Increasing the Minimum Wage hurts those most vulnerable in our society.

[Squatch347]

I'll agree that their laws are the ones preventing it but that there's no reason not to comply.

That's all that is required. Going back to post 596, two pages ago, you are conceding the point made by Prof. Boudreaux about the similarity between minimum wage laws and poll taxes. You insisted that it wasn't the government interfering in the transaction, but the employer. That point is now conceded. So we can return to the analogy with a clearer understanding:

But even apart from the evidence, let me offer you one reason to be suspicious of minimum wages: they are akin to a poll tax.

Those who impose a poll tax demand that persons wishing to vote bring to polling places a minimum amount of value, in the form of money, before being allowed to vote. Likewise, those who impose a minimum wage demand that persons wishing to work bring to job sites a minimum amount of value, in the form of hourly productivity, before being allowed to work.

Just as a poll tax prevents people with very few dollars from voting, a minimum wage prevents people with very few skills from working. And so just as a poll tax reserves access to ballot boxes to people with more money, a minimum wage reserves access to jobs to people with more skills.

Only if you can find your way to suppose that poll taxes have no negative consequences on voting should you continue to suppose that minimum wages have no negative consequences on employment.

Sincerely,
Donald J. Boudreaux
Professor of Economics

https://cafehayek.com/2019/05/if-you...mum-wages.html

My town, for example, you couldn't open a restaurant and start serving liquor. You wouldn't be denied a liquor license, there's none to be had.

Because the 21st Amendment reinforces States' ability to regulate the sale of liquor as a "compelling state interest." IE absent that Constitutionally defined interest, the state would have to argue that it has a compelling interest to abridge the right of an individual to engage in economic activity. Same in the other case. The state could not show that it had a compelling interest to abridge the right of individuals within the state to engage in economic activity. Your town couldn't bar restaurants from serving liquor without reference to the 21st Amendment's granting of compelling interest or to some other argument about compelling interest.

Again, bottom line point here is that the de facto right exists to open a business. It can be abridged, but the burden of proof is on the government.

That would not be a "certain circumstance".

Unless you are defining "certain circumstances" as "something Cowboy agrees with" then yes it would. If you are defining it that way then it is a special pleading fallacy.

And sure there's a moral argument.

Ok, to get the thread back to the point, what is the moral argument for the minimum wage?

[CowboyX]

Only if you can find your way to suppose that poll taxes have no negative consequences on voting should you continue to suppose that minimum wages have no negative consequences on employment.

What would negative consequences to employment be?

[Squatch347]

What would negative consequences to employment be?

Of the minimum wage? I sincerely hope you are kidding given the length of this thread.

Macroeconomic Evidence

This is a relatively rare phenomenon in economics, but agreement with the claim “Does minimum wage hurt employment of low skilled workers” is about as universal as we can find. Recently, David Neumark (UC Irvine) conducted an environmental scan of the current state of economic research on the minimum wage. He reviewed more than 100 major academic studies (since 1992) and found that 85% of them find a negative effect on employment of low skilled workers.

And Prof. Neumark is not the only economist to have done an environmental scan (a review of all academic literature on a subject) in recent years. Congress did one back in 1995 as well and found that the effects go beyond simply not hiring or letting go. At the margin, where people are retained at the higher income, other pecuniary benefits such as training, time off and working conditions suffered as minimum wages increased.

It will also indicate that the minimum wage has wide-ranging negative effects that go beyond unemployment. For example, higher minimum wages encourage employers to cut back on training, thus depriving low wage workers of an important means of long-term advancement, in return for a small increase in current income.

Scott Sumner has done some excellent work on the data coming out of Europe, where minimum wage laws vary significantly, and data is relatively reliable.

