or maybe more) and at the same time abolishes the state income tax, I bet it will have huge support. I’d like to see more analysis of how WA maintains comparable quality of life and presumably comparable state services with no state income tax. These might not seem related but if a business owner has to pay higher wages but knows she will pay less in income taxes, it is easier to deal with that.
The end result is too obvious to require elaboration
As a small business owner, if you raise the minimum wage, I raise my prices. Every business will be because we are in business to make money. Once businesses start raising prices, the people who are making minimum wage have to pay more for their goods. This is simply an illusion one party uses to illustrate how they are helping the poor. Raise the minimum wage to a million dollars! Then everyone is a millionaire. The only issues is that gas is $250,000/gallon, Bread is $50,000 a loaf. This belief that forcing a company to pay employees more money will increase the income of the poor is misguided at best and destructive at worst.
So the disappears into…
As a businessman, I would imagine you like to sell whatever good and or services you provide right? You understand that as real wages stagnate the purchasing power of the consumer goes away too right? You can raise prices as much as you like, but when your demand goes away, good luck. OR you can choose to keep prices intact and shift the equation of returns between owner and employee slightly, recognizing that by enriching your employees you create new consumers, who then drive demand at OTHER businesses and , and so on and so forth all the way back to your own. I know its sacrilege to put aside present gains in favor of future returns, but myopic focus on every quarterly earnings report is part of what led us to the place we are in.
Compression
Though I am not a proponent of raising the min wage, I don’t think it is quite as bad as the conservatives make it. I think that some income compression will occur. (ie ref video link above)
Just because a small portion of the economy gets a raise, it does not mean the high income folks will get a raise. So it may help some low income folks while a having minimal impact on many of us.
http://give2attain.blogspot.com/2014/01/minimum-wage-arguments.html
However I do not doubt that the bottom 2 quartiles will have to deal with some positive and negative change.
Wages are not necessarily the biggest cost driver
Your analysis that this will cause a massive increase in prices assumes that wages at the bottom of the pay scale are the primary driver of product costs. This is not the case. Raw materials, property, tax rates, capital equipment and exempt salaries are cost drivers that would be affected very little.
It is disturbing to see people allude to wages as a “handout”. Minimum wage employees are doing necessary and productive work, not stealing from the owners. Productivity has been steadily increasing (the true creator of wealth) but the ever productive worker sees little of the gain.
Commenting on the original article I think amending the state constitution regarding minimum wages is a terrible idea. The constitution is too inflexible if there is a rapid change in economic activity (recession).
Good to see how many responded to what I commented. Still, those against an increase in the lowest wage fail to realize what $750 a MONTH can buy a person…housing first right? Then food? Transportation to a minimum wage job? And they can buy what else after that? A car? TV? oops forgot clothing! Mobile phone? A computer? Small businesses aren’t selling to those making minimum wage as a general rule. A small business is any business who have 250 employees or less. A vast majority don’t sell to minimum wage people. For those who think $750 a month is a lot of money, please use some math…real math…and figure out how you’d spend that each and every month. Don’t forget insurance!
See…at a certain point you’ll have to look for outside help to get by! Unless your math is hopelessly mired in fantasy. “Give a man a fish and he’ll eat for a day. Teach a man to fish and the reality is that he’ll have to buy a fishing rod, a fishing reel, line, bait, transportation to a lake, and a fishing license.” That’s after securing housing and all those other good things a person needs to feel secure.
Who cares what the prices are if a person can’t afford to buy whatever it is?? Who cares if the parts for ‘assembled in America’ goods are? If a person can’t buy it, it’s pointless to talk about those things in relation to ‘them’. Just start at the bottom…$750 a month…and simply figure out where you’d live? If you are making a paltry $7500 a month or more, you have a handicap in doing so I’d imagine. Somebody else does your math for you perhaps.
Nothing else is important except the $750 a month and what that person can afford in this society. You need to start there to understand the problem.
Assumptions/Choices
Back when I was a college student I seemed to have a fair amount of money, however my choices were severly limited.
I ended up living with multiple room mates in a cheap apartment or home.
My car was a piece of junk and I carried minimal insurance.
I ate a lot of carbs and watched for bargains.
I got real good at maintaining and/or fixing my property.
And I was really motivated to learn, improve, work and escape that reality.
What life do you expect for these low skill, low academics, low effort, very safe positions/personnel?
