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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: 1, Insightful) by Anonymous Coward on Friday May 18 2018, @08:51PM (2 children)

    by Anonymous Coward on Friday May 18 2018, @08:51PM (#681385)

    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.

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  • (Score: 0) by Anonymous Coward on Friday May 18 2018, @09:29PM (1 child)

    by Anonymous Coward on Friday May 18 2018, @09:29PM (#681406)

    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

      by khallow (3766) Subscriber Badge on Saturday May 19 2018, @01:28AM (#681466) Journal

      but keeping the money in circulation IS the point.

      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.

      Money can be spent on renewable energy projects, community improvement, etc.

      Or it can simply not be spent on things that don't do much for us.