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: 1) by khallow on Saturday May 19 2018, @01:58AM
Richness is simply having a lot of wealth. Being thrifty can help since it retainw wealth, but you really need some means to create significant wealth in order to generate a lot of richness.
Markets have effective minimum wages as well. There is no such thing as a free lunch.
The "expansion of businesses due to forced circulation"? I would agree.
The harshest of some of the non-market-based ideologies have a far greater problem with that than libertarians. Letting people starve is a trademark move of 20th Century Communism, for example.
Or we can just accept that conflict of interest exists and move on.