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Metalworking (rec.crafts.metalworking) Discuss various aspects of working with metal, such as machining, welding, metal joining, screwing, casting, hardening/tempering, blacksmithing/forging, spinning and hammer work, sheet metal work. |
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#1
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Wednesday, August 5, 2015 at 7:58:59 AM UTC-4, Ed Huntress wrote:
Minimum wages are set on the basis of maintaining a socially and economically viable minimum for workers at the bottom, for the sake of the society and the economy as a whole. Raising it is justified when those at the bottom can't sustain themselves to a degree that the society finds acceptable on their present income (and polls make it clear what most people think about it). It isn't about those who are already making more. It isn't because we feel sorry for Bambi or for the engineers who already are making much more. I am a cynic. Minimum wages are set by politicians who want to increase their chances of being re-elected. Dan seems to think it's all about relative proportions of income. That's a bogus argument. Those who were near the bottom, and who now find themselves at the very bottom because the minimum wage was raised to match what they're making now, will need a small raise. Above them, nobody is going to care. They're already well above the bottom. The minimum wage isn't about them, and nobody will think it is. You need to figure out how the relative proportions of income came about. And then figure out why raising the minimum wage will not affect the relative proportions of incomes. Increasing the minimum wage by law will have no effect as long as the minimum wage as dictated by law is less than the minimum wage dictated by supply and demand. But raising it above the minimum dictated by supply and demand will increase inflation. So a raise in the Federal rate to $10 / hour is no big deal. I can not find anyone to hire for $10 now. But raising it to $15 will have an effect. Hours will be cut, jobs will not be created, jobs will be lost, unemployment costs will rise, jobs will go overseas, jobs will be automated. Think of what an increase of the minimum wage to $30 / hour would do. Now think how a raise to $15 / hour will have the same type of effect but not as large an effect. And finally think of the effect that eliminating the Federal minimum wage would have. Almost none. Dan -- Ed Huntress |
#2
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Wed, 5 Aug 2015 10:40:57 -0700 (PDT), "
wrote: On Wednesday, August 5, 2015 at 7:58:59 AM UTC-4, Ed Huntress wrote: Minimum wages are set on the basis of maintaining a socially and economically viable minimum for workers at the bottom, for the sake of the society and the economy as a whole. Raising it is justified when those at the bottom can't sustain themselves to a degree that the society finds acceptable on their present income (and polls make it clear what most people think about it). It isn't about those who are already making more. It isn't because we feel sorry for Bambi or for the engineers who already are making much more. I am a cynic. Minimum wages are set by politicians who want to increase their chances of being re-elected. Dan seems to think it's all about relative proportions of income. That's a bogus argument. Those who were near the bottom, and who now find themselves at the very bottom because the minimum wage was raised to match what they're making now, will need a small raise. Above them, nobody is going to care. They're already well above the bottom. The minimum wage isn't about them, and nobody will think it is. You need to figure out how the relative proportions of income came about. Supply and demand. And then figure out why raising the minimum wage will not affect the relative proportions of incomes. Within the ranges we're talking about, relative proportions don't matter. The gaps are too large for it to matter. Increasing the minimum wage by law will have no effect as long as the minimum wage as dictated by law is less than the minimum wage dictated by supply and demand. But raising it above the minimum dictated by supply and demand will increase inflation. Show us what has happened after minimum wages were increased in the past. Here, I'll help you out. Wages are scaled to show the relationship: https://research.stlouisfed.org/fred...raph_id=249218 You have a period of inflation, and then a minimum-wage hike to try to keep up. Inflation is pretty steady; it does not react to wage hikes. Consistently. So a raise in the Federal rate to $10 / hour is no big deal. I can not find anyone to hire for $10 now. But raising it to $15 will have an effect. Hours will be cut, jobs will not be created, jobs will be lost, unemployment costs will rise, jobs will go overseas, jobs will be automated. Here, let's add employment to see how that works out in real life (wages and employment are scaled to show the relationships): https://research.stlouisfed.org/fred...0&category_id= Employment follows recessions (the gray bars), not minimum wage hikes. Think of what an increase of the minimum wage to $30 / hour would do. Too big of a shock. Now think how a raise to $15 / hour will have the same type of effect but not as large an effect. Much less of a shock. Outcome unknown. And finally think of the effect that eliminating the Federal minimum wage would have. Almost none. According to what you've said, it should increase employment. -- Ed Huntress |
#3
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Wed, 05 Aug 2015 14:34:09 -0400, Ed Huntress
wrote: snip Show us what has happened after minimum wages were increased in the You have a period of inflation, and then a minimum-wage hike to try to past. Here, I'll help you out. Wages are scaled to show the relationship: https://research.stlouisfed.org/fred...raph_id=249218 I think that one got buggered. Try this one: https://research.stlouisfed.org/fred...8&updated=4913 -- Ed Huntress |
#4
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Wednesday, August 5, 2015 at 2:34:13 PM UTC-4, Ed Huntress wrote:
You need to figure out how the relative proportions of income came about. |
#5
Posted to rec.crafts.metalworking
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Wednesday, August 5, 2015 at 3:11:35 PM UTC-4, Ed Huntress wrote:
Show us what has happened after minimum wages were increased in the You have a period of inflation, and then a minimum-wage hike to try to past. Here, I'll help you out. Wages are scaled to show the relationship: https://research.stlouisfed.org/fred...raph_id=249218 I think that one got buggered. Try this one: https://research.stlouisfed.org/fred...8&updated=4913 -- Ed Huntress That one looks more like raising the minumum wage caused recessions. Dan |
#6
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Wed, 5 Aug 2015 13:32:42 -0700 (PDT), "
wrote: On Wednesday, August 5, 2015 at 3:11:35 PM UTC-4, Ed Huntress wrote: Show us what has happened after minimum wages were increased in the You have a period of inflation, and then a minimum-wage hike to try to past. Here, I'll help you out. Wages are scaled to show the relationship: https://research.stlouisfed.org/fred...raph_id=249218 I think that one got buggered. Try this one: https://research.stlouisfed.org/fred...8&updated=4913 -- Ed Huntress That one looks more like raising the minumum wage caused recessions. Then you need to take a closer look at minimum wage increases and GDP: https://research.stlouisfed.org/fred...raph_id=249246 There were two wage increases in '91. GDP climbed after the first, and then climbed again after the second. There were wage increases in '96 and '97. GDP went up after each one. There were two wages increases in 2009. GDP climbed after each one. On the other side, there was a wage increase in 1990. GDP went down. You know what happened after 2007; wages weren't involved. Jobs were hardly involved. g So, as I said earlier, it's mixed. But minimum wage increases were followed by GDP growth more often than not over the last 35 years. -- Ed Huntress Dan |
#7
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Wed, 5 Aug 2015 13:28:16 -0700 (PDT), "
wrote: On Wednesday, August 5, 2015 at 2:34:13 PM UTC-4, Ed Huntress wrote: You need to figure out how the relative proportions of income came about. Supply and demand. And then figure out why raising the minimum wage will not affect the relative proportions of incomes. Within the ranges we're talking about, relative proportions don't matter. The gaps are too large for it to matter. But you can not explain why the gaps are too large to matter. You didn't ask. d8-) In actual fact you are wrong. You did not explain why you think I'm wrong. Tell us what kind of misfit, making over $40/hr., is going to complain because people at the bottom got a $5 raise and he just got...a $5 raise. Increasing the minimum wage by law will have no effect as long as the minimum wage as dictated by law is less than the minimum wage dictated by supply and demand. But raising it above the minimum dictated by supply and demand will increase inflation. Show us what has happened after minimum wages were increased in the past. Show us when the minimum wage was raised above the minimum wage dictated by supply and demand. There are 3.3 million people making minimum wage, and they are the ones that will get the raise. What do you think the "minimum wage dictated by supply and demand" is? Now do that for when the demand for minimum wage workers is declining. What would that show you? And finally for when the economy is doing so poorly. What is "so poorly"? You mean like now, when GDP is at an all-time high? Here, I'll help you out. Wages are scaled to show the relationship: https://research.stlouisfed.org/fred...raph_id=249218 You have a period of inflation, and then a minimum-wage hike to try to keep up. Inflation is pretty steady; it does not react to wage hikes. Consistently. So a raise in the Federal rate to $10 / hour is no big deal. I can not find anyone to hire for $10 now. But raising it to $15 will have an effect. Hours will be cut, jobs will not be created, jobs will be lost, unemployment costs will rise, jobs will go overseas, jobs will be automated. Here, let's add employment to see how that works out in real life (wages and employment are scaled to show the relationships): https://research.stlouisfed.org/fred...0&category_id= Employment follows recessions (the gray bars), not minimum wage hikes. Think of what an increase of the minimum wage to $30 / hour would do. Too big of a shock. Now think how a raise to $15 / hour will have the same type of effect but not as large an effect. Much less of a shock. Outcome unknown. And finally think of the effect that eliminating the Federal minimum wage would have. Almost none. According to what you've said, it should increase employment. I never said that. I do say that when the minimum wage dictated by supply and demand is higher than the minimum wage dictated by law, then the wage dictated by law has little or no effect. So what is the minimum wage "dictacted by supply and demand"? Remember, there are 3.3 million making the minimum wage *dictated by law*. Should they be making more? -- Ed Huntress |
#8
Posted to rec.crafts.metalworking
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Wednesday, August 5, 2015 at 5:16:16 PM UTC-4, Ed Huntress wrote:
That one looks more like raising the minumum wage caused recessions. Then you need to take a closer look at minimum wage increases and GDP: https://research.stlouisfed.org/fred...raph_id=249246 There were two wage increases in '91. GDP climbed after the first, and then climbed again after the second. There were wage increases in '96 and '97. GDP went up after each one. There were two wages increases in 2009. GDP climbed after each one. On the other side, there was a wage increase in 1990. GDP went down. You know what happened after 2007; wages weren't involved. Jobs were hardly involved. g So, as I said earlier, it's mixed. But minimum wage increases were followed by GDP growth more often than not over the last 35 years. -- Ed Huntress According to the chart there were recessions at about the same time as the minimum wage increases. The grey bars indicate recessions where the GDP did not grow as you claim. Dan |
#9
Posted to rec.crafts.metalworking
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Wednesday, August 5, 2015 at 5:41:25 PM UTC-4, Ed Huntress wrote:
In actual fact you are wrong. You did not explain why you think I'm wrong. Tell us what kind of misfit, making over $40/hr., is going to complain because people at the bottom got a $5 raise and he just got...a $5 raise. That would be me and most all of the engineers I have known. If the people at the bottom got a 5 dollar raise and the engineer got a $5 raise, then the engineer did not get a proportional increase. Increasing the minimum wage by law will have no effect as long as the minimum wage as dictated by law is less than the minimum wage dictated by supply and demand. But raising it above the minimum dictated by supply and demand will increase inflation. Show us what has happened after minimum wages were increased in the past. Show us when the minimum wage was raised above the minimum wage dictated by supply and demand. There are 3.3 million people making minimum wage, and they are the ones that will get the raise. What do you think the "minimum wage dictated by supply and demand" is? The actual wage that a unskilled worker is willing accept for work. Now do that for when the demand for minimum wage workers is declining. What would that show you? That things have changed from what they were when those previous minimum wage increases were made. And finally for when the economy is doing so poorly. What is "so poorly"? You mean like now, when GDP is at an all-time high? The rate of increase of the GDP is low. Here, I'll help you out. Wages are scaled to show the relationship: https://research.stlouisfed.org/fred...raph_id=249218 You have a period of inflation, and then a minimum-wage hike to try to keep up. Inflation is pretty steady; it does not react to wage hikes. Consistently. So a raise in the Federal rate to $10 / hour is no big deal. I can not find anyone to hire for $10 now. But raising it to $15 will have an effect. Hours will be cut, jobs will not be created, jobs will be lost, unemployment costs will rise, jobs will go overseas, jobs will be automated. Here, let's add employment to see how that works out in real life (wages and employment are scaled to show the relationships): https://research.stlouisfed.org/fred...0&category_id= Employment follows recessions (the gray bars), not minimum wage hikes. Think of what an increase of the minimum wage to $30 / hour would do. Too big of a shock. Now think how a raise to $15 / hour will have the same type of effect but not as large an effect. Much less of a shock. Outcome unknown. And finally think of the effect that eliminating the Federal minimum wage would have. Almost none. According to what you've said, it should increase employment. I never said that. I do say that when the minimum wage dictated by supply and demand is higher than the minimum wage dictated by law, then the wage dictated by law has little or no effect. So what is the minimum wage "dictacted by supply and demand"? Remember, there are 3.3 million making the minimum wage *dictated by law*. Should they be making more? In some states they should be making more. In other states , no. Dan -- Ed Huntress |
#10
Posted to rec.crafts.metalworking
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Wed, 5 Aug 2015 20:02:03 -0700 (PDT), "
wrote: On Wednesday, August 5, 2015 at 5:16:16 PM UTC-4, Ed Huntress wrote: That one looks more like raising the minumum wage caused recessions. Then you need to take a closer look at minimum wage increases and GDP: https://research.stlouisfed.org/fred...raph_id=249246 There were two wage increases in '91. GDP climbed after the first, and then climbed again after the second. There were wage increases in '96 and '97. GDP went up after each one. There were two wages increases in 2009. GDP climbed after each one. On the other side, there was a wage increase in 1990. GDP went down. You know what happened after 2007; wages weren't involved. Jobs were hardly involved. g So, as I said earlier, it's mixed. But minimum wage increases were followed by GDP growth more often than not over the last 35 years. -- Ed Huntress According to the chart there were recessions at about the same time as the minimum wage increases. The grey bars indicate recessions where the GDP did not grow as you claim. Dan The GDP grew exactly as I said. If you can't read the graph, I'll pull out the data for you. -- Ed Huntress |
#11
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Wed, 5 Aug 2015 20:15:41 -0700 (PDT), "
