Seattle Minimum Wage Study: Obvious Result Stuns the …

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After Seattle’s hike in the minimum wage, low-wage workers are earning less money

The economic consensus on the minimum wage is that a 10 percent increase causes a one to three percent drop in employment for affected groups such as teens. for young high-school drop outs, in the range of a six percent drop in employment for each 10 percent mandated wage increase.

In operational terms Fair Trade is characterized by several key practices that are practiced by the labelling organizations as well as by the alternative trading organizations that do not participate in certification (Nichols & Opal, 2005: 6-7): agreed minimum prices, usually above or independent of world market prices, that allow for a living wage for producers; an emphasis on development and technical support through the payment of a social premium; direct purchasing from producers to shorten the global supply chains and reduce the margins of middle men; transparent and long-term partnerships; provision of credit when requested and pre-financing of up to 60 per cent of the total purchase value; producers are democratically organized, often in a cooperative; sustainable and increasingly organic production is practiced; there are no labour abuses and unionization must me allowed.

The study, commissioned by the city government of Seattle and published by the National Bureau of Economic Research, found that Seattle’s law incrementally raising its minimum wage — to $13 an hour last year, en route to $15 — resulted in low-wage workers’ earning less money rather than more. This surprised many in Seattle, who had been assured by all the best economists, including Paul Krugman, that such a thing would not come to pass.

Today's sad anniversary: Another year congressional inaction further erodes the federal minimum wage

Twenty eight states increased their minimum wages between 2003 and 2007, prior to the last federal minimum wage increase. Economists from Cornell and American University, , found no associated reduction in poverty rates. Poor targeting helps explain the disappointing result: don’t work and thus aren’t affected by a minimum wage increase. (Similarly, many other poor individuals already earn considerably more than the minimum wage, but are in poverty for other reasons such as lack of work hours.)

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The Card-Krueger study included only a few months’ worth of data from after the time the minimum-wage hike went into effect. Some economists suspected that while fast-food operators were unlikely to simply start hacking away at their staffs in the months following an increase in the minimum wage (which, again, would not affect the wages of most fast-food workers), they would instead change their medium- and long-term plans, choosing less labor-intensive modes of production, substituting capital for labor through automation, reducing hours to make their labor consumption more efficient, etc. And that is, in fact, what subsequent studies found: Restaurants didn’t just start firing people after the minimum wage went up, but the wage hike did significantly reduce future job growth and labor consumption. As Preston Cooper of e21 put it:

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This suggests that in a short-term response to the minimum wage hike, few businesses fired anyone. Instead, they raised their prices — something Card and Krueger found — to cover their extra labor costs, and left employment where it was. It makes sense, as employers might not want to immediately, significantly alter their business plans in response to a small increase in the minimum wage.

The targeting problem extends further to those who do earn the minimum wage and are affected by an increase. As the data below demonstrate, many minimum wage earners either live at home with family or are in a household where they aren’t the primary earner. For instance, nearly 60 percent of employees affected by $10.10 either live with family or relatives, or are second-earners in a married couple. As a result, their average family income ($54,445) is considerably higher than the full-time minimum would suggest.

The Economist calls minimum wage hike a "reckless wager" - S

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. Anyhow, the one thing this economy is good at is generating profits with most of it, of course, going to the top 1 percent. Corporate (after-tax) profits are currently ringing the cash register at . This equals about all wages and salaries earned by those employed in the (state, local, federal) combined. That’s quite a lot. Adjusted for inflation, profits increased by a factor of 4.7 since 1968 while minimum wage decreased by a third. That is the best the free market could deliver for the men and women on Main Street.


OK, I will begin this post with what I guess is, for some, a damning admision: My company pays many of its employees minimum wage. I believe that I have a very

In 2013, 3.3 million Americans worked at an hourly rate at or below the federal minimum of $7.25. This data comes from the (conducted by the Census Bureau for the Bureau of Labor Statistics). Note that the Current Population Survey does not specify whether workers are covered by federal or state minimum wages; their calculations are based only on the wage reported.Here, Making Sen$e presents the basic data that proponents and opponents of raising the minimum wage generally accept as coming from nonpartisan sources: namely the on minimum wage workers, which relies on Census Bureau surveys. Both sides can, and happily do, shape this data to support their own positions, but any conversation about the minimum wage should start here.We know minimum wage workers tend to be younger, female and white, often working in notoriously low-paying industries like hospitality and service. But characterizing their place in the workforce is a common starting point for disagreement over raising the minimum wage.Moreover, the minimum wage in the U.S. is well below that of other advanced countries. The estimates that the minimum wage should be about $12 an hour in the U.S based on our GDP. That makes a lot of sense, especially because $10.90 would put it just where it was in 1968. If we add a little extra to the minimum wage for the growth in productivity, $12 seems to be a conservative estimate of where the lower bound of workers’ wages should be. In addition to the working at minimum wage, there are another working below minimum wage (tipped employees) and an additional who are working just above the minimum, but below $10 an hour. They would also be affected, because their pay is pegged to the minimum wage. So an increase in the minimum wage would affect a third of the labor force being paid an hourly basis.