Friday, June 2, 2017

Please Don't Share Stupid Memes: Raising the Minimum Wage

I try to avoid the local Facebook group, but there is county legislation were a minimum wage increase will go in unless municipalities opt out of it. So far about 40 in the county have. So I posted about it and wanted to share some thoughts on FB.

I haven't seen this posted, so sorry if I missed it. 

The County passed a minimum wage increase last year to go into effect July 1, but many of our neighboring communities are opting out. Is Brookfield doing the same?

And it pretty quickly got into this stuff:

“you obviously are unable of comprehending my statement. perhaps you should try again. Life is a series of choices by which you either learn from your choices and better yourself by gaining knowledge and skills making yourself more marketable thus commanding a better wage or you make poor decisions, lack work ethic and cry about how life is not fair. If you have put yourself in the position of trying to raise a family on a minimum wage you have obviously made the wrong life decisions or are lacking the ability to learn, maintain a good work ethic and obtain knowledge and skills to better your financial situation.

Which to me is a horrific stance, so I replied – 

“Just a weird disconnect to me that at some level 1) these jobs are worth doing but 2) we shouldn't pay the people more because they are trash and don't deserve the very basics society has to offer.

“From a business perspective, it is hard, since a wage increase goes right to your bottom line and it's hard to increase revenue on a one on one basis.

“But ultimately, a lot of people with minimum wage jobs aren't just some teenager, but people trying to support themselves. And what that means is that we as a society subsidize the employer when pay for SNAP benefits and the EITC and section 8. Why not just agree that there is a minimum level of need for all people and help them get there through a smart mix of policy decisions.

“Now, I'd prefer these decisions happened at a larger level, since what happens is what we're seeing - a race to the bottom framed as being business friendly.

Unfortunately, no real engagement, until I got this post: 

Because no one seems to get the economic implications....
With the Meme below:

It really blows my mind that someone thinks this is some clever checkmate. It feels like one of those fake memes made up to show how stupid the other side is but then it used by the other side unironically. For one, the model economy is weird, with one wage rate and one commodity, but we can work with their assumptions. There’s also the fact that $1.00 take home on $1.23 gross isn’t a 23% tax rate, but we’ll let that slide.

But this made me have some thoughts on the meme:

“That meme is so disingenuous that its doesn't even deserve rebuttal.

1)No one is calling for over increasing the minimum wage by more than a factor of 10.

2) Though maybe we should, if all you can afford after a day's work is a gallon of milk

3) Labor is not the only component to the price of a gallon of milk. I would suppose that it is probably a small part, unless we're paying the cows.

4) Tax rates are marginal rates, so you don't pay the top rate on all your income, only after a certain point, thought this weird world we don't know the cutoff

“So posting this shows your economic illiteracy. Minimum wage increases are much studied and still a contentious issue. The literature I'm familiar with shows little to no actual job loss and the people who maintain employment have a higher living standard. Though it is often ambiguous and based on so called "natural experiments" starting with the famous Kreuger / Card paper and building on that. (Link to paper

“There is a positive business case for raising wages. Your turnover drops so you have less training costs, and productivity goes up. Even WalMart has acknowledged this. There is a real cost to you, as identified by researchers like Sendhil Mullainathan in that someone worried about their poverty have less attention space to worry about other things - this is a problem if they're your employees and you want them to pay attention to their work.

“It's also the right thing to do.

“This is not to say that on the line between 8.25/hr and 1000/hr there is not some point that would start the acceleration of job losses and another that would start the acceleration of inflation, but it doesn't seem these small incremental changes trigger that.

“It isn't necessarily all roses though - raising the minimum means that you start knocking at the wages of the first levels of supervisory employees. They'll want wage increases too.

These things are complex. So the moral of the story is “Please Don’t Share Stupid Memes”.