There are nine countries with a minimum wage (Belgium, Netherlands, Britain, Ireland, France, Spain, Portugal, Greece, Luxembourg). Their unemployment rates range from 5.9% in Luxembourg to 27.6% in Greece. The median country is France with 11.1% unemployment.
There are nine countries with no minimum wage (Iceland, Norway, Sweden, Finland, Denmark, Austria, Germany, Italy, Switzerland.) Five of the nine have a lower unemployment rate than Luxembourg, the best of the other group. The median country is Iceland, with a 5.5% unemployment rate. The biggest country in Europe is Germany. No minimum wage and 5.2% unemployment.

Conclusion

So what does all this economic babble mean? I’ll make it brutally simple. If you support a minimum wage, you support hurting the lowest skilled workers in our economy (generally young minorities) in favor of those who are more moderately skilled. You prevent them from getting a foot on the economic ladder. You prevent them from competing with those who can spend money towards their personal capital.
To use an illustration, generally, you are limiting the options for a young black female and helping a middle income white male (which incidentally, it was originally designed to do).
There are plenty of other moral issues with the minimum wage as well, but I think we can start with these.

...
First, Prof. David Neumark of UC Irvine did an environmental scan. This is a procedure where economists (it is also done in other fields like medicine) do a scan of all peer reviewed literature on a subject and attempt to see what the state of the discussion is. Sometimes these types of scans will also use the underlying data sets to do a meta study of the data presented. These types of meta-studies are often far more powerful (in the statistical sense) and accurate for underlying causation. Prof. Neumark did both types of scans during this study.

He has two major findings:

1) 85% of all economic studies find a strong negative correlation between minimum wage increases and minority employment rates.

2) A 10% increase in minimum wage reduces minority employment by 3.9%. That number is composed primarily of teenagers (drop of 6.6%). Blacks suffer the most (-2.8%) and especially black teenagers (-8.4%).

His full study was linked in my OP, but for convenience here it is again: http://www.epionline.org/studies/Neumark_2007.pdf

I would specifically point you to table 5 on page 28. This table shows employment elasticity for different groups. You'll notice that those who are younger and a minority (or with low training like a High school drop out) have negative elasticity, meaning that they lose jobs as minimum wage increases. In turn, you'll notice that older, non-minority groups have a positive elasticity, meaning they do get jobs when the minimum wage increases.

So to re-emphasize my conclusion. Increases to the minimum wage (or whatever wage mandating solution you are discussing) benefits older, whiter people at the expense of younger minorities.



The second study I offered was conducted by Congress and studied older economic data (pre-Neumark study). These papers generally also support the notion that minimum wage increases negatively impact the ability of minorities and the young to get employment. They highlight exactly how unique are Card and Kreuger's findings. I would like to post the analysis of the major papers they used:

• The minimum wage reduces employment.
Currie and Fallick (1993), Gallasch (1975), Gardner (1981), Peterson (1957), Peterson and Stewart (1969).

• The minimum wage reduces employment more among teenagers than adults.
Adie (1973); Brown, Gilroy and Kohen (1981a, 1981b); Fleisher (1981); Hammermesh (1982); Meyer and Wise (1981, 1983a); Minimum Wage Study Commission (1981); Neumark and Wascher (1992); Ragan (1977); Vandenbrink (1987); Welch (1974, 1978); Welch and Cunningham (1978).

• The minimum wage reduces employment most among black teenage males.
Al-Salam, Quester, and Welch (1981), Iden (1980), Mincer (1976), Moore (1971), Ragan (1977), Williams (1977a, 1977b).

• The minimum wage helped South African whites at the expense of blacks.
Bauer (1959).

• The minimum wage hurts blacks generally.
Behrman, Sickles and Taubman (1983); Linneman (1982).

• The minimum wage hurts the unskilled.
Krumm (1981).

• The minimum wage hurts low wage workers.
Brozen (1962), Cox and Oaxaca (1986), Gordon (1981).

• The minimum wage hurts low wage workers particularly during cyclical downturns.
Kosters and Welch (1972), Welch (1974).

• The minimum wage increases job turnover.
Hall (1982).

