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posted by martyb on Friday May 18 2018, @02:50AM   Printer-friendly
from the Mo'-Money dept.

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).


Original Submission

 
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  • (Score: 5, Insightful) by Joe Desertrat on Friday May 18 2018, @09:48AM (6 children)

    by Joe Desertrat (2454) on Friday May 18 2018, @09:48AM (#681091)

    Maybe we need a maximum wage, based on how much the lowest employee is paid, instead of a minimum wage. Your lowest paid employee gets paid $20,000 per year (adjusted for a 40 hour week), you can earn a maximum of say, $50,000 a year. Profits go up, everyone gets a share in the increase or it all goes back into expanding or improving the business.

    Starting Score:    1  point
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    Extra 'Insightful' Modifier   0  
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    Total Score:   5  
  • (Score: 2) by PiMuNu on Friday May 18 2018, @03:59PM

    by PiMuNu (3823) on Friday May 18 2018, @03:59PM (#681222)

    Politically impossible though, no?

  • (Score: 2) by crafoo on Friday May 18 2018, @08:20PM

    by crafoo (6639) on Friday May 18 2018, @08:20PM (#681360)

    Huh, that actually makes a lot of sense. Implement it with an exponential curve on taxes on earnings. On anything that isn't reinvested somewhere.

  • (Score: 0) by Anonymous Coward on Friday May 18 2018, @11:45PM

    by Anonymous Coward on Friday May 18 2018, @11:45PM (#681435)

    It has already been done.
    Under Republicans Harding, Coolidge, and Hoover in the 1920s, taxes on the uber-rich went down and down and down.
    ...then the economy tanked in 1929.

    Hoover sat on his thumb for over 3 years and, before the electorate kicked out his sorry ass in 1932, 1 in 4 USAians didn't have a job.
    (Sound familiar? Yeah. Oligarchical Capitalism goes completely into the shitter about every 80 years.)

    FDR got the gig starting in March 1933 and, before he was done, he had raised the marginal income tax rate on the 1 Percent[1] to 94 percent.
    (The Labor Movement, led by 2 Socialist groups and 1 Communist group, told FDR that he needed to reverse the misery or the 99 Percent wouldn't vote for him--and might just stage a revolution.
    He took that You-might-lose-everything message to the Patricians and they conceded.)

    [1] After you had gotten to the level of Extremely Comfortable (~$300k today) the returns on personal compensation diminished sharply.
    You may as well give the surplus to your workers so that they can buy more stuff and get the (Capitalist) economy up off its back.

    FDR used the tax money to hire USAians to build infrastructure (much of which, under subsequent Neoliberal/Reactionary regimes has fallen into disrepair).

    Through the terms of Truman and Ike, that billionaires' tax stayed at over 90 percent.
    ...then we got into the early stages of Neoliberalism, then into absolutely Reactionary times.

    Wanna see what comes next?
    Refer to a history of The Gilded Age (and The Long Depression).
    Think that slump in 2007-2008 was bad?
    You ain't seen nothing yet.

    "Those who cannot learn from history are doomed to repeat it." --George Santayana

    -- OriginalOwner_ [soylentnews.org]

  • (Score: 1) by khallow on Saturday May 19 2018, @02:00AM

    by khallow (3766) Subscriber Badge on Saturday May 19 2018, @02:00AM (#681487) Journal
    I'm not feeling the need here. I'm not any richer, if Gates were worth a million dollars than if he were worth 100 billion.

    Don't we have actual problems to solve?
  • (Score: 2) by FatPhil on Saturday May 19 2018, @11:03AM

    by FatPhil (863) <pc-soylentNO@SPAMasdf.fi> on Saturday May 19 2018, @11:03AM (#681568) Homepage
    Yousound like you've never owned any businesses. Most of the money that ends up in my bank account comes not as wages, but as dividends. So any wage ratio is irrelevant - in fact I'm the lowest wge earner in the company anyway!
    --
    Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
  • (Score: 0) by Anonymous Coward on Saturday May 19 2018, @03:20PM

    by Anonymous Coward on Saturday May 19 2018, @03:20PM (#681584)

    Maybe we need a maximum wage

    But then you'd have to define what wage is and what constitutes a legal entity that pays such wages.

    Needless to say, maximum wage is not a bad concept. The problem is there are many ways around such a setup and hence it is almost unenforceable. Just look at how televangelists amassed enormous fortunes. And then we have non-wage earnings. So, maximum wage, maybe maximum income instead? But we already have that, except that high earners just keep getting one tax break after another. At least in the US.