Federal Reserve Says State Minimum Wage Hikes Have Cost Up to 200,000 Jobs

originally posted by: grey580
Bad for less skilled workers. Why would an employer hire a crappy worker.

The big question is why would a skilled worker work a crappy job?

The answer is that there is no skilled jobs for the skill worker so they need to do the crappy job that takes away from the unskilled worker. So who can we blame on not enough skilled jobs these last 8 years? The other side to all this is we have a large number of under employed skilled workers that can not get by on minimum wage and are worth more than the job pays, so people say minimum wage should be a living wage to compensate for this issue.

Why should I care!

As long as I'm employed and get my raise.

The bigger picture doesn't exist in the small minded.

originally posted by: jimmyx

originally posted by: ketsuko
Having lived through a minimum wage hike as a minimum wage worker, I have seen every single one of the negative impacts of such an artificial hike:

1.) Wage devaluation
2.) Loss of jobs
3.) Price increases

All three occurred in the area after the hike. All three occurred even in the very business I worked at too.

just think how many jobs businesses can create, if we lowered the minimum wage to a dollar an hour.....millions more employed, and all those jobs that went overseas would now come back here....(sarcasm)

I have to ask though ... Why would a business create more jobs than it needed simply because they could only pay $1/hour?

That truly makes no sense.

You miss the point.

I worked for a small gift shop that was a mom & pop outfit. You better believe the owners of that place were skinflints, and they only paid minimum wage for clerks, but they were fair and I had earned enough in raises that when a minimum wage hike came along I had earned enough to be about $0.10/hour above what the hike brought the minimum to.

At the time, we were shorthanded and they were getting ready to hire an extra clerk, but between having to give the other three clerks unearned raises they felt they could no longer afford that extra clerk. So someone lost a job that they decided not to create. And my hard work in earning my raises was devalued as the other three clerks got unearned raises. I, of course, did not get a raise to compensate me. I simply lost the relative value of the pay I had earned.

And to compensate for the extra pay for the clerks, everything in the store was marked up the next day. So any extra they made was cancelled by the inflation.

This phenomena played out all over the area, but it was instructive in the microcosm of the store where I lived it first hand.

Go ahead and sneer. Maybe you never lived it directly, or if you did, you never paid attention. Or maybe you never simply made the direct connections.

I wouldn't trust anything published by the Fed if my life depended on it.

I'm not sure if a universal wage increase across the board all at once is a good idea (it needs to be gradual), but let me put this in plain and simple terms: Supply Side Economics. Does. Not. Work.

especially the entitlement generation of Millennials

I'm sorry, but WHO ARE YOU to say that this generation is entitled? We're the ones who will have to deal with a planet environmentally ruined by greedy executives with far too much money and influence, because of short-sighted decisions made before we were even born. We're the ones who have to saddle tens of thousands of dollars of debt just to have a chance at getting a decent-paying job, we're the ones who have to deal with an economy ruined by the older generations at a time when we had no say whatsoever in how things were run.

Claim what you will about people trying to fight for a future where they don't have to live paycheck to paycheck, so that they don't have to rely on government assistance to eat. Call it idealistic, call it 'unrealistic', but don't you DARE say it's entitled while smugly dismissing it as an 'emotional issue.'

This kind of attitude is exactly why we're in the situation we're in to begin with. Because of people looking down on those trying to cobble together happiness, or even just not having to worry every day about tomorrow, for themselves, rather than looking up at the ones hoarding everything for themselves. It isn't entitlement to want an improvement for the years ahead.

originally posted by: JDmOKI
a reply to: Sremmos80

Because giving poor people a livable wage hurts the profit margins of the people at the top. All they see are numbers and don't see normal hard working people having to work two jobs and still struggling. They don't care about anything except the graphs showing continued growth.

Exactly, and if you don't see it that way then "you don't understand basic economics" *rolls eyes*

If we keep letting the people who want to make the most money teach us what the basics are then ya I guess that will be what it is.
People want to stop crime and always ask what we can do about it, well keeping people employed at a wage they can live on is part of it.
We always talk about this divide and what not, the biggest divide we have in this nation is people who think that people working min wage jobs are just low lifes that don't deserve anything more.
Class warfare is RAMPANT in that regard, but that word only gets thrown out when we talk about maybe having the billionaires will all the money pay some more tax and pay their employees a little more.
/shrug.

a reply to: ketsuko

I feel like you're sort of making my case for me. I'm not sure if a unilateral minimum wage hike is a good idea if it's done too quickly, but what we have simply doesn't work.

