…anybody could have predicted this: Seattle workers whose minimum wage has been jacked up to 15 bucks an hour…
…are now asking for fewer hours, so they don’t lose their housing subsidies.
Naturally, the artificially-high minimum wage was supposed to cut welfare dependency, blah blah blah.
So now we’ve got fewer jobs, and just watch – the program dependence is going to stay the same.
It baffles me how politicians can’t see the “cliffs” where eligibility for a program ends and not wonder whether people will stay at a low income to keep their bennies. One graph I saw from Mises and Pennsylvania indicated that a single mother of two children has basically no increase in available goods and services until her income exceeds about $70,000.
Hard to motivate someone without a STEM degree with that logic, to put it mildly.
Welfare and dependence are a career for some. Work is what other people do to support them.
I think to some degree, it is an intended result. There are multiple programs and departments with similar cutoffs, which results in creating a cliff. If we combined all welfare programs into a single program, and instituted a tapered run out of benefits, people might be able to transition into productivity in a sensible manner.
When my disabled sister was alive, if she would have earned $1 over a certain amount in a month, she would lose her entire Section 8 benefit. And due to backlog, would have waited around 18 months to get benefits reinstated. Even though she was learning disabled, she was smart enough to make sure she never worked more than that limit.
A typically dishonest take by Krugman on the minimum wage:
http://goo.gl/dPy5ed
Krueger-Card research Krugman references is here: http://davidcard.berkeley.edu/papers/njmin-aer.pdf
The reason Krugman’s take is dishonest is because the research was problematic. It has serious problems and has been heavily criticized by mainstream economists. Krugman knows this. He does not mention the controversy around the Krueger-Card research, because he, like so many liberals these days, wants to deny that his political opponents are making good-faith arguments. If you believe Krugman’s dishonest argument, you believe that the reason free market oriented people don’t want to raise the minimum is because they want to keep people poor.
Critiques of the Krueger-Card research can easily be found online. The paper has a lot of problems; it is not unlike the “research” that proves a perpetual motion machine can work. The research can’t be reproduced, and the mechanism (minimum wage increase) produces something from nothing.
Some specific problems with the Krueger-Card research:
1) The data cannot be reproduced. Rather than rely on public records from the states of New Jersey and Pennsylvania, Krueger and Card depended on personal interviews with managers to get their hiring data. This cannot be duplicated. We are completely dependent on Krueger and Card for the collection of the data.
2) The study only included fast food franchise restaurants. It did not include mom & pop businesses, non-franchise restaurants, or larger, non-restaurant businesses.
3) The study has a contradictory conclusion. Krueger and Card find that wages increased for minimum wage workers, but hours did not decrease, and business did not decrease. Where did the increased money come from to pay the workers? Krueger and Card say they don’t know. The extra wages are like the extra energy that goes into a perpetual motion machine. It comes from nothing. Don’t you want to believe?
Critics of the research point out that the extra money to pay the workers’ raises had to come from somewhere. Franchise restaurants, unlike non-franchise restaurants, can shuffle wages. They can pay office workers and suppliers less in order to pay minimum wage workers more. There are also some issues raised in the study itself that point to where the “free” money comes from. Restaurant managers mentioned managing food more astutely. To the consumer this means your hamburger bun may be older, and the lettuce at the salad bar may be changed less frequently. Regardless of whether you feel that this is good or bad, it amounts to less value to the consumer for the same money. Krueger and Card gloss over this detail. Last, the restaurant managers themselves may work longer hours to cover minimum wage worker hours. Restaurant managers are usually given bonuses based on cost reduction and sales. Increasing the minimum wage may effectively shift wages from hourly workers to management.
This is elementary stuff. It should have been included in the research.
To some, Prussian Blue, it doesn’t matter how silly Paul Krugman acts or how stupid/nasty the things he says are just as long as he is a professor at Princeton. That, and he backs their political agenda.
And in related news, in CA, unions who pushed for a law to increase in minimum wage are now asking to be exempt from it.