Consequences of repealing minimum wage rates.

That's a pathetic effort! You have to show any unemployment effect is due to minimum wages. Try again

 

You ignore the obvious, how Reiver....

 

It isn't possible to ignore the obvious: you were asked to show how minimum wage keeps a lot of kids out of the job market. You've given raw data that doesn't even mention minimum wages. Shoddy doesn't do that justice.

 

Here's an example whilst I wait for you to provide something relevant:

Giuliano (2013, Minimum Wage Effects on Employment, Substitution, and the Teenage Labor Supply: Evidence from Personnel Data, Journal of Labor Economics, Vol. 31, pp. 155-194)
[FONT=&amp]Using personnel data from a large US retail firm, I examine the firm's response to the 1996 federal minimum wage increase. Compulsory increases in average wages had negative but statistically insignificant effects on overall employment. However, increases in the relative wages of teenagers led to significant increases in the relative employment of teenagers, especially younger and more affluent teenagers. Further analysis suggests a pattern consistent with noncompetitive models. Where the legislation affected mainly the wages of teenagers and so was only moderately binding, it led both to higher teenage labor market participation and to higher absolute employment of teenagers[/FONT]

 

Sorry, but I have to question that. When I first started working, minimum wage was $3.10. And then it raised to $3.35 where it was from 1981-1989. Teens who want to work will go out and get jobs, others will continue to do what they are doing, nothing and living off of their parents. I think "Teen Employment" has more to do with family and household dynamics then anything else. Because I knew plenty of kids who were forbidden by their parents from getting jobs until after they turned 18.

 

There are of course numerous factors behind teenage participation and employment rates. However, this only informs us that we need an empirical methodology that isolates minimum wage effects. The paper referenced achieves that.

 

Minimum wage not only effects teens, but all that haven't had the benefit of "affluence".

 

You've been given a study that concludes that your argument over teen participation effects was tosh. Will you adjust your outlook or simply assume that an inaccurate position is valid?

 

Unemployed Youth:

Not Amused, due to the amended Fair Labor Standards act of 1996 an employer is legally required to pay a youth under the age of 21 years of age only $4.25/Hr for the first 90 days from their hiring initial hiring date.

[Refer to “Fact Sheet #32: Youth Minimum Wage - Fair Labor Standards Act”,
http://www.dol.gov/whd/regs/compliance/whdfs32.pdf ].

This provision of law encourages age preference for youth and thus indirectly is of some disadvantage to many others.
The law’s explicitly drafted to prohibit displacement of any or all others to enable hiring youths at cheaper wage rates; but I think that will be difficult to enforce.

I would suppose this $4.25 minimum rate is not applicable youths returning to the same employer during their school break during next year’s summer.

I don’t believe that the application of the $4.25 rate is applicable for each employer within a series of employers. If that’s the case, I foresee youths working for a series of independent contractors that are working for the same client but employed by a series of unproven but related or client chosen independent contracted enterprises.

Eliminating the federal minimum wage rate to reduce youths' high rate of unemployment would reduce the purchasing power of all wages and salary earners and increase poverty among wage earning families currently and for the remainder of their lives. I suspect that this new sub-minimal wage rate for youths may have a lesser but similar effect upon our economy.

Respectfully, Supposn

 

The minimum wage has very little impact on poverty. In addition, eliminating the minimum wage is likely to increase unemployment. Your argument is built on invalidity

 

Reiver, you’re generally peering through the wrong end of telescopes, and usually fail to correctly perceive reality.
You, as do many opponents believe that the minimum wage only affects the very poorest of the working poor. Except in the cases of jobs requiring labor that’s in short supply, all wage scales are related to each other; (i.e. the rising tide raises all boats). The minimum and all job rates are related but less so if there are labor shortages for particular jobs.

The relationship is inverse to the difference between the minimum and the jobs’ rates’ purchasing powers; (i.e. proportionally the minimum rate is of greater benefit to lesser earners and of lesser benefit to greater earners purchasing powers but all employees somewhat benefit from the minimum rate).
Thus the minimum rate significantly increases the earners’ purchasing powers for no less than the lowest quarter of USA’s entire full time employee population.

Respectfully, Supposn

 

Given your disregard of economic evidence, I'd typically be on a loser if I had your support.

The empirical evidence shows that poverty effects are minor. You pretend otherwise in order to peddle this new script you've got going over purchasing power. It won't be an effective strategy.

 

That doesn't apply in states with their own minimum wage.

Ignoring that, an employer that has work that only generates $4.25 an hour + benefits (SSI / Medicare / unemployment / etc.) worth of value, is forced to terminate and hire every 90 days. There is no "path" from $4.25 to $7.25 an hour.

In addition, a dedicated kid may stay employed through a series of 90 day employments. That may provide job experience, but it could also look like they can't hold a job.

QUOTE=Supposn;1062834644]Eliminating the federal minimum wage rate to reduce youths' high rate of unemployment would reduce the purchasing power of all wages and salary earners and increase poverty among wage earning families currently and for the remainder of their lives. I suspect that this new sub-minimal wage rate for youths may have a lesser but similar effect upon our economy.

Respectfully, Supposn [/QUOTE]Again, only a small portion of the workforce is at minimum wage, where is the proof that lowering minimum wage lowers all wages?

Here is a study that provides some insight into minimum wage, and unemployment / under-employment.

http://www.socsci.uci.edu/~dneumark/min_wage_review.pdf

 

A meta-analysis of course wouldn't agree with their conclusions, demonstrating that the majority of research shows either insignificant effects or positive effects on employment

 

Do you confirm your biases by picking and choosing the studies you believe?