Thankfully, dealing with all the corruption at the top should lead to a natural increase as the majority of income stops going to a few thousand people.

originally posted by: grey580
a reply to: xuenchen

I've been saying that the min wage increase is a double edged sword.
It's great for employers. Because now they can hire better workers.
Bad for less skilled workers. Why would an employer hire a crappy worker.

And the report bears out my point.

Of course, the labor market is more complicated. Most important, workers have varying skill levels, and a higher minimum wage will lead employers to hire fewer low-skilled workers and more high-skilled workers. This “labor-labor” substitution may not show up as job losses unless researchers focus on the least-skilled workers whose wages are directly pushed up by the minimum wage. Moreover, fewer jobs for the least-skilled are most important from a policy perspective, since they are the ones the minimum wage is intended to help.

Minimum wage hurts the lowest skilled workers the most. It removes the lowest rung on the ladder that allows them to gain marketable skills. Employers will often hire older and more experienced workers as the minimum wage increases.

When I was growing up in the 80s, most of the fast food jobs in my area were worked by teenagers. We worked the jobs to earn a little spending change to buy clothes, cars, weed, etc.

Things began to change though. Instead of black teenagers, now all I see at those restaurants are adult hispanics. Most of whom barely speak english. In still largely black neighborhoods mind you. Instead of the jobs being just a temporary job, we now have people trying to raise families. They are stuck in these jobs for years.

The kids who would have maybe worked these jobs, now have nothing.

originally posted by: Informer1958

The problem we have is corporate greed and their out sourcing our jobs over seas for slave labor.

Even white collar work is outsourced, Obama has allowed over a million people with work visa's to come in our country and take professional jobs away from our Americans.

Many of these Jobs I am talking about are Scientist, Doctors, Professors, Engineers, and so on. These people have the same education as many of Americans and then some, but are willing to work for far less money than Americans.

This needs to stop. It's greed and more is not enough.

I disagree with the word "greed". Business takes the path of most profit, and if that profit is China, Mexico, or the good old USA then it will go that direction. It is up to the Government to make the USA the best choice for business to chose from. We see it all he time, a business will start in China and go to another Asian country then maybe to south America etc. If it wasn't profitable for them to do this then they would not do it, but even with the much higher cost of transportation and increased time overseas is still a good deal such as moving to Ireland to cut taxes.

So what should the government do? They can do a lot with taxes, tariffs and benefits to have jobs here. If it costs Nike more to produce a shoe in China and ship it here then they would open a factory(s) in America like next week. That is the way business is, kind of mindless in following the current of most profit.

originally posted by: ketsuko

And to compensate for the extra pay for the clerks, everything in the store was marked up the next day. So any extra they made was cancelled by the inflation.

Was this all done to keep their business alive or were they greedy? My neighbor shut down his Quiznos because the state of WA has a 9.47 per hour minimum and he told me that he could not afford to pay the staff that much and stay open, he also worked 16 hours everyday 7 days a week too. He went on and got hired by a corporation making more money/working less, but at the cost of 8 jobs.

a reply to: Xtrozero

Eh, that's mostly semantics. "Corporate Greed" encapsulates the issue fairly adequately, even if you don't wish to affix malice to their actions.

The biggest problem is that as it stands, the most profitable course of action is to buy the government. Which is why you need to vote for Sanders, because he's the only one dealing with that particular thing. It's the root of all evil. The 'original sin.'

originally posted by: Xtrozero

originally posted by: ketsuko

And to compensate for the extra pay for the clerks, everything in the store was marked up the next day. So any extra they made was cancelled by the inflation.

Was this all done to keep their business alive or were they greedy? My neighbor shut down his Quiznos because the state of WA has a 9.47 per hour minimum and he told me that he could not afford to pay the staff that much and stay open, he also worked 6 hours everyday 7 days a week too. He went on and got hired by a corporation making more money/working less, but at the cost of 8 jobs.

Most business owners don't make a ton of money. Too often people confuse a CEO making $20 million a year with their local Mom & Pop business owner. Many of the mega restaurant chains are franchises, so the actually store owners are often small business owners.

