Who has a rebuttal for this San Jose minimum wage article?

 

According to PolicyMic.com, one year after the City of San Jose raised the minimum wage to $10, the following has happened:

1) The [predicted] $600,000 annual enforcement cost evaporated; so far, the city has racked up just $5,000. No new bureaucrats were added, with the compliance department merely shuffling staff to handle the small amount of extra work.

2) Workers have averaged the same number of hours as they did before.

3) San Jose businesses grew by 3%, as reported by the San Jose Downtown Association.

4) Just a dozen or so noncompliance complaints were investigated through mid-2013 in the 10th largest city in the United States, with a metro population of 1.975 million people and 84,000 businesses.

5) Unemployment in 2013 fell from 7.6% in February to 5.8% in December during the holiday season, and has since evened out at 6.3%.

Well? What’s the proper rebuttal from conservatives who oppose minimum wage increases?

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  1. user_240173 Member
    user_240173
    @FrankSoto

    I’ve talked about this before.  If you raise the minimum wage in a city, all you do is drive away minimum wage jobs to the nearby surrounding areas.

    Most cities have few minimum wage jobs to begin with, so there is limited effect.  To the extent that there is an effect, it is difficult to detect, as those who were working a minimum wage job and lose it, end up having to flee the city looking for work else were, thus the unemployment rate for the city doesn’t rise.

    This policy’s primary effect is to keep poor people out of the city.   Liberals then tout that they have eradicated poverty.  

    If you expand this policy to the entire country, it will be disastrous, as there is no where for the poor to flee to, aside from entitlements.

    • #1
  2. Ryan M Inactive
    Ryan M
    @RyanM

    What frank said.

    • #2
  3. user_1030767 Inactive
    user_1030767
    @TheQuestion

    What Frank says makes sense to me.  If the minimum wage is low enough, it does no harm. I was watching a Crossfire episode where a Republican congressman was asked whether the natiaonal minimum wage should be scrapped.  He said he wanted to keep the minimum wage where it was.  That seems like the politically smart position, since saying there is should be no minimum wage would be used against him, but arguing to keep it the same has practically the same result, but sounds more balanced and reasonable.

    • #3
  4. user_240173 Member
    user_240173
    @FrankSoto

    Here is the post where I ramble on about this subject.

    • #4
  5. Roberto Inactive
    Roberto
    @Roberto

    Misthiocracy:

    According to PolicyMic.com, one year after the City of San Jose raised the minimum wage to $10, the following has happened:

    1) The [predicted] $600,000 annual enforcement cost evaporated; so far, the city has racked up just $5,000. No new bureaucrats were added, with the compliance department merely shuffling staff to handle the small amount of extra work.

    Where does that $5,000 number come from? That does not even cover the cost of the city paying its own employees at a level in compliance with the law:

    In addition, it is estimated that there are approximately 85 City employees in three job classifications that currently earn less than $10.00 per hour. The estimated annual cost to increased compensation to bring the employees up to the new minimum wage is $29,942.

    • #5
  6. Mike H Inactive
    Mike H
    @MikeH

    How long was there between businesses knowing the hike was coming and the hike occurring? Liberals say that minimum wage increases have no negative effect on the economy. Well, if that’s true, why don’t they hike it in secret and tell everyone the next day?

    The effects of the minimum wage hike were mostly felt before the hike happened, that’s how business works, and that’s how liberals hide the true negative effects of rate hikes. Is this analysis from the day before and the day after, or is it from before buisness knew it was going to pass until today?

    • #6
  7. Mendel Inactive
    Mendel
    @Mendel

    This discussion is missing a key point: San Jose is currently experiencing a huge boom (seeing as it is in the heart of Silicon Valley).

    Of course unemployment is shrinking and hours are growing even with the minimum wage: the rising tide of economic growth in the area is stronger than the negative effects of the wage law. One cannot assess the effects of any economic policy by simply asking “what happens after the policy is enacted?” but rather by asking “what would have happened had the policy not been enacted?”

    And in general, one of the richest and highest-growth cities in America probably shouldn’t be used for an example of anything.

    • #7
  8. user_129440 Member
    user_129440
    @JackRichman

    Minimum wage laws criminalize the hiring of workers whose goods and services are worth less than the statute permits. If the legal minimum is less than the market will pay, the law is irrelevant. If it is more and is enforced, it reduces opportunities for the least experienced to acquire skills and income. My first three jobs were at below the then prevailing minimum wage. The only thing that saved me from the “good intentions” of politicians was getting paid in cash.

    The real minimum wage is zero and millions of Americans are collecting it.

