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1) Re: 2009 House Bill 4968 (Exempt schools and roads from “prevailing wage” ) [by gypsy on June 16, 2009]Brilliant.
Ignore scientific studies.
Austrian economics is better than Keynsian, because you believe it is.
We should listen to you, even though you provide no basis in fact, other than your opinion.
Sounds like the foundation for a dictatorship to be built on. We have no control, you provide us with the answers and keep us safe.
Brilliiant.
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I enjoy these studies. I like the rigorous, detailed analysis, complete with statistical formulas.
My summary after reading the paper is: the study says that other people's research showing job loss when minimum wages are increased is wrong because they didn't consider differences do to different regions. Also, that their study, which shows that minimum wage laws have no effect on NUMBER OF JOBS, is a better measure. Oh, by the way, we weren't able to measure whether there was a decrease in hours worked for those jobs, but we don't think that made much of a difference. Also, we mainly looked at restaurant workers, and extrapolated to other workers, which shouldn't be very different. Also, we didn't look at whether jobs were displaced with other workers, for example, hiring older workers rather than minority teens, who presumably have more skills to offer for the extra wages paid, but we don't think that should be significant.
The problem with these kinds of studies is similar to policy makers using Keynesian economics. Keynsian economics is flawed, but because it gives them an excuse to do what they want to do, they won't look at anything else. Austrian economics makes total sense. It explains business cycles, which no other economic theory does. Austrian economics is qualitatively different form Keysian. Austrian economics recognizes that there are too many unknown variables in economics to ever predict the future. It only shows logically what kind of effect a policy will have. A tax increase on something will lead to less of that thing than it would have without a tax increase. It is impossible to predict exactly what the outcome will be, only that it will be less.
Correspondingly, an increase in costs, such as minimum wages imposed by government, will lead a lesser demand for labor than without a minimum wage. No one can predict what employment will actually be. It may go up. It may go down. All due to the myriad of variables that a scientific study cannot control for. So whether you are union or management, it does no good to point to these kinds of studies. This study showed no effect of minimum wages. The next one will show job loss all due to minimum wages. The nature of economics does not lend itself to the scientific method. We cannot control the variables to do a valid experiment.
We have to remember this when some politician sites a study that "proves" anything, and therefore,
- We need more regulation to prevent ....
- We need more taxes to help pay for .....
- I have the only solution to the problem of ..... and you must give me more power to implement it.
- Rinse. Repeat.
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[quote user="shearwater"]The minimun wage is simply a ruse to get the entire unionized work force a salary increase. It does very little to raise the standards of living for employees but does a lot at preventing business from expanding and offering new hires a decent job. [/quote]
Economists' new research shows
positive effects of minimum-wage increases
BERKELEY — As
various states consider minimum wage increases, and
with Democratic Presidential nominee Barack Obama
proposing that the minimum wage be increased and
indexed to adjust for cost-of-living increases,
researchers at the University of California, Berkeley's
Institute for Research on Labor and Employment (IRLE)
have found that such increases do benefit the lowest-paid
workers and do not have negative effects on their employment.
Institute director Michael Reich, a UC Berkeley
economist, has authored two new reports on the topic.
"Do Minimum Wages Really Reduce Teen
Employment?," a study completed last month
by Reich and campus labor economists Sylvia Allegretto
and Arindrajit Dube, used data from the government's
Current Population Survey from 1990 through 2007
to analyze minimum-wage impacts on teenagers, who
represent about one-fourth of all minimum-wage workers.
The study controlled for state, regional, and local
economic conditions, as well as for individual characteristics.
It found no significant teen employment loss due
to minimum-wage increases. While it revealed a very
small loss of work hours among teens, the loss of
hours was offset by the minimum-wage pay increase.
The other study, "Minimum Wage Effects Across
State Borders: Estimates Using Contiguous Counties," by
Dube, T. William Lester and Reich, compared all neighboring
U.S. counties across state borders with different
minimum-wage levels between 1990 and 2006. The exhaustive
study carefully controlled for local economic conditions,
an important advance over previous studies. It also
controlled for county size, population, and geographic
region. The study found no adverse employment effects
in counties with a higher minimum wage.
The researchers say their findings may be due to
the fact that a higher minimum wage attracts more
workers and reduces a firm 's vacancy rate; in addition,
decreased turnover increases productivity and reduces
the cost of expanding employment, they say.
"It appears that minimum-wage increases are
not job killers — they are job-vacancy killers," Reich
says.
The full
text of the new studies, as well as other
minimum-wage research from the institute, can be found
on the IRLE website.
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