tag:blogger.com,1999:blog-239070883775529047.post3227890169730594422..comments2024-03-02T16:26:31.465-05:00Comments on The Middletown Insider: The Unintended Consequences of Raising Minimum WageMiddletown Insiderhttp://www.blogger.com/profile/10242085742226763775noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-239070883775529047.post-62110462268908705602016-04-12T13:57:35.573-04:002016-04-12T13:57:35.573-04:00It is not uncommon for a person to use analogies t...It is not uncommon for a person to use analogies to make a point. Although Laura's scenarios are "made up", they serve well to illustrate her point; that being, there are unintended (supposedly unintended) consequences when government messes with the free market.<br /><br />Thank you for engaging in civil discourse!Middletown Insiderhttps://www.blogger.com/profile/10242085742226763775noreply@blogger.comtag:blogger.com,1999:blog-239070883775529047.post-3314776485028911822016-04-12T12:39:53.218-04:002016-04-12T12:39:53.218-04:00You make some decent arguments, some of which I ag...You make some decent arguments, some of which I agree with, some I don't. There are a lot of issues raised by such a significant raise in the minimum wage and they are worth examining and debating.<br />My complaint about the original article was not his opposition to an increase in the minimum wage, but rather the author's attempt to prove a thesis based on purely made up scenarios. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-239070883775529047.post-86410679468859475142016-04-12T11:14:24.261-04:002016-04-12T11:14:24.261-04:00Thanks for submitting your comments, though I have...Thanks for submitting your comments, though I have to question the voracity of the claims made, based on the fact that it comes from Alan Krueger, a member of the current administration, which has a vested interest in "fundamentally transforming America". One does not make it into this administration without having socialistic (communist) leanings. And the data indicates that the cost was passed on to consumers, which leads to inflation of prices.<br /><br />"Well, the inflation was minimal." A little here, a little there; it adds up.<br /><br />The 2012 paper you cite says “The minimum wage is a useful tool if the government values redistribution toward low wage workers . . ." Redistribution of wealth is not a legitimate function of government under the US Constitution; it is communism, the only virtue of which is the equal spread of misery.<br /><br />It goes on to say, "it may be better for the government to subsidize low-wage workers and keep the minimum wage relatively low." Again, not a legitimate function of government. In order for the government to subsidize wages, it has to tax. It is robbing Peter to pay Paul, which is theft.<br /><br />None of these studies make mention of the fact that those who have worked hard gaining skills and experience, proving themselves worth being paid more, will not likely receive comparable pay increases. When people work hard and see others who are unwilling to work that hard being paid the same as them, it is a motivation killer.<br /><br />However, minimum wage increases ARE useful tools for union bosses negotiating wage increases for their members. Nowadays, the biggest class of union employees are government employees, who are paid from . . . tax money.<br />Middletown Insiderhttps://www.blogger.com/profile/10242085742226763775noreply@blogger.comtag:blogger.com,1999:blog-239070883775529047.post-79949047784400331422016-04-12T09:21:13.909-04:002016-04-12T09:21:13.909-04:00As a starting place:
Scholarly debates over the m...As a starting place:<br /><br />Scholarly debates over the minimum wage have taken a distinct shape over the past two decades. In the 1990s, Princeton’s Alan Krueger — now Chairman of the White House Council of Economic Advisers — and his colleague David Card produced a seminal paper that has framed much of the subsequent debate. Those scholars examined the results of a New Jersey law raising the minimum wage, comparing the outcomes in the fast food industry to those in the bordering state of Pennsylvania, where wage laws remained the same. Their study called into question textbook assumptions about how labor markets might work. The findings included:<br /><br />The data indicated “no evidence that the rise in New Jersey’s minimum wage reduced employment at fast-food restaurants in the state.”<br />Further, “prices of fast-food meals increased in New Jersey relative to Pennsylvania, suggesting that much of the burden of the minimum-wage rise was passed on to consumers.”<br />That paper’s implication was that the neoclassical models, which suggested the opposite would happen, didn’t comport with reality — data triumphed over theory. For the next decade, the economics profession saw an extended debate about whether that paper’s fundamental insights were right and could be extended to support policy. Krueger and Card had to defend their findings in a follow-up to the original paper. In 2000, dozens of pages of an issue of the American Economic Review were dedicated to this fight, as Timothy Taylor notes at his “Conversable Economist” blog.<br /><br />Subsequent studies<br /><br />Some subsequent studies have generally supported aspects of Krueger/Card. A 2004 study of available literature, “The Effect of Minimum Wage on Prices,” analyzed a wide variety of research on the impact of changes in the minimum wage. The paper, from the University of Leicester, found that firms tend to respond to minimum wage increases not by reducing production or employment, but by raising prices. Overall, price increases are modest: For example, a 10% increase in the minimum wage would increase food prices by no more than 4% and overall prices by no more than 0.4%, significantly less than the minimum-wage increase.<br /><br />In a 2010 study published in Review of Economics and Statistics, scholars Arindrajit Dube, T. William Lester and Michael Reich also looked at low-wage sectors in states that raised the minimum wage and compared them with those in bordering areas where there were no mandated wage changes. They found “strong earnings effects and no employment effects of minimum-wage increases.”<br /><br />A 2012 paper published in the Journal of Public Economics, “Optimal Minimum Wage Policy in Competitive Labor Markets,” furnishes a theoretical model that lends some support to the empirical insights of Krueger/Card. The paper, from David Lee at Princeton and Emmanuel Saez at UC-Berkeley, concludes: “The minimum wage is a useful tool if the government values redistribution toward low wage workers, and this remains true in the presence of optimal nonlinear taxes/transfers.” However, under certain labor market conditions, it may be better for the government to subsidize low-wage workers and keep the minimum wage relatively low.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-239070883775529047.post-34160006334834249552016-04-11T13:32:28.335-04:002016-04-11T13:32:28.335-04:00So enlighten the rest of us. What "actual re...So enlighten the rest of us. What "actual research" are you talking about?Middletown Insiderhttps://www.blogger.com/profile/10242085742226763775noreply@blogger.comtag:blogger.com,1999:blog-239070883775529047.post-90068240455776192382016-04-11T13:09:26.919-04:002016-04-11T13:09:26.919-04:00It is always so enlightening when someone "pr...It is always so enlightening when someone "proves" their argument by making up facts and figures out of thin air. There is actual research on this issue, but why waste time with reality when you can just make things up.Anonymousnoreply@blogger.com