    • #8
  9. Lucy Pevensie Inactive
    Lucy Pevensie
    @LucyPevensie

    Ever since I saw someone suggest it on Ricochet, I have always wanted to respond, “Absolutely. It would be even better if they raised the minimum wage to $1000/hour.”  I would love to see whether people get that there is a wage at which no one could be hired.  Because if they get that, then they ought to get that the only minimum wage that does no harm is the one that is below the lowest market wage.  

    I haven’t tried the response out yet, so I don’t know how it would go. 

    (Corrected careless error)

    • #9
  10. Ryan M Inactive
    Ryan M
    @RyanM

    Lucy Pevensie:

    …then they ought to get that the only minimum wage that does no harm is the one that is above the lowest market wage.

    I haven’t tried the response out yet, so I don’t know how it would go.

     you mean “below” the lowest market wage, right?  But I’ll tell you how it would go.  The only reason that market wage is so low to begin with is that greedy businessmen set it that low.  They all collude together to take advantage of the powerless worker.  When the worker rises up, they pour gobs of money into republican campaigns so that people like Scott walker can bust unions in order to keep down wages.  The end result is super powerful “millionaires and billionaires” like the Koch brothers, endlessly taking advantage of people.  Minimum wages force these monsters to pay “living wages” (don’t ask them to define this!).  Of course, that money comes directly out of their “profits” (which is code-word for “evil greed fruit”).

    Expect some variation on the above as your typical liberal response.

    • #10
  11. Misthiocracy Member
    Misthiocracy
    @Misthiocracy

    Jack Richman: The real minimum wage is zero and millions of Americans are collecting it.

    Come on, just how many Americans truly collect $0?  i.e. they collect no welfare, no food stamps, no free this-or-that, etc…

    • #11
  12. Lucy Pevensie Inactive
    Lucy Pevensie
    @LucyPevensie

    Ryan M:

    Lucy Pevensie:

    …then they ought to get that the only minimum wage that does no harm is the one that is above the lowest market wage.

    I haven’t tried the response out yet, so I don’t know how it would go.

    you mean “below” the lowest market wage, right? But I’ll tell you how it would go. The only reason that market wage is so low to begin with is that greedy businessmen set it that low. They all collude together to take advantage of the powerless worker. When the worker rises up, they pour gobs of money into republican campaigns so that people like Scott walker can bust unions in order to keep down wages. The end result is super powerful “millionaires and billionaires” like the Koch brothers, endlessly taking advantage of people. Minimum wages force these monsters to pay “living wages” (don’t ask them to define this!). Of course, that money comes directly out of their “profits” (which is code-word for “evil greed fruit”).

    Expect some variation on the above as your typical liberal response.

     Thanks. I fixed it.

    • #12
  13. Lucy Pevensie Inactive
    Lucy Pevensie
    @LucyPevensie

    Ryan M:

    Lucy Pevensie:

    …then they ought to get that the only minimum wage that does no harm is the one that is above the lowest market wage.

    I haven’t tried the response out yet, so I don’t know how it would go.

    you mean “below” the lowest market wage, right? But I’ll tell you how it would go. The only reason that market wage is so low to begin with is that greedy businessmen set it that low. They all collude together to take advantage of the powerless worker. When the worker rises up, they pour gobs of money into republican campaigns so that people like Scott walker can bust unions in order to keep down wages. The end result is super powerful “millionaires and billionaires” like the Koch brothers, endlessly taking advantage of people. Minimum wages force these monsters to pay “living wages” (don’t ask them to define this!). Of course, that money comes directly out of their “profits” (which is code-word for “evil greed fruit”).

    Expect some variation on the above as your typical liberal response.

     But then why shouldn’t we just raise the minimum wage to $1000/hour?  

    • #13
  14. user_54093 Member
    user_54093
    @ChrisBogdan

    1. In a small enough market, demand for labor can be pretty inelastic. Without a dramatic change in pricing, there’s not going to be much change in demand (in this case, minimum wage employment)

    2. If there are few jobs actually paying the minimum wage (pretty common around here), hiking it will affect a very small number of people & businesses.

    3. Businesses in CA are used to paying outrageous sums of money for the privilege of operating. 

    Take your pick.

    Whatever the answer, the conditions and results are not scalable to an entire nation.

    • #14
  15. flownover Inactive
    flownover
    @flownover

    I would rebut by asking who compiled the study and wrote the report ? 
    And I looked up San Jose burger joints and the first three were all priced above $7 for a burger . That reasonable for a burger ? 

    • #15
  16. Mendel Inactive
    Mendel
    @Mendel

    Lucy Pevensie:

    Ever since I saw someone suggest it on Ricochet, I have always wanted to respond, “Absolutely. It would be even better if they raised the minimum wage to $1000/hour.” 

