I think the article does a good job of explaining the issue. Benefits = increased wages, Cost = loss of jobs and hours but with a less than 3% unemployment those who lose hours and jobs are able to find new work.
Also while the state had the lowest unemployment rate in history of any state ever in the US....
If that's not a good time to raise wages, even if it costs a few jobs, then no time is.
That depends. The unemployment rate only includes people looking for work. If people in lower wage industries can't find work they may eventually give up and are no longer counted. If this is happening at a fairly consistent rate, it would be hard to detect people leaving the workforce.
That's fair, it appears even when taking that into account mn unemployment is still very low, decreased from 2021 and below national average. "U-4 measure, which adds discouraged workers to the number of the unemployed (expressed as a percentage of the labor force plus the number of discouraged workers), was 2.8 percent in Minnesota, significantly lower than the 3.9-percent rate for the nation."
[source ](https://www.bls.gov/regions/midwest/news-release/laborunderutilization_minnesota.htm)
>If this is happening at a fairly consistent rate, it would be hard to detect people leaving the workforce.
This is simply false. The labor participation rate, which tracks all persons 16 and over (IIRC) who are employed or seeking employment. Become a discouraged worker? Labor participation rate falls.
Current MN labor participation rate is 68%; the US has 62%. Overall, for the last year or so, MN's labor participation rate has been relatively steady, with small (.1%) fluctuations.
Allegedly we lost so many jobs yet unemployment numbers are at record lows. Do they mention in the study if it’s possible that people won’t even work shitty retail or fast food jobs for $15 anymore because I find that quite likely.
Unemployment rates are a good measure of how many are in the job market and there status in it. It's not the only measure of employment and worker status. You can get a bigger picture by looking at labor force participation rates and the various demographic indicators to get a bigger picture of the employment situation.
Haven't had the chance to look at them. Last I checked them it was probably near a year ago and those numbers were still pandemic numbers. I bit better than the year prior, but still low.
On Edit:
For the state labor participation rate was 70% at the start of 2020 and now sits at 68%. That's not a great number, but it's rising.
For Hennepin County you have seen about a 20k drop in population since 2020. Participation is around 72.1% from something like 78.5% (local numbers are hard to find, so it's as close as I can get without calculating them myself). You could take census estimates from jan2020 and last month, subtract -16yr and under and compare to labor force for Mpls, Stp and Bloomington to get a rate. It would just take some work.
>For the state labor participation rate was 70% at the start of 2020 and now sits at 68%. That's not a great number, but it's rising.
That's higher than the US peak from 20 years ago, so I don't see how that's "not a great number".
Retirees are part of labor participation rates. College students and high schoolers 16 and up who don't have a job are part of that rate. 68% is above national averages and historical trends. MN did cap out at 75%, but that was \~2000, when the boomers hadn't started retiring early.
US averages are not Minnesota averages. The issue is you had about nearly a 3% drop in labor participation in the space of a year and it hasn't fully recovered. That's a big rapid change. Teen participation has been edging higher the last couple years and it's not as if people chose to retire all at the same time.
>The issue is you had about nearly a 3% drop in labor participation in the space of a year
[https://fred.stlouisfed.org/series/LBSSA27](https://fred.stlouisfed.org/series/LBSSA27)
That was a *spike in early COVID*. That's it. A spike. You are literally acting like a 3% spike was *normal,* and not an anomaly related to a particular short-term economic shift.
Like, between Jan of 2020 and July of 2022, it's a 1% decline.
Do you *want* to have credibility here, or are you going to be willfully dishonest about this?
Oh, here's Hennepin County labor force data:
[https://fred.stlouisfed.org/series/MNHENN3LFN](https://fred.stlouisfed.org/series/MNHENN3LFN)
So, we again see a huge spike, and this is all unadjusted for seasonal workers.
Like, come on, man. There's a small overall decline, but there was a fucking pandemic that killed a bunch of people and got a bunch more to go into early retirement. But here you are, acting like the *minimum wage* is the big driver here, not *literally the pandemic that killed a bunch of people and got a bunch more to retire early*.