wrote: On Wednesday, August 5, 2015 at 5:41:25 PM UTC-4, Ed Huntress wrote: In actual fact you are wrong. You did not explain why you think I'm wrong. Tell us what kind of misfit, making over $40/hr., is going to complain because people at the bottom got a $5 raise and he just got...a $5 raise. That would be me and most all of the engineers I have known. If the people at the bottom got a 5 dollar raise and the engineer got a $5 raise, then the engineer did not get a proportional increase. You got an unshceduled raise and now you're bitching about it. Nobody is going to care. Increasing the minimum wage by law will have no effect as long as the minimum wage as dictated by law is less than the minimum wage dictated by supply and demand. But raising it above the minimum dictated by supply and demand will increase inflation. Show us what has happened after minimum wages were increased in the past. Show us when the minimum wage was raised above the minimum wage dictated by supply and demand. There are 3.3 million people making minimum wage, and they are the ones that will get the raise. What do you think the "minimum wage dictated by supply and demand" is? The actual wage that a unskilled worker is willing accept for work. Bt how much is that, relative to the minimum wage? Now do that for when the demand for minimum wage workers is declining. What would that show you? That things have changed from what they were when those previous minimum wage increases were made. And what things would have changed? You seem unwilling to explain your point. And finally for when the economy is doing so poorly. What is "so poorly"? You mean like now, when GDP is at an all-time high? The rate of increase of the GDP is low. Here, I'll help you out. Wages are scaled to show the relationship: https://research.stlouisfed.org/fred...raph_id=249218 You have a period of inflation, and then a minimum-wage hike to try to keep up. Inflation is pretty steady; it does not react to wage hikes. Consistently. So a raise in the Federal rate to $10 / hour is no big deal. I can not find anyone to hire for $10 now. But raising it to $15 will have an effect. Hours will be cut, jobs will not be created, jobs will be lost, unemployment costs will rise, jobs will go overseas, jobs will be automated. Here, let's add employment to see how that works out in real life (wages and employment are scaled to show the relationships): https://research.stlouisfed.org/fred...0&category_id= Employment follows recessions (the gray bars), not minimum wage hikes. Think of what an increase of the minimum wage to $30 / hour would do. Too big of a shock. Now think how a raise to $15 / hour will have the same type of effect but not as large an effect. Much less of a shock. Outcome unknown. And finally think of the effect that eliminating the Federal minimum wage would have. Almost none. According to what you've said, it should increase employment. I never said that. I do say that when the minimum wage dictated by supply and demand is higher than the minimum wage dictated by law, then the wage dictated by law has little or no effect. So what is the minimum wage "dictacted by supply and demand"? Remember, there are 3.3 million making the minimum wage *dictated by law*. Should they be making more? In some states they should be making more. In other states , no. Dan -- Ed Huntress |
#12
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Thursday, August 6, 2015 at 5:07:50 AM UTC-4, Ed Huntress wrote:
You got an unshceduled raise and now you're bitching about it. Nobody is going to care. I lost buying power relative to others. I care . And may go into business for myself. The actual wage that a unskilled worker is willing accept for work. Bt how much is that, relative to the minimum wage? Obvious that will vary depending on the time and place. And what things would have changed? You seem unwilling to explain your point. You stated that previous increases in the minimum wage have had little effect. I am just pointing out that the past is not necessarily a good predictor of what will happen in the present. And finally for when the economy is doing so poorly. What is "so poorly"? You mean like now, when GDP is at an all-time high? The rate of increase of the GDP is low. The recovery after the last recession has been weak. In times past the recovery has been much faster. Just showing that the past is not a good predictor of the present. Think of what an increase of the minimum wage to $30 / hour would do. Too big of a shock. Now think how a raise to $15 / hour will have the same type of effect but not as large an effect. Much less of a shock. Outcome unknown. And finally think of the effect that eliminating the Federal minimum wage would have. Almost none. According to what you've said, it should increase employment. I never said that. I do say that when the minimum wage dictated by supply and demand is higher than the minimum wage dictated by law, then the wage dictated by law has little or no effect. So what is the minimum wage "dictacted by supply and demand"? Remember, there are 3.3 million making the minimum wage *dictated by law*. Should they be making more? In some states they should be making more. In other states , no. Dan -- Ed Huntress |
#13
Posted to rec.crafts.metalworking
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Thu, 6 Aug 2015 04:29:47 -0700 (PDT), "
wrote: On Thursday, August 6, 2015 at 5:07:50 AM UTC-4, Ed Huntress wrote: You got an unshceduled raise and now you're bitching about it. Nobody is going to care. I lost buying power relative to others. I care . And may go into business for myself. Go for it! And the next time you hear about your CEO getting an increase in his bonus, be sure to bring up the fact that you've "lost buying power" relative to him -- perhaps by a factor of 10 or more greater than the *amount* of buying power you've lost. That's not the mentality of most businesspeople I've known. Not even of engineers. The actual wage that a unskilled worker is willing accept for work. Bt how much is that, relative to the minimum wage? Obvious that will vary depending on the time and place. Right. So you're talking about an unknown, in unkown terms. The actual wages of most workers, skilled or not, is greater than the minimum. The minimum sets a competitive floor. But without it, wages for others would be less. We've seen this in our own history, before we started putting a floor under a minimum wage. Once you have one, however, it has a sharply declining effect on wages above the minimum. It flattens the curve. That's what happened through the '50s and '60s. And what things would have changed? You seem unwilling to explain your point. You stated that previous increases in the minimum wage have had little effect. I am just pointing out that the past is not necessarily a good predictor of what will happen in the present. If you have reason to believe it will be different, you'd need some reasons for that. The pattern is pretty clear; the effect is slight, up or down, but, historically, it's mostly up. That's what I showed you with those graphs. And finally for when the economy is doing so poorly. What is "so poorly"? You mean like now, when GDP is at an all-time high? The rate of increase of the GDP is low. The recovery after the last recession has been weak. In times past the recovery has been much faster. Just showing that the past is not a good predictor of the present. Slow or fast, it recovers. And more times than not, a minimum wage increase is followed shortly by an increasing GDP. So the old economic theories on this subject, probably the ones you were taught, are completely demolished by the facts. We have much better data today. If they had it a century ago, there probably would have been no "neo-liberal" (conservative) economics. Think of what an increase of the minimum wage to $30 / hour would do. Too big of a shock. Now think how a raise to $15 / hour will have the same type of effect but not as large an effect. Much less of a shock. Outcome unknown. And finally think of the effect that eliminating the Federal minimum wage would have. Almost none. According to what you've said, it should increase employment. I never said that. I do say that when the minimum wage dictated by supply and demand is higher than the minimum wage dictated by law, then the wage dictated by law has little or no effect. So what is the minimum wage "dictacted by supply and demand"? Remember, there are 3.3 million making the minimum wage *dictated by law*. Should they be making more? In some states they should be making more. In other states , no. Dan -- Ed Huntress |
#14
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Dunkin' CEO: $15 minimum wage is 'outrageous'
In article , Ed Huntress
wrote: On Wed, 5 Aug 2015 20:02:03 -0700 (PDT), " wrote: On Wednesday, August 5, 2015 at 5:16:16 PM UTC-4, Ed Huntress wrote: That one looks more like raising the minumum wage caused recessions. Then you need to take a closer look at minimum wage increases and GDP: https://research.stlouisfed.org/fred2/graph/?graph_id=249246 There were two wage increases in '91. GDP climbed after the first, and then climbed again after the second. There were wage increases in '96 and '97. GDP went up after each one. There were two wages increases in 2009. GDP climbed after each one. On the other side, there was a wage increase in 1990. GDP went down. You know what happened after 2007; wages weren't involved. Jobs were hardly involved. g So, as I said earlier, it's mixed. But minimum wage increases were followed by GDP growth more often than not over the last 35 years. -- Ed Huntress According to the chart there were recessions at about the same time as the minimum wage increases. The grey bars indicate recessions where the GDP did not grow as you claim. Dan The GDP grew exactly as I said. If you can't read the graph, I'll pull out the data for you. Graph reading isn't the problem. The chart shows GDP reduction (not increase) at the same time as increases in minimum wage. The cause is of course political, not economics: Congress raises the minimum wage only during hard times, to show that they are doing something, at last. The subsequent rise is simply the general recovery from recession, and is not a result of raising the minimum wage. The minimum wage in Mass is $9/hr, or $3/hr with at least $20 per month of tips, as of 1 Jan 2015. It was $8/hr before. In the Boston area, Dunkin Donuts is offering $10/hr plus tips (according to a sign out front), and has been for some time now, long before the recent increase. Now one would assume that Dunkin Donuts knows from long experience exactly how much they must offer to attract the desired number and quality of employees. As long as the minimum wage is less than the market-clearing wage for low-skill jobs, the minimum wage will have no effect. It would be useful to plot minimum wage and the earning quartiles or deciles together. That should tell the tale. Joe Gwinn |
#15
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Thursday, August 6, 2015 at 9:21:32 AM UTC-4, Joe Gwinn wrote:
Graph reading isn't the problem. The chart shows GDP reduction (not increase) at the same time as increases in minimum wage. The cause is of course political, not economics: Congress raises the minimum wage only during hard times, to show that they are doing something, at last. The subsequent rise is simply the general recovery from recession, and is not a result of raising the minimum wage. The minimum wage in Mass is $9/hr, or $3/hr with at least $20 per month of tips, as of 1 Jan 2015. It was $8/hr before. In the Boston area, Dunkin Donuts is offering $10/hr plus tips (according to a sign out front), and has been for some time now, long before the recent increase. Now one would assume that Dunkin Donuts knows from long experience exactly how much they must offer to attract the desired number and quality of employees. As long as the minimum wage is less than the market-clearing wage for low-skill jobs, the minimum wage will have no effect. It would be useful to plot minimum wage and the earning quartiles or deciles together. That should tell the tale. Joe Gwinn Ed sometime has problems with reading graphs when they do not agree with what he wants them to show. Dan |
#16
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Thu, 06 Aug 2015 09:21:27 -0400, Joe Gwinn
wrote: In article , Ed Huntress wrote: On Wed, 5 Aug 2015 20:02:03 -0700 (PDT), " wrote: On Wednesday, August 5, 2015 at 5:16:16 PM UTC-4, Ed Huntress wrote: That one looks more like raising the minumum wage caused recessions. Then you need to take a closer look at minimum wage increases and GDP: https://research.stlouisfed.org/fred2/graph/?graph_id=249246 There were two wage increases in '91. GDP climbed after the first, and then climbed again after the second. There were wage increases in '96 and '97. GDP went up after each one. There were two wages increases in 2009. GDP climbed after each one. On the other side, there was a wage increase in 1990. GDP went down. You know what happened after 2007; wages weren't involved. Jobs were hardly involved. g So, as I said earlier, it's mixed. But minimum wage increases were followed by GDP growth more often than not over the last 35 years. -- Ed Huntress According to the chart there were recessions at about the same time as the minimum wage increases. The grey bars indicate recessions where the GDP did not grow as you claim. Dan The GDP grew exactly as I said. If you can't read the graph, I'll pull out the data for you. Graph reading isn't the problem. It's Dan's problem. d8-) The chart shows GDP reduction (not increase) at the same time as increases in minimum wage. The cause is of course political, not economics: Congress raises the minimum wage only during hard times, to show that they are doing something, at last. The subsequent rise is simply the general recovery from recession, and is not a result of raising the minimum wage. Then how do you explain raises in '96 and '97? There were no hard times then. Minimums were raised twice and the GDP kept climbing. And if you move the slider to the left, you'll see a very complex situation. There were so many variables at work during those years that I didn't want to complicate the issue -- 35 years of modern experience seemed to tell enough -- but you'll see, if you look back, that in '74 and '75, the minimum was raised twice DURING a recession, and the GDP started climbing just a couple of months later. Through the late '70s, the minimum was raised three times, and GDP just kept climbing right through it. No recession then. If you attribute the GDP increases after periods of both minimum-wage increases and simultaneous recession to the normal business cycle, then you have to agree that the minimum-wage raises did not stop or even slow the recovery. In recessions that were not accompanied by minimum-wage increases (1982; 2001), the shape of the recovery was the same as those with a minimum increase. Conservative theory would have predicted at least a delay. In several cases, with business facing the newer, higher minimums, growth just went on throughout the following period. If the conservative theorists were right, none of this would have happened. The minimum wage in Mass is $9/hr, or $3/hr with at least $20 per month of tips, as of 1 Jan 2015. It was $8/hr before. In the Boston area, Dunkin Donuts is offering $10/hr plus tips (according to a sign out front), and has been for some time now, long before the recent increase. Now one would assume that Dunkin Donuts knows from long experience exactly how much they must offer to attract the desired number and quality of employees. As long as the minimum wage is less than the market-clearing wage for low-skill jobs, the minimum wage will have no effect. But we know that the minimum is no more than the "market clearing" rate for 3.3 million (or 3.6 million, more recently) people. And the percentage, now at 4.7% of workers, has been much higher in the past. It was over 17% in the late '60s, IIRC. So the historical examples are based on much higher percentages. The pattern holds. I find that conservative theorists have put themselves in a dilemma. First they say that increasing the minimum will cause a substantial loss of jobs and business bankruptcies, not to mention inflation, and then they say that raising the wages will do nearly nothing because the number who are making minimum is so small; that the market-clearing rate is higher to begin with. It would be useful to plot minimum wage and the earning quartiles or deciles together. That should tell the tale. That will take you quite a long while, unless you find a way to extract quintiles from something simpler than IRS data. That stuff is a bugger to work with. However, you already have the percentages making minimum wage. -- Ed Huntress |
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Thu, 6 Aug 2015 07:52:18 -0700 (PDT), "
wrote: On Thursday, August 6, 2015 at 9:21:32 AM UTC-4, Joe Gwinn wrote: Graph reading isn't the problem. The chart shows GDP reduction (not increase) at the same time as increases in minimum wage. The cause is of course political, not economics: Congress raises the minimum wage only during hard times, to show that they are doing something, at last. The subsequent rise is simply the general recovery from recession, and is not a result of raising the minimum wage. The minimum wage in Mass is $9/hr, or $3/hr with at least $20 per month of tips, as of 1 Jan 2015. It was $8/hr before. In the Boston area, Dunkin Donuts is offering $10/hr plus tips (according to a sign out front), and has been for some time now, long before the recent increase. Now one would assume that Dunkin Donuts knows from long experience exactly how much they must offer to attract the desired number and quality of employees. As long as the minimum wage is less than the market-clearing wage for low-skill jobs, the minimum wage will have no effect. It would be useful to plot minimum wage and the earning quartiles or deciles together. That should tell the tale. Joe Gwinn Ed sometime has problems with reading graphs when they do not agree with what he wants them to show. No. You just can't read that one. That's why I suggested using the data instead of the graphs. I think it's available on the same pages as the graphs themselves. Look for a button or a tab. You may have forgotten the relationship between GDP and recessions. I note that you were using the gray bars, rather than the GDP curves, in your last post. Or you're messing up the timing of relationships. Consistently, shortly after the minimum wage is increased, the recession ends. That would not be possible if the increased wages actually put a damper on the economy. -- Ed Huntress Dan |
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Thursday, August 6, 2015 at 7:59:54 AM UTC-4, Ed Huntress wrote:
Go for it! And the next time you hear about your CEO getting an increase in his bonus, be sure to bring up the fact that you've "lost buying power" relative to him -- perhaps by a factor of 10 or more greater than the *amount* of buying power you've lost. That's not the mentality of most businesspeople I've known. Not even of engineers. Well I kind of have gone into business for myself. I think a lot about various businesses I could go into. But none of my ideas seem like they would be real businesses. They all seem like they would be hobby businesses. And they all require work. And I do not need the money. So I just do a little investing and make more money than when I was working as an engineer. And I am trying to get the next generation interested in investing. I funded my sister's granddaughter's Roth IRA. And am hoping she will eventually get interested. Dan -- Ed Huntress |