     As an argument, I don’t think the “ad absurdum” strategy makes much sense. Most people in favor of raising the minimum wage recognize that $1000/hr would destroy the economy, just as most people who want to see taxes raised on the rich recognize that an upper bracket marginal rate of 90% would also be counterproductive.
    The problem is that these people think that there is some minimum wage between $0 and $1000/hr that lets society have its cake and eat it too, just like they think there are levels of taxation, welfare and regulation which provide only upside and no costs.

    • #16
  17. Lucy Pevensie Inactive
    Lucy Pevensie
    @LucyPevensie

    By the way, I took economics from a left-wing professor at a left-wing institution, but even so I learned that minimum wages were a bad thing. It simply astonishes me when people don’t get that.

    • #17
  18. Mendel Inactive
    Mendel
    @Mendel

    Lucy Pevensie:

    Ever since I saw someone suggest it on Ricochet, I have always wanted to respond, “Absolutely. It would be even better if they raised the minimum wage to $1000/hour.” 

    The other problem with using this type of argument is that it can be turned against conservative policies:
    – Conservatives want lower taxes? Then why not lower them to $0?
    – Want less government? Then why not no government at all?
    – You think we need more aircraft carriers? Why not build 1000 of them?

    In the end, both sides of the debate think they’re advocating for the Goldilocks solution.

    • #18
  19. Asquared Inactive
    Asquared
    @ASquared

    flownover:

    I would rebut by asking who compiled the study and wrote the report ? And I looked up San Jose burger joints and the first three were all priced above $7 for a burger . That reasonable for a burger ?

     This is San Jose, Silicon Valley we are talking about.  I recall reading an article about people in San Jose earning $100k a year sleeping on a bus because they couldn’t afford to get an apartment on $100k a year.  

    I bet the number of people actually earning the minimum wage was close enough to zero that raising the minimum wage had no impact on employment.
     
    That does not mean that it will have no impact on employment in Mayfield KY (where my grandmother lives).

    • #19
  20. Asquared Inactive
    Asquared
    @ASquared

    Mendel:

    As an argument, I don’t think the “ad absurdum” strategy makes much sense. Most people in favor of raising the minimum wage recognize that $1000/hr would destroy the economy…The problem is that these people think that there is some minimum wage between $0 and $1000/hr that lets society have its cake and eat it too.

     My response to these people is, at the margins, it always matters.  The Coca-Cola Company spends millions of dollars each year trying to set exactly the right price to maximize profits.  Yes, they know if they charge $100 a can, they would make no profits, they also know if they raised their price 40% (the proposed minimum wage increase), enough people would buy less coke that they would lose more revenue than they gain from higher prices.

    Also, if Coke raised their price and they lost revenue, they could lower it again tomorrow. If we raise the minimum wage too high and too many people lose their job, it would be politically impossible to lower it again.  

    If raising minimum to $1,000 an hour is disastrous, then raising 40% is bad.  There are no solutions, only tradeoffs.

    • #20
  21. James Of England Inactive
    James Of England
    @JamesOfEngland

    Mendel:

    This discussion is missing a key point: San Jose is currently experiencing a huge boom (seeing as it is in the heart of Silicon Valley).

     This is, in general, the chief problem with economics. There are relatively few phenomena for which the noise does not threaten to drown out the signal.

    With price controls, it should be recalled that centrally planned economies can derive much of the benefits of pricing signals from intercourse across temporal, sectoral, or geographic lines with free markets. They thus degrade the efficiency of the economy on a gradual and accelerating basis when cut off from contemporary information. San Jose is pretty integrated into the regional and national economies, though, so a part of the cost is socialized and carried by the rest of the country.

    • #21
  22. Lucy Pevensie Inactive
    Lucy Pevensie
    @LucyPevensie

    Mendel:

    Lucy Pevensie:

    Ever since I saw someone suggest it on Ricochet, I have always wanted to respond, “Absolutely. It would be even better if they raised the minimum wage to $1000/hour.”

    As an argument, I don’t think the “ad absurdum” strategy makes much sense. Most people in favor of raising the minimum wage recognize that $1000/hr would destroy the economy, just as most people who want to see taxes raised on the rich recognize that an upper bracket marginal rate of 90% would also be counterproductive. The problem is that these people think that there is some minimum wage between $0 and $1000/hr that lets society have its cake and eat it too, just like they think there are levels of taxation, welfare and regulation which provide only upside and no costs.

