Minimum wage

[KaneKungFu123]

how does minimum wage hurt the poor? if they were willing to work for $4/hr and now they are unemployed they just get more government benefits and dont miss Springer!!!!!!!!

[BCPVP]

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Aren't 70+% of economists from the United States?

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I don't know and don't know if there's any way to know this.

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How can such a third world country, hampered so long with the bad economy minimum wage laws, produce so many economists?

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Ever think that it might be in spite of and not because of?

Draw a graph of the supply and demand curves. Draw a horizontal line below the equilibrium (since this is what we're concerned with). Note the shortage caused by this price floor.

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I forgot to mention that the reason there isn't much nuance to the statement was because it was basically part of the introduction. There's a whole section for the minimum wage in the book that says what I said above.

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Hmm, fair enough. What are the other things that 70% agree on?

Here are some numbers if you still aren't convinced. This is a 1.94MB pdf file, a research study lead by a Florida State University professor.

http://mail.commonwealthfoundation.org/r17-03.pdf

Here is a summary:

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The proposed legislative effort to raise Pennsylvania’s minimum wage could lead to a catastrophic $350 million hit on the Pennsylvania economy and the loss of 10,000 jobs, according to a study commissioned by the Commonwealth Foundation and the Washington, DC-based Employment Policies Institute (EPI).

“The most troubling consequence of artificially increasing the cost of labor in Pennsylvania is that it hurts the very people that minimum wage proponents purport to be helping,” said Matthew Brouillette, president of the Commonwealth Foundation, an public policy research and education institute located in Harrisburg.

The study, The Effects of the Proposed Pennsylvania Minimum Wage Increase by leading labor economist Dr. David A. Macpherson from Florida State University, found that more than 2,800 jobs would be lost for people earning less than $25,000, if a proposal in the General Assembly were enacted. Although most of the economic cost in Pennsylvania, $262.7 million, would stem from increased labor costs to employers, a significant portion, $86.7 million, would result from the lost income from the thousands of employees who stand to lose their jobs.

The study affirms what many economists have previously noted—artificial increases in the wage floor are a blunt and ineffective means of assisting low-income employees because of the simple fact that most minimum wage earners aren’t poor. Only 10% of Pennsylvania’s minimum wage earners are the sole earner in a family with kids. Over half (56.2%) are under 24, and 45.9% still live with their parents. Nearly two-thirds (65%) are part-time employees. The Commonwealth Foundation/EPI study also found that the average family income of minimum wage employees in Pennsylvania is nearly $50,000.

“Despite the high cost of the increase, many low-income persons will see no benefit because they either do not work or work too few hours to benefit from the increase,” said Brouillette. “Overall, Pennsylvania families whose incomes fall below $12,500 would experience only an $89 increase in annual income.”

Flynn said, “The emotionally compelling arguments for raising the minimum wage cannot escape the drastic negative economic consequences. Minimum wage hikes impose enormous costs on the economy, businesses may be forced to close their doors, employees will likely lose their jobs, and new opportunities for job creation will be lost.”

In his testimony before the Senate committee, Flynn offered an alternative to artificially increasing the minimum wage as better means of assisting low-income workers. He urged lawmakers to explore more effective and targeted means of helping low-income employees through a state Earned Income Tax Credit (EITC) companion to the federal EITC, which 17 states presently offer to low-income families, but Pennsylvania does not.



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btw in my previous post, an important line in the summary was as follows

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simple fact that most minimum wage earners aren’t poor.

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I forgot to mention that the reason there isn't much nuance to the statement was because it was basically part of the introduction. There's a whole section for the minimum wage in the book that says what I said above.

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Hmm, fair enough. What are the other things that 70% agree on?

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"1) A ceiling on rents reduces the quantity and quality of housing availability. (93%)
2) Tariffs and import quotas usually reduce the general economic welfare. (93%)
8) A minimum wage increases unemployment among the young and unskilled workers (79%)
9) The government should restructure the wellfare system along the lines of a "negative income tax." (79%)
10) Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)"

Richard M, Alston, J. R. Kearl, and Michael B. Vaughn, "Is There Consensus among Economists in the 1990s?" American Economic Review (May 1992): 203-209.