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(17 People Likes) In those places where the minimum wage has gone up to $15/hour, are employees who were already making $15/hour and up (e.g. accounting clerks ambulance workers) also asking for raises?

ary pressure on an economy. But concluding that inflation absorbs that minimum wage increase isn’t supported by any macroeconomic research. It’s also a testament to the brilliance of a very cynical marketing effort that has sought to win arguments through a sustained campaign of disinformation, when it recognized the facts wouldn’t make for good politics
Fundamentally, changes in minimum wage are about wealth redistribution. There are many who believe that our current levels of income inequality are a healthy bi-product of a functioning capitalist economy. I’d suggest those people don’t understand capitalism and are willfully blind to how destructive the current levels of inequality are to our national productivity. Joseph Stiglitz was awarded the Nobel Prize, in part, for his work in this area. Here’s a really good summary of his book on the topic From The Price of Inequality: Joseph Stiglitz on the 1 Percent Problem
If increasing the minimum wage is good, who opposes it? Over the long term, there is some good evidence that increases in the minimum wage benefit almost everybody. BUT, in the short term, increases in minimum wage benefit “labor” at the expense of “capital”. In other words, these changes benefit MOST everyone.
One of the most insidious bi-products of income inequality is dramatic rise in rent seeking behavior; it’s a behavior pattern of wealthy interests “changing the rules” of our economy to redistribute a disproportionate share of resources without providing any value in return. In 2017, there was a Presidential study on our “rigged economy” I’ll footnote the study[1], but, here’s a summary: How Rent-Seeking Is Driving Inequality
The people who oppose Minimum Wage Increases tend to be the same lobbying groups as those which sponsor the agenda of rent seeking behaviors that have exacerbated income inequality[2]. These notable ‘non-beneficiaries’ tend to also be large contributors to conservative causes. And, much like the capital gains tax[3], inheritance tax[4][5] and regulations surrounding banking reform[6], these contributors are keenly aware that they are advocating an unpopular position. So, they can’t show their cards and admit their true intentions (would you?) - they need to come up with other arguments[7]
Rather than argue the issues, create counter-narratives that confuse voters[8][9][10] Rather than use facts to argue an unpopular position, their arguments are recast with the reductive power of populist politics and then blasted through established channels of idealogically inspired dogma. Now, we argue about something other than the real issue.
The “new” minimum wage argument has been recast away from peer reviewed research and into a slickly manufactured sound bite narrative. Instead of facts, the voter hears an oversimplified ‘thought experiment’ to cause him to conclude he understands the issue. From there, its easy to convince this voter he/she can extrapolate their insight to something that looks like the same problem. But, it’s not - and the same intellectual hubris that was excited to “understand” the one problem prevents us from seeing that it’s not applicable to the other problem.
This is the essence of conservative marketing and it’s very effective.[11]
Who needs facts when you have a “thought experiment?” Think about the minimum wage argument you hear all the time.
“If I ran a business and suddenly, the enactment of a minimum wage caused me to have to pay that worker more money, I’d hire less workers.”[12]
It sounds like a good argument. Except it offers a simple microeconomic construct to refute a much more nuanced macroeconomic problem.
That distinction my sound like semantics, but, it goes way further.
Micro: focuses on the decision of a single entity. And, how the laws of supply and demand a specific decision on price level or resource allocation.
Macro: focuses behavior of the economy as a whole and not just on specific companies, but entire industries and economies. This looks at economy-wide phenomena, such as Gross Domestic Product (GDP) how decisions impact levels unemployment, national income, rate of growth, and price levels.
By reducing a broad question about how the minimum wage affects the economy to “what would I do if something cost more?” conservatives re-frame the argument. The micro question is the wrong question: it ignores all of the secondary effects of the minimum wage: specifically (1) improves social mobility (2) reduces poverty (3) increased economic activity (4) increased monetary velocity. In other words, the more accurate micro question would be
“If I ran a business and suddenly, the enactment of a minimum wage caused me to have to pay that worker more money, HOWEVER, because the additional wages these workers received meant I had new customers, with more money to spend at my business….”
Secondary effects matter - even in thought experiments…
But, even economists disagree about the minimum wage, right? Not so much. The minimum wage is one of the most studied phenomena in all of economics and collective insight is best expressed in Card Krueger’s 1993 study Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania
It’s a comparative study of a single MSA that straddles two states - one which had a minimum wage increase and one that didn’t. It turns out raising the minimum wage didn’t effect employment growth. BUT, it did contribute to better lives for lower income people who benefited from the wage increase. There are some updates since then - particularly notable was Belman and Wolfson[13]
To be clear, this isn’t a “single standalone study” but, the culmination of 50 years of economic research on the topic. That’s the thing about the real scientific process - it’s rarely “revolutionary” - and more often a collection of petty, bickering, arcane studies that support a slow and steady march of progress.
doesn't the inflation caused by a minimum wage increase wipe out the benefit of the increase? Not even close [14]Our economy is big. The impact the the broader economy of a minimum wage increase is very small. However, a meaningful minimum wage does provide for upward mobility. You wanna know what destroys an economy: no hope…
But, ideology is persistent - especially when it’s misguided[15]. Even as a standalone, the study has withheld a series of well-funded and increasingly stupid attacks from the right for one reason: it’s right. (example of problems with most recent “study” The Problems With A New Study On Seattle's $15 Minimum Wage
)
Truthfully, I blame the Dems. Instead of using facts to refute an intellectually flawed attack, the Dems promote a story of “hardship at the bottom”[16]. But, by ignoring conservative dishonesty, they unintentionally validate it. If voters understood how wealthy interests were co-opting misunderstood policies like minimum wage oppositions to support the largest wealth transfer in history, they might finally recognize those “job creators” for what they are. The Economist had a good article about this: The rich, the poor and the growing gap between them
Instead, the Dems focus on charity and empathy - both noble ideals - but, entirely inadequate for this ‘knife fight’.[17] Still, you can't blame the GOP… is representing their true base.[18] I'm frustrated that the Dems don’t seem to wanna scrap a little.
A little more reading, should you want:
Angry restaurant worker / Jezebel blogger: he/she is angry, but basically right[19]
Footnotes
[1] https://obamawhitehouse.archives.gov/sites/default/files/docs/2017_economic_report_of_president.pdf
[2] How a powerful rightwing lobby is plotting to stop minimum wage hikes
[3] Republican “Small Business” Tax Cuts Would Mostly Help Rich Individuals
[4] A big tax break for billionaires, courtesy of the GOP
[5] The Estate Tax Used To Be Sort Of Popular -- Even With Republicans
[6] How the Banks and Republicans Plan to Kill Financial Reform Under Trump
[7] How 'Choice' Became the Most Misleading Word in Politics
[8] Trump Supporters Appear To Be Misinformed, Not Uninformed
[9] The GOP’s Misinformation Problem
[10] Conservative Voters Aren't Monocausal - Lawyers, Guns Money
[11] The Agony of Frank Luntz
[12] Column: Why raising the minimum wage is good economics
[13] http://research.upjohn.org/cgi/viewcontent.cgi?article=1220 context=empl_research
[14] Column: Why raising the minimum wage is good economics
[15] Confirmation bias - Wikipedia
[16] I Don't Know How To Explain To You That You Should Care About Other People
[17] Opinion | B

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