• The minimum wage reduces average earnings of young workers.
Meyer and Wise (1983b).

• The minimum wage drives workers into uncovered jobs, thus lowering wages in those sectors.
Brozen (1962), Tauchen (1981), Welch (1974).

• The minimum wage reduces employment in low-wage industries, such as retailing.
Cotterman (1981), Douty (1960), Fleisher (1981), Hammermesh (1981), Peterson (1981).

• The minimum wage hurts small businesses generally.
Kaun (1965).

• The minimum wage causes employers to cut back on training.
Hashimoto (1981, 1982), Leighton and Mincer (1981), Ragan (1981).

• The minimum wage has long-term effects on skills and lifetime earnings.
Brozen (1969), Feldstein (1973).

• The minimum wage leads employers to cut back on fringe benefits.
McKenzie (1980), Wessels (1980).

• The minimum wage encourages employers to install labor-saving devices.
Trapani and Moroney (1981).

• The minimum wage hurts low-wage regions, such as the South and rural areas.
Colberg (1960, 1981), Krumm (1981).

• The minimum wage increases the number of people on welfare.
Brandon (1995), Leffler (1978).

• The minimum wage hurts the poor generally.
Stigler (1946).

• The minimum wage does little to reduce poverty.
Bonilla (1992), Brown (1988), Johnson and Browning (1983), Kohen and Gilroy (1981), Parsons (1980), Smith and Vavrichek (1987).

• The minimum wage helps upper income families.
Bell (1981), Datcher and Loury (1981), Johnson and Browning (1981), Kohen and Gilroy (1981).

• The minimum wage helps unions.
Linneman (1982), Cox and Oaxaca (1982).

• The minimum wage lowers the capital stock.
McCulloch (1981).

• The minimum wage increases inflationary pressure.
Adams (1987), Brozen (1966), Gramlich (1976), Grossman (1983).

• The minimum wage increases teenage crime rates.
Hashimoto (1987), Phillips (1981).

• The minimum wage encourages employers to hire illegal aliens.
Beranek (1982).

• Few workers are permanently stuck at the minimum wage.
Brozen (1969), Smith and Vavrichek (1992).

• The minimum wage has had a massive impact on unemployment in Puerto Rico.
Freeman and Freeman (1991), Rottenberg (1981b).

• The minimum wage has reduced employment in foreign countries.
Canada: Forrest (1982); Chile: Corbo (1981); Costa Rica: Gregory (1981); France: Rosa (1981).

• Characteristics of minimum wage workers
Employment Policies Institute (1994), Haugen and Mellor (1990), Kniesner (1981), Mellor (1987), Mellor and Haugen (1986), Smith and Vavrichek (1987), Van Giezen (1994).

And sure there's a moral argument.

Ok, to get the thread back to the point, what is the moral argument for the minimum wage?

[CowboyX]

It will also indicate that the minimum wage has wide-ranging negative effects that go beyond unemployment. For example, higher minimum wages encourage employers to cut back on training, thus depriving low wage workers of an important means of long-term advancement, in return for a small increase in current income.

Your source.

That actually might be desirable to some. Do they address that?

[Squatch347]

That actually might be desirable to some. Do they address that?

Wait, are you seriously maintaining that reduced non-pecuniary benefits are beneficial to employees? We'd need to see some pretty strong logic and evidence to hold that as possibly true. We might as well argue that increasing the minimum wage hurts some employees because they don't want to get paid more.

1) 85% of all economic studies find a strong negative correlation between minimum wage increases and minority employment rates.

2) A 10% increase in minimum wage reduces minority employment by 3.9%. That number is composed primarily of teenagers (drop of 6.6%). Blacks suffer the most (-2.8%) and especially black teenagers (-8.4%).

• The minimum wage causes employers to cut back on training.
Hashimoto (1981, 1982), Leighton and Mincer (1981), Ragan (1981).

• The minimum wage has long-term effects on skills and lifetime earnings.
Brozen (1969), Feldstein (1973).

