The editors of the Washington Post take note of another study finding that a sharp increase of the minimum wage to $15 will harm the very workers it purports to aid:
According to the 146-page report by Philadelphia-based consulting group PFM, the proposed higher wage would indeed yield benefits for low-wage workers who received it, in the form of reduced stress, greater food security and better mental health. Employers, in turn, could benefit from their workers’ improved morale, in the form of higher productivity. However, there would be offsetting costs and they could be substantial: a loss of almost 47,000 jobs and $396.5 million in total income by 2022, due to workers’ being priced out of the job market by the higher minimum wage. This would spell a reduction of nearly $41 million in expected county tax revenue between fiscal 2018 and fiscal 2022; meanwhile, the county government’s payroll costs would go up $10 million.
It will, no doubt, be met by angry retorts and directed research finding the opposite. Left unstated is that there are 300 years of economic reasoning that supports the idea that in general the demand curve for labor slopes down.
However, as Jonathan Swift observed, “Reasoning will never make a man correct an ill opinion, which by reasoning he never acquired.” I don’t expect any study or even actual results will cause its advocates to relinquish their charge for a higher minimum wage.
“Thinking, Fast and Slow” Is the name of an interesting book about reason and logic and how we go wrong. One example he gives is that shark attacks actually save swimmers lives! Every reported attack reduces drowning deaths, which don’t get the press of shark attacks.
Hmmmm. My first real jobs, other than a couple bucks here and there for shoveling snow or mowing yards, were back in 1964, when the Federal minimum wage was 85 cents an hour.
There’s been some inflation since — that’d be about $6.60 now, and the state-specified $1.05 I was getting at years end would be about $8.25 now — a bit ahead of the $7.25 now prescribed by the feds, but on a par with or a bit behind minimum wages set by most states.
Hmmm. So in a bit more than 50 years, minimum wages in the USA have basically stayed the same in real terms. Not a penny to reflect rising living standards, improvements in productivity, or increases in our general affluence. Just inflation adjustments and all sensible people ought to see even these are too much.
Hmmmm.
A major difference between the minimum wage then and now is that then the minimum wage was largely being paid to teenagers and part-timers while now many of those earning minimum wage are adults working full-time trying to support families.