Raising the minimum wage? Study using US tax data finds more gain than pain | Hacker News Reader

Raising the minimum wage? Study using US tax data finds more gain than pain

phys.org

29 pointsbikenaga65 comments

I wonder if these results will stand up under independent scrutiny?

And I'm dismayed by the cavalier dismissal of lost jobs for teenagers. Getting that first job is hard enough already

(https://econjwatch.org/File+download/1296/GreenHandMar2024.p...)

If you can only afford to hire someone if they're being subsidized by their parents, then the job position you're offering should either not exist or the subsidy should be made explicit. If our civilization's entry-level positions require five years of internships then we should, as a civilization, figure out a way for people to hold internships for five years and expect every single human alive to go through that process.

> And I'm dismayed by the cavalier dismissal of lost jobs for teenagers. Getting that first job is hard enough already

And almost all of these "starter jobs" are filled with abusive and exploitative working conditions, made possible by the (literal!) kids not knowing that they don't have to mop up feces in a toilet without proper training and equipment or that they aren't supposed to work late night hours (at least in some jurisdiction). Good f...ing riddance, I'd say.

I held a number of low-paid jobs while in high school and college. I can't say that dealing with cooking grease was enjoyable, but in no case can I say that the working conditions were abusive.

Do you recognize that this means you were lucky, and not that no low-wage jobs are abusive?

Obviously there's a mismatch between "first job for teenagers" and "job I need to pay my rent and maybe provide for my kids". This would be less of a problem if more of the jobs paid better. But you can only scoop ice cream or bag groceries for people who have enough money to pay for them.

> And I'm dismayed by the cavalier dismissal of lost jobs for teenagers.

The way Geneva handles their minimum wage (almost $27/hr) is to have exceptions for apprentices and au-pairs under 18. That au-pairs will eventually become older than 18 is obvious; what is less obvious is that companies taking apprentices share responsibility for their education, so I believe if too many of their apprentices fail the final exams, the company loses the ability to take new ones.

https://www.eda.admin.ch/missions/mission-onu-geneve/en/home...

Teenage labor participation is at some of the lowest levels ever. Most teenagers who would have otherwise gotten jobs, are now trying to do things to pad out their college applications. My suspicion is that you would have a hard time paying low wages to teeneagers at the moment.

https://fred.stlouisfed.org/series/LNS11300012

Even a few percentage points extra would be a big positive to society, since presumably the teenagers will learn real world lessons at a faster rate than padding out college applications.

> The bottom line for workers: Higher wage floors ultimately raise the earnings of low-income workers and young workers most likely to be impacted by the policies by thousands of dollars annually. Further, on average, these workers are no less likely to be employed following the minimum wage increases.

But that's not the bottomline. The bottomline is to ask: After a year, do these workers have more disposable income, or does - for example - local housing cost raise and eat up the higher wages?

The bottomline is to ask: After a year, do these workers have more disposable income, or does - for example - local housing cost raise and eat up the higher wages?

What if that was the point of this study - be a submarine for increasing the minimum wage? If has been said that Silicon Valley is a conduit to move VC money to landowners, and here is just more of it.

It seems like the best course of action is to tie minimum wage to housing costs (on a per-county or city basis), this would help ensure the ownership class has to balance the costs of assets and labor.

If you want cheap labor, housing costs must go down. If you want expensive real estate, labor costs must go up.

Interesting idea, that actually could work. The biggest issue I could see though is that the people paying labor costs are not necessarily the same people paying wages so putting pressure on one doesn't necessarily get a result from the other.

Just look at Walmart. They don't offer a living wage, so they fix their employees up with every last social program the locality offers. And as a citizen you don't even get to opt out of that. Ordinarily, when you disagree with any business, the first step would be to boycott it, but you can't, you cannot opt out of your taxes going to food stamps and housing subsidies for those working at Walmart under the living-wage threshold.

Especially insidious: work requirement for people on food stamps.

Why not tie housing price to minimum wage? We don't end up in a feed back loop that explode unlike in your example.

Likely means some type of purchase power parity calculation.

Now to how big area should the minimum wage apply to is more complicated question. And should it be based on where the job is or where the employee lives.