• The minimum wage leads employers to cut back on fringe benefits.
McKenzie (1980), Wessels (1980).

These are all related. Decreases in on the job training and access to early forms of human capital development perpetuate intergenerational poverty and exacerbate economic inequality that is structural (rather than the statistical inequality usually cited)

And sure there's a moral argument.

Ok, to get the thread back to the point, what is the moral argument for the minimum wage?

[CowboyX]

Wait, are you seriously maintaining that reduced non-pecuniary benefits are beneficial to employees? We'd need to see some pretty strong logic and evidence to hold that as possibly true. We might as well argue that increasing the minimum wage hurts some employees because they don't want to get paid more.

1) 85% of all economic studies find a strong negative correlation between minimum wage increases and minority employment rates.

2) A 10% increase in minimum wage reduces minority employment by 3.9%. That number is composed primarily of teenagers (drop of 6.6%). Blacks suffer the most (-2.8%) and especially black teenagers (-8.4%).

• The minimum wage causes employers to cut back on training.
Hashimoto (1981, 1982), Leighton and Mincer (1981), Ragan (1981).

• The minimum wage has long-term effects on skills and lifetime earnings.
Brozen (1969), Feldstein (1973).

• The minimum wage leads employers to cut back on fringe benefits.
McKenzie (1980), Wessels (1980).

These are all related. Decreases in on the job training and access to early forms of human capital development perpetuate intergenerational poverty and exacerbate economic inequality that is structural (rather than the statistical inequality usually cited)

I was just asking about that one reference. Are you saying people might not forego training and opportunities for advancement in exchange for a higher wage? Someone, who, for example, might not be interested in those things in a certain job and just wants money.

---------- Post added at 11:00 AM ---------- Previous post was at 10:58 AM ----------

Ok, to get the thread back to the point, what is the moral argument for the minimum wage?

Sure, more money for the same job.

[Squatch347]

Are you saying people might not forego training and opportunities for advancement in exchange for a higher wage?

Are you conflating choosing to forgo training that makes you more valuable and increases your wages with being legally forced to accept that trade off?

The point in linking all that work together is that the effects of forcing that tradeoff on all workers are unambiguous; the decrease in human capital development, especially in the poor or racial minority communities, the extension and exacerbation of intergenerational poverty, and the movement of capital from poor areas to wealthy areas.

Sure, more money for the same job.

"There are no solutions in life, only trade-offs." Thomas Sowell.

We know from 33 pages of evidence however that you don't get more money for the same job. Rather, there are a significant number of people who get no money for no job after MW increases. Additionally, for those that still have a job, they generally lose hours so that their net take home pay decreases rather than increases. The remainder that, in fact, do get more take home pay generally are not performing the same job, but have expanded responsibilities, lower non-pecuniary benefits, decreased economic mobility, and less safe working conditions.

So that moral argument fails from the data. Do you have another?

[CowboyX]

they generally lose hours so that their net take home pay decreases rather than increases.

So I'm making the same money for less time input? How is that not beneficial?

[Squatch347]

So I'm making the same money for less time input? How is that not beneficial?

Please re-read that quote. "...so that their net take home pay decreases..." IE less work and less money.

[CowboyX]

Are you conflating choosing to forgo training that makes you more valuable and increases your wages with being legally forced to accept that trade off?

If I'm a greeter at Wal-Mart on my last job (or even my first job) then sure. I'm not interested in anything from Wal-Mart. My experience with trying to advance in minimum wage positions is it is never worth it (in my experience). A little bit more to be a floor supervisor? No thanks. I'd rather have a little bit more to do the same job.

---------- Post added at 11:29 AM ---------- Previous post was at 11:26 AM ----------

Please re-read that quote. "...so that their net take home pay decreases..." IE less work and less money.

Because they take away hours when the MW goes up right? So on an hourly basis I am now making more per hour, which is all I am trading. I still have my remaining hours that I can now go somewhere else to trade.