Do you want them to be able to rent their own apartment, buy nicer stuff, own homes, etc? If they could, wouldn’t this reduce the extrinsic motivators to work hard and improve themselves. And with the earned income credit and other programs in place, I am not sure what you want.
http://www.taxpolicycenter.org/briefing-book/key-elements/family/images/Taxation-Family-Graphs-EITC-2013_1.gif
In a word no
It would give them the freedom to pursue those things as opposed to every minute of every day being filled with basic survival techniques. You struggled in college by choice, you could have easily postponed your studies, or attended a lower cost institution. You had an option. The people we are talking about aren’t students slumming until they land that first real job, they are the product of years of grinding poverty, brought about by the intentional disinvestment in American society by the moneyed class. They are the product if a decades long assault on public education by those who would see it abolished, they are in many cases the product of discrimination toward their skin color, ethnicity, or socioeconomic position. While the old myth of “pulling oneself up by the bootstraps” makes for great rhetorical theater, it still (as its always been) isn’t based on reality.
Perception is Reality
You would turn all of those people into helpless victims. That is sad.
A good friend of mine who came here from Ethiopia, who is very black, and came here at age 19 would find your perceptions disturbing and disrespectful. He had little money, didn’t speak English and yet he worked hard, took advantage of every program we American’s provide to minorities, attended Normandale community college until he could get into the U of MN’s engineering school. He graduated as a Mechanical Engineer and makes a whole lot more than minimum wage as one of my co-workers.
He had fellow black people trying to hold him back and fellow white people who were frustrated that he qualified for so many more programs than they could. Yet he persisted and succeeded.
I hope some day you can help to cheer and motivate these folks rather than keep demeaning them.
wrong perception
I know Ethiopians! I know people from China! I count them as friends but most had an advantage when they came over here that most minorities who grew up here didn’t have. If they needed help it was easier for them to get it, but you also have to remember that when many fled their countries it was because they could afford to. Many already had educations, some owned businesses. Most Mexicans have it worse however. I know one Ethiopian Engineer who works for a lot less than I made, he makes more than minimum wage, works on contract and will probably be stuck working contract jobs for years (if he’s lucky it’ll just be a few more years). He works for a company that makes automated systems. He should be making double what he makes. He and his family live in a one bedroom apartment and his older car won’t start and they are expecting their second child. They can’t afford to move. He agrees with my assessment by the way. Wages aren’t keeping up with the cost of living period!
Nothing changes the fact that $750 a month is a poverty wage. Minimum wage has fallen over the years so it doesn’t buy what it did even back, say, 20 years ago, certainly not 40 years ago. Most people living on a minimum wage won’t be able to get training because they simply can’t afford it and living at the same time. The older a person becomes the harder it is to get grants. Loans will be crushing. That’s the reality. Exceptions only proof the rule. The reason for that is that they ‘are’ exceptions.
There is nothing about making more than the current minimum wage that is demeaning in any way I can think of? Cheering someone on who is making minimum wage doesn’t do anything for them and it doesn’t motivate them or make them glad they are living in poverty. Most will curse you (behind your back of course). No one in this country, the richest country in the world, should work for poverty wages. Make exclusions for high school students if they are living at home perhaps, but working shouldn’t mean poverty for adults.
In most minimum wage jobs, there is very little in the way of moving up the ladder also. They are dead-end jobs for most part. There’s a choke point when it comes to moving up the ladder just because of the numbers involved if it’s at all possible to ‘move up the ladder’. The minimum wage should be tied to the average wage in this country in a way that simply insures a living wage. Better yet, let’s tie it to the top salaries and let’s make sure we can close the growing gap between the wealthy and the poor. Making more than the current minimum wage won’t make them helpless victims, just the reverse. Giving people a living wage isn’t demeaning either. I don’t understand why you would think it would be?
Victimology 101
From my perspective, Matt sees these people as hopeless victims that have no options. I disagree and find it insulting to all the people I know who have taken personal responsibility for their lives, taken advantage of the free education and programs offered, work hard, and made it into the middle class.
“The people we are talking about aren’t students slumming until they land that first real job, they are the product of years of grinding poverty, brought about by the intentional disinvestment in American society by the moneyed class. They are the product if a decades long assault on public education by those who would see it abolished, they are in many cases the product of discrimination toward their skin color, ethnicity, or socioeconomic position. ”
I always wonder who these “villains” are that are working to keep these people oppressed. Most people I know are focused on themselves, their families and friends. They have little interest or time to spend ensuring that others don’t succeed. Most of us capitalists want them to succeed, then they will be able to buy more of our products and / or services…
Thats the irony
“The people you know” are most likely the same as the “people I know” , the difference is that I recognize the utter lack of influence and societal power possessed by peons like us. (YES you are, in comparison tin the billionaires and corporate entities that dominate our economy) Conservatives still labor under the delusion that they can somehow become irreplaceable, that all they need do is become proficient at some needed skill in order to secure their future success. What you all fail to realize is that they’re will always be someone better, cheaper, and younger that will be available to replace EVERY American worker should we choose to allow it to happen. Wages can be pushed to zero if we choose to grant those who hold the purse strings the ability to do so. What is forgotten by the conservative is that all notions of market control fail when the actors have no compulsion to worry about what damage their actions might cause to society. Our country could burn, and as long as the shareholders get that extra 1% return, all is well.
