Almost Everything You Have Been Told About The Minimum Wage Is False | Hacker News Reader

Almost Everything You Have Been Told About The Minimum Wage Is False

forbes.com

14 pointsmrfusion11 comments

This article starts out with some bad assumptions, namely that raising the minimum wage would only affect workers who are "at or below minimum wage" - a group claimed to be 31% teenagers.

However, a more intellectually honest statistic would be to look at the populations at or below a proposed new minimum wage (say $10/hr), which you'd find is a much larger portion of the US population and a much smaller percentage of teenagers.

It also discounts people who currently do not work, because the amount of additional pay (after taxes and reduced benefits due to having a higher income) is so minuscule compared to the amount of time they have to spend. If the minimum wage was raised, it may lead to more people actually seeking work, since they difference between not working and being paid welfare, and working and having reduced welfare (maybe even going off it completely) is higher, and this guy ignores that as well.

yes reeks of a "think tank" massaging the figures to support a hard right political line - it also ignores the effect of in work benefits (ie joe tax payer subsidizing poor employers).

Its telling that George Osbourn the conservative chancellor of the exchequer wants to increase the minimum wage in the UK to reduce the vast amount of tax subsidy he has to pay out.

Yes. If one were to analyze the effects of a minimum wage, why would one look at the minimum wage itself? The minimum wage is a price floor that can only drive wages up. It would be logical to understand that an hourly wage ( for example, minimum wage + $0.50) is a function of the minimum wage.

> The minimum wage is a price floor that can only drive wages up

Not quite true. It can also drive people out of work. If you include all the people who lose their jobs (counting their new wage as $0/hour), the average wage paid to all the people involved might easily decline when the minimum wage rate is increased.

Read the rest of the article - it goes on to discuss those making less than $9.50. (Not $10.10, because the stats available apparently aren't broken down in a way that makes it easy to isolate that group - the article mentions that too.)

This clown is making a pretty myopic argument.

The weakest part by far (paraphrasing): "Since food service worker productivity hasn't increased over the past 27 years, neither should their wages."

So when you sit down at a restaurant in 2014 compared to 1987, you're paying significantly more for your dinner. Why? The owner has higher operating costs in 2014 than in 1987. Fuel costs more, which means the production and delivery of fresh food to his restaurant is more expensive. Rent is also higher. This isn't complicated, I'm basically describing the effects of inflation.

So even though the restaurant isn't any more productive for its customers in 2014, it costs significantly more, because the restaurant owner is passing off his rising costs to the customers.

I'm sure if you pointed this out to Mr. Dorfman, he'd be fine with it. The system works! But as soon as we suggest raising the cook's wages in proportion with the owner's profits and the customer's bill, he gets enraged, starts sputtering about government forcing business to give handouts to greedy lazy bottom-feeders (who aren't actually poor, apparently?).

In reality, there's only one difference between the restaurant owner and the cook: The owner has leverage to increase the amount of money he gets (raising the price of a sandwich), while the cook doesn't. Neither the owner nor the cook has increased productivity whatsoever in the past 27 years, and expecting significant gains would be insane.

The restaurant industry has been around for millennia with only a handful of major improvements to productivity, none of which have happened in the past 30 years. Yet somehow, this is solely the fault of the cook.

From the comments section, a telling quote from this imbecile: "Why is it 'true' that full time work should be enough to meet all your basic needs (which is undefined anyway)?"

...you don't need an undergraduate Econ degree to answer that one. If you're working full time and it's not enough to support your basic needs, you're going to die.

>"Having established that the number of minimum wage workers is small and shrinking, that most minimum wage workers are not poor, and that most of them are young and working their way up the ladder"

Except it doesn't.

It says that 2.5% are on or below minimum wage, that's 3.6 million people and doesn't include those on slightly above minimum wage, that would be affected by the changes. That's a significant number of people.

45% of minimum wage workers are over 25 years of age, so not that young.

And I really don't know how Mr Dorfman thinks he has established that they are 'not poor'.

Here - someone did the few minutes of Google searching and rational analysis that Dorfman didn't have time for, you know, to keep this piece from being complete bullshit.

http://www.mathofpolitics.com/2014/01/30/poor-work-counting-...

I was going to say this was just more partisan bickering, but at the end he does offer a credible solution: Raising the Earned Income tax credit. This is actually a good idea.

Unfortunately it won't gain any traction because it's not drama. I wonder how we could make increasing the EIC a more exciting, dramatic and controversial issue so the media will cover it.

As another comment by calciphus points out, the data is completely wrong. Yet, let's assume for a second that it's not. If so few people are affected by the minimum wage, why would there be so much opposition to raising it?

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