[Squatch347]

If I'm a greeter at Wal-Mart on my last job (or even my first job) then sure.

Are you conflating choosing to forgo training that makes you more valuable and increases your wages with being legally forced to accept that trade off?

The point in linking all that work together is that the effects of forcing that tradeoff on all workers are unambiguous; the decrease in human capital development, especially in the poor or racial minority communities, the extension and exacerbation of intergenerational poverty, and the movement of capital from poor areas to wealthy areas.

Nothing about you having a specific job at Walmart addresses this point, so I've repeated it. Your specific situation is not a valid basis for laws that apply to everyone regardless of circumstance.

Because they take away hours when the MW goes up right? So on an hourly basis I am now making more per hour, which is all I am trading. I still have my remaining hours that I can now go somewhere else to trade.

A) You aren't trading anything. You are being forced, like everyone else, to accept that trade off.

B) We also know that you don't have somewhere else to go to trade as has been established in this thread. The evidence isn't that they get less take home pay from this job. It is that they get less take home pay total. By increasing the capital expenditure to have labor in a set of given roles, you decrease the number of additional jobs created in an economy. That is why, as has also been established, job growth slows in an economy when MW laws are enacted and mobility decreases when MW laws are enacted. You might be interested in using your additional hours to work a second job, but there are significantly less second jobs to work at.

[CowboyX]

Are you conflating choosing to forgo training that makes you more valuable and increases your wages with being legally forced to accept that trade off?

The point in linking all that work together is that the effects of forcing that tradeoff on all workers are unambiguous; the decrease in human capital development, especially in the poor or racial minority communities, the extension and exacerbation of intergenerational poverty, and the movement of capital from poor areas to wealthy areas.

Nothing about you having a specific job at Walmart addresses this point, so I've repeated it. Your specific situation is not a valid basis for laws that apply to everyone regardless of circumstance.

Indeed, I was just asking if it had been looked at. I wonder if it is significant. You should explain it to mccann.

---------- Post added August 13th, 2019 at 12:02 AM ---------- Previous post was August 12th, 2019 at 11:57 PM ----------

A) You aren't trading anything. You are being forced, like everyone else, to accept that trade off.

B) We also know that you don't have somewhere else to go to trade as has been established in this thread. The evidence isn't that they get less take home pay from this job. It is that they get less take home pay total. By increasing the capital expenditure to have labor in a set of given roles, you decrease the number of additional jobs created in an economy. That is why, as has also been established, job growth slows in an economy when MW laws are enacted and mobility decreases when MW laws are enacted. You might be interested in using your additional hours to work a second job, but there are significantly less second jobs to work at.

Hmm, yeah, ok I get that. But I still have my hours to use as I please. I can braid hair at home for money on the side (seems everyone I work with does that) or do whatever. Those hours still have value to me and if I can make the same amount working 11 hours instead of 12 then I am +1 hour to spend with nana.

[Squatch347]

Indeed, I was just asking if it had been looked at.

I think you are confusing what you are responding to here. Mican isn't debating in this thread. Nor were you asking if something had been looked at. Rather, you were asserting that the pay/economic mobility tradeoff was worth it. I was rebutting that assertion by pointing out that you were conflating a single hypothetical with the impacts on a large group of people. Those impacts are clear; the decrease in human capital development, especially in the poor or racial minority communities, the extension and exacerbation of intergenerational poverty, and the movement of capital from poor areas to wealthy areas.

Hmm, yeah, ok I get that. But I still have my hours to use as I please. ...Those hours still have value to me and if I can make the same amount working 11 hours instead of 12 then I am +1 hour to spend with nana.

Yes, but we know that the value of those hours is less than you would have recieved from doing the extra work. How do we know that? You are free to make that trade off absent MW laws. You are completely free to work a much shorter work day now and use that time to pursue other activities. That people don't do that indicates that they are making a choice that the pay, or training, or experience, or happiness, they get from work is greater than the other available options.