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Thu, 6 Aug 2015 14:45:32 -0700 (PDT), "
wrote: On Thursday, August 6, 2015 at 7:59:54 AM UTC-4, Ed Huntress wrote: Go for it! And the next time you hear about your CEO getting an increase in his bonus, be sure to bring up the fact that you've "lost buying power" relative to him -- perhaps by a factor of 10 or more greater than the *amount* of buying power you've lost. That's not the mentality of most businesspeople I've known. Not even of engineers. Well I kind of have gone into business for myself. I think a lot about various businesses I could go into. But none of my ideas seem like they would be real businesses. They all seem like they would be hobby businesses. And they all require work. And I do not need the money. So I just do a little investing and make more money than when I was working as an engineer. And I am trying to get the next generation interested in investing. I funded my sister's granddaughter's Roth IRA. And am hoping she will eventually get interested. Dan I hope you succeed. It sounds like you're a good example for her. -- Ed Huntress |
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Thursday, August 6, 2015 at 5:49:58 PM UTC-4, Ed Huntress wrote:
And I am trying to get the next generation interested in investing. I funded my sister's granddaughter's Roth IRA. And am hoping she will eventually get interested. Dan I hope you succeed. It sounds like you're a good example for her. -- Ed Huntress I am beginning to believe that main thing is whether someone can delay gratification. Teaching the basics of investing is fairly simple. The key is not immediately spending every cent one gets. And I am not sure if that can be taught. Dan |
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Thu, 6 Aug 2015 18:28:52 -0700 (PDT), "
wrote: On Thursday, August 6, 2015 at 5:49:58 PM UTC-4, Ed Huntress wrote: And I am trying to get the next generation interested in investing. I funded my sister's granddaughter's Roth IRA. And am hoping she will eventually get interested. Dan I hope you succeed. It sounds like you're a good example for her. -- Ed Huntress I am beginning to believe that main thing is whether someone can delay gratification. Teaching the basics of investing is fairly simple. The key is not immediately spending every cent one gets. And I am not sure if that can be taught. Dan It seems to me that if she was brought up that way, your job is half done. If she wasn't, it's going to be an uphill task all the way. -- Ed Huntress |
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Dunkin' CEO: $15 minimum wage is 'outrageous'
In article , Ed Huntress
wrote: On Thu, 06 Aug 2015 09:21:27 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Wed, 5 Aug 2015 20:02:03 -0700 (PDT), " wrote: On Wednesday, August 5, 2015 at 5:16:16 PM UTC-4, Ed Huntress wrote: That one looks more like raising the minumum wage caused recessions. Then you need to take a closer look at minimum wage increases and GDP: https://research.stlouisfed.org/fred2/graph/?graph_id=249246 There were two wage increases in '91. GDP climbed after the first, and then climbed again after the second. There were wage increases in '96 and '97. GDP went up after each one. There were two wages increases in 2009. GDP climbed after each one. On the other side, there was a wage increase in 1990. GDP went down. You know what happened after 2007; wages weren't involved. Jobs were hardly involved. g So, as I said earlier, it's mixed. But minimum wage increases were followed by GDP growth more often than not over the last 35 years. -- Ed Huntress According to the chart there were recessions at about the same time as the minimum wage increases. The grey bars indicate recessions where the GDP did not grow as you claim. Dan The GDP grew exactly as I said. If you can't read the graph, I'll pull out the data for you. Graph reading isn't the problem. It's Dan's problem. d8-) Well, I probably read the graph the same way as Dan, then - the claim was that raising the minimum wage caused the GDP to increase, but the graph says exactly the opposite. I don't see how looking at the numbers that are graphed would change this general observation. The chart shows GDP reduction (not increase) at the same time as increases in minimum wage. The cause is of course political, not economics: Congress raises the minimum wage only during hard times, to show that they are doing something, at last. The subsequent rise is simply the general recovery from recession, and is not a result of raising the minimum wage. Then how do you explain raises in '96 and '97? There were no hard times then. Minimums were raised twice and the GDP kept climbing. Politics. I don't recall what was going on at the time, 20 years ago. The mini-recession of 2001 seems to have had no political effect - no change in minimum wage. And if you move the slider to the left, you'll see a very complex situation. There were so many variables at work during those years that I didn't want to complicate the issue -- 35 years of modern experience seemed to tell enough -- but you'll see, if you look back, that in '74 and '75, the minimum was raised twice DURING a recession, and the GDP started climbing just a couple of months later. Correlation is not causation. Through the late '70s, the minimum was raised three times, and GDP just kept climbing right through it. No recession then. If you attribute the GDP increases after periods of both minimum-wage increases and simultaneous recession to the normal business cycle, then you have to agree that the minimum-wage raises did not stop or even slow the recovery. In recessions that were not accompanied by minimum-wage increases (1982; 2001), the shape of the recovery was the same as those with a minimum increase. Conservative theory would have predicted at least a delay. In several cases, with business facing the newer, higher minimums, growth just went on throughout the following period. If the conservative theorists were right, none of this would have happened. Not quite. See below. The minimum wage in Mass is $9/hr, or $3/hr with at least $20 per month of tips, as of 1 Jan 2015. It was $8/hr before. In the Boston area, Dunkin Donuts is offering $10/hr plus tips (according to a sign out front), and has been for some time now, long before the recent increase. Now one would assume that Dunkin Donuts knows from long experience exactly how much they must offer to attract the desired number and quality of employees. As long as the minimum wage is less than the market-clearing wage for low-skill jobs, the minimum wage will have no effect. But we know that the minimum is no more than the "market clearing" rate for 3.3 million (or 3.6 million, more recently) people. And the percentage, now at 4.7% of workers, has been much higher in the past. It was over 17% in the late '60s, IIRC. So the historical examples are based on much higher percentages. The pattern holds. I find that conservative theorists have put themselves in a dilemma. First they say that increasing the minimum will cause a substantial loss of jobs and business bankruptcies, not to mention inflation, and then they say that raising the wages will do nearly nothing because the number who are making minimum is so small; that the market-clearing rate is higher to begin with. I fail to see the problem. Both statements are simultaneously true. Consider apples. Let's say that apples are an unregulated market, and the current market price for apples is $11 per pound for better apples, but only $8 for lower-quality apples. The growers of low-quality apples are complaining about the unfairness of it all, raising quite the ruckus. The King eventually decrees that henceforth, apples may not be sold for less than $9 per pound. What effect will this have on the apple market? None on the better apples (which have always complied), but significant on the lower-quality apples (where sales volume will decrease, because not everybody is willing to buy low-grade apples at $9 a pound). This is the rationale behind the suggestion that we plot wage deciles against minimum wage over time. It would be useful to plot minimum wage and the earning quartiles or deciles together. That should tell the tale. That will take you quite a long while, unless you find a way to extract quintiles from something simpler than IRS data. That stuff is a bugger to work with. The FRED site you posted above does have quartile data (see under Add a Data Series), but I wasn't familiar enough with that site to get it to work properly. You have far more practice with that site. Decile data must be somewhere. Actually, the whole percentile curve is available (there was a thread on this some time ago). However, you already have the percentages making minimum wage. What is the source of the percentages given earlier in the posting? This actually gives the percentile limit. We now know that current minimum-wage workers are in the lowest decile. Do we have the age and education-level distributions of these workers? One would assume that (excluding teenagers' summer jobs and the like) these are the people with no better option. Joe Gwinn |
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Fri, 07 Aug 2015 10:00:35 -0400, Joe Gwinn
wrote: In article , Ed Huntress wrote: On Thu, 06 Aug 2015 09:21:27 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Wed, 5 Aug 2015 20:02:03 -0700 (PDT), " wrote: On Wednesday, August 5, 2015 at 5:16:16 PM UTC-4, Ed Huntress wrote: That one looks more like raising the minumum wage caused recessions. Then you need to take a closer look at minimum wage increases and GDP: https://research.stlouisfed.org/fred2/graph/?graph_id=249246 There were two wage increases in '91. GDP climbed after the first, and then climbed again after the second. There were wage increases in '96 and '97. GDP went up after each one. There were two wages increases in 2009. GDP climbed after each one. On the other side, there was a wage increase in 1990. GDP went down. You know what happened after 2007; wages weren't involved. Jobs were hardly involved. g So, as I said earlier, it's mixed. But minimum wage increases were followed by GDP growth more often than not over the last 35 years. -- Ed Huntress According to the chart there were recessions at about the same time as the minimum wage increases. The grey bars indicate recessions where the GDP did not grow as you claim. Dan The GDP grew exactly as I said. If you can't read the graph, I'll pull out the data for you. Graph reading isn't the problem. It's Dan's problem. d8-) Well, I probably read the graph the same way as Dan, then - the claim was that raising the minimum wage caused the GDP to increase, but the graph says exactly the opposite. No. The "claim" was that it's sometimes up, and sometimes down -- that there is no correlation. I don't see how looking at the numbers that are graphed would change this general observation. sigh Let's go through it. There was a two-step increase ending in 1991. Just as the second minimum wage increase took effect, the theory suggesting that the effect on GDP should be at its worst, the recession ended and GDP took off. In 1996 - 97, another two-step increase. GDP just keep rising, with NO effect from the increased minimum wage. 2007 - 2009: Again, a multi-step increase, amidst a recession that was precipitated by the financial collapse. Just before the end of it, the increases reached their peak -- just as the economy turned around and GDP began to grow again. In all of those cases, the worst effect should have been when the increase raised wages to their peak. But just the opposite happened. Just as wages peaked, the recession ended and GDP started to grow. Are we looking at the same graph? https://research.stlouisfed.org/fred...raph_id=249246 The chart shows GDP reduction (not increase) at the same time as increases in minimum wage. The cause is of course political, not economics: Congress raises the minimum wage only during hard times, to show that they are doing something, at last. The subsequent rise is simply the general recovery from recession, and is not a result of raising the minimum wage. Then how do you explain raises in '96 and '97? There were no hard times then. Minimums were raised twice and the GDP kept climbing. Politics. I don't recall what was going on at the time, 20 years ago. The mini-recession of 2001 seems to have had no political effect - no change in minimum wage. And if you move the slider to the left, you'll see a very complex situation. There were so many variables at work during those years that I didn't want to complicate the issue -- 35 years of modern experience seemed to tell enough -- but you'll see, if you look back, that in '74 and '75, the minimum was raised twice DURING a recession, and the GDP started climbing just a couple of months later. Correlation is not causation. But how do you show causation if there is no correlation? The answer is, you don't. A correlation doesn't show causation. But a lack of correlation shows there is no causation. Through the late '70s, the minimum was raised three times, and GDP just kept climbing right through it. No recession then. If you attribute the GDP increases after periods of both minimum-wage increases and simultaneous recession to the normal business cycle, then you have to agree that the minimum-wage raises did not stop or even slow the recovery. In recessions that were not accompanied by minimum-wage increases (1982; 2001), the shape of the recovery was the same as those with a minimum increase. Conservative theory would have predicted at least a delay. In several cases, with business facing the newer, higher minimums, growth just went on throughout the following period. If the conservative theorists were right, none of this would have happened. Not quite. See below. The minimum wage in Mass is $9/hr, or $3/hr with at least $20 per month of tips, as of 1 Jan 2015. It was $8/hr before. In the Boston area, Dunkin Donuts is offering $10/hr plus tips (according to a sign out front), and has been for some time now, long before the recent increase. Now one would assume that Dunkin Donuts knows from long experience exactly how much they must offer to attract the desired number and quality of employees. As long as the minimum wage is less than the market-clearing wage for low-skill jobs, the minimum wage will have no effect. But we know that the minimum is no more than the "market clearing" rate for 3.3 million (or 3.6 million, more recently) people. And the percentage, now at 4.7% of workers, has been much higher in the past. It was over 17% in the late '60s, IIRC. So the historical examples are based on much higher percentages. The pattern holds. I find that conservative theorists have put themselves in a dilemma. First they say that increasing the minimum will cause a substantial loss of jobs and business bankruptcies, not to mention inflation, and then they say that raising the wages will do nearly nothing because the number who are making minimum is so small; that the market-clearing rate is higher to begin with. I fail to see the problem. Both statements are simultaneously true. The problem is that the theories you guys are going on have no evidence. You're whipping up ideas like cotton candy, and the historical record shows that they're crap. Consider apples. Let's say that apples are an unregulated market, and the current market price for apples is $11 per pound for better apples, but only $8 for lower-quality apples. The growers of low-quality apples are complaining about the unfairness of it all, raising quite the ruckus. The King eventually decrees that henceforth, apples may not be sold for less than $9 per pound. What effect will this have on the apple market? None on the better apples (which have always complied), but significant on the lower-quality apples (where sales volume will decrease, because not everybody is willing to buy low-grade apples at $9 a pound). Again, you have no evidence that this has happened with minimum wage increases. In 1991, 1997, and 2009, just as wage increases reachd their peak, employment either continued to climb steadily, or it actually jumped. The correlation is between recessions and employment, not between wage hikes and employment. This is the rationale behind the suggestion that we plot wage deciles against minimum wage over time. It would add nothing to the employment data, but if it floats your boat, go for it. You can get quintile data from the IRS. It would be useful to plot minimum wage and the earning quartiles or deciles together. That should tell the tale. That will take you quite a long while, unless you find a way to extract quintiles from something simpler than IRS data. That stuff is a bugger to work with. The FRED site you posted above does have quartile data (see under Add a Data Series), but I wasn't familiar enough with that site to get it to work properly. You have far more practice with that site. Aha. Well, they've added data for the first three quartiles, from some source I didn't check. I could plot that for you, if you want, over the weekend. It will be one messy graph, with all three in there plotted against minimum wage increases, but it can be done. You need an account with them to show more than a couple of lines on one graph, and to store them. It's free. If you're interested, it's worth it. They've set it up very nicely. Decile data must be somewhere. Actually, the whole percentile curve is available (there was a thread on this some time ago). I don't know where. That may be buried in the DoL site, probably at BLS. It's nowhere near as slick as the St. Louis Fed. However, you already have the percentages making minimum wage. What is the source of the percentages given earlier in the posting? BLS: http://data.bls.gov/search/query/res...m+wage+workers This actually gives the percentile limit. We now know that current minimum-wage workers are in the lowest decile. Do we have the age and education-level distributions of these workers? Yes. I think it's all in the BLS reports (one report for each year) noted above. One would assume that (excluding teenagers' summer jobs and the like) these are the people with no better option. Probably. -- Ed Huntress Joe Gwinn |
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Dunkin' CEO: $15 minimum wage is 'outrageous'
