Ep. 93 The Seattle Minimum Wage Policy Is a Disaster

30 June 2017     |     Tom Woods     |     17

The official study commissioned by the city of Seattle is painting a grim picture of the consequences of the minimum wage increase in that city thus far.

Posts Discussed

The Seattle Minimum Wage Study,” by Alex Tabarrok
The Minimum Wage: Evidence from a Danish Discontinuity,” by Alex Tabarrok

Background

Raising the Minimum Wage: Misguided Policy, Unintended Consequences,” by Bob Murphy, Charles Lammam, and Hugh MacIntyre

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  • davegrille

    If a person has achieved a salary of ten dollars an hour in the labor market,keep a job at fifteen dollars an hour?

  • batymahn

    What does Krugman say about Illinois (and Connecticut) financial situation(s).

  • David Zientara

    I wonder what the family crisis was…perhaps one of his children was found under the sink with a flashlight reading a copy of Human Action?

  • Guide To Liberty

    I really enjoyed this episode! Maybe in the future whenever Krugman engages in his repeated rants against Donald Trump/GOP, Bob and Tom can just pick a recent economic news item and discuss it.

  • http://2vnews.com 2VNews

    The value of your labor is mainly set by the amount people are willing to pay for the product you produce or service you perform.

  • http://2vnews.com 2VNews

    Everything is not an issue in need of a law or statute. Waving the magic government wand at businesses does not magically fix everything.

  • http://2vnews.com 2VNews

    If you feel workers should get better benefits and higher wages, then go start a business and offer these things to your workers. Lead by example and out compete those who pay less, instead of dictating to people who are actually providing jobs. Or start a non-profit that will train, educate and help people stuck in low paying jobs develop new skills so they can get higher paying jobs.

  • http://2vnews.com 2VNews

    It is not about what people deserve or what is fair or what is just; it is about what the market will bear. Blame the consumer for shopping for the lowest price and blame the voter for voting for government to fix their problems.

  • http://2vnews.com 2VNews

    It is about supply and demand. If you have an easy time filling your employee needs, you offer lower wages, if you have a hard time filling your employee needs, you offer higher wages; because if you do not your competition will and you will be out of business.

  • http://2vnews.com 2VNews

    Any increase in the minimum wage would only be a temporary relief to some as jobs, other wages and prices rebalance around the increase. It will hurt unskilled workers looking for their first job.

  • http://2vnews.com 2VNews

    There is no such thing as a livable wage; there is only a wage that someone can afford to pay. You have to tailor your living around your wage, not have government tailor your wage around your living.

  • http://2vnews.com 2VNews

    Middle class is a byproduct of a market economy without excessive regulation, it isn’t manufactured by government redistribution of wealth, minimum wage laws or a politician’s tax gimmicks.

  • http://2vnews.com 2VNews

    Solutions:
    Abolish the tax code,16th Amendment and IRS.
    Enact the Fair Tax.
    Minimize regulations to only what is absolutely necessary.
    Balance the budget.
    Start decreasing the national debt.
    Abolish the Federal Reserve, the FDIC and all bank regulations.
    Treat gold, silver and cryptocurrencies as legal tender (not as assets) for tax purposes.

  • Winston Ewert

    Regarding the seeming paradox about the large drop in low wage restaurant workers implying a large gain in high wage workers: it seems to me that any employer makes a choice as to the best skill level to hire. Market forces will tend to equalize the profit from either choice. If law makes the unskilled more expensive, that would be expected to shift the balance decisively to more skilled workers.

  • Uffe Merrild

    A bit of info from Denmark:

    I was working for a law firm from 15-18yrs of age. My task was to deliver the mail to the other law firms in town, as well as carry checks to the banks etc.

    Everyone with this type of job was routinely fired at the age of 18. Back in the 90s the wage set by the union jumped from 48kr/hr to 84kr/hr when anyone turned 18 and had a job at a law firm.

    There’s also another thing going on when you turn 18, you become eligible for universal student aid. The data from my experience was that I would stop working for the law firm and take up the student aid from the government.

    I would be working 4-6hrs a week getting roughly 1200kr per month, and as a student on the government payroll I’d get the same amount of money for not doing anything.

    So there you have it, government subsidises you when the time in your life comes where the employer because of unions fire you. How’s that for a nice bit of “education” of the masses? Your employer is bad and fires you, but the government is a sweetie-pie and gives you money.

    Oh and by the way, I wasn’t fired, I quit 20 days prior to my 18th birthday. And the employer was my father. Pretty funny now that I think of it.

  • Kristian

    Quick question for you guys.The typical Bernie sanders Robert Reich mantra seems to be unions lift wages overall without consequence (they claim that its why our incomes have not grown since the late 90s early 2000s)…my understanding and again correct me if I’m wrong is that in the empirical literature minimum wages for most studies (I’m thinking of Neumark’s 06 meta analysis) cause unemployment, whereas with unions it seems to have settled with the opposite conclusion at least of what I have seen that unions effects are net positive (ie free lunch utility welfare enhancing), what am I missing?

  • Graham Murray

    I’m a masonry contractor in Washington state and just want to point out another factor that most are not talking about. There are relatively high payroll taxes here that compound the minimum wage law problems. For example – in my industry (non union construction) I pay almost ten dollars per hour, per employee in payroll taxes. Yes, some tax is shared by the employee, but most is not.
    So, when I hire someone young and/or no experience for $13 per hr minimum wage, they actually cost $23 per hr. Very difficult to make that work, especially for a small or start-up business.