Does increasing the minimum wage cost jobs?

rdowns

macrumors Penryn
Original poster
Jul 11, 2003
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We already have studies showing it doesn't from past hikes.


The 13 U.S. states that increased their minimum wages on January 1 saw higher employment growth, on average, than the states where the minimum wage didn't change, according to an analysis by the Center for Economic Policy Research, a progressive think tank.

Four states passed laws to raise wages, while nine others had automatic wage increases pegged to inflation. The employment rate rose 0.99 percent, on average, in those states in the first five months of 2014, according to the CEPR. Employment rose by just 0.68 percent, on average, during that same period in the 37 states that didn't raise wages.

But economic research has shown this simply isn't the case. Take San Francisco, where the minimum wage, $10.74 an hour, is one of the highest in the country. The city has seen faster job growth than any other big city over the past 10 years. Likewise, Washington state, which has the highest state minimum wage in the country at $9.32, has seen faster job growth than any other state.
http://www.huffingtonpost.com/2014/07/10/minimum-wage-kill-jobs_n_5571412.html?awesm=ofa.bo_g0Bh
 

Southern Dad

macrumors 68000
May 23, 2010
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Shady Dale, Georgia
If you increase minimum wage, it results in an "in kind" increase for some of the production departments that I have to deal with. It also makes some equipment that I've considered to be too costly for the return to look better. Yes, that equipment runs with far less people.

McDonald's and other fast food are already looking at kiosks to replace counter people.
 

vrDrew

macrumors 65816
Jan 31, 2010
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McDonald's and other fast food are already looking at kiosks to replace counter people.
At a certain level, that would be an economic and societal blessing.

Because, truth be told, the level of customer service you get for the minimum wages that McDonalds pays most of its counter people, you'd be better off dealing with a kiosk. I wouldn't have to tell a kiosk three times how many creams to put in my coffee. And a kiosk wouldn't argue with me when I gave it $11.25 for a $6.05 meal.
 
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LIVEFRMNYC

macrumors 604
Oct 27, 2009
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McDonald's and other fast food are already looking at kiosks to replace counter people.
I doubt that would work on a large scale. Orders are too diverse and people love substituting parts of meals(like a soft drink for a smoothie). Also, some orders are just weird. Maybe just one counter as a kiosk that only allows orders of numbered meals.
 

Southern Dad

macrumors 68000
May 23, 2010
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Shady Dale, Georgia
At a certain level, that would be an economic and societal blessing.

Because, truth be told, the level of customer service you get for the minimum wages that McDonalds pays most of its counter people, you'd be better off dealing with a kiosk. I wouldn't have to tell a kiosk three times how many creams to put in my coffee. And a kiosk wouldn't argue with me when I gave it $11.25 for a $6.05 meal.
You may have a point there...

I doubt that would work on a large scale. Orders are too diverse and people love substituting parts of meals(like a soft drink for a smoothie). Also, some orders are just weird. Maybe just one counter as a kiosk that only allows orders of numbered meals.
Really? A company called Wa Wa has been doing it for years. They do deli sandwiches. That's even more difficult than burgers.
 

jnpy!$4g3cwk

macrumors 65816
Feb 11, 2010
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Studies that address the job loss myth:[/B


I think the evidence clearly shows that in large urban areas (AKA "the big city") minimum wage increases are generally good for the economy.

If there is a concern, it would be that in Monroe, Walton Co., GA, USA, prevailing wages and prices are significantly lower than the national average, so, it could hurt the local economy. Or is that Walton, Monroe Co., GA, USA? I can never remember which.

If we are to get serious about using minimum wage as a tool to help fight inequality, it probably needs some kind of fairly sophisticated "locality" adjustment.
 

LIVEFRMNYC

macrumors 604
Oct 27, 2009
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Really? A company called Wa Wa has been doing it for years. They do deli sandwiches. That's even more difficult than burgers.
Wa Wa is a different type of environment, same as Subway. Their rate of serving customers is no way near the rate of McDonalds. You think a bunch of kiosks at the morning rush or noon lunch in a major city can keep up with the productivity of actual people at the counters? I doubt a kiosk gives the heads up to start making a non popular item before the order is complete. I doubt a kiosk recommends meals on a large order to lower the cost for the customer, and if it does, it will confuse the customer vs a real person explaining it.

Too many variables that a kiosk can't handle. For example, no kiosk can give explanations of what exactly certain foods, sauces, salads, and etc are, or special requests. Hey kiosk, I want a fresh batch of fries. Then you have the insane coffee requests.

Maybe in smaller towns having one kiosk at the side or as a drive thru option might work. But it will not work in populated areas, and would also have to deal with frequent out of service moments.
 

localoid

macrumors 68020
Feb 20, 2007
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America's Third World
I think the evidence clearly shows that in large urban areas (AKA "the big city") minimum wage increases are generally good for the economy.

If there is a concern, it would be that in Monroe, Walton Co., GA, USA, prevailing wages and prices are significantly lower than the national average, so, it could hurt the local economy. Or is that Walton, Monroe Co., GA, USA? I can never remember which.

If we are to get serious about using minimum wage as a tool to help fight inequality, it probably needs some kind of fairly sophisticated "locality" adjustment.
Are there any studies you can cite that support your theory?
 

Ledgem

macrumors 68000
Jan 18, 2008
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Hawaii, USA
If you increase minimum wage, it results in an "in kind" increase for some of the production departments that I have to deal with. It also makes some equipment that I've considered to be too costly for the return to look better. Yes, that equipment runs with far less people.
You're right, but you're only looking at one part of the equation. You're focusing on the fact that personnel will cost more to a company. This would force a company to raise the cost of its products and services or accept a lower overall profitability (or, ideally, pay the guys at the top a bit less and not change much else).