In article , Ed Huntress
wrote: On Fri, 07 Aug 2015 10:00:35 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Thu, 06 Aug 2015 09:21:27 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Wed, 5 Aug 2015 20:02:03 -0700 (PDT), " wrote: On Wednesday, August 5, 2015 at 5:16:16 PM UTC-4, Ed Huntress wrote: That one looks more like raising the minumum wage caused recessions. Then you need to take a closer look at minimum wage increases and GDP: https://research.stlouisfed.org/fred2/graph/?graph_id=249246 There were two wage increases in '91. GDP climbed after the first, and then climbed again after the second. There were wage increases in '96 and '97. GDP went up after each one. There were two wages increases in 2009. GDP climbed after each one. On the other side, there was a wage increase in 1990. GDP went down. You know what happened after 2007; wages weren't involved. Jobs were hardly involved. g So, as I said earlier, it's mixed. But minimum wage increases were followed by GDP growth more often than not over the last 35 years. -- Ed Huntress According to the chart there were recessions at about the same time as the minimum wage increases. The grey bars indicate recessions where the GDP did not grow as you claim. Dan The GDP grew exactly as I said. If you can't read the graph, I'll pull out the data for you. Graph reading isn't the problem. It's Dan's problem. d8-) Well, I probably read the graph the same way as Dan, then - the claim was that raising the minimum wage caused the GDP to increase, but the graph says exactly the opposite. No. The "claim" was that it's sometimes up, and sometimes down -- that there is no correlation. In fact, in the window shown, the biggest changes in both GDP and minimum wage occurred during the 2008 recession, during which the minimum wage went up as the GDP went down. I don't see how looking at the numbers that are graphed would change this general observation. sigh Let's go through it. There was a two-step increase ending in 1991. Just as the second minimum wage increase took effect, the theory suggesting that the effect on GDP should be at its worst, the recession ended and GDP took off. In 1996 - 97, another two-step increase. GDP just keep rising, with NO effect from the increased minimum wage. 2007 - 2009: Again, a multi-step increase, amidst a recession that was precipitated by the financial collapse. Just before the end of it, the increases reached their peak -- just as the economy turned around and GDP began to grow again. In all of those cases, the worst effect should have been when the increase raised wages to their peak. But just the opposite happened. Just as wages peaked, the recession ended and GDP started to grow. Are we looking at the same graph? https://research.stlouisfed.org/fred2/graph/?graph_id=249246 Yes. See part about correlation below. The chart shows GDP reduction (not increase) at the same time as increases in minimum wage. The cause is of course political, not economics: Congress raises the minimum wage only during hard times, to show that they are doing something, at last. The subsequent rise is simply the general recovery from recession, and is not a result of raising the minimum wage. Then how do you explain raises in '96 and '97? There were no hard times then. Minimums were raised twice and the GDP kept climbing. Politics. I don't recall what was going on at the time, 20 years ago. The mini-recession of 2001 seems to have had no political effect - no change in minimum wage. And if you move the slider to the left, you'll see a very complex situation. There were so many variables at work during those years that I didn't want to complicate the issue -- 35 years of modern experience seemed to tell enough -- but you'll see, if you look back, that in '74 and '75, the minimum was raised twice DURING a recession, and the GDP started climbing just a couple of months later. Correlation is not causation. But how do you show causation if there is no correlation? The answer is, you don't. A correlation doesn't show causation. But a lack of correlation shows there is no causation. If there is no correlation, causation is unlikely for sure. If there is correlation, there is still much to be proven. The biggest danger (aside from coincidence) is when the two timeseries showing correlation are in fact both dependent on some other timeseries. The classic example is the fact that there is a positive and significant correlation between automobile accidents and the sale of ice cream. This is true, even if you discount kids running into the street at the sound of an ice cream truck. So, to save lives, we must outlaw ice cream. It's the only moral course of action. Why the correlation? In the summer, people drive more and eat more ice cream, because it's warm and nice out. ..https://www.google.com/search?q=fals...es&client=oper a&hs=DlD&tbm=isch&tbo=u&source=univ&sa=X&ved=0CDgQ sARqFQoTCKaB37iPmMcCFY SUHgodezQGYw&biw=1216&bih=1271 Through the late '70s, the minimum was raised three times, and GDP just kept climbing right through it. No recession then. If you attribute the GDP increases after periods of both minimum-wage increases and simultaneous recession to the normal business cycle, then you have to agree that the minimum-wage raises did not stop or even slow the recovery. In recessions that were not accompanied by minimum-wage increases (1982; 2001), the shape of the recovery was the same as those with a minimum increase. Conservative theory would have predicted at least a delay. In several cases, with business facing the newer, higher minimums, growth just went on throughout the following period. If the conservative theorists were right, none of this would have happened. Not quite. See below. The minimum wage in Mass is $9/hr, or $3/hr with at least $20 per month of tips, as of 1 Jan 2015. It was $8/hr before. In the Boston area, Dunkin Donuts is offering $10/hr plus tips (according to a sign out front), and has been for some time now, long before the recent increase. Now one would assume that Dunkin Donuts knows from long experience exactly how much they must offer to attract the desired number and quality of employees. As long as the minimum wage is less than the market-clearing wage for low-skill jobs, the minimum wage will have no effect. But we know that the minimum is no more than the "market clearing" rate for 3.3 million (or 3.6 million, more recently) people. And the percentage, now at 4.7% of workers, has been much higher in the past. It was over 17% in the late '60s, IIRC. So the historical examples are based on much higher percentages. The pattern holds. I find that conservative theorists have put themselves in a dilemma. First they say that increasing the minimum will cause a substantial loss of jobs and business bankruptcies, not to mention inflation, and then they say that raising the wages will do nearly nothing because the number who are making minimum is so small; that the market-clearing rate is higher to begin with. I fail to see the problem. Both statements are simultaneously true. The problem is that the theories you guys are going on have no evidence. You're whipping up ideas like cotton candy, and the historical record shows that they're crap. Which guys are you talking about? There is sufficient foolishness to go around. Many times over. Consider apples. Let's say that apples are an unregulated market, and the current market price for apples is $11 per pound for better apples, but only $8 for lower-quality apples. The growers of low-quality apples are complaining about the unfairness of it all, raising quite the ruckus. The King eventually decrees that henceforth, apples may not be sold for less than $9 per pound. What effect will this have on the apple market? None on the better apples (which have always complied), but significant on the lower-quality apples (where sales volume will decrease, because not everybody is willing to buy low-grade apples at $9 a pound). Again, you have no evidence that this has happened with minimum wage increases. In 1991, 1997, and 2009, just as wage increases reachd their peak, employment either continued to climb steadily, or it actually jumped. A lot of random motion to be sure. Do you deny the truth of the parable of the apples above? It's Econ 101. If yes, what is your reasoning? The correlation is between recessions and employment, not between wage hikes and employment. Well, both are likely. Usually, wages go down during recessions, and rise when times are good. Supply and demand. And it's really unwise to be demanding a raise or threatening to leave while others are being laid off. This is the rationale behind the suggestion that we plot wage deciles against minimum wage over time. It would add nothing to the employment data, but if it floats your boat, go for it. You can get quintile data from the IRS. The point was not to add to employment data (which we cannot do anyway), but to put the minimum wage into economic context. It would be useful to plot minimum wage and the earning quartiles or deciles together. That should tell the tale. That will take you quite a long while, unless you find a way to extract quintiles from something simpler than IRS data. That stuff is a bugger to work with. The FRED site you posted above does have quartile data (see under Add a Data Series), but I wasn't familiar enough with that site to get it to work properly. You have far more practice with that site. Aha. Well, they've added data for the first three quartiles, from some source I didn't check. I could plot that for you, if you want, over the weekend. It will be one messy graph, with all three in there plotted against minimum wage increases, but it can be done. I think we only need the minimum wage and the lowest quartile lines to give the context. You need an account with them to show more than a couple of lines on one graph, and to store them. It's free. If you're interested, it's worth it. They've set it up very nicely. Decile data must be somewhere. Actually, the whole percentile curve is available (there was a thread on this some time ago). I don't know where. That may be buried in the DoL site, probably at BLS. It's nowhere near as slick as the St. Louis Fed. I'll dig that thread up. However, you already have the percentages making minimum wage. What is the source of the percentages given earlier in the posting? BLS: http://data.bls.gov/search/query/results?cx=013738036195919377644%3A6ih0hfrgl50&q=c haracteristics+of+minimum+wage+workers This actually gives the percentile limit. We now know that current minimum-wage workers are in the lowest decile. Do we have the age and education-level distributions of these workers? Yes. I think it's all in the BLS reports (one report for each year) noted above. I'll look into it. There is a lot there, all in a big pile. One would assume that (excluding teenagers' summer jobs and the like) these are the people with no better option. Probably. Joe Gwinn |
#25
Posted to rec.crafts.metalworking
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Dunkin' CEO: $15 minimum wage is 'outrageous'
SNIP
There are 3.3 million people making minimum wage, and they are the ones that will get the raise. What do you think the "minimum wage dictated by supply and demand" is? The actual wage that a unskilled worker is willing accept for work. The actual wage that an unskilled worker is willing to accept for work cannot be computed, because the data is skewed. They have to accept whatever they can get, or starve. Ask any unskilled worker, which he would rather do, work for less or starve. SNIP Here, I'll help you out. Wages are scaled to show the relationship: https://research.stlouisfed.org/fred...raph_id=249218 Dang, Ed. Just when I was getting ready to go to sleep, I read this. Now I gotta go graph some stuff. You have a period of inflation, and then a minimum-wage hike to try to keep up. Inflation is pretty steady; it does not react to wage hikes. Consistently. Very informative. I would have never guessed. Maybe because minimum wage increases don't hardly affect the total amount of wages paid to all workers to produce the GDP. SNIP |
#26
Posted to rec.crafts.metalworking
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Sun, 09 Aug 2015 00:30:31 -0400, Steve Walker
wrote: SNIP There are 3.3 million people making minimum wage, and they are the ones that will get the raise. What do you think the "minimum wage dictated by supply and demand" is? The actual wage that a unskilled worker is willing accept for work. The actual wage that an unskilled worker is willing to accept for work cannot be computed, because the data is skewed. They have to accept whatever they can get, or starve. Ask any unskilled worker, which he would rather do, work for less or starve. SNIP Here, I'll help you out. Wages are scaled to show the relationship: https://research.stlouisfed.org/fred...raph_id=249218 Dang, Ed. Just when I was getting ready to go to sleep, I read this. Now I gotta go graph some stuff. It's addictive. g I think every economics student should have to spend two hours per week with those graphs, looking for surprising relationships -- or lack of relationships. It would make hash out of a lot of economic theory. You have a period of inflation, and then a minimum-wage hike to try to keep up. Inflation is pretty steady; it does not react to wage hikes. Consistently. Very informative. I would have never guessed. Maybe because minimum wage increases don't hardly affect the total amount of wages paid to all workers to produce the GDP. That's the confounding factor, Steve. The amount of additional wages paid, after a raise in the minumum wage, is a miniscule percentage of total wages paid to everyone. So if there is any direct effect, it's so small that it's totally submerged in the consequences of other dynamics in the economy. When you see the data laid out graphically like that, however, it's immediately apparent that the claims that raising the minimum will kill jobs, or economic growth, or inflation, are all so much bunk. It hasn't happened. And there's no way to tell how much of an increase would have a significant effect. That's why Seattle has a commission studying it and trying to predict results. I doubt if they'll succeed at that, however. -- Ed Huntress SNIP |
#27
Posted to rec.crafts.metalworking
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Fri, 07 Aug 2015 19:45:43 -0400, Joe Gwinn
wrote: In article , Ed Huntress wrote: On Fri, 07 Aug 2015 10:00:35 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Thu, 06 Aug 2015 09:21:27 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Wed, 5 Aug 2015 20:02:03 -0700 (PDT), " wrote: On Wednesday, August 5, 2015 at 5:16:16 PM UTC-4, Ed Huntress wrote: That one looks more like raising the minumum wage caused recessions. Then you need to take a closer look at minimum wage increases and GDP: https://research.stlouisfed.org/fred2/graph/?graph_id=249246 There were two wage increases in '91. GDP climbed after the first, and then climbed again after the second. There were wage increases in '96 and '97. GDP went up after each one. There were two wages increases in 2009. GDP climbed after each one. On the other side, there was a wage increase in 1990. GDP went down. You know what happened after 2007; wages weren't involved. Jobs were hardly involved. g So, as I said earlier, it's mixed. But minimum wage increases were followed by GDP growth more often than not over the last 35 years. -- Ed Huntress According to the chart there were recessions at about the same time as the minimum wage increases. The grey bars indicate recessions where the GDP did not grow as you claim. Dan The GDP grew exactly as I said. If you can't read the graph, I'll pull out the data for you. Graph reading isn't the problem. It's Dan's problem. d8-) Well, I probably read the graph the same way as Dan, then - the claim was that raising the minimum wage caused the GDP to increase, but the graph says exactly the opposite. No. The "claim" was that it's sometimes up, and sometimes down -- that there is no correlation. In fact, in the window shown, the biggest changes in both GDP and minimum wage occurred during the 2008 recession, during which the minimum wage went up as the GDP went down. This is why I say you have to look at those graphs carefully. During the period from the end of 2007 through the first quarter of 2009, the correlations we July 2007 -- min. goes up, GDP goes down. July 2008 -- min. goes up again, GDP goes down. July 2009 -- min. goes up again, GDP goes up. So what is the correlation? It's the same pattern as 1975 and 1990: Small increases in minimum wage correlate with a decline in GDP. The highest level of min. wage in all three periods correlates with GROWTH in GDP. Small increases bad; big increases good. g Of course, that's unlikely to have any causative relationship, but the point is that the overall correlation coefficient is close to zero, whether you look at it from the standpoint of minimum wage increases (1997; Mar 1975 through May 1979) or the standpoint of recessions (2001, 1970, 1960, etc.). The correlation with recessions seems shot to hell by the fact that, consistently, the highest raise in an annual series of raises occurs roughly at the time the economy turns up. Again, no correlation with any direction: there are ups, and there are downs. The number of samples is too small to rely much on the coefficient, but it's surely close to zero. I don't see how looking at the numbers that are graphed would change this general observation. sigh Let's go through it. There was a two-step increase ending in 1991. Just as the second minimum wage increase took effect, the theory suggesting that the effect on GDP should be at its worst, the recession ended and GDP took off. In 1996 - 97, another two-step increase. GDP just keep rising, with NO effect from the increased minimum wage. 2007 - 2009: Again, a multi-step increase, amidst a recession that was precipitated by the financial collapse. Just before the end of it, the increases reached their peak -- just as the economy turned around and GDP began to grow again. In all of those cases, the worst effect should have been when the increase raised wages to their peak. But just the opposite happened. Just as wages peaked, the recession ended and GDP started to