People really have no understanding of business, corporations, shareholders, etc. All they see are these big numbers and think that is money that could be spread around for the good of man kind. They don't know that money often gets kept as retained earnings, to pay dividends, reinvestment in the company, expansion, etc.

a reply to: Xtrozero

It was a bit of both, but it was the kind of business that relied on being able to survive on college sports season and Christmas. The rest of the year was virtually nil on sales. I used to count up the register at close and it was a good day if we cleared $100 in sales most days.

So keeping the place open was a very delicate balance. The minimum wage increase was a huge upset to that.

Raising the minimum wage does reduce the numbers of jobs. When you raise the price of the Whopper or Big Mac, many people will quit going there as much and buy a TV dinner or other quick food. That is well known and has been mentioned many times in my lifetime by Economists.

It just creates inflation and lowers the number of jobs. Maybe they should send these Democrats back to high school so they can take government and Econ again.

The problem is that the middle and upper class are not spending money that supports the lower middle and poverty classes. We buy too many products that are made by technology or are from other countries. The Technology money filters up the ladder and not towards the bottom of the ladder.

a reply to: Sostratus

The money itself does not really exist, was created out of thin air by the Federal Reserve, and Saudi Arabias use of the Chinese yuan instead of the dollar will most certainly create collapse. The higher paying jobs causing a collapse is nothing compared to the bigger picture.

originally posted by: Metallicus
a reply to: xuenchen

This just confirms what people that understand economics have been saying. If you try to artificially increase pay then people lose jobs and goods cost more.I know this is an emotional issue for many people...especially the entitlement generation of Millennials, but the fact is that you cannot magically raise pay without consequences.

Would you rather work for what the job is worth or just be unemployed? I firmly believe that if you want a better paying job then you must position yourself to have skills that are in-demand. It is YOUR responsibility to make yourself marketable. You can't simply do a menial job an expect to get paid like someone who has the proper training and motivation.

If you can be replaced by a kiosk then you can expect to have your job eliminated if the rate of pay exceeds your value. Self-checkouts and automation are going to eliminate low paying jobs if people continue to insist they should be paid an artificially high wage.

2/3 of the jobs in the US dont pay much above or above poverty levels.

You are not making any sense, because as it stands right now, most of the US workers, 66%, are in poverty.

While the wealthy have more than they ever have in US history.

You cant educate 66% of jobs paying poverty wages into extinction.

a reply to: xuenchen

Yeah, but think of all the votes for democrats. So it all balances out...see?

a reply to: forkedtongue

66% of workers are in poverty? source please...

originally posted by: NewzNose
a reply to: Sostratus

The money itself does not really exist, was created out of thin air by the Federal Reserve, and Saudi Arabias use of the Chinese yuan instead of the dollar will most certainly create collapse. The higher paying jobs causing a collapse is nothing compared to the bigger picture.

And yet millionaires and billionaires make more than a hundred typical American families in a day by betting whether or not a commodity will perform in a certain way every week. Futures market, my ass...that's simply gambling. And if you don't think collusion and insider trading occur then you're a fool. The elite have won.
Sad.

Interesting as this article that was on Bill Moyers March of this year state the Fed could kill 200,000 jobs:

The Federal Reserve Board Is Openly Planning to Kill Jobs
March 3, 2015

The Fed’s plans to raise interest rates are rarely spoken of as hurting employment, but job-killing is really at the center of the story. The rationale for raising interest rates is that inflation could begin to pick up and start to exceed the Fed’s current 2.0 percent target, if the Fed doesn’t slow the economy with higher interest rates.

The potential impact of Fed rate hikes on jobs is large. Suppose the Fed raises interest rates enough to shave 0.2 percentage points off the growth rate, say pushing growth for the year down from 2.4 percent to 2.2 percent. If we assume employment growth drops roughly in proportion to GDP growth, this would imply a reduction in the rate of job growth of almost 10 percent. If the economy would have otherwise created 2.4 million jobs over the course of the year, the Fed’s rate hikes would have cost the economy more than 200,000 jobs in this scenario.

source

So now since the fed has raised interest, we will lose another 200,000 jobs, thanks Fed.

When someone makes millions a year, losing a dime is devastating.