Our Rep Democracy is Fraudulent?
I think you must be mistaking the USA for a place where each of us does not get a vote. A place where we are forced to work against our free will. A place where we can not start our own businesses. A place where you can not voice your cynical views openly. No freedom to buy “American Made” product.
Then again maybe I should ask, what country are you living in that you have no influence?
I have friends who immigrated from countries that used to be within the USSR, and I have friends in China… Now you want to talk about no influence, few rights and low wages… Are you commenting from China?
Who is being demeaning?
Mr. Lord stole a portion of my thunder so I will try to keep this brief. What is demeaning about pointing out reality as it actually stands, warts, challenges, and all, and stating that people facing these challenges need and deserve aid? Conversely, what are we to make of the unspoken implications of the story you shared? Do you really mean to imply that every person who doesn’t succeed at the level your colleague has failed because of laziness? That the millions upon millions of folks who don’t pull down six figures are simply unwilling to work hard enough to do so? What a cynical view towards the vast majority of your fellow citizens.
Cynical…
Hi Matt,
You seem to think there is a group of people trying “oppress” these poor victims. Now that is what term as cynical.
Reality
Matt is not saying that one group is trying to oppress another group. He is simply pointing out that the system is rigged in favor of one group against another.
Could have fooled me
“intentional disinvestment in American society by the moneyed class”
“assault on public education by those who would see it abolished”
“discrimination toward their skin color, ethnicity, or socioeconomic position”
I simply don’t share his views. I think most Americans would love to see the poor succeed. Many of them just see “more govt and forced wealth transfer” as an ineffective model that may do more harm than good.
Money
And on the other side of the coin, Matt sees “more forced wealth transfer via big business and a rigged system” as an ineffective model that is doing more harm than good. Are you right or is Matt right? Or are you both right?
It appears to me that the two of you both have good intentions for fixing the issue. What you need to do is emphasize your commonalities and find common ground to move solutions forward. Right now you’re just engaging in an argument that produces nothing more than a “I’m right and you’re wrong” mentality, which does absolutely nothing to move the ball forward.
Stop debating like a twenty year old who simply wants to play gotcha arguments and instead work towards real adult solutions.
Hmm
I guess American History was never your strongest subject?
Nor current events
for that matter.
Past vs Present
Which do you choose to live in?
Regarding Reality
I replied to “Reality” however it has not shown up, so I’ll try here.
“intentional disinvestment in American society by the moneyed class”
“assault on public education by those who would see it abolished”
“discrimination toward their skin color, ethnicity, or socioeconomic position”
I guess I would say that these statements indicate a belief that citizens are intentionally working to oppress others. I disagree with this belief system. Especially given the amount of money that our society does move from the “haves” to the “have nots”. (ie welfare, medicare, education assistance, housing assistance, higher K-12 spending in poor neighborhoods, child tax credits, work tax credits, ACA insurance subsidies, etc) I am unsure if we could ever transfer enough money to make folks like Matt happy.
Belief Vs Reality
You responded with:
“I guess I would say that these statements indicate a belief that citizens are intentionally working to oppress others. I disagree with this belief system. ”
to these statements:
“intentional disinvestment in American society by the moneyed class”
“assault on public education by those who would see it abolished”
“discrimination toward their skin color, ethnicity, or socioeconomic position”
Can you actually refute these three points, without resorting to discussion of ‘belief?’ Whether or not you believe a fact exists, does not stop that fact from existing.
We know that the Koch brothers spent heavily in many states and help fund ALEC, and are in no small part responsible for the election of Scott Walker in WI, and the subsequent assault on public unions, teachers, reproductive rights, environmental regulations and public education funding in that state. We know that many GOP members willfully intended to shut down the US government and have slashed funding for valuable public research.
We know that there are concerted efforts to disenfranchise whole swaths of the population among the states, and those efforts are explicitly stated as such by the GOP party members who pushed and advanced them.
These are all verifiable events. Belief is not relevant in this discussion.
And yes, perspective IS an interesting thing… but only when you can actually CHANGE your perspective, which I don’t believe you are actually doing, at least not enough to fathom the reality of existence of those who are different from you or your immediate peer network.
2 Sides to Every Topic
Now the question is can you see both sides?
Assault on public unions vs Allowing market to set correct compensation, thereby saving money for the tax payers.
Assault on Teachers vs Helping the Students learn by ensuring only the most effective Educators are in their classrooms and the expectations are clearly defined.
Assault on reproductive rights vs Preventing the stilling of a human heart for someone’s convenience.
Assaulting environmental regulations vs Promoting a balanced cost effective approach to ensure the regulations do not cost our society more than they are worth.
Assault public education funding vs ensuring that the tax payer’s money is used effectively so people can keep more of their paycheck.