grow. Are we looking at the same graph? https://research.stlouisfed.org/fred2/graph/?graph_id=249246 Yes. See part about correlation below. The chart shows GDP reduction (not increase) at the same time as increases in minimum wage. The cause is of course political, not economics: Congress raises the minimum wage only during hard times, to show that they are doing something, at last. The subsequent rise is simply the general recovery from recession, and is not a result of raising the minimum wage. Then how do you explain raises in '96 and '97? There were no hard times then. Minimums were raised twice and the GDP kept climbing. Politics. I don't recall what was going on at the time, 20 years ago. The mini-recession of 2001 seems to have had no political effect - no change in minimum wage. And if you move the slider to the left, you'll see a very complex situation. There were so many variables at work during those years that I didn't want to complicate the issue -- 35 years of modern experience seemed to tell enough -- but you'll see, if you look back, that in '74 and '75, the minimum was raised twice DURING a recession, and the GDP started climbing just a couple of months later. Correlation is not causation. But how do you show causation if there is no correlation? The answer is, you don't. A correlation doesn't show causation. But a lack of correlation shows there is no causation. If there is no correlation, causation is unlikely for sure. If there is correlation, there is still much to be proven. The biggest danger (aside from coincidence) is when the two timeseries showing correlation are in fact both dependent on some other timeseries. The classic example is the fact that there is a positive and significant correlation between automobile accidents and the sale of ice cream. This is true, even if you discount kids running into the street at the sound of an ice cream truck. So, to save lives, we must outlaw ice cream. It's the only moral course of action. Why the correlation? In the summer, people drive more and eat more ice cream, because it's warm and nice out. .https://www.google.com/search?q=fals...es&client=oper a&hs=DlD&tbm=isch&tbo=u&source=univ&sa=X&ved=0CDg QsARqFQoTCKaB37iPmMcCFY SUHgodezQGYw&biw=1216&bih=1271 So, based on your conclusion and example, what is the likelihood of causation between the peak of each two- or three-year rollout of a series of minimum wage increases, and its correlation with an economic upturn and growth in GDP? Through the late '70s, the minimum was raised three times, and GDP just kept climbing right through it. No recession then. If you attribute the GDP increases after periods of both minimum-wage increases and simultaneous recession to the normal business cycle, then you have to agree that the minimum-wage raises did not stop or even slow the recovery. In recessions that were not accompanied by minimum-wage increases (1982; 2001), the shape of the recovery was the same as those with a minimum increase. Conservative theory would have predicted at least a delay. In several cases, with business facing the newer, higher minimums, growth just went on throughout the following period. If the conservative theorists were right, none of this would have happened. Not quite. See below. The minimum wage in Mass is $9/hr, or $3/hr with at least $20 per month of tips, as of 1 Jan 2015. It was $8/hr before. In the Boston area, Dunkin Donuts is offering $10/hr plus tips (according to a sign out front), and has been for some time now, long before the recent increase. Now one would assume that Dunkin Donuts knows from long experience exactly how much they must offer to attract the desired number and quality of employees. As long as the minimum wage is less than the market-clearing wage for low-skill jobs, the minimum wage will have no effect. But we know that the minimum is no more than the "market clearing" rate for 3.3 million (or 3.6 million, more recently) people. And the percentage, now at 4.7% of workers, has been much higher in the past. It was over 17% in the late '60s, IIRC. So the historical examples are based on much higher percentages. The pattern holds. I find that conservative theorists have put themselves in a dilemma. First they say that increasing the minimum will cause a substantial loss of jobs and business bankruptcies, not to mention inflation, and then they say that raising the wages will do nearly nothing because the number who are making minimum is so small; that the market-clearing rate is higher to begin with. I fail to see the problem. Both statements are simultaneously true. The problem is that the theories you guys are going on have no evidence. You're whipping up ideas like cotton candy, and the historical record shows that they're crap. Which guys are you talking about? There is sufficient foolishness to go around. Many times over. The only theories are coming from those who say minimum-wage increases cause loss of jobs, inflation, or economic downturns. There is no one on the other side of this discussion except me, and I present only evidence, not theories. Consider apples. Let's say that apples are an unregulated market, and the current market price for apples is $11 per pound for better apples, but only $8 for lower-quality apples. The growers of low-quality apples are complaining about the unfairness of it all, raising quite the ruckus. The King eventually decrees that henceforth, apples may not be sold for less than $9 per pound. What effect will this have on the apple market? None on the better apples (which have always complied), but significant on the lower-quality apples (where sales volume will decrease, because not everybody is willing to buy low-grade apples at $9 a pound). Again, you have no evidence that this has happened with minimum wage increases. In 1991, 1997, and 2009, just as wage increases reachd their peak, employment either continued to climb steadily, or it actually jumped. A lot of random motion to be sure. It's hardly random, but there is no sensible connection between economic upturns or downturns and increases in the minimum wage. The evidence says that the correlation is close to zero. Do you deny the truth of the parable of the apples above? It's Econ 101. If yes, what is your reasoning? Having spent most of my years since Econ 101 (and up through 300) paying attention to evidence and facts rather than theory, I'd like to see that theory in actual practice. The general tendency, as I've learned in recent years, is for unintended and unexpected consequences, with theorists scrambling after the fact to re-build their models so they can better predict the past. Today, a lot would depend on the marketing skills of the people selling lower-quality apples. They may actually make more money, despite a small decline in the volume sold. This is a good example of why classical economic theories are suspect. They may work on very large scales (although they may not), but you never know if apple marketers in the next town are charging $10 for all apples, and when their customes start seeing your ads and get wind of the fact that you're selling apples for $9, you could start selling like crazy. The correlation is between recessions and employment, not between wage hikes and employment. Well, both are likely. Usually, wages go down during recessions, and rise when times are good. Supply and demand. Again, look at the evidence. MINIMUM wages, at least, tend to go up during recessions. Why do you think that is? And why does the economy tend to turn up after a string of two or three years of minimum wage increases? And it's really unwise to be demanding a raise or threatening to leave while others are being laid off. This is the rationale behind the suggestion that we plot wage deciles against minimum wage over time. It would add nothing to the employment data, but if it floats your boat, go for it. You can get quintile data from the IRS. The point was not to add to employment data (which we cannot do anyway), but to put the minimum wage into economic context. Well, you can plot the first three quartiles against anything else you desire on the St. Louis Fed research page. It would be useful to plot minimum wage and the earning quartiles or deciles together. That should tell the tale. That will take you quite a long while, unless you find a way to extract quintiles from something simpler than IRS data. That stuff is a bugger to work with. The FRED site you posted above does have quartile data (see under Add a Data Series), but I wasn't familiar enough with that site to get it to work properly. You have far more practice with that site. Aha. Well, they've added data for the first three quartiles, from some source I didn't check. I could plot that for you, if you want, over the weekend. It will be one messy graph, with all three in there plotted against minimum wage increases, but it can be done. I think we only need the minimum wage and the lowest quartile lines to give the context. You need an account with them to show more than a couple of lines on one graph, and to store them. It's free. If you're interested, it's worth it. They've set it up very nicely. Decile data must be somewhere. Actually, the whole percentile curve is available (there was a thread on this some time ago). I don't know where. That may be buried in the DoL site, probably at BLS. It's nowhere near as slick as the St. Louis Fed. I'll dig that thread up. However, you already have the percentages making minimum wage. What is the source of the percentages given earlier in the posting? BLS: http://data.bls.gov/search/query/results?cx=013738036195919377644%3A6ih0hfrgl50&q=c haracteristics+of+minimum+wage+workers This actually gives the percentile limit. We now know that current minimum-wage workers are in the lowest decile. Do we have the age and education-level distributions of these workers? Yes. I think it's all in the BLS reports (one report for each year) noted above. I'll look into it. There is a lot there, all in a big pile. One would assume that (excluding teenagers' summer jobs and the like) these are the people with no better option. Probably. Joe Gwinn |
#28
Posted to rec.crafts.metalworking
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Dunkin' CEO: $15 minimum wage is 'outrageous'
In article , Ed Huntress
wrote: On Fri, 07 Aug 2015 19:45:43 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Fri, 07 Aug 2015 10:00:35 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Thu, 06 Aug 2015 09:21:27 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Wed, 5 Aug 2015 20:02:03 -0700 (PDT), " wrote: On Wednesday, August 5, 2015 at 5:16:16 PM UTC-4, Ed Huntress wrote: That one looks more like raising the minumum wage caused recessions. Then you need to take a closer look at minimum wage increases and GDP: https://research.stlouisfed.org/fred2/graph/?graph_id=249246 There were two wage increases in '91. GDP climbed after the first, and then climbed again after the second. There were wage increases in '96 and '97. GDP went up after each one. There were two wages increases in 2009. GDP climbed after each one. On the other side, there was a wage increase in 1990. GDP went down. You know what happened after 2007; wages weren't involved. Jobs were hardly involved. g So, as I said earlier, it's mixed. But minimum wage increases were followed by GDP growth more often than not over the last 35 years. -- Ed Huntress According to the chart there were recessions at about the same time as the minimum wage increases. The grey bars indicate recessions where the GDP did not grow as you claim. Dan The GDP grew exactly as I said. If you can't read the graph, I'll pull out the data for you. Graph reading isn't the problem. It's Dan's problem. d8-) Well, I probably read the graph the same way as Dan, then - the claim was that raising the minimum wage caused the GDP to increase, but the graph says exactly the opposite. No. The "claim" was that it's sometimes up, and sometimes down -- that there is no correlation. In fact, in the window shown, the biggest changes in both GDP and minimum wage occurred during the 2008 recession, during which the minimum wage went up as the GDP went down. This is why I say you have to look at those graphs carefully. During the period from the end of 2007 through the first quarter of 2009, the correlations we July 2007 -- min. goes up, GDP goes down. July 2008 -- min. goes up again, GDP goes down. July 2009 -- min. goes up again, GDP goes up. So what is the correlation? It's the same pattern as 1975 and 1990: Small increases in minimum wage correlate with a decline in GDP. The highest level of min. wage in all three periods correlates with GROWTH in GDP. Small increases bad; big increases good. g The biggest move was in 2008, by far. There are a few ways to tell if a correlation could be due to causation. The first is causal order - effect must follow purported cause. The second is the the bigger the cause, the bigger the effect. And the sign of the correlation coefficient must be all positive or all negative. But even if these tests all pass, the correlation can be due to some un-modeled common cause. It can also be difficult to decide which is cause and which is effect if cause and effect happen simultaneously (to the resolution of the measurements). Of course, that's unlikely to have any causative relationship, but the point is that the overall correlation coefficient is close to zero, whether you look at it from the standpoint of minimum wage increases (1997; Mar 1975 through May 1979) or the standpoint of recessions (2001, 1970, 1960, etc.). The correlation with recessions seems shot to hell by the fact that, consistently, the highest raise in an annual series of raises occurs roughly at the time the economy turns up. Again, no correlation with any direction: there are ups, and there are downs. The number of samples is too small to rely much on the coefficient, but it's surely close to zero. Oh, there is a correlation there, but it is more political than economic, and doesn't happen every time. This isn't Physics. The minimum wage changes only when Congress changes it. This happens only when Congress is under considerable political pressure. Like during a recession. The Minimum Wage is not an economic variable like Supply and Demand. I don't see how looking at the numbers that are graphed would change this general observation. sigh Let's go through it. There was a two-step increase ending in 1991. Just as the second minimum wage increase took effect, the theory suggesting that the effect on GDP should be at its worst, the recession ended and GDP took off. In 1996 - 97, another two-step increase. GDP just keep rising, with NO effect from the increased minimum wage. 2007 - 2009: Again, a multi-step increase, amidst a recession that was precipitated by the financial collapse. Just before the end of it, the increases reached their peak -- just as the economy turned around and GDP began to grow again. In all of those cases, the worst effect should have been when the increase raised wages to their peak. But just the opposite happened. Just as wages peaked, the recession ended and GDP started to grow. Are we looking at the same graph? https://research.stlouisfed.org/fred2/graph/?graph_id=249246 Yes. See part about correlation below. The chart shows GDP reduction (not increase) at the same time as increases in minimum wage. The cause is of course political, not economics: Congress raises the minimum wage only during hard times, to show that they are doing something, at last. The subsequent rise is simply the general recovery from recession, and is not a result of raising the minimum wage. Then how do you explain raises in '96 and '97? There were no hard times then. Minimums were raised twice and the GDP kept climbing. Politics. I don't recall what was going on at the time, 20 years ago. The mini-recession of 2001 seems to have had no political effect - no change in minimum wage. And if you move the slider to the left, you'll see a very complex situation. There were so many variables at work during those years that I didn't want to complicate the issue -- 35 years of modern experience seemed to tell enough -- but you'll see, if you look back, that in '74 and '75, the minimum was raised twice DURING a recession, and the GDP started climbing just a couple of months later. Correlation is not causation. But how do you show causation if there is no correlation? The answer is, you don't. A correlation doesn't show causation. But a lack of correlation shows there is no causation. If there is no correlation, causation is unlikely for sure. If there is correlation, there is still much to be proven. The biggest danger (aside from coincidence) is when the two timeseries showing correlation are in fact both dependent on some other timeseries. The classic example is the fact that there is a positive and significant correlation between automobile accidents and the sale of ice cream. This is true, even if you discount kids running into the street at the sound of an ice cream truck. So, to save lives, we must outlaw ice cream. It's the only moral course of action. Why the correlation? In the summer, people drive more and eat more ice cream, because it's warm and nice out. .https://www.google.com/search?q=fals...es&client=oper a&hs=DlD&tbm=isch&tbo=u&source=univ&sa=X&ved=0CDg QsARqFQoTCKaB37iPmMcCFY SUHgodezQGYw&biw=1216&bih=1271 So, based on your conclusion and example, what is the likelihood of causation between the peak of each two- or three-year rollout of a series of minimum wage increases, and its correlation with an economic upturn and growth in GDP? See above comment on the role of Congress. Through the late '70s, the minimum was raised three times, and GDP just kept climbing right through it. No recession then. If you attribute the GDP increases after periods of both minimum-wage increases and simultaneous recession to the normal business cycle, then you have to agree that the minimum-wage raises did not stop or even slow the recovery. In recessions that were not accompanied by minimum-wage increases (1982; 2001), the shape of the recovery was the same as those with a minimum increase. Conservative theory would have predicted at least a delay. In several cases, with business facing the newer, higher minimums, growth just went on throughout the following