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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: 3, Insightful) by khallow on Friday May 18 2018, @12:28PM (2 children)
Not really sure what I can do here though. If you can't get basic concepts like choice or cooperation, then you're just not going to get concepts like markets or employment.
(Score: 0) by Anonymous Coward on Friday May 18 2018, @06:23PM (1 child)
Yeah right? If only everyone could enter into a voluntary contract for every aspect of life wouldn't things be great!
You can try and high road with your incorrect assumptions but you're just feeding right into your stereotype.
(Score: 1) by khallow on Saturday May 19 2018, @01:50AM
We don't need silly straw men that are near impossible to achieve. A key driver to things like minimum wage is the axiom that people are incapable of making important decisions, thus, someone wiser has to make those decisions for them. That completely ignores actual people making actual decisions in actual societies. Somehow they have it figured out. It's also viciously anti-democratic. It's only a small step ideologically from that to simply removing the choice altogether.
Meanwhile somehow businesses which have a hostile relationship with their employees do better than those that don't? Tell me another fairy tale. Cooperation is the secret sauce to all successful businesses. You can't get rich by screwing over a bunch of people who can leave any time they want to. Every such business has something to offer in exchange for whatever dysfunction it has.