    My thought is to make the point that there is a market price for labor. If you set the minimum wage above it, then you decrease employment.  If you set it below it, then you neither decrease employment nor increase people’s wages. But I suppose these people must be economically illiterate, and the point won’t get across. 

    • #22
  23. Roberto Inactive
    Roberto
    @Roberto

    Mendel:

    Lucy Pevensie:

    Ever since I saw someone suggest it on Ricochet, I have always wanted to respond, “Absolutely. It would be even better if they raised the minimum wage to $1000/hour.”

    The other problem with using this type of argument is that it can be turned against conservative policies: – Conservatives want lower taxes? Then why not lower them to $0? 

     Hmm, I might be persuadable on that one. After all we seemed to manage all right without a Federal Income Tax up until 1913.

    • #23
  24. Ryan M Inactive
    Ryan M
    @RyanM

    Lucy Pevensie:

    Ryan M:

    Lucy Pevensie:

    …then they ought to get that the only minimum wage that does no harm is the one that is above the lowest market wage.

    Expect some variation on the above as your typical liberal response.

    But then why shouldn’t we just raise the minimum wage to $1000/hour?

     Well, that would be ridiculous, wouldn’t it?  Now, as an argument, that’s probably not the right approach – I get that from abortion folks every time we start arguing:  “why don’t we just charge every one of these women with murder and execute them?”  Well, an argument can almost always be taken to the point where it is unpalatable, but that doesn’t make it wrong in a more reasonable form.  That said; your point is still useful.  If people can recognize that 1k/hr is unreasonable, than they may even articulate why, at which point you can ask them to justify 10$/hr, and you can confront them with their own reasoning.  It is always good to develop a language, which is where extremes really do come in handy.

    • #24
  25. Darth Vader Jr Inactive
    Darth Vader Jr
    @NedWalton

    The locals here in Seattle are working on a $15/hr minimum wage & I suspect it will happen before the end of the year. I can already hear the deep rumblings of laughter emanating from Doctor Murphy’s belly. Unintended consequences anyone?

    • #25
  26. James Of England Inactive
    James Of England
    @JamesOfEngland

    Roberto:

    Mendel:

    Hmm, I might be persuadable on that one. After all we seemed to manage all right without a Federal Income Tax up until 1913.

     I’m pretty confident that we don’t want to go back to the massive tariffs that we used to fund the government with. There’s a reason that the Fair Tax is a movement, but no one that I know of is arguing that we ought to return to the pre-income tax system.

    • #26
  27. The Mugwump Inactive
    The Mugwump
    @TheMugwump

    I live in a city with a $10.10 per hour minimum wage.  The figure has also become a maximum wage for many workers.  Economists fail to understand that a higher minimum flattens wages across the board.  The mandate has the perverse affect of freezing the wages of middle class workers who will never again see a raise.  If you are looking to create income equality, a higher minimum wage is the perfect mechanism to achieve it.  Ask yourself at what number the owner of a nursing home will be forced to pay a skilled nurse and a cafeteria worker the same wage to stay in business.   The soviets tried it, and it didn’t work in the USSR either.

    • #27
  28. BuckeyeSam Inactive
    BuckeyeSam
    @BuckeyeSam

    5) Unemployment in 2013 fell from 7.6% in February to 5.8% in December during the holiday season, and has since evened out at 6.3%.

    Correlation versus causal? I’d be interested to know how many were at that level and got the raise. Then I’d be interested to know whose wages were tied to it and also got a raise. Then, I’d be interested to know the effect on the continued employment within those two groups. It would seem that improving unemployment rates attributable to increased employment at pay rates above minimum wage are largely irrelevant to the analysis of the effect of increasing the minimum wage.

    • #28
  29. user_409996 Member
    user_409996
    @

    So San Jose is not the place to run the experiment of increasing the minimum wage. 

    There have to be enough workers in the experimental zone who are earning the minimum wage to be able to gauge the effects of increasing it. 

    Doing so would mean that compliance monitoring would have to be appreciable and in earnest, and the economy would be doing poorly enough already that a decline (and the attendant rise in people relying solely on welfare benefits) would be noticeable.

    This makes sense.  To people who want to know the answer rather than prove a conclusion they have already drawn.

    • #29
  30. Mario the Gator Inactive
    Mario the Gator
    @Pelayo

    Lots of good responses already.  My first question is whether anyone has looked at the number of workers earning minimum wage in San Jose before and after the hike.  I suspect that some may have left town or are collecting unemployment and that may be a way to prove it.  In addition, I concur with those who feel that the sample size is too small and cost of living is much higher in San Jose than the national average.  The strong tech industry also masks the truth.  I bet they could raise the minimum wage in North Dakota and unemployment would not go up either.

    • #30
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