period. If the conservative theorists were right, none of this would have happened. Not quite. See below. The minimum wage in Mass is $9/hr, or $3/hr with at least $20 per month of tips, as of 1 Jan 2015. It was $8/hr before. In the Boston area, Dunkin Donuts is offering $10/hr plus tips (according to a sign out front), and has been for some time now, long before the recent increase. Now one would assume that Dunkin Donuts knows from long experience exactly how much they must offer to attract the desired number and quality of employees. As long as the minimum wage is less than the market-clearing wage for low-skill jobs, the minimum wage will have no effect. But we know that the minimum is no more than the "market clearing" rate for 3.3 million (or 3.6 million, more recently) people. And the percentage, now at 4.7% of workers, has been much higher in the past. It was over 17% in the late '60s, IIRC. So the historical examples are based on much higher percentages. The pattern holds. I find that conservative theorists have put themselves in a dilemma. First they say that increasing the minimum will cause a substantial loss of jobs and business bankruptcies, not to mention inflation, and then they say that raising the wages will do nearly nothing because the number who are making minimum is so small; that the market-clearing rate is higher to begin with. I fail to see the problem. Both statements are simultaneously true. The problem is that the theories you guys are going on have no evidence. You're whipping up ideas like cotton candy, and the historical record shows that they're crap. Which guys are you talking about? There is sufficient foolishness to go around. Many times over. The only theories are coming from those who say minimum-wage increases cause loss of jobs, inflation, or economic downturns. There is no one on the other side of this discussion except me, and I present only evidence, not theories. See the parable of the apples, below. Consider apples. Let's say that apples are an unregulated market, and the current market price for apples is $11 per pound for better apples, but only $8 for lower-quality apples. The growers of low-quality apples are complaining about the unfairness of it all, raising quite the ruckus. The King eventually decrees that henceforth, apples may not be sold for less than $9 per pound. What effect will this have on the apple market? None on the better apples (which have always complied), but significant on the lower-quality apples (where sales volume will decrease, because not everybody is willing to buy low-grade apples at $9 a pound). Again, you have no evidence that this has happened with minimum wage increases. In 1991, 1997, and 2009, just as wage increases reachd their peak, employment either continued to climb steadily, or it actually jumped. A lot of random motion to be sure. It's hardly random, but there is no sensible connection between economic upturns or downturns and increases in the minimum wage. The evidence says that the correlation is close to zero. Do you deny the truth of the parable of the apples above? It's Econ 101. If yes, what is your reasoning? Having spent most of my years since Econ 101 (and up through 300) paying attention to evidence and facts rather than theory, I'd like to see that theory in actual practice. The general tendency, as I've learned in recent years, is for unintended and unexpected consequences, with theorists scrambling after the fact to re-build their models so they can better predict the past. Hmm Econ 300 does not replace Econ 101. This is basic Supply and Demand, which has not been overthrown, and never will be. Today, a lot would depend on the marketing skills of the people selling lower-quality apples. They may actually make more money, despite a small decline in the volume sold. This assumes that the other apple growers are all asleep at the switch. More generally, advertising tends to balance out - they drown each other out. This is a good example of why classical economic theories are suspect. They may work on very large scales (although they may not), but you never know if apple marketers in the next town are charging $10 for all apples, and when their customes start seeing your ads and get wind of the fact that you're selling apples for $9, you could start selling like crazy. Yes markets have always been imperfect for just the reasons you give above, but the advent of modern communications (including but not limited to the Internet) have greatly reduced such imperfections, especially concerning commodities like apples and low-skill labor. Particularly informative (and heartening) are the news accounts of the economic effects of cell phones in third-world counties - centuries-old inequities are being erased because people can now reach around traditional middlemen (who would be classified as pure rentiers by Marx) and discover what the market price for their products are, and seek the best price. And keep a far higher fraction of the proceeds. The correlation is between recessions and employment, not between wage hikes and employment. Well, both are likely. Usually, wages go down during recessions, and rise when times are good. Supply and demand. Again, look at the evidence. MINIMUM wages, at least, tend to go up during recessions. Why do you think that is? Because Congress raises the floor under political pressure. If it were due only to economic forces, the minimum wage would rise and fall all by itself, long before Congress was invented. And why does the economy tend to turn up after a string of two or three years of minimum wage increases? Because the broad economy recovers. There is always a dispute as to the effect of Congress, harmful or beneficial, too little too late, or nothing at all. Flipping the question around, how can those unfortunate folk making minimum wage, being the least well paid 5% of the workforce, have any effect whatsoever on the broad economy? And it's really unwise to be demanding a raise or threatening to leave while others are being laid off. This is the rationale behind the suggestion that we plot wage deciles against minimum wage over time. It would add nothing to the employment data, but if it floats your boat, go for it. You can get quintile data from the IRS. The point was not to add to employment data (which we cannot do anyway), but to put the minimum wage into economic context. Well, you can plot the first three quartiles against anything else you desire on the St. Louis Fed research page. Yep. There is a lot in there. And in the BLS data. The BLS data mentioned later actually answered the question of percentile of workforce getting minimum wage - 5% these days. Joe Gwinn It would be useful to plot minimum wage and the earning quartiles or deciles together. That should tell the tale. That will take you quite a long while, unless you find a way to extract quintiles from something simpler than IRS data. That stuff is a bugger to work with. The FRED site you posted above does have quartile data (see under Add a Data Series), but I wasn't familiar enough with that site to get it to work properly. You have far more practice with that site. Aha. Well, they've added data for the first three quartiles, from some source I didn't check. I could plot that for you, if you want, over the weekend. It will be one messy graph, with all three in there plotted against minimum wage increases, but it can be done. I think we only need the minimum wage and the lowest quartile lines to give the context. You need an account with them to show more than a couple of lines on one graph, and to store them. It's free. If you're interested, it's worth it. They've set it up very nicely. Decile data must be somewhere. Actually, the whole percentile curve is available (there was a thread on this some time ago). I don't know where. That may be buried in the DoL site, probably at BLS. It's nowhere near as slick as the St. Louis Fed. I'll dig that thread up. However, you already have the percentages making minimum wage. What is the source of the percentages given earlier in the posting? BLS: http://data.bls.gov/search/query/results?cx=013738036195919377644%3A6ih0hfrgl50&q=c haracteristics+of+minimum+wage+workers This actually gives the percentile limit. We now know that current minimum-wage workers are in the lowest decile. Do we have the age and education-level distributions of these workers? Yes. I think it's all in the BLS reports (one report for each year) noted above. I'll look into it. There is a lot there, all in a big pile. One would assume that (excluding teenagers' summer jobs and the like) these are the people with no better option. Probably. Joe Gwinn |
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Sun, 09 Aug 2015 16:48:06 -0400, Joe Gwinn
wrote: In article , Ed Huntress wrote: On Fri, 07 Aug 2015 19:45:43 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Fri, 07 Aug 2015 10:00:35 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Thu, 06 Aug 2015 09:21:27 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Wed, 5 Aug 2015 20:02:03 -0700 (PDT), " wrote: On Wednesday, August 5, 2015 at 5:16:16 PM UTC-4, Ed Huntress wrote: That one looks more like raising the minumum wage caused recessions. Then you need to take a closer look at minimum wage increases and GDP: https://research.stlouisfed.org/fred2/graph/?graph_id=249246 There were two wage increases in '91. GDP climbed after the first, and then climbed again after the second. There were wage increases in '96 and '97. GDP went up after each one. There were two wages increases in 2009. GDP climbed after each one. On the other side, there was a wage increase in 1990. GDP went down. You know what happened after 2007; wages weren't involved. Jobs were hardly involved. g So, as I said earlier, it's mixed. But minimum wage increases were followed by GDP growth more often than not over the last 35 years. -- Ed Huntress According to the chart there were recessions at about the same time as the minimum wage increases. The grey bars indicate recessions where the GDP did not grow as you claim. Dan The GDP grew exactly as I said. If you can't read the graph, I'll pull out the data for you. Graph reading isn't the problem. It's Dan's problem. d8-) Well, I probably read the graph the same way as Dan, then - the claim was that raising the minimum wage caused the GDP to increase, but the graph says exactly the opposite. No. The "claim" was that it's sometimes up, and sometimes down -- that there is no correlation. In fact, in the window shown, the biggest changes in both GDP and minimum wage occurred during the 2008 recession, during which the minimum wage went up as the GDP went down. This is why I say you have to look at those graphs carefully. During the period from the end of 2007 through the first quarter of 2009, the correlations we July 2007 -- min. goes up, GDP goes down. July 2008 -- min. goes up again, GDP goes down. July 2009 -- min. goes up again, GDP goes up. So what is the correlation? It's the same pattern as 1975 and 1990: Small increases in minimum wage correlate with a decline in GDP. The highest level of min. wage in all three periods correlates with GROWTH in GDP. Small increases bad; big increases good. g The biggest move was in 2008, by far. The thing is, if increases in the minimum wage caused a decline in economic growth, the growth following an increase to an even HIGHER level in 2009 would be impossible. Or, more sensibly, the level of the minimum wage has nothing to do with GDP, that one can measure. There are a few ways to tell if a correlation could be due to causation. The first is causal order - effect must follow purported cause. The second is the the bigger the cause, the bigger the effect. And the sign of the correlation coefficient must be all positive or all negative. Um...do you mean each correlation? If so, then no. What we're really talking about here is covariance. Some can be negative while most are positive, and you get a positive overall covariance and correlation coefficient. Only if you assume that the "cause" is exclusive -- that there is nothing else going on that would affect the relationship -- can you say that a cause must be all positive or negative, in every case, to prove causation. Even a strong positive correlation can have an occassional negative value in the sample, due to other causative issues. In real-world economics, there are few causative relationships that show up with a purely positive or purely negative relationship. In most cases there are multiple influences at work. Where it gets really interesing, to me, is in those cases where a small force drives a result in one direction, while a larger value of the same force drives a result in the other direction. For example, an improvement in one's ability to get family health care as an independent insured (no group policy, no Medicare, etc.) has been shown to improve the level of risk-taking and individual entrepreneurship. That doesn't seem to hold when safety-net measures grow large. A massive unemployment system, such as the ones they have in much of western Europe, does not seem to improve such risk-taking, and actually hinders it, compared to countries with more modest safety nets (particularly the US). But even if these tests all pass, the correlation can be due to some un-modeled common cause. It can also be difficult to decide which is cause and which is effect if cause and effect happen simultaneously (to the resolution of the measurements). Right. Of course, that's unlikely to have any causative relationship, but the point is that the overall correlation coefficient is close to zero, whether you look at it from the standpoint of minimum wage increases (1997; Mar 1975 through May 1979) or the standpoint of recessions (2001, 1970, 1960, etc.). The correlation with recessions seems shot to hell by the fact that, consistently, the highest raise in an annual series of raises occurs roughly at the time the economy turns up. Again, no correlation with any direction: there are ups, and there are downs. The number of samples is too small to rely much on the coefficient, but it's surely close to zero. Oh, there is a correlation there, but it is more political than economic, and doesn't happen every time. This isn't Physics. The minimum wage changes only when Congress changes it. This happens only when Congress is under considerable political pressure. Like during a recession. If you look at the pattern, you'll see that most of them are multi-step raises that either start before the recession, or that had to be signed into law before the recession. I agree that it's political, but the pressure seems to occur when CPI and employment are rising sharply: https://research.stlouisfed.org/fred...0&category_id= I suspect that CPI is what applies the political pressu Prices are rising,and there is a clamor for higher wages. Then, at about the same time, we fall off of the economic boom and go into a normal business-cycle recession. That's happened several times since 1980. Before then, it was more complicated, as our monetary responses were really messy and uninformed. That's the "before Volcker" period. Look at it from that perspective and see if that doesn't agree closely with the evidence. The Minimum Wage is not an economic variable like Supply and Demand. Right. I don't see how looking at the numbers that are graphed would change this general observation. sigh Let's go through it. There was a two-step increase ending in 1991. Just as the second minimum wage increase took effect, the theory suggesting that the effect on GDP should be at its worst, the recession ended and GDP took off. In 1996 - 97, another two-step increase. GDP just keep rising, with NO effect from the increased minimum wage. 2007 - 2009: Again, a multi-step increase, amidst a recession that was precipitated by the financial collapse. Just before the end of it, the increases reached their peak -- just as the economy turned around and GDP began to grow again. In all of those cases, the worst effect should have been when the increase raised wages to their peak. But just the opposite happened. Just as wages peaked, the recession ended and GDP started to grow. Are we looking at the same graph? https://research.stlouisfed.org/fred2/graph/?graph_id=249246 Yes. See part about correlation below. The chart shows GDP reduction (not increase) at the same time as increases in minimum wage. The cause is of course political, not economics: Congress raises the minimum wage only during hard times, to show that they are doing something, at last. The subsequent rise is simply the general recovery from recession, and is not a result of raising the minimum wage. Then how do you explain raises in '96 and '97? There were no hard times then. Minimums were raised twice and the GDP kept climbing. Politics. I don't recall what was going on at the time, 20 years ago. The mini-recession of 2001 seems to have had no political effect - no change in minimum wage. And if you move the slider to the left, you'll see a very complex situation. There were so many variables at work during those years that I didn't want to complicate the issue -- 35 years of modern experience seemed to tell enough -- but you'll see, if you look back, that in '74 and '75, the minimum was raised twice DURING a recession, and the GDP started climbing just a couple of months later. Correlation is not causation. But how do you show causation if there is no correlation? The answer is, you don't. A correlation doesn't show causation. But a lack of correlation shows there is no causation. If there is no correlation, causation is unlikely for sure. If there is correlation, there is still much to be proven. The biggest danger (aside from coincidence) is when the two timeseries showing correlation are in fact both dependent on some other timeseries. The classic example is the fact that there is a positive and significant correlation between automobile accidents and the sale of ice cream. This is true, even if you discount kids running into the street at the sound of an ice cream truck. So, to save lives, we must outlaw ice cream. It's the only moral course of action. Why the correlation? In the summer, people drive more and eat more ice cream, because it's warm and nice out. .https://www.google.com/search?q=fals...es&client=oper