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posted by janrinok on Monday December 08 2014, @06:49PM   Printer-friendly
from the consumers-with-more-money-to-spend dept.

NPR (formerly National Public Radio) reports:

By a 44-5 vote, Chicago's City Council set a minimum-wage target of $13 an hour, to be reached by the middle of 2019. The move comes after Illinois passed a nonbinding advisory last month that calls for the state to raise its minimum pay level to $10 by the start of next year.

The current minimum wage in Chicago and the rest of Illinois is $8.25. Under the ordinance, the city's minimum wage will rise to $10 by next July and go up in increments each summer thereafter.

[...]The bill states that "rising inflation has outpaced the growth in the minimum wage, leaving the true value of lllinois' current minimum wage of $8.25 per hour 32 percent below the 1968 level of $10.71 per hour (in 2013 dollars)."

It also says nearly a third of Chicago's workers, or some 410,000 people, currently make $13 an hour or less.

[...][In the 2014] midterm elections, voters in Alaska, Arkansas, Nebraska, and South Dakota approved binding referendums that raise their states' wage floor above the federal minimum.

Media Matters for America notes that The Chicago Tribune's coverage tried to trot out the *job-killer* dead horse once again, to which the response was

According to a March 2014 report(PDF) prepared for the Seattle Income Inequality Advisory Committee titled "Local Minimum Wage laws: Impacts on Workers, Families, and Businesses", city-wide minimum wage increases in multiple locations--Albuquerque, NM; Santa Fe, NM; San Francisco, CA; and Washington, DC--produced "no discernible negative effects on employment" and no measurable job shift from metropolitan to suburban areas.

Related:

Seattle Approves $15 Minimum Wage

Mayor's Minimum Wage Veto Overridden by San Diego City Council

States That Raised Their Minimum Wages Are Experiencing Faster Job Growth

 
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  • (Score: 3, Interesting) by khallow on Tuesday December 09 2014, @07:10AM

    by khallow (3766) Subscriber Badge on Tuesday December 09 2014, @07:10AM (#124099) Journal
    This post demonstrates the unrealistic expectations of minimum wage supporters and the resulting blame games, (here, scapegoating) they play, when things don't go their way.

    I notice here that a number of people are bashing Walmart because it's not willing to pay an imaginary and arbitrary, "living wage" to its employees. There is absolutely no consideration or understanding of the value such businesses provide to society or the difficulties that these businesses face. Nor is there understanding of the economic consequences of punishing these employers for bad social policy. There are numerous things wrong with this viewpoint and argument and it's worth it, I think, to go through these flaws of reasoning.

    First, Walmart does a variety of things that help the poor. They provide a huge variety of goods at cheaper prices. That is, they directly reduce the cost of living and indirectly, by creating more efficient delivery of goods, reduce the demand for goods that the poor use, like fuel and land. They also employ over two million people directly. Finally, they help match developed world wants with developing world labor. Millions of people are being helped out of poverty throughout the world as a result of Walmart's efforts. When one advocates bankruptcy of such a useful business, they aren't just advocating the harming of a couple of million employees and several hundred million customers or the increased consumption of a variety of scarce resources, but also the vast supply chains that deliver these goods sold by Walmart and the billions of people whose economies benefit from this trade.

    Second, these low-end jobs serve a very important societal purpose. They allow one to demonstrate that they can be a valuable and trustworthy worker and they enable the would-be worker to pick up useful work skills. That in turn allows one to command a higher wage than a person who has sat out of the labor market for years. It is painful to have to note that in the US, there is vast unemployment among youth and various highly urbanized ethnic groups (particularly, African Americans) and that minimum wage law has a big role in making that happen.

    Third, there is this fantasy that merely paying more to workers makes for a stronger economy. What is routinely and roundly ignored is that the other side of the coin here is that workers are employed to do useful things. And unfortunately, quite often, there are a bunch of employees who just can't do that much in the way of useful things. Raising minimum wage doesn't help these employees become more valuable. It doesn't give businesses more money with which to pay these employees. Thus, it is folly to expect a higher minimum wage to result in no decrease in employment. Similarly, why expect that massive bankruptcy of the businesses that employ people near the minimum wage are somehow going to create more such businesses or help anyone's economy? I think one of the worst aspects of this debate is the Pollyanna assumption that something I want is automatically good for society or the economy. Sorry, that just isn't true.

    I'd much rather pay Target 10 cents more for a roll of TP while also paying $3 less in taxes because their employees don't have to take my tax money to buy their food. That is a much fairer, freer, more ethical way to do business.

    This last line is typical example of how such do gooding creates problems. If there were no social programs, then there would be no such claims of parasitism. It's only a problem because you insist on paying for such things (at a claimed rate which is grotesquely inefficient no less). Why is it that Walmart gets singled out for being a parasite rather than the grazing social workers and accountants? For example, by your admission, if we culled the herd by 50%, then we would save $1 of your money. That's the same as the savings from ten rolls of toilet paper. At least Walmart provides something of considerable value for that alleged parasitism (which kind of makes it not parasitism, you know?).

    Further, this is a classic example of how a social program creates zero sum thinking. Walmart is collectively benefiting the entire world, but it's all about how they're milking social benefits for cheap labor. Would you rather that businesses just not employ low skill people than that they enjoy a slight benefit of a social program which was intended to provide such benefit?

    All these social policies and the various problems they create are textbook examples of the principle of "unintended consequences" as well as callous disregard of the actual circumstances of the poor. They also promote zero sum thinking (such as the scapegoating of businesses) and magic thinking (such as "what I want has to be good for society" meme). Humanity has a vast capacity to rationalize anything.

    Finally, this whole mess ignores the fundamental dynamic of labor today: namely, that the global labor market has over the past fifty years, expanded by something like a factor of five due to the access by the entire world's labor to global markets, which is called "globalization". This process won't halt until most labor is near parity with developed world labor. If you want your country to be on the high end of that eventual labor market, then you need to enact policies that make your workers more valuable and less costly. Minimum wage laws just don't help.

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