The part that you're neglecting is what happens to the overall economy when the average worker has more money. What do most people do with money? They spend it! More people spending more money causes an increased demand for products. That's good for business. Do you know of any country that has a strong economy based off of selling high-priced items to a relatively small group of people? I don't.

There was a wealthy philanthropist who had a quote on this subject that I found insightful. She said something along the lines of 'money is like blood: if you attempt to hoard it and stop its flow then it stagnates and spoils, harming the greater body. Prosperity occurs when it flows through society freely and evenly.' Isn't this a concept that Henry Ford was a proponent of, as well? A business needs demand for its products to continue to operate, and that demand is only present if you have people who want and can afford your products.
 

Southern Dad

macrumors 68000
May 23, 2010
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Shady Dale, Georgia
Wa Wa is a different type of environment, same as Subway. Their rate of serving customers is no way near the rate of McDonalds. You think a bunch of kiosks at the morning rush or noon lunch in a major city can keep up with the productivity of actual people at the counters? I doubt a kiosk gives the heads up to start making a non popular item before the order is complete. I doubt a kiosk recommends meals on a large order to lower the cost for the customer, and if it does, it will confuse the customer vs a real person explaining it.

Too many variables that a kiosk can't handle. For example, no kiosk can give explanations of what exactly certain foods, sauces, salads, and etc are, or special requests. Hey kiosk, I want a fresh batch of fries. Then you have the insane coffee requests.

Maybe in smaller towns having one kiosk at the side or as a drive thru option might work. But it will not work in populated areas, and would also have to deal with frequent out of service moments.
Right... And ATM's would never put bank tellers out of work.
 

impulse462

macrumors 68000
Jun 3, 2009
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Really? A company called Wa Wa has been doing it for years. They do deli sandwiches. That's even more difficult than burgers.
Deli sandwiches are made with the intention of people swapping toppings out unlike burgers. But you're right it would probably be easy to implement.
 

tunerX

Suspended
Nov 5, 2009
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Deli sandwiches are made with the intention of people swapping toppings out unlike burgers. But you're right it would probably be easy to implement.
Wa Wa still requires a counter person. You enter your semi custom order at a touch screen kiosk and get a ticket. You take your ticket to the main counter and pay for it there. Then you go back to the deli counter and pick up your order when it is ready.
 

localoid

macrumors 68020
Feb 20, 2007
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America's Third World
Right... And ATM's would never put bank tellers out of work.
Actually, "employment of tellers is projected to show little or no change from 2012 to 2022", to quote from BLS's Occupational Outlook Handbook

Job Outlook: Tellers
Percent change in employment, projected 2012-22
Tellers
1%

Job Outlook
Employment of tellers is projected to show little or no change from 2012 to 2022.

Past job growth for tellers was driven by a rapid expansion of bank branches, where most tellers work. However, the growth of bank branches is expected to slow because of both changes to the industry and the abundance of banks in certain areas.

In addition, online and mobile banking allows customers to handle many transactions traditionally handled by tellers. As more people use online banking, fewer bank customers will visit the teller window. This will result in decreased demand for tellers. Some banks also are developing systems that allow customers to interact with tellers through webcams at ATMs. This technology will allow tellers to service a greater number of customers from one location, reducing the number of tellers needed for each bank.

Job Prospects
Job prospects for tellers should be excellent because many workers leave this occupation.
.
 

tshrimp

macrumors 6502
Mar 30, 2012
366
2,658
I am not going to link to anything for my comment, so take it as you will.

I did a report back in college. Way before the internet I am sad to say. All we had to rely on was our own research. For my report (for a speech I was to give in class) I interviewed several store owner. All were retail from what I remember, and all of them stated when the minimum wage went up they would be letting people go as well as raising prices.

Far from scientific, and a very small sample.

Another issue that is not always seen is that when prices go up the dollar does not go as far hence a salaried employee ends up with a pay cut due to higher cost of living.

Raising the minimum wage always looks great on paper, but not sure about the actually reality.
 

vrDrew

macrumors 65816
Jan 31, 2010
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How about from 1952 to 2012? Oh wait..
Look, technology has always caused changes in employment and jobs. Powered looms put weavers out of work. Cotton gins likewise. And automobiles put an end to buggy whip makers.

But any rational economist will tell you that in aggregate we all end up richer as a result. And the descendants of those unemployed Lancashire weavers of 1840 live a life incredibly richer than their forbears.

So lets not lose too much sleep over the minimum-wage McDonalds counter person. Or the near-minimum wage bank teller of 1985. Hopefully, given a modicum of training, they'll end up with a much better, rewarding and productive job. One that benefits the entire economy.

I'm still trying to understand why a Conservative doesn't understand this sort of economics.
 

tshrimp

macrumors 6502
Mar 30, 2012
366
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Read any of the studies I posted, which are all "reality based".
Mine was real...well it was college...maybe I dreamed it :). But did you not read my entire post? I just gave feedback from my interviews (in a vey very short summary) and admitted it was not scientific and was a small sample.
 

localoid

macrumors 68020
Feb 20, 2007
2,428
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America's Third World
Mine was real...well it was college...maybe I dreamed it :). But did you not read my entire post? I just gave feedback from my interviews (in a vey very short summary) and admitted it was not scientific and was a small sample.
Yeah. I read your post. Which is why I suggested that you might want to read any/all of surveys which were based on a much larger samples, collected from the real world, etc.