a&hs=DlD&tbm=isch&tbo=u&source=univ&sa=X&ved=0CDg QsARqFQoTCKaB37iPmMcCFY SUHgodezQGYw&biw=1216&bih=1271 So, based on your conclusion and example, what is the likelihood of causation between the peak of each two- or three-year rollout of a series of minimum wage increases, and its correlation with an economic upturn and growth in GDP? See above comment on the role of Congress. Yeah, but the *effect* of the min. wage increase on the economy is minimal or nonexistent. It may even be one of those "small safety net" phenomena that have an overall beneficial effect. I suspect it is, but proving it is beyond my analytical skills -- or time. Through the late '70s, the minimum was raised three times, and GDP just kept climbing right through it. No recession then. If you attribute the GDP increases after periods of both minimum-wage increases and simultaneous recession to the normal business cycle, then you have to agree that the minimum-wage raises did not stop or even slow the recovery. In recessions that were not accompanied by minimum-wage increases (1982; 2001), the shape of the recovery was the same as those with a minimum increase. Conservative theory would have predicted at least a delay. In several cases, with business facing the newer, higher minimums, growth just went on throughout the following period. If the conservative theorists were right, none of this would have happened. Not quite. See below. The minimum wage in Mass is $9/hr, or $3/hr with at least $20 per month of tips, as of 1 Jan 2015. It was $8/hr before. In the Boston area, Dunkin Donuts is offering $10/hr plus tips (according to a sign out front), and has been for some time now, long before the recent increase. Now one would assume that Dunkin Donuts knows from long experience exactly how much they must offer to attract the desired number and quality of employees. As long as the minimum wage is less than the market-clearing wage for low-skill jobs, the minimum wage will have no effect. But we know that the minimum is no more than the "market clearing" rate for 3.3 million (or 3.6 million, more recently) people. And the percentage, now at 4.7% of workers, has been much higher in the past. It was over 17% in the late '60s, IIRC. So the historical examples are based on much higher percentages. The pattern holds. I find that conservative theorists have put themselves in a dilemma. First they say that increasing the minimum will cause a substantial loss of jobs and business bankruptcies, not to mention inflation, and then they say that raising the wages will do nearly nothing because the number who are making minimum is so small; that the market-clearing rate is higher to begin with. I fail to see the problem. Both statements are simultaneously true. The problem is that the theories you guys are going on have no evidence. You're whipping up ideas like cotton candy, and the historical record shows that they're crap. Which guys are you talking about? There is sufficient foolishness to go around. Many times over. The only theories are coming from those who say minimum-wage increases cause loss of jobs, inflation, or economic downturns. There is no one on the other side of this discussion except me, and I present only evidence, not theories. See the parable of the apples, below. Consider apples. Let's say that apples are an unregulated market, and the current market price for apples is $11 per pound for better apples, but only $8 for lower-quality apples. The growers of low-quality apples are complaining about the unfairness of it all, raising quite the ruckus. The King eventually decrees that henceforth, apples may not be sold for less than $9 per pound. What effect will this have on the apple market? None on the better apples (which have always complied), but significant on the lower-quality apples (where sales volume will decrease, because not everybody is willing to buy low-grade apples at $9 a pound). Again, you have no evidence that this has happened with minimum wage increases. In 1991, 1997, and 2009, just as wage increases reachd their peak, employment either continued to climb steadily, or it actually jumped. A lot of random motion to be sure. It's hardly random, but there is no sensible connection between economic upturns or downturns and increases in the minimum wage. The evidence says that the correlation is close to zero. Do you deny the truth of the parable of the apples above? It's Econ 101. If yes, what is your reasoning? Having spent most of my years since Econ 101 (and up through 300) paying attention to evidence and facts rather than theory, I'd like to see that theory in actual practice. The general tendency, as I've learned in recent years, is for unintended and unexpected consequences, with theorists scrambling after the fact to re-build their models so they can better predict the past. Hmm Econ 300 does not replace Econ 101. This is basic Supply and Demand, which has not been overthrown, and never will be. Today, a lot would depend on the marketing skills of the people selling lower-quality apples. They may actually make more money, despite a small decline in the volume sold. This assumes that the other apple growers are all asleep at the switch. To some degree, they usually are. That's why there are winners and losers in the marketing game. You're assuming perfect knowledge. As you know, the lack of it is the major thorn in the side of basic free-market theory. More generally, advertising tends to balance out - they drown each other out. There are hundreds of counter examples. There are many, many ways to manipulate demand, some of them very successful. This is a good example of why classical economic theories are suspect. They may work on very large scales (although they may not), but you never know if apple marketers in the next town are charging $10 for all apples, and when their customes start seeing your ads and get wind of the fact that you're selling apples for $9, you could start selling like crazy. Yes markets have always been imperfect for just the reasons you give above, but the advent of modern communications (including but not limited to the Internet) have greatly reduced such imperfections, especially concerning commodities like apples and low-skill labor. I don't agree about low-skill labor. Labor mobility is running very low, not high, and communication advances are one of the reasons, say the researchers. http://www.economist.com/blogs/freee...abour-mobility But we're really getting off-track here. I agree that wages are set by supply and demand, but with a legislated floor below which they can't go. Based on the history of min. wages, it doesn't seem to have had any overall negative effects. If you need workers, you need them, and having to pay them 50% more than you would like probably does not change the fact. You either have a market and potential growth in sales, or you do not. Even taxes have been shown to have a minimal effect on capital expenditures and hiring. Particularly informative (and heartening) are the news accounts of the economic effects of cell phones in third-world counties - centuries-old inequities are being erased because people can now reach around traditional middlemen (who would be classified as pure rentiers by Marx) and discover what the market price for their products are, and seek the best price. And keep a far higher fraction of the proceeds. It's positive news. The correlation is between recessions and employment, not between wage hikes and employment. Well, both are likely. Usually, wages go down during recessions, and rise when times are good. Supply and demand. Again, look at the evidence. MINIMUM wages, at least, tend to go up during recessions. Why do you think that is? Because Congress raises the floor under political pressure. Yes, but the pressure comes while GDP and CPI are rising. Again, look at the timing. The beginnings of those min. wage hikes (which usually occur in multi-year steps) are legislated before the downturn. The political pressure seems to relate more closely to increases in the CPI, which also happens to make more sense. If it were due only to economic forces, the minimum wage would rise and fall all by itself, long before Congress was invented. Well, it did, for centuries. And some of the "falls" -- notably from the 1870s through the Great Depression -- produced catastrophic results. That's why we now have minimum wage laws. And why does the economy tend to turn up after a string of two or three years of minimum wage increases? Because the broad economy recovers. There is always a dispute as to the effect of Congress, harmful or beneficial, too little too late, or nothing at all. The broad economy recovers despite what is going on with wages, suggesting that minimum wage hikes are not a measureable, causative factor at all. This is why I think that increasing the minimum wage has been one of those "small" improvements that makes more economic activity possible, based on its effect on the behavior of consumers at the bottom of the economic ladder. The effects, though, as so small that you can't draw many conclusions, except that people at the bottom have more money. Flipping the question around, how can those unfortunate folk making minimum wage, being the least well paid 5% of the workforce, have any effect whatsoever on the broad economy? Nothing directly. Mostly, it's social and political. And it's really unwise to be demanding a raise or threatening to leave while others are being laid off. This is the rationale behind the suggestion that we plot wage deciles against minimum wage over time. It would add nothing to the employment data, but if it floats your boat, go for it. You can get quintile data from the IRS. The point was not to add to employment data (which we cannot do anyway), but to put the minimum wage into economic context. Well, you can plot the first three quartiles against anything else you desire on the St. Louis Fed research page. Yep. There is a lot in there. And in the BLS data. The BLS data mentioned later actually answered the question of percentile of workforce getting minimum wage - 5% these days. Right. The year-by-year BLS reports we've referred to, about the characteristics of minimum-wage earners, get specific about it and tell you some things about who they are. -- Ed Huntress Joe Gwinn It would be useful to plot minimum wage and the earning quartiles or deciles together. That should tell the tale. That will take you quite a long while, unless you find a way to extract quintiles from something simpler than IRS data. That stuff is a bugger to work with. The FRED site you posted above does have quartile data (see under Add a Data Series), but I wasn't familiar enough with that site to get it to work properly. You have far more practice with that site. Aha. Well, they've added data for the first three quartiles, from some source I didn't check. I could plot that for you, if you want, over the weekend. It will be one messy graph, with all three in there plotted against minimum wage increases, but it can be done. I think we only need the minimum wage and the lowest quartile lines to give the context. You need an account with them to show more than a couple of lines on one graph, and to store them. It's free. If you're interested, it's worth it. They've set it up very nicely. Decile data must be somewhere. Actually, the whole percentile curve is available (there was a thread on this some time ago). I don't know where. That may be buried in the DoL site, probably at BLS. It's nowhere near as slick as the St. Louis Fed. I'll dig that thread up. However, you already have the percentages making minimum wage. What is the source of the percentages given earlier in the posting? BLS: http://data.bls.gov/search/query/results?cx=013738036195919377644%3A6ih0hfrgl50&q=c haracteristics+of+minimum+wage+workers This actually gives the percentile limit. We now know that current minimum-wage workers are in the lowest decile. Do we have the age and education-level distributions of these workers? Yes. I think it's all in the BLS reports (one report for each year) noted above. I'll look into it. There is a lot there, all in a big pile. One would assume that (excluding teenagers' summer jobs and the like) these are the people with no better option. Probably. Joe Gwinn |
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Dunkin' CEO: $15 minimum wage is 'outrageous'
In article , Ed Huntress
wrote: On Sun, 09 Aug 2015 16:48:06 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Fri, 07 Aug 2015 19:45:43 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Fri, 07 Aug 2015 10:00:35 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Thu, 06 Aug 2015 09:21:27 -0400, Joe Gwinn wrote: In article , Ed Huntress wrote: On Wed, 5 Aug 2015 20:02:03 -0700 (PDT), " wrote: On Wednesday, August 5, 2015 at 5:16:16 PM UTC-4, Ed Huntress wrote: That one looks more like raising the minumum wage caused recessions. Then you need to take a closer look at minimum wage increases and GDP: https://research.stlouisfed.org/fred2/graph/?graph_id=249246 There were two wage increases in '91. GDP climbed after the first, and then climbed again after the second. There were wage increases in '96 and '97. GDP went up after each one. There were two wages increases in 2009. GDP climbed after each one. On the other side, there was a wage increase in 1990. GDP went down. You know what happened after 2007; wages weren't involved. Jobs were hardly involved. g So, as I said earlier, it's mixed. But minimum wage increases were followed by GDP growth more often than not over the last 35 years. -- Ed Huntress According to the chart there were recessions at about the same time as the minimum wage increases. The grey bars indicate recessions where the GDP did not grow as you claim. Dan The GDP grew exactly as I said. If you can't read the graph, I'll pull out the data for you. Graph reading isn't the problem. It's Dan's problem. d8-) Well, I probably read the graph the same way as Dan, then - the claim was that raising the minimum wage caused the GDP to increase, but the graph says exactly the opposite. No. The "claim" was that it's sometimes up, and sometimes down -- that there is no correlation. In fact, in the window shown, the biggest changes in both GDP and minimum wage occurred during the 2008 recession, during which the minimum wage went up as the GDP went down. This is why I say you have to look at those graphs carefully. During the period from the end of 2007 through the first quarter of 2009, the correlations we July 2007 -- min. goes up, GDP goes down. July 2008 -- min. goes up again, GDP goes down. July 2009 -- min. goes up again, GDP goes up. So what is the correlation? It's the same pattern as 1975 and 1990: Small increases in minimum wage correlate with a decline in GDP. The highest level of min. wage in all three periods correlates with GROWTH in GDP. Small increases bad; big increases good. g The biggest move was in 2008, by far. The thing is, if increases in the minimum wage caused a decline in economic growth, the growth following an increase to an even HIGHER level in 2009 would be impossible. Or, more sensibly, the level of the minimum wage has nothing to do with GDP, that one can measure. I agree that changes to the minimum wage have no effect on GDP, plus or minus. Although recessions do tend to cause raises in minimum wage, as discussed. There are a few ways to tell if a correlation could be due to causation. The first is causal order - effect must follow purported cause. The second is the the bigger the cause, the bigger the effect. And the sign of the correlation coefficient must be all positive or all negative. Um...do you mean each correlation? If so, then no. What we're really talking about here is covariance. Some can be negative while most are positive, and you get a positive overall covariance and correlation coefficient. Only if you assume that the "cause" is exclusive -- that there is nothing else going on that would affect the relationship -- can you say that a cause must be all positive or negative, in every case, to prove causation. Correlation and covariance are pretty much the same mathematically here. The statistics folk and the signal-processing folk use different aspects of the same math core. Sometimes they use a correlation that varies from zero to one, and sometimes from minus one to plus one, depending on intended use. In any event, the signed correlation is needed to tell direct relations from inverse relations - both kinds can be causal. Even a strong positive correlation can have an occassional negative value in the sample, due to other causative issues. The point is that if (ignoring a few outliers) one has a scattering of plus and minus coefficients, the true correlation coefficient may be difficult to tell from zero: one cannot reject the null hypothesis. In real-world economics, there are few causative relationships that show up with a purely positive or purely negative relationship. In most cases there are multiple influences at work. Where it gets really interesing, to me, is in those cases where a small force drives a result in one direction, while a larger value of the same force drives a result in the other direction. For example, an improvement in one's ability to get family health care as an independent insured (no group policy, no Medicare, etc.) has been shown to improve the level of risk-taking and individual entrepreneurship. Yes. This is one difference between macro and micro economics. That doesn't seem to hold when safety-net measures grow large. A massive unemployment system, such as the ones they have in much of western Europe, does not seem to improve such risk-taking, and actually hinders it, compared to countries with more modest safety nets (particularly the US). Exactly. One can be too comfortable. Complacent companies tend to slide gently into bankruptcy and vanish. Unfortunately, while governments can go bankrupt, they don't vanish, or much change. Datapoint: Greece. But even if these tests all pass, the correlation can be due to some un-modeled common cause. It can also be difficult to decide which is cause and which is effect if cause and effect happen simultaneously (to the resolution of the measurements). Right. Of course, that's unlikely to have any causative relationship, but the point is that