 

You've done that, not me. I've referred to the available meta-analysis. That depends on the period of study. Thus, if earlier studies are included the conclusion is insignificant disemployment effects (Doucouliagos and Stanley, 2009, Publication Selection Bias in Minimum Wage Research? A Meta-Regression Analysis, British Journal of Industrial Relations, Vol. 47, no. 2, pp. 406-428 ). If only latter studies are used , arguably by eliminating earlier empirical bias, then positive effects are found (a forthcoming article from Wolfson and Belman)

 

Another pay per view paper that confirms your bias.

How many regressions were run until they got the answers they wanted?

 

Not Amused, the only wage discussed in the abstract of David Neumark and William L. Wascher’s paper is THE MINIMUM WAGE.
(Refer to the last paragraph of post #211). Again, the minimum wage affects ALL wage scales and it significantly affects no less the least earning quarter segment of USA’s entire full time employees population.

I too am concerned about minimum wage’s affect upon those less desired by employers.
There are many more of that are not considered as unemployed because they have no reason to hope and are not considered as seeking employment. If the minimum rate would be eliminated, many of those people would be employed at extremely low wages. So many more jobs will be created and so many more people will now be seeking employment at those extremely low wages that the unemployment rate, (retaining our present method of calculation) is difficult to predict.

The rate’s change may be no significant difference and one can say with any reasonable confidence if the change would be positive or negative. What I’m reasonably certain of is those low wages would severely reduce the purchasing power of the median wage thus indicating that they have rippled through our entire economy.

Currently many, if not most of the working poor receive little or no public assistance. These wages will have so little purchasing power that ALL of the working poor will be in dire need of public assistance. Regardless of the elimination of the federal minimum wage rate’s affect upon on our unemployment rate it would be of significant net detriment to our economy; national poverty would increase.

Respectfully, Supposn

 

Nope, two properly conducted meta-analysis that demonstrate that the majority of research confirms either insignificant or positive effects. The days of Brown, Gilroy and Kohen are long gone!

The analysis is based on a huge number of estimates by other researchers. It is an accepted means to review the nature of the findings.

Don't like the results? Well you've already been shown to prefer spurious conclusion over empirical analysis, as shown by your unsupportable comments over teen participation rates.

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Nope. It narrows wage differentials. The idea that it impacts on all wage rates has been dismissed for some time (and was inappropriately used in macroeconomic modelling to assume large disemployment effects)

 

Did you watch the analysis and make sure they didn't discard inconvenient data, or regression results? How many regressions did they run, and what was the result from each?

"Empirical analysis" I have to pay to see.

It is odd that I can find papers in the public domain, and you can only find papers that were only suitable for journals. But, they are peer reviewed papers you say. How many peers reviewed the paper, and did their comments change the content of the paper?

 

Yep. The first paper, for example, is based on 1,474 estimated minimum-wage elasticities

I don't have any problem accessing the available evidence. Clearly you have more of a problem than access, as shown how you were prepared to misrepresent teen participation effects.

You could look up the working paper versions. I don't tend to use them as they haven't been through quality control.

Typically there is 2 or 3 referees. Authors have to respond to all comments (assuming it isn't an out-right rejection) or they aren't accepted for publication

 

Within labor markets lacking an enforced legally mandated minimum wage rate, an indefinite market determined minimum rate will emerge. An indefinite minimum rate is “a race to the bottom”.

Lobbyist for the elimination of the federal minimum wage, (FMW) laws are contending that the legally enforced FMW rate should be replaced by an indefinite minimum that would practically always of drastically lesser purchasing power than that of the FMW’s rate; (i.e. An indefinite minimum rate that’s “a race to the bottom&#8221.

Those Lobbyists avoid explicitly stating their implied contention that the working poor are generally at equally advantageous negotiating positions as that of their potential and/or actual employers.

There are examples of legislators of all levels of governments’ within the USA having explicitly described and prohibited practices that they determined to be clearly detrimental to the populations and/or enterprises within their jurisdictions. That’s the justification for the FMW laws.

I’m a proponent of a federal minimum wage rate pegged to the cost/price index in the same manner as our Social Security retirement benefits’ annual cost of living adjustments.

Respectfully, Supposn

 

The minimum wage discriminates against the poor because it denies them a job and an opportunity to advance.

The "race to the bottom" is an impossibility because the job market is a voluntary one. You cannot pay your workers 10 cents a day because I'll gladly hire them for a much higher wage. Both of us have to respond to supply demand considerations, we don't operate in a vacuum.

 

Actually, the majority of those I know of who are trying to abolish the Federal Minimum Wage are actually trying to do what I believe really needs to be done:

Replace a poor "one size fits all" Federal guideline with more appropriate State and Local guidelines.

All to often, changes in the minimum wage impact rural areas and states much more then the big cities. They will try to use Los Angeles or New York with $2,000+ monthly rents, and use that to try and convince people that higher wages are needed.

Meanwhile the same Federal standards are forced into places which have much lower standards of living. Like Southern Alabama, where $300-500 is more the standard for rent.

They also tend to forget that only a small percentage of people in the country even make "minimum wage". In fact, nationally it is below 10%.

http://www.bls.gov/cps/minwage2011.htm

So why are we trying to obsess so much over the bottom 10% on a national level, when this really needs to be a state or local level? Should the Minimum Wage in rural Mississippi really be the same as in a suburb of Chicago? Does the minimum wage in Alabama need to be the same as that in Oregon?

I for one agree, there should be no such thing as a "Federal Minimum Wage". Let each state, county and city set it's own standards.

 

Yet relegating it to the states (which is an improvement) is still a one size fits all prescription.

Why not let me decide if I want to work for $3 an hour? Anything is better than sitting at home doing nothing or collecting unemployment.