The U.K. has massively increased minimum wage over he last decade or so, but this has meant people who used to be on 50-100% more than minimum wage are now finding themselves on the same wage as shelf stackers.

They are of course now questioning why they bothered to do so much training, incurring debt and lost opportunity, to find everyone on the same wage.

Seems like they need to organize/unionize then, no? Their failure to do so isn’t the “shelf stackers’” fault. If anything, this gives them leverage to get paid more. But they have to use it, because capitalists will never pay someone fairly if they don’t fight for it.

A job is worth only so much. When wages raise above that amount those jobs disappear. Street sweepers are one example.

Yes, well, many young programmers today are finding it increasingly difficult to find a good job out of school, what with all the new AI tools and general diffusion of the skill across the global population.

The skills required to be a "shelf stacker" are generally taught in public schools. What did you think would happen when they started teaching all these kids to program as well? There is a good reason why these giant tech companies kept lobbying for, and creating school programs centered around code-education, and I hope you realize it wasn't purely philanthropic.

Exactly. It's an economic *system*. Change X and there is impact not only on W and Y but perhaps also V and Z. So to say, "Look! We raised the min wage and people earned more money. That's the bottomline", is naive at best.

Furthermore (re: California), increasing the min wage is not a fix for the housing supply and associated failed policies.

Marx always emphasised the general law of capitalist accumulation: no matter what temporary victories a local population might win (wage increases, stable housing, free education and healthcare, etc.), as long as Capital continues to dominate the social world, people will always be enslaved to the conditions of the market, and every effort will be made to extract as much surplus value as possible, since its what produces the most productivity and profit in the capitalist system.

They really should turn their ire towards their employers, not resent shelf stackers for making the same wage. They have all this training, debt, and lost opportunity, and their employers still pay them minimum wage? That doesn't seem acceptable to me. And it doesn't have anything to do with the shelf stackers.

Market value has to be considered though, can't blame a car mechanic for being pissed that regulations force a shelf stocker, a lower value/difficulty job, to be paid the same (above fair market value).

Car mechanic should be pissed: at his employer, not at the government. His employer is the one choosing to pay him the same as a shelf stocker.

In a functioning labor market with empowered workers, all wages would rise to reflect the skill/scarcity gap between minimum wage work and skilled work.

If all wages rise, than inflations rises along with it… to cancel out the wage rises in practice (unless productivity improves). As the last few years have shown.

So what you're saying is, under this theory, increases in productivity create real improvements in people's purchasing power?

In that case, how do you explain the last 40+ years, where productivity has been skyrocketing, but most peoples purchasing power has remained mostly flat?

Or is it your contention that there is nothing we can do that can increase the purchasing power of regular people under the current system? Because if that's the case, that would be a pretty massive indictment of the system as a whole.

What are you talking about?

Most people’s effective purchasing power have skyrocketed.

e.g. A single solar panel 40 years ago would have been more than a years‘s income for the median American. (And much less efficient too)

Even the crappiest healthcare plans nowadays offers options beyond what the absolute top of the line healthcare plans offered 40 years ago.

Approximately no one who is having trouble affording bread and eggs cares that solar panels are vastly more affordable.

So your just going to ignore the healthcare example that every passing reader can clearly see? Really?

And btw eggs are also roughly the same or even cheaper for the median American income compared to over 40 years ago.

My point is that you can cherry-pick specific examples all you like, but the data clearly shows that the purchasing power (real wages, whatever term you prefer) of average Americans has stayed (nearly) flat for the past 40+ years.

What data? Why not just link it?

Everything I’ve seen suggests otherwise, a big net positive even after factoring in everything.

Then you must have only been looking at horrendously biased sources.

This is incredibly common knowledge. It's very widely reported. Just Google "real wages vs productivity graphs".

It seems you’re confusing these concepts? Purchasing power is NOT equivalent to productivity.

What do you mean by "choosing".

But even that isn't the true bottom line. If you want the true bottom line, you have to ask: What is the net effect on utility for the entire population?

That's one zoom level. Another one that's just as relevant is: What is the effect on me, personally? And there are other zoom levels in between.