the overall correlation coefficient is close to zero, whether you look at it from the standpoint of minimum wage increases (1997; Mar 1975 through May 1979) or the standpoint of recessions (2001, 1970, 1960, etc.). The correlation with recessions seems shot to hell by the fact that, consistently, the highest raise in an annual series of raises occurs roughly at the time the economy turns up. Again, no correlation with any direction: there are ups, and there are downs. The number of samples is too small to rely much on the coefficient, but it's surely close to zero. Oh, there is a correlation there, but it is more political than economic, and doesn't happen every time. This isn't Physics. The minimum wage changes only when Congress changes it. This happens only when Congress is under considerable political pressure. Like during a recession. If you look at the pattern, you'll see that most of them are multi-step raises that either start before the recession, or that had to be signed into law before the recession. I agree that it's political, but the pressure seems to occur when CPI and employment [unemployment?] are rising sharply: https://research.stlouisfed.org/fred2/graph/?graph_id=249220&category_id= I suspect that CPI is what applies the political pressu Prices are rising, and there is a clamor for higher wages. Then, at about the same time, we fall off of the economic boom and go into a normal business-cycle recession. That's happened several times since 1980. Before then, it was more complicated, as our monetary responses were really messy and uninformed. That's the "before Volcker" period. Look at it from that perspective and see if that doesn't agree closely with the evidence. Yes. I think it's the joint effect of rising CPI and rising unemployment that causes the political pressure. The Minimum Wage is not an economic variable like Supply and Demand. Right. I don't see how looking at the numbers that are graphed would change this general observation. sigh Let's go through it. There was a two-step increase ending in 1991. Just as the second minimum wage increase took effect, the theory suggesting that the effect on GDP should be at its worst, the recession ended and GDP took off. In 1996 - 97, another two-step increase. GDP just keep rising, with NO effect from the increased minimum wage. 2007 - 2009: Again, a multi-step increase, amidst a recession that was precipitated by the financial collapse. Just before the end of it, the increases reached their peak -- just as the economy turned around and GDP began to grow again. In all of those cases, the worst effect should have been when the increase raised wages to their peak. But just the opposite happened. Just as wages peaked, the recession ended and GDP started to grow. Are we looking at the same graph? https://research.stlouisfed.org/fred2/graph/?graph_id=249246 Yes. See part about correlation below. The chart shows GDP reduction (not increase) at the same time as increases in minimum wage. The cause is of course political, not economics: Congress raises the minimum wage only during hard times, to show that they are doing something, at last. The subsequent rise is simply the general recovery from recession, and is not a result of raising the minimum wage. Then how do you explain raises in '96 and '97? There were no hard times then. Minimums were raised twice and the GDP kept climbing. Politics. I don't recall what was going on at the time, 20 years ago. The mini-recession of 2001 seems to have had no political effect - no change in minimum wage. And if you move the slider to the left, you'll see a very complex situation. There were so many variables at work during those years that I didn't want to complicate the issue -- 35 years of modern experience seemed to tell enough -- but you'll see, if you look back, that in '74 and '75, the minimum was raised twice DURING a recession, and the GDP started climbing just a couple of months later. Correlation is not causation. But how do you show causation if there is no correlation? The answer is, you don't. A correlation doesn't show causation. But a lack of correlation shows there is no causation. If there is no correlation, causation is unlikely for sure. If there is correlation, there is still much to be proven. The biggest danger (aside from coincidence) is when the two timeseries showing correlation are in fact both dependent on some other timeseries. The classic example is the fact that there is a positive and significant correlation between automobile accidents and the sale of ice cream. This is true, even if you discount kids running into the street at the sound of an ice cream truck. So, to save lives, we must outlaw ice cream. It's the only moral course of action. Why the correlation? In the summer, people drive more and eat more ice cream, because it's warm and nice out. .https://www.google.com/search?q=fals...es&client=oper a&hs=DlD&tbm=isch&tbo=u&source=univ&sa=X&ved=0CDg QsARqFQoTCKaB37iPmMcCFY SUHgodezQGYw&biw=1216&bih=1271 So, based on your conclusion and example, what is the likelihood of causation between the peak of each two- or three-year rollout of a series of minimum wage increases, and its correlation with an economic upturn and growth in GDP? See above comment on the role of Congress. Yeah, but the *effect* of the min. wage increase on the economy is minimal or nonexistent. It may even be one of those "small safety net" phenomena that have an overall beneficial effect. I suspect it is, but proving it is beyond my analytical skills -- or time. I doubt you could prove the effect, even if you did have the skills and time, given the small size of any likely effect. Too much obscuring noise. Through the late '70s, the minimum was raised three times, and GDP just kept climbing right through it. No recession then. If you attribute the GDP increases after periods of both minimum-wage increases and simultaneous recession to the normal business cycle, then you have to agree that the minimum-wage raises did not stop or even slow the recovery. In recessions that were not accompanied by minimum-wage increases (1982; 2001), the shape of the recovery was the same as those with a minimum increase. Conservative theory would have predicted at least a delay. In several cases, with business facing the newer, higher minimums, growth just went on throughout the following period. If the conservative theorists were right, none of this would have happened. Not quite. See below. The minimum wage in Mass is $9/hr, or $3/hr with at least $20 per month of tips, as of 1 Jan 2015. It was $8/hr before. In the Boston area, Dunkin Donuts is offering $10/hr plus tips (according to a sign out front), and has been for some time now, long before the recent increase. Now one would assume that Dunkin Donuts knows from long experience exactly how much they must offer to attract the desired number and quality of employees. As long as the minimum wage is less than the market-clearing wage for low-skill jobs, the minimum wage will have no effect. But we know that the minimum is no more than the "market clearing" rate for 3.3 million (or 3.6 million, more recently) people. And the percentage, now at 4.7% of workers, has been much higher in the past. It was over 17% in the late '60s, IIRC. So the historical examples are based on much higher percentages. The pattern holds. I find that conservative theorists have put themselves in a dilemma. First they say that increasing the minimum will cause a substantial loss of jobs and business bankruptcies, not to mention inflation, and then they say that raising the wages will do nearly nothing because the number who are making minimum is so small; that the market-clearing rate is higher to begin with. I fail to see the problem. Both statements are simultaneously true. The problem is that the theories you guys are going on have no evidence. You're whipping up ideas like cotton candy, and the historical record shows that they're crap. Which guys are you talking about? There is sufficient foolishness to go around. Many times over. The only theories are coming from those who say minimum-wage increases cause loss of jobs, inflation, or economic downturns. There is no one on the other side of this discussion except me, and I present only evidence, not theories. See the parable of the apples, below. Consider apples. Let's say that apples are an unregulated market, and the current market price for apples is $11 per pound for better apples, but only $8 for lower-quality apples. The growers of low-quality apples are complaining about the unfairness of it all, raising quite the ruckus. The King eventually decrees that henceforth, apples may not be sold for less than $9 per pound. What effect will this have on the apple market? None on the better apples (which have always complied), but significant on the lower-quality apples (where sales volume will decrease, because not everybody is willing to buy low-grade apples at $9 a pound). Again, you have no evidence that this has happened with minimum wage increases. In 1991, 1997, and 2009, just as wage increases reachd their peak, employment either continued to climb steadily, or it actually jumped. A lot of random motion to be sure. It's hardly random, but there is no sensible connection between economic upturns or downturns and increases in the minimum wage. The evidence says that the correlation is close to zero. Do you deny the truth of the parable of the apples above? It's Econ 101. If yes, what is your reasoning? Having spent most of my years since Econ 101 (and up through 300) paying attention to evidence and facts rather than theory, I'd like to see that theory in actual practice. The general tendency, as I've learned in recent years, is for unintended and unexpected consequences, with theorists scrambling after the fact to re-build their models so they can better predict the past. Hmm Econ 300 does not replace Econ 101. This is basic Supply and Demand, which has not been overthrown, and never will be. Today, a lot would depend on the marketing skills of the people selling lower-quality apples. They may actually make more money, despite a small decline in the volume sold. This assumes that the other apple growers are all asleep at the switch. To some degree, they usually are. That's why there are winners and losers in the marketing game. You're assuming perfect knowledge. As you know, the lack of it is the major thorn in the side of basic free-market theory. Over the long term, yes, Over the short term, no. More generally, advertising tends to balance out - they drown each other out. There are hundreds of counter examples. There are many, many ways to manipulate demand, some of them very successful. The classic example is name-brand soap, where the retail price of a bar of hand soap is something like 2/3 the cost of advertising. But labor is not such a market. Nor is apples for that matter. This is a good example of why classical economic theories are suspect. They may work on very large scales (although they may not), but you never know if apple marketers in the next town are charging $10 for all apples, and when their customes start seeing your ads and get wind of the fact that you're selling apples for $9, you could start selling like crazy. Yes markets have always been imperfect for just the reasons you give above, but the advent of modern communications (including but not limited to the Internet) have greatly reduced such imperfections, especially concerning commodities like apples and low-skill labor. I don't agree about low-skill labor. Labor mobility is running very low, not high, and communication advances are one of the reasons, say the researchers. http://www.economist.com/blogs/freee...abour-mobility I'll grant you that mobility of adult minimum-wage workers tends to be low. It's one of the reasons they remain minimum-wage. But we're really getting off-track here. I agree that wages are set by supply and demand, but with a legislated floor below which they can't go. Based on the history of min. wages, it doesn't seem to have had any overall negative effects. If you need workers, you need them, and having to pay them 50% more than you would like probably does not change the fact. You either have a market and potential growth in sales, or you do not. Even taxes have been shown to have a minimal effect on capital expenditures and hiring. So far. But it's the dose that makes the poison, and governments must always be restrained, or they will crush their economy. One example is the loss of energy if the safety net is too comfortable, as mentioned above. Particularly informative (and heartening) are the news accounts of the economic effects of cell phones in third-world counties - centuries-old inequities are being erased because people can now reach around traditional middlemen (who would be classified as pure rentiers by Marx) and discover what the market price for their products are, and seek the best price. And keep a far higher fraction of the proceeds. It's positive news. Yes. And it's happening in the US as well. The correlation is between recessions and employment, not between wage hikes and employment. Well, both are likely. Usually, wages go down during recessions, and rise when times are good. Supply and demand. Again, look at the evidence. MINIMUM wages, at least, tend to go up during recessions. Why do you think that is? Because Congress raises the floor under political pressure. Yes, but the pressure comes while GDP and CPI are rising. Again, look at the timing. The beginnings of those min. wage hikes (which usually occur in multi-year steps) are legislated before the downturn. The political pressure seems to relate more closely to increases in the CPI, which also happens to make more sense. As discussed above, I think that it's the combination of high unemployment an high inflation that causes the political pressure. When times are good, there is little pressure - the party is on! If it were due only to economic forces, the minimum wage would rise and fall all by itself, long before Congress was invented. Well, it did, for centuries. And some of the "falls" -- notably from the 1870s through the Great Depression -- produced catastrophic results. That's why we now have minimum wage laws. Yes. https://en.wikipedia.org/wiki/Minimum_wage And why does the economy tend to turn up after a string of two or three years of minimum wage increases? Because the broad economy recovers. There is always a dispute as to the effect of Congress, harmful or beneficial, too little too late, or nothing at all. The broad economy recovers despite what is going on with wages, suggesting that minimum wage hikes are not a measureable, causative factor at all. This is why I think that increasing the minimum wage has been one of those "small" improvements that makes more economic activity possible, based on its effect on the behavior of consumers at the bottom of the economic ladder. The effects, though, as so small that you can't draw many conclusions, except that people at the bottom have more money. Yes. Simply put, minimum wage is a form of welfare. The key question is if it helps or hurts those it claims to help. By supply and demand, it would seem that it hurts precisely those whose wages are thereby raised above the free-market level. Some people now see more money, but some now see zero money. Flipping the question around, how can those unfortunate folk making minimum wage, being the least well paid 5% of the workforce, have any effect whatsoever on the broad economy? Nothing directly. Mostly, it's social and political. And it's really unwise to be demanding a raise or threatening to leave while others are being laid off. This is the rationale behind the suggestion that we plot wage deciles against minimum wage over time. It would add nothing to the employment data, but if it floats your boat, go for it. You can get quintile data from the IRS. The point was not to add to employment data (which we cannot do anyway), but to put the minimum wage into economic context. Well, you can plot the first three quartiles against anything else you desire on the St. Louis Fed research page. Yep. There is a lot in there. And in the BLS data. The BLS data mentioned later actually answered the question of percentile of workforce getting minimum wage - 5% these days. Right. The year-by-year BLS reports we've referred to, about the characteristics of minimum-wage earners, get specific about it and tell you some things about who they are. Joe Gwinn |
#31
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Mon, 10 Aug 2015 09:34:15 -0400, Joe Gwinn
wrote: snip everything I think we've beaten this dead horse bloody, Joe, and that we're basically in agreement on everything that's important. Now I have to leave for a while. I'll be travelling and working too much to get on RCM. I never do it with my mobile machines, anyway. So, hasta la vista. I'll be back; I just don't know when. -- Ed Huntress |
#32
Posted to rec.crafts.metalworking
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Dunkin' CEO: $15 minimum wage is 'outrageous'
In article , Ed Huntress
wrote: On Mon, 10 Aug 2015 09:34:15 -0400, Joe Gwinn wrote: snip everything I think we've beaten this dead horse bloody, Joe, and that we're basically in agreement on everything that's important. Now I have to leave for a while. I'll be travelling and working too much to get on RCM. I never do it with my mobile machines, anyway. So, hasta la vista. I'll be back; I just don't know when. On the road, watching metal be tortured? Joe Gwinn |
#33
Posted to rec.crafts.metalworking
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Dunkin' CEO: $15 minimum wage is 'outrageous'
On Mon, 10 Aug 2015 22:12:51 -0400, Joe Gwinn
wrote: In article , Ed Huntress wrote: On Mon, 10 Aug 2015 09:34:15 -0400, Joe Gwinn wrote: snip everything I think we've beaten this dead horse bloody, Joe, and that we're basically in agreement on everything that's important. Now I have to leave for a while. I'll be travelling and working too much to get on RCM. I never do it with my mobile machines, anyway. So, hasta la vista. I'll be back; I just don't know when. On the road, watching metal be tortured? Joe Gwinn Yup. I'm back home now, but I'm off again tomorrow. -- Ed Huntress |
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