Let me use a non-economic analogy I think will show why the argument you are offering doesn't quite follow.

Let's say someone was arguing that there should be a ban on homosexual activity. And let's say I responded with a dissent that argued that the law would have all kinds of negative consequences, for example it would prevent homosexuals from finding a sexual relationship.

Now, what if that original person responded; "But it isn't really doing that because they could have a sexual relationship with someone of the opposite sex."

You see how that kind of rebuttal doesn't really work here. Because there is a hypothetically valid other option doesn't mean that it is the preferred option. And it certainly doesn't justify removing the preferred option by force.

[CowboyX]

I think you are confusing what you are responding to here. Mican isn't debating in this thread. Nor were you asking if something had been looked at. Rather, you were asserting that the pay/economic mobility tradeoff was worth it. I was rebutting that assertion by pointing out that you were conflating a single hypothetical with the impacts on a large group of people. Those impacts are clear; the decrease in human capital development, especially in the poor or racial minority communities, the extension and exacerbation of intergenerational poverty, and the movement of capital from poor areas to wealthy areas.

So you're saying factors such as those have not been considered? Worked into the analysis in some way? Are you sure it's just a single hypothetical?

Let's say I'm in unemployment and I have a part time job. I can work 10 hours a week at my current rate. Anymore and I cut into my benefit. Now the MW wage goes up and I can only work 8 hours so I decrease my hours. I'm am not plus 2 hours?

---------- Post added at 12:59 PM ---------- Previous post was at 12:53 PM ----------

Yes, but we know that the value of those hours is less than you would have recieved from doing the extra work. How do we know that? You are free to make that trade off absent MW laws. You are completely free to work a much shorter work day now and use that time to pursue other activities. That people don't do that indicates that they are making a choice that the pay, or training, or experience, or happiness, they get from work is greater than the other available options.

Let me use a non-economic analogy I think will show why the argument you are offering doesn't quite follow.

Let's say someone was arguing that there should be a ban on homosexual activity. And let's say I responded with a dissent that argued that the law would have all kinds of negative consequences, for example it would prevent homosexuals from finding a sexual relationship.

Now, what if that original person responded; "But it isn't really doing that because they could have a sexual relationship with someone of the opposite sex."

You see how that kind of rebuttal doesn't really work here. Because there is a hypothetically valid other option doesn't mean that it is the preferred option. And it certainly doesn't justify removing the preferred option by force.

Yes, maybe, but in this case they get the same amount for less time. If I made that trade off before I'd be making less for less time.

[Squatch347]

Let's say I'm in unemployment and I have a part time job. I can work 10 hours a week at my current rate. Anymore and I cut into my benefit. Now the MW wage goes up and I can only work 8 hours so I decrease my hours. I'm am not plus 2 hours?

Sure. And you have less take home pay. That is what several studies posted here have shown, that the cut in hours overcomes the additional pay. So, let's go with your example.

Pre-MW

Hours: 10
Pay/hour: 13
Total Pay: 130.0


Post-MW
Hours: 8
Pay/hour: 15
Total Pay: 120.0


So you can 2 hours of unemployed time (which you could have gotten in the old paradigm by not working during that time) and you lost 10 dollars in take home pay. See any of the studies in the last 33 pages or so, you'll find that the average total take home pay loss is about 250 per month.

[CowboyX]

Sure. And you have less take home pay. That is what several studies posted here have shown, that the cut in hours overcomes the additional pay. So, let's go with your example.

Pre-MW

Hours: 10
Pay/hour: 13
Total Pay: 130.0


Post-MW
Hours: 8
Pay/hour: 15
Total Pay: 120.0


So you can 2 hours of unemployed time (which you could have gotten in the old paradigm by not working during that time) and you lost 10 dollars in take home pay. See any of the studies in the last 33 pages or so, you'll find that the average total take home pay loss is about 250 per month.

