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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: 2, Insightful) by khallow on Friday May 18 2018, @10:53AM (5 children)

    by khallow (3766) Subscriber Badge on Friday May 18 2018, @10:53AM (#681102) Journal

    But there was some guy about a century ago, that figured out that if he wanted to sell his product, he needed to pay his employees enough that they could actually afford to buy it.

    No, that would be very incorrect since the vast majority of purchasers of Ford products were not Ford employees. It was simply a bit of propaganda to help Ford recruit and retain workers.

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  • (Score: 3, Insightful) by cmdrklarg on Friday May 18 2018, @02:35PM (2 children)

    by cmdrklarg (5048) Subscriber Badge on Friday May 18 2018, @02:35PM (#681176)

    Attract and retain workers by having better pay than the competition? What will Wall Street think about that? Madness, I tell you...

    --
    The world is full of kings and queens who blind your eyes and steal your dreams.
    • (Score: 0) by Anonymous Coward on Friday May 18 2018, @06:07PM (1 child)

      by Anonymous Coward on Friday May 18 2018, @06:07PM (#681306)

      Such propaganda, much lizard thinking /s

      Pay no mind to jmorris, his brain is permanently stuck on the wash cycle.

      • (Score: 0) by Anonymous Coward on Friday May 18 2018, @10:43PM

        by Anonymous Coward on Friday May 18 2018, @10:43PM (#681425)

        I would have said the Soak cycle.
        ...and clearly what's in that solution has leeched out any intelligence from his brain and turned what's left into a soggy mess.

        -- OriginalOwner_ [soylentnews.org]

  • (Score: 2) by FatPhil on Saturday May 19 2018, @07:29AM (1 child)

    by FatPhil (863) <pc-soylentNO@SPAMasdf.fi> on Saturday May 19 2018, @07:29AM (#681540) Homepage
    Nice reading comprehension you got there.
    Why do you think "could afford to buy" is synonymous with "would buy"?
    --
    Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
    • (Score: 1) by khallow on Saturday May 19 2018, @10:25AM

      by khallow (3766) Subscriber Badge on Saturday May 19 2018, @10:25AM (#681562) Journal

      Why do you think "could afford to buy" is synonymous with "would buy"?

      Look at the quote. They are asserting that paying enough to employees that they can afford to buy the car (explicitly stated in the quote) causes more cars to be sold. If it isn't because those employees are buying cars, then what is the mechanism by which that happens? Some sort of imaginary capitalist karma?