Posted on December 12, by Scott Alexander Aquinas famously said: For example, take medical research. Suppose a certain drug is weakly effective against a certain disease. After a few years, a bunch of different research groups have gotten their hands on it and done all sorts of different studies.
If minimum wage hikes lead businesses to eliminate jobs, should progressives still support them? The Seattle study, after all, seems to confirm neoclassical economic theory, which predicts that raising the minimum wage leads to job losses, particularly among workers with little education and few skills.
It is important to note that the Seattle study has not been peer reviewed yet, and some scholars have questioned its methodology.
Nevertheless, it still raises a thorny question: The short answer is: Even if they reduce employment levels, such laws help reduce class and status divisions within the labor market that can be toxic in a democracy.
Indeed, some job losses may a good thing, since many minimum wage jobs are not worth saving. To explain why, it is helpful to summarize the broader debate on the effects of minimum wage laws. Does a 20 percent increase in the minimum wage lead to a 20 percent drop in demand?
Past studies, including one of the Seattle wage hike by researchers at Berkeleyhave found demand elasticity for labor in the low-wage sector to be minimal or even negative, meaning that minimum wage increases led to a proportionally smaller decline in demand, or even an increase in demand.
Within local markets, higher wages may lead to increased consumption, sparking higher demand for goods and higher demand for labor. The headline numbers are indeed bad: That may make its findings more convincing than past studies.
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But many economists have cautioned against drawing conclusions just yet. First, as noted above, the study has not faced peer review. Second, it is an outlier: Third, the data set had a critical limitation: This could have skewed the results if, for example, large firms are better able to absorb a wage increase than smaller ones.
In other words, part of the decline in low-wage employment could be a result of formerly low-wage employees moving into higher wage positions. Given such concerns, we may not get a good picture of the effects on the ground for some time.
The dust-up is nevertheless typical of debates surrounding minimum wage laws: This might happen, for example, if Amazon sparks a substantial closure of retailers in Seattle. If this turns out to be the case, what should progressives do?
We should change the subject.
As Noah Zatz has observedprogressives and conservatives alike seem to view minimum wage laws as a means of providing additional resources to the working poor. Moreover, if one accepts the basic neoclassical model of supply and demand—or the initial Seattle findings—liberal labor markets combined with transfers looks pretty good.
Let wages be set at market prices, so that all who need jobs can find them, then top up our take-home pay as necessary given our circumstances. Young is far from alone.
Second, minimum wage laws help align power and responsibility in the labor market by forcing firms and wealthy individuals to share profits with workers.
While tax-and-transfer policies can have a similar net effect on distribution, they do not target the worker-firm relationship directly. Instead, all transfers are filtered through the state, an alien institution. The solution is to build an economy in which market work is not the only path to economic citizenship.
And what if firms respond to minimum wage hikes by automating menial tasks? As I noted in a previous essayI am skeptical that automation is going to end work as we know it.
Many low-wage jobs require substantial fine motor skills, situational judgment, and emotional intelligence, none of which are about to get automated.
Nevertheless, there is significant capital substitution in the low-wage market today, as tablets automate the ordering process in fast food, robots replace some human labor in warehouses, and AI-based apps replace human taxi dispatchers. Private labor markets have the virtue of allocating workers to tasks based on their skills and social demand for particular goods and services, but they would cease to function without unpaid care work on the one hand, and a robust public sector on the other.
In this light, the typical debate around minimum wages gets things backward. We should not be asking if minimum wage laws contract labor markets and condemn them if they do.
Rather, we should be asking how to build a more equitable society and considering how minimum wage laws fit into that project.The Minimum Wage Debate Essay - The minimum wage debate has recently made a large comeback in United States politics. Contemporary studies show over million Americans are paid at or below minimum wage (Dickinson 33).
Anarchist economics is the set of theories and practices of economic activity within the political philosophy of ashio-midori.com the exception of anarcho-capitalists who accept private ownership of the means of production, anarchists are anti-capitalists.
They argue that its characteristic institutions promote and reproduce various forms of economic activity which they consider oppressive. Minimum wage Minimum wage is defined as the lowest hourly, daily or monthly salary that employers may legally pay to workers.
Minimum wage is the lowest amount where workers may sell their services which in term are known as the market floor for wage. Since , when the minimum wage was first introduced (at a rate of $ an hour), the federal minimum wage has increased 22 times.
The minimum wage is the salary floor, or the lowest possible rate that employers can pay employees. Central Futures is our programme designed to prepare you for your future beyond Central Foundation Boys’ School. Whether that be continuing your studies at university, looking for an apprenticeship or going straight into employment, we aim to help you develop the right qualifications, skills and experiences to be successful.
The Fraser Institute says its student essay contest — which asks if hiking minimum wage is a "bad policy" — isn’t biased and shouldn’t have been pulled from Ottawa-area high schools.