Ok, wait, no. That was just a quick example. I would cut my hours to take home the same amount of pay - so $130 in each scenario.

[Squatch347]

Ok, wait, no. That was just a quick example. I would cut my hours to take home the same amount of pay - so $130 in each scenario.

How would you do that? We've seen in the evidence that that almost never happens that overall takehome pay decreases. Remember, they are getting two hours less work from you, so they are going to lose some revenue as well. That additional lost revenue gets (mostly, it depends on the elasticity of labor) passed along as reductions in pay to the employee as well.


Think of it this way. Let's say you owned a pizza shop when the MW went up. You only have two employees, but you need to cut both of their hours to make up for the wage rate increase. When you cut both their hours you end up being able to sell less pizza (can't sell pizza without employees). That decreases the money you have to pay wages, so you need to cut hours a little bit more to balance out that loss in revenue until you are back to breaking even. That revenue loss is why hours reductions tend not to be income neutral for people.

[CowboyX]

How would you do that? We've seen in the evidence that that almost never happens that overall takehome pay decreases. Remember, they are getting two hours less work from you, so they are going to lose some revenue as well. That additional lost revenue gets (mostly, it depends on the elasticity of labor) passed along as reductions in pay to the employee as well.

Think of it this way. Let's say you owned a pizza shop when the MW went up. You only have two employees, but you need to cut both of their hours to make up for the wage rate increase. When you cut both their hours you end up being able to sell less pizza (can't sell pizza without employees). That decreases the money you have to pay wages, so you need to cut hours a little bit more to balance out that loss in revenue until you are back to breaking even. That revenue loss is why hours reductions tend not to be income neutral for people.

Right, I don't think I'm doubting your analysis since you've done so much work on this. If the demand is there I would the owner cut hours more? Or something else such as training.

[Squatch347]

If the demand is there I would the owner cut hours more? Or something else such as training.

That's a great question. The answer lies in the fact that demand and supply don't necessarily happen at the same time. Let's stick without pizza shop example. When it comes to margin (ie how much money does the pizza shop owner get from selling a single pizza after paying for ingredients, electricity, wages, rent, etc), when we raise the MW there are only two possibilities; that the margin is zero or less or it isn't.

Let's say we raised the MW such that the pizza shop owner now lost money on every pizza sold. He would obviously shut down, which happens a lot when the MW rate increases.

But, your question relates to when it isn't zero. The problem for him is that he is getting money per pizza, but paying employees per hour. So if there isn't demand for enough pizzas during a certain period of time, the owner will lose money. Given that he is only making lets say $1/pizza, he would need to be very careful not to keep people on shift for hours of low demand or he could quickly go out of business.


Let's do a quick math example which I think highlights the point. We will ignore things like rent and electricity and toppings because they don't really get to what we are talking about. We'll just say the pizza owner makes $2/pizza after paying all that other stuff that isn't wages.

Time	Pizzas	Revenue	Wages
5PM	7	14	10 (one hour at this area's MW)
6PM	6	12	10
7PM	5	10	10
8PM	4	8	10
9PM	3	6	10
10PM	2	4	10

From this we can see that it would probably make the most sense to close up at 7PM, when he stops making money. We can also see that even if he were to make no money at all for the whole night, he couldn't keep them on for that last hour. From the employee's point of view they make $20 (30 if they have a really nice employer) in this scenario. If the MW were 8/hour, the employer would stay open an additional hour. So while there pay rate would drop, their take home would increase to $30 (40 if they have a nice employer).

[Belthazor]

The underlying claim that I will deal in this thread is that increases to the minimum wage negatively affect employment. Specifically, the minimum wage negatively affects employment for those workers most vulnerable to economic fluctuations, low skilled workers.

Saw this article today. Seems to back p your point/s quite well:

https://fox17online.com/2019/10/14/t...em-struggling/

“I got that dollar raise but I’m getting $200 less in my paycheck,” said one, employee.


Good intentions can hurt/kill.