None of these zoom levels are more "true" than the others.

The government's job is to pass laws that benefit the population at large. They could pass a law saying "skybrian gets $100,000,000/yr" and it would be awesome for you. It would be a stupid law.

Yes, of course. But which population? Most of us aren't national politicians. A mayor, for example, might be more interested in what the effect is for their city.

Its job is also to protect minorities...

The government’s job is to pass laws that the people asked for. While it is reasonable to think that the population will act in its own self-interest, that is not a requirement.

> The government’s job is to pass laws that the people asked for

Many governments appear to have lost their way...or more likely they just define "the people" as the folks who donate to their next campaign.

Most likely the people have lost their way. It is pretty clear the vast majority of people standing amongst us have never even talked to the government to say what laws they want – or what laws they don't want – even just once in their life, let alone on an ongoing basis as is required for government to know what to do as time marches forward. For better or worse, government is not made of mind readers. So, government has to go on what the small few people who do voice their position have to say.

Government is merely the term that identifies a group of employees who work for the people. If said employees are not doing their job well, that's not on the employees, that's on bad management at the top. A fish rots from the head down, as they say.

You can zoom out even more to, "What's the effect on all of future humanity?" Though that's much more difficult to answer, why should we discount them for the only inconvenience of not being born yet?

You can, but which timeline? Predicting the future is very difficult, so I prefer to stick with actually existing people. Expectant parents should probably take a different point of view, though!

Even in the abstract, do we have any responsibility to future humanity? Does this extend to economic policy?

Again you have to specify specific timelines, otherwise it would be an infinite number of potential futures, with an infinite responsibility in the abstract.

This is a good place to remind ourselves that we shouldn't let perfect get in the way of good.

This doesn’t make sense, it’s not dependent on quality. You literally would have to spend an infinite amount of time pondering an infinite number of possible futures to accomplish anything, at even the lowest possible amount of ‘good’.

Hence it’s physically impossible to advance a single nanometer on this line of reasoning.

How do you advance decisions about yourself when there's an infinite number of future possibilities for you?

I pick a finite number of possibilities and ignore the rest?

This is genuinely surprising to me, do you not understand how people make decisions?

Why does that work for you, but doesn't extend when considering others? Simply make n>1, no?

I’m really not sure how else to put this… there are 8 billion plus people, each with their own, not entirely identical, desires. Just as complex as your own, some so much more complex that you literally can not keep up with them (assuming there are some bonafide super geniuses out there).

How could you possibly extend this to all of them without running into an even more intractable problem?

This is a serious question. Why not pick a finite number of possibilities and ignore the rest?

Yes that’s my point, and because you want to ‘extend’ to ‘n>1’, this is doubly impossible without picking.

i.e. you literally cannot accomplish this otherwise, even for the simplest case of n=2, with certainty. Since there’s always a non zero possibility of any chosen person becoming much smarter and wiser than you in the future.

Via ignoring the infinite number of futures where they do.

The infinities have the same cardinality. Any consideration of a finite subset still ignores an infinite number of unconsidered possibilities whether n=1 or not.

Besides, any choice you make for yourself has an impact on others in the second order. Ignoring it makes the problem worse. No one is a isolated system, no man an island.

Yes that’s my point, n=1 is already impossible, n>1 even more so.

How can something be more impossible? Impossiblity is boolean.

Stop messing around. Take the lesson learned and move on out of here, I’m being generous but someone less patient would have flagged this by now.

Digging an ever deeper hole for yourself at this point is distracting from the actual post.

There's always the possibility of going back, re-reading and changing your mind. What's the worst that could happen if you believed that you could make decisions while keeping in mind other people?

This seems like ignoring the previous comment, so take it or leave it, the previous points are still there.

Not quite. https://en.wikipedia.org/wiki/Utility_monster

Would be great if there was a non-profit that kept track of inflation per country and suggested the appropriate yearly wage increase for all workers. Or at least let people know how much their relative salary is decreasing when it stays the same.

This way less people would get screwed by inflation, or at least keep track of reality

You could link it to congressional/senate salaries. Whenever they want a pay raise because of 'rising cost of living' or whatever - minimum wage goes up the same amount.

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