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An article in Australian newspaper The Age describes a paper just released by the Reserve Bank of Australia which has found that periodic increases in the Minimum Wage (also known as the "Award" wage in Australia) did not negatively affect the level of employment in each respective industry:
The paper, published by the central bank's economic research department on the final day the Fair Work Commission hearings had to decide if 2.3 million Australians will get a pay rise in July, found "no evidence that small, incremental increases in award wages had an adverse effect on hours worked or the job destruction rate".
It used a sample of 32,000 jobs between 1998 and 2008, when award wages were increased by a flat dollar amount each year, to find jobs with larger award wage rises had larger increases in hours worked than jobs experiencing a smaller award wage rise.
"I am able to rule out adverse effects on hours worked. I also find that award wage increases do not have a statistically significant effect on the job destruction rate," said researcher James Bishop.
"If anything, the point estimates suggest that the job destruction rate actually declines when the award wage is increased."
[...] The RBA paper said their results may not "necessarily generalise to large, unanticipated changes in award wages", cautioned it only included adult positions, and that the consequences of wage increases may "be borne by job seekers, rather than job holders".
"There will always be some point at which a minimum wage adjustment will begin to reduce employment," the paper stated.
Naturally, this is proving problematic for some politicians who have been advocating against increases in the minimum wage due to fears that this will harm business.
Link to Abstract and Paper (pdf).
(Score: 5, Informative) by PartTimeZombie on Friday May 18 2018, @03:34AM (15 children)
...aaaand, there it is.
First cab off the rank didn't even read as far as
But why not totally make it $500 an hour?
Fuckwit.
(Score: 2) by krishnoid on Friday May 18 2018, @04:10AM
I'll just leave this here [xkcd.com].
(Score: -1, Troll) by Anonymous Coward on Friday May 18 2018, @05:14AM (11 children)
Yeah, cunt, I know you're a smug asshole who thinks they know everything, but you shot yourself in the foot because you're a fucking moron. There is nothing of value in this paper and the sentence you quoted nails down exactly why. Over ten years the minimum wage is ratcheted up very slowly and doesn't actually affect anything. Guess what, dumbass? There's this thing called "inflation." Try and keep up.
Better yet, let the adults talk and go shred napkins in the corner.
(Score: 3, Interesting) by jmorris on Friday May 18 2018, @06:31AM (10 children)
More important, what is a major driver of inflation?
Then look deeper and understand who benefits most from the slow steady inflation that is the stated goal of every country with a central bank.
(Score: 5, Informative) by shrewdsheep on Friday May 18 2018, @08:24AM (7 children)
Inflation is important to any economy as it is tied in with the speed of money circulation. With hyper-inflation, spend your money as quickly as possible, with deflation, hold on to it as long as you can. The sweet point is reached with a small level of inflation when most people will spend on all the daily needs, plus consume as much as possilbe, but costs for the economy to adapt to inflation keep at a minimum. The latter would be frequent changes in prices, cost to money management, and increased risk to loans on the lender side.
This is a purely economic perspective, of course.
(Score: 5, Insightful) by khallow on Friday May 18 2018, @10:50AM (6 children)
Well, that is the propaganda, isn't it? I agree that there would be some one-time negative economic effects from the shuffling around that would accompany a transition from a debt-oriented economy to a savings-oriented economy, but I doubt it'd be as bad as discovering that credit default swaps are more risky than advertised.
Because "consume as much as possible" is something we want to force people to do?
Sure.
(Score: 1, Insightful) by Anonymous Coward on Friday May 18 2018, @06:05PM (4 children)
Cute seeing people say their ignorance is better then the evidence. There is plenty to complain about with big banks and how they fuck people over, but you sound like someone who thinks we should go back to the gold standard.
(Score: 1, Insightful) by Anonymous Coward on Friday May 18 2018, @08:51PM (2 children)
I don't know about him, but I loathe this reasoning because wasting your money on consuming as many useless products as possible is harmful both to yourself and the world. We should not encourage this type of wastefulness. The 'conventional wisdom' of consumerism is unsustainable.
(Score: 0) by Anonymous Coward on Friday May 18 2018, @09:29PM (1 child)
Blind consumerism is not the point, but keeping the money in circulation IS the point. Don't conflate the two. Restaurants are a great example, with more money people could eat out more thus creating more economic activity. We all gotta eat and you could argue that a restaurant is more efficient than everyone cooking at home.
Money can be spent on renewable energy projects, community improvement, etc.
Do not conflate.
(Score: 1) by khallow on Saturday May 19 2018, @01:28AM
Inflation helps how? Bottom line is that currency is relative. $100 doesn't spend differently than $50. If one is having circulation troubles, they'll have those troubles whether or not something is valued at $50 or $100.
Or it can simply not be spent on things that don't do much for us.
(Score: 1) by khallow on Saturday May 19 2018, @01:25AM
And you brought that up why? And evidence? I'd be interested in such.
(Score: 3, Interesting) by crafoo on Friday May 18 2018, @08:09PM
If you run banks, and you transfer wealth to yourself through transaction fees and interest on debt, then yes. Everyone should consume as much as possible. Make as many transactions as possible. Carry as much debt as possible.
If you control the banks that all the other banks magically derive their lending power from, then all of the above x100. Plus you get to boss around countries and poke the prince of England in the chest like he's your little bitch. Because he is.
(Score: 2, Touché) by Anonymous Coward on Friday May 18 2018, @09:48AM
Lemme guess - the latest time it happened on a great scale was cheap credit offered to anyone without risk analysis. Then the entire world sunk into a deflationary spiral.
Did I guess right?
(Score: 3, Insightful) by Thexalon on Friday May 18 2018, @07:21PM
That's easy: People who borrowed money at a fixed rate that assumed a level of inflation lower than what actually happened. Examples of this include homeowners who took on fixed-rate mortgages or businesses that sold bonds around 2010 or so.
The interesting thing to me is that prices of goods and services going up is considered, to the libertarian crowd, simply good business, whereas if wages start rising to match that they say "OMG! Inflation! We're about to become Zimbabwe! Buy gold! Head for the hills!"
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by Anonymous Coward on Friday May 18 2018, @07:13AM (1 child)
You could, but then for a little bit everyone would be making that much. You also would have to fill the in the gap between the time government distributes cash (via public servant sector and contracts) and it getting to the hands of private sector to pay the wages.
Anyway, you may just live to a time when min wage is $500/h.
You seem to have issues accepting other than your own preconceived ideas and then lashing out. Perhaps years of therapy will help with your impulses?
(Score: 1, Interesting) by Anonymous Coward on Friday May 18 2018, @08:53AM
You do not want to even think about house prices and rent.
The "minimum wage" input was the major input to the equations some "flip this house" seminars I went to talked about... how if the minimum wage went up, the amount of rent one could afford went up, and if the landlord did not take it, someone else would.