I'm not sure what this person is admitting other than than their own opinion. For example, it is incredibly debatable that raising the minimum wage would improve the livelihood of low income workers, as those workers could end up trading underemployment for unemployment.
This just reads like a progressive opinion piece, which is fine, except it postures itself as the truth revealed. I'd downvote it if I could.
"That's just the ramblings of a greedy, out-of-touch asshole who should be taxed down to 0 to atone for their sins."
> Billionaire says something people agree with
"Our idea is validated! Someone who is very rich and successful concurs!"
Or that's an old wives tale, and the market will adjust and keep them employed (like tons of countries with minimum wage AND low unemployment), while most low-end job sector bosses will never willingly pay more than the minimum it can get away with.
The same way that if bosses could have child labor or slave labor or company scrip, tons of them would use it (as tons of them did use it, when the law allowed it).
Yes. The market doesn't work based on some naive untouched "supply and demand" curve. Both supply and demand can be manipulated, and every weakness of the employee (who has the more need and the less information) can be and is exploited.
Second, the minimum wage can increase consumption (poor workers wage almost go all to the market, not to wealth accumulation and rent-seeking), and thus lift demand.
Third, demand is in many sectors inelastic. A employer need a certain amount of workers to function, period. If he doesn't have them, he can either overwork existing employees (if the law permits it, that's why overtime compensation and related laws are important), or squeeze his profit margins and rise to the minimum wage.
But he'll seldom if ever voluntarily squeeze his profit margins to minimum wage if he can get away with it (and thus use employees as a profit source). In an ideal (for the boss) world he would be able to even use slave labor (as many did in the past), blackmail employees (as many who employ illegal immigrants do), collide with other owners in an era to keep wages low, and so on.
Actually that's the same way huge increases in productivity are seldom/never passed on to employees, but are pocketed as extra profit margins, which is why productivity has skyrocketed in many sectors, but wages remain stagnant or even lower than 70s levels (when adjusted).
Fourth, minimum wage law equally affects all businesses in a sector (or across the market), and thus the extra costs will eventually just be a cost of doing business that will be passed along to the overall price. Other conditions being the same, countries that introduced minimum wage laws, even higher than the US, do just fine with their unemployment.
Fifth, certain markets (and especially ones were low wage earners work at, from fast food to strawberry picking), have a single or a few large employers in areas, that kill competition, and force workers to accept whatever's given (regardless of what demand would point to). That's a monopsony market, and certain low wage markets like fast food have been shown to be that (can depend on area).
And we haven't even touched into the improved (sometimes substantially) conditions of those getting a higher wage (because the got lower than the minimum before), which could result in increased productivity.
Economists are not clear cut as you seem to believe: "The profession as a whole is divided on the topic: When the University of Chicago Booth School of Business asked a panel of prominent economists in 2013 whether increasing the minimum wage to $9 would “make it noticeably harder for low-skilled workers to find employment,” the responses were split down the middle." [1]
[1] https://www.theatlantic.com/business/archive/2017/01/economi...
-- which also mentions:
Looking at historical experience, there is no obvious relationship between the minimum wage and unemployment: adjusted for inflation, the federal minimum was highest from 1967 through 1969, when the unemployment rate was below 4 percent—a historically low level. When economists try to tackle this question, they come up with all sorts of results. In 1994, David Card and Alan Krueger evaluated an increase in New Jersey’s minimum wage by comparing fast-food restaurants on both sides of the New Jersey-Pennsylvania border. They concluded, “Contrary to the central prediction of the textbook model ... we find no evidence that the rise in New Jersey’s minimum wage reduced employment at fast-food restaurants in the state.”
Card and Krueger’s findings have been vigorously contested across dozens of empirical studies. Today, people on both sides of the debate can cite papers supporting their position, and reviews of the academic research disagree on what conclusions to draw. David Neumark and William Wascher, economists who have long argued against the minimum wage, reviewed more than one hundred empirical papers in 2006. Although the studies had a wide range of results, they concluded that the “preponderance of the evidence” indicated that a higher minimum wage does increase unemployment. On the other hand, two recent meta-studies (which pool together the results of multiple analyses) have found that increasing the minimum wage does not have a significant impact on employment. In the past several years, a new round of sophisticated analyses comparing changes in employment levels between neighboring counties also found “strong earnings effects and no employment effects of minimum wage increases.”
Third: True, and may make the demand curve flatter, but doesn't change the sign of the slope of the demand curve.
Fourth: True, and may make the demand curve flatter, but doesn't change the sign of the slope of the demand curve.
Fifth: True, but doesn't change the sign of the slope of the demand curve.
That leaves your second point as the only one that actually addresses the question. But even that only gives a plausibility argument that it might slope the way we would wish, rather than the way most people expect. Your last two paragraphs also merely indicate that the question is open.
But the thing that triggered this discussion was this statement by tyree731:
> For example, it is incredibly debatable that raising the minimum wage would improve the livelihood of low income workers, as those workers could end up trading underemployment for unemployment.
To which you replied:
> Or that's an old wives tale, and the market will adjust and keep them employed...
Which seems to indicate that your position is something other than "it's incredibly debatable" - that the demand curve for employment will raise employment if the minimum wage is raised, and that it's an old wives tale that raising minimum wage will cut employment. But in the parent post to this, all you've shown is tyree731's point, that it's highly debatable.
Actually the 50-50 split mentioned among economists are the very definition of "incredibly debatable".
Of course, one paper isn't enough; I'm willing to learn if there's contradictory evidence out there, too.
[0]: https://www.bloomberg.com/opinion/articles/2019-01-24/u-s-ec...
Doubly applicable in this case, as it talks about the perils of a single study _and_ discusses this in the context of minimum wage research.
Specifically, while I agree with three of the four solution points, I actually strongly disagree with the first.
1. Increase the minimum wage.
2. Pay workers for overtime labor.
3. Restore labor's bargaining power.
4. Increase taxes on the rich and their estates.
The true way of achieving the spiritual ideal of the first point is to instead INCREASE CONSUMER BUYING POWER by making the 'staples' of living cost less. There are many and potentially controversial ways of making that happen. My own favorite is for "the government" to establish a baseline which private industry is free to compete against. (If they're so much better, they should be able to win; which would be a win for consumers.)
Combined with overreaching assertions, the whole article just makes me feel like they're trying to manipulate me in a ham-handed way. And I'm someone receptive to this argument! I can imagine anyone that already hold beliefs otherwise immediately ignoring it.
If you raise the minimum wage and it results in unemployment, then that's a clear indication that the only reason the jobs existed was to exploit workers that couldn't meaningfully survive off that wage. Which means we need some sort of other societal solution to solve the problem of jobs being rendered redundant.
Ultimate the intent of working for a living is that you work _for_ a living. If that doesn't work out, then the system is broken.