Steve Ahlquist is a writer, artist and current president of the Humanists of Rhode Island, a non-profit group dedicated to reason, compassion, optimism, courage and action. He also maintains the blog SteveAhlquist.com where almost all his writing can be found. The views expressed are his own and not necessarily those of any organization of which he is a member.

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Email: atomicsteve@gmail.com
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32 responses to “Republicans are wrong about minimum wage and economists know it”

  1. Barry

    Its really a disappointment to me that (ex-moderate?) Ken Block, who I think has some good intentions on some issues of reform and combatting waste, seems so mean-spirited on this by trying to hold down wages of the poorest workers.   Perhaps he thinks he needs to be this way to win the GOP primary.
    I recall an earlier RIF post about how the problem is not the accumulation of capital – that is enormous – but its not invested here because wages/benefits of working people hasn’t grown enough to sustain demand to justify investment.  I also note the Projo non-scientific poll on their site shows 2 to 1 opposition to increasing the minimum wage.  What ths shows to me is both that there are a lot of mean spirited folks in our state, and that they have been allowed to dominate this (and all similar) forum.  I don’t think it reflects tru opinion of Rhode Islanders.

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    1. jgardner

      Barry, if you don’t have a job, how much are your wages? The minimum wage has never been, nor will ever be, a job creator, but will always be a job destroyer. If there are fewer jobs because the cost of those jobs is higher than the return on that job’s existence, how’s that going to help poor people gain the skills and experience necessary to command a higher wage?

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      1. lottopol

        Raising the minimum wage is mostly a transfer from those who eat at McDonalds to those who work at McDonalds. It would have no effect on inequality. The minimum wage law should only be used as an enforcement mechanism, meaning that if an employer claims that someone agreed to work for $1 per hour or some amount that it would be unreasonable that someone would agree to, then there would be a violation if the worker was being paid only $1.
        How could you not expect vast inequality to occur when you make the tax rate on income received by the rich such as: dividends, capital gains and corporate profits much less than the tax rate on wages and eliminate the tax on inheritance tax for 99.9% of all estates.
        “..Equally unhelpful in terms of addressing the income and wealth inequality which results in the overinvestment cycle that caused the depression are those who emphasize various non-tax factors. Issues such as globalization, minimum wage laws, outsourcing, free trade, unionization, the increase in single-parent families, problems with our education system and infrastructure can increase the income and wealth inequality. However, these are extremely minor when compared to the shift of the tax burden from the rich to the middle class. It is the compounding year after year of the effect of the shift away from taxes on capital income such as dividends over time as the rich get proverbially richer which is the prime generator of inequality…”
         
        http://seekingalpha.com/article/1543642

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  2. jgardner

    One of the most basic and unquestioned economic principles is that people tend to buy less when the price is higher and more when the price is lower. Labor is no different than any other good or service in this respect. That you and others want to believe different does not make it so.
     
    I’m actually surprised you’d reference the Card/Krueger study given it was debunked less than 2 yrs after it was published. The debunking study was done by Neumark and Wascher and was crafted using the actual payroll data from the restaurants C/K used in their methodologically flawed telephone survey, reinforced yrs later by a study done by Hoffman and Trace. The reality is the very people the minimum wage is supposed to help — the relatively young and relatively unskilled — are the very people who are hurt by this misguided policy.

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  3. Johnnie

    This is not about just one study. Ask Allen Fung and Ken Block to site peer-reviewed studies which support their position on an increase in the minimum wage.
    A totally unsubstantiated position – just because they happen to think it – doesn’t make it so. Here are a list of studies which say they are full of s**t.
    Research Shows Minimum Wage Increases Do Not Cause Job Loss

    Extensive research refutes the claim that increasing the minimum wage causes increased unemployment and business closures. (See list below.)

     

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    1. jgardner

      If the cost of something increases, does demand stay the same, increase or decrease?

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      1. Rhody Towny

        Labor is not elastic.  Wages are “sticky.”  We have empirical evidence that refutes your position.
         
        Even if you find a right wing economic article that supports it, there’s a problem.  The left wing Card-Krueger paper disagrees.  What to do about it?
         
        How about a meta-analysis of minimum wage studies.
         
        Oh, look, it has been done: http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
         
        “Hristos Doucouliagos and T. D. Stanley (2009) conducted a meta-study of 64 minimum-wage studies published between 1972 and 2007 measuring the impact of minimum wages on teenage employment in the United States. When they graphed every employment estimate contained in these studies (over 1,000 in total), weighting each estimate by its statistical precision, they found that the most precise estimates were heavily clustered at or near zero employment effects.”

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        1. jgardner

          Rhody, I’m asking what does demand do in response to an increase in price. Only if demand is perfectly inelastic does demand not change, and since there is no such good or service whose demand is perfectly inelastic, it’s not relevant. So my question still stands unanswered.
           
          Oh, and yes, there is elasticity of demand when it comes to labor. 

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  4. cailin rua

    As McDonald’s goes, so goes the nation . . .??? 

    Science is not synonymous with technology. Technology has become the mechanical rabbit at the greyhound track. 

    I look at all the power equipment used to keep the postage stamp properties on the East Side neat and trim with nary a leaf in November; the noise pollution, the air pollution,  intimidating workers brandishing their leaf blowers and weed wackers while their bodies vibrate at who knows how many cycles per minute, the dirt and dog poop rising up in plumes, making it so you have to close the car windows as you pass by them at work. One wonders why these flat lots can’t be cut with push mowers, why the yards can’t simply be raked, why driveways can’t be swept with push brooms, why low tech wouldn’t be an improvement and mean more jobs; and, one wonders, most of all, why these people who are so important and busy, who need other people to perform their menial tasks can’t pay a fair wage or just do the work themselves. Then there is the issue of bicycles and cars in the city center. Do those who encourage low tech modes of transportation deserve to be described as luddites? Technology is good as long as it exists in service to humankind, all of human kind; not as a means to eliminate the livelihoods of losers in a social Darwinistic competition.

    I am definitely not a fan of the R I Foundation but I think one of the most important pieces of legislation passed this year was Gayle Goldin’s family leave bill. Unfortunately, I have trouble believing it will benefit anyone not working in a very stable middle class or upper middle class occupation.  Outside of make work projects, there isn’t as much work that needs to be done as there used to be before this age of technological advancement. What to do with the redundant? Take a laissez-faire approach and watch shanty towns develop with people foraging at garbage dumps, more and bigger prisons, or establish a public policy involving euthanasia? There has to be sharing of work, serious economic redistribution, shorter working hours, less competition or there will have to be greater repression. The repressive apparatus is already in place at great expense – the military and the militarized domestic police. That is pretty much the name of the tune, as things stand today. 

    A raise in the minimum wage is a modest proposal. If McDonald’s stockholders do not want to share some of the profit and would either raise prices or replace workers with automated equipment to pay for an increase in wages, an intelligent population would boycott them. I guess that’s where the commercial media comes in – sustain the system by dumbing down the population.

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