I look at both sides all the time. That’s the point of G2A, I like to challenge my beliefs and those of others. Now can you truly believe that those you call oppressors could actually be the freedom fighters? Or at least that they truly believe they are… Just as you truly believe you are on the side of “good”.
Reality Part 2
Rigged System?
I agree that children born into financially stable two parent English speaking families where the parents model and teach personal responsibility, the value of academics, a strong work ethic, good financial management, etc have a big advantage. I even agree that interest and dividends being taxed at a lower rate than earned income is an advantage.
On the other hand, their are some big benefits for the poor / unfortunate people. They have been blessed to be born or to have immigrated to a country where they have incredible freedoms, opportunities and they only have to pay a very small percentage of the country’s cost of operation. In many cases they pay nothing (ie after credits/benefits) and in some case they come out ahead.
Perspective is an interesting thing.
The system is rigged towards the wealthy. Consider a CEO making $20 million a year and then match that up with a person making $12 thousand a year. Who’s got the greatest pull? Assume someone making $12,000 a year gets all their taxes back after credits and benefits versus a CEO paying in 12-15% on $20,000,000. Those are big benefits alright, but not for the person making minimum wage. Which one has the bigger house? Maybe the question is, which one has a house? Who’s got more than one mansion? (sometimes even the wealthy can forget how many mansions they have) Which one is actually working for a living? Or trying to?
We need those things for the poorest of Americans. Welfare, Medicare, housing assistance, ACA, and etc. But they aren’t embraced by most of the wealthiest people in this country and the politicians who they support. In fact they do their best to get rid of those safety nets. And they work to lower wages in this country, for the middle class.
And you are right. Perspective is an interesting thing.
Work to Lower Wages
Now are they working to “lower wages” in America, or working to protect jobs in America? As I asked in the other min wage post.
Let’s say that Liberals and Unions are successful in arbitrarily raising the wages in the USA via laws and or collective bargaining. Then let’s say that Liberal and Conservative consumers continue to buy the lowest cost / highest quality products and/or services available. (ie typically from low cost labor markets when practical)
How do you see this working?
The Unions and GM thought they could do it… However the American consumers very strongly disagreed by voting with their wallet.
How…
How has this very recent, timely piece by noted economist regarding minimum wages and effects not come up? He does an extensive literature review and then does data mining of his own between 1990 and 2012: https://dl.dropboxusercontent.com/u/15038936/Dube_MinimumWagesFamilyIncomes.pdf
So much to read (which I did), but his data concludes a moderate reduction in people below 50, 75, and 100% of the poverty line, with a $10.10 wage having short-term reductions in poverty levels of 1.7% (from 17% now) with lagged effects of 2.5 points lower than current.
Of course, Dube also notes:
“To be clear, if we were to assess public policies strictly based on their e”cacy in reducing poverty, we should prefer more targeted policies like cash transfers, food stamps, and programs that raise the employment rate for highly disadvantaged groups. As many researchers, including Card and Krueger (1995), have pointed out, the minimum wage is a blunt tool when it comes to fighting poverty. In comparison, the EITC is better targeted at those with very low incomes. It is important to point out, however, that as currently structured, the EITC provides only minimal assistance to adults without children, and may hurt some of them through a negative incidence on wages (Rothstein 2011). More generally, in the presence of such incidence e!ects due to increased labor supply, the optimal policy calls for combining tax and transfers like the EITC with a minimum wage (Lee and Saez 2012).”
“However, motivations behind minimum wage policies go beyond reducing poverty. The popular support for minimum wages is in part fueled by a desire to raise earnings of low and moderate income families more broadly, and by concerns of fairness that seek to limit the extent of wage inequality (Green and Harrison 2010), or employers’ exercise of market power (Fehr and Fischbacher 2004; Kahneman, Knetsch and Thaler 1986). The findings from this paper suggest that attaining such goals through increasing minimum wages is also consistent with a modest reduction in poverty, and moderate increases in family incomes at the bottom quantiles. Ultimately, this conclusion does not di!er markedly from that reached by Card and Krueger (1995), or by Gramlich (1976) before them.”
We can listen to basic economics overview videos, which are good and certainly have a place in the debate, or examine real-world effects as Dube does to find effects and limitations of minimum wage increases.
Interesting Link
Though I don’t think I will read it all.
From what I read would this summary be correct. Raising the min wage does help low income households to some extent, however the impact fades with time and there are some more effective methods that could be used. (ie earn income tax credits)
Did Dube analyze the relationship to job loss/creation?
Personally I like the EITC concept much better, if we are going to subsidize low knowledge low skill employees, I would like for it to be visible and quantifiable. Whereas raising the MW tends to hide the government mandated money transfer under the guise of the higher prices us citizens/consumers will pay for products and services.
Maybe that’s why the supporters like it.