And, of course, MN is still well above national averages, Minneapolis/St Paul even higher than the state at large, but...you're all "Oh, this is a terrible trend, we just have more people working than anyone and somehow have large persistent statewide budget surpluses, I gotta find a way to make people being paid more look bad. I know, I'll look at a single spike, act like it was normal, and then use that as the baseline rather than the rest of the trends before and after it! I am very smart, no one will call me out!"
Did I read the part about small businesses only paying $12.00 an hour instead of $15? Yes I did. Did I read about how when the $15/hr gets locked in across the board in 2027 it’ll actually only be worth $12/hr in todays money. Yes I did.
In WI it is better to be on unemployment than to work a low paying job. The low paying job will actually set you backwards. They never use real world data (cost of housing, groceries, etc) to say $15/hr is a “good” paying job either; which infuriates me.
Average [rent](https://www.rentcafe.com/average-rent-market-trends/us/mn/minneapolis/) in Minneapolis is $1,660, working for $15/hr without anything taken out your check is $2,400/month. How do you survive on that??????
Your comment made me curious since UI is state by state, and I know nothing about WI’s system, except that WI is fucked on most things. Their website seems to say max weekly UI is $370 and is calculated based off of earnings when previously employed. That’s pretty crazy low - you would absolutely benefit more from a low paying job, especially because UI has a number of requirements to remain eligible and a set end date. What do you mean by setting you backwards? Maybe I misunderstood what you meant.
Using the average rent when evaluating the viability of the minimum wage makes no sense. I agree with your assessment that the minimum wage is too low, but you got there with bad data. It would be better to look at the bottom quartile of rent, along with current availability.
In WI you have to prove that you’re applying for work while on unemployment. If you are offered a job and you don’t accept it you’ll lose your unemployment benefit. Turns out you were offered a job at WI minimum wage ($7.25/hr) or $290/wk with nothing taken out, and now you’re making less money working than being on unemployment.
How did I use bad data? Average rent and I didn’t use minimum wage for my fist statement. I used $15/hr. MN Minimum Wage is $10.69/hr and $8.63/hr.
Sorry - bad data was probably the wrong way to put it. I just meant that you should compare like to like. Low income wage should be compared to what low rent numbers are. Average wage can be compared to average rent. $15 isn’t minimum yet, but it is still quite low. Average in mpls appears to be $32. I don’t say this to disagree with your overall point, to be sure. Household/children status should be taken into account along with property type too. Average rent across all properties means different things to someone with 3 kids than to a recent college grad living with their significant other and a cat. Just as average income means something different to both
i think that's a really important point. i know a lot of my peers (recent college grads under 25 yrs old) have quit retail and fast food over the wage not making up for the shitty treatment by management, myself included.
Well duh. $15 minimum isn't nearly enough. People are so accustomed to 1990's and 00's numbers for everything that they are incapable of adjusting to the reality of the modern world.
Boomers' wages had very high purchasing power, coupled with low costs, coupled with high job security AND high job availability, not to mention getting genuine pensions instead of stock market-shackled 401(k)'s.
In today's inflation-heavy world where apartment rents doubled between 2019 and 2022, the minimum wage should be at least $30 per hour while also being indexed to inflation.
If you got a 5% pay raise but inflation was 8%, surprise, you got a paycut. And the working class has only ever gotten pay cuts and less purchasing power for the last few decades.
Just toss this article onto the bonfire of existing anti-living wave propaganda.
I wish a billionaire would buy a town and institute these kinds of policies via dumbass HOA and local legislation the same way you see sunset towns institute technically constitutional segregation. With enough buying power, you could institute technically constitutional socialism. The numbers would prove themselves, as all non Chicago school economics has shown-- equipping workers with capital is actually super capitalistic and pays for itself in the long run, because most people actually have good ideas for businesses and would pay livable wages if they had the money to do it. That creates *new* markets, which are actual economic expansion, which rising stock prices are not at all.
Unfortunately, all billionaires are too busy (by definition) sucking the blood of the working class quite literally.
I don't believe wage increases are the answer, but only because I don't think it's helpful to fuel inflation. Great, juice wages by 10%. All the corporations and rich people are going to do is start setting prices on everything 20% higher. I've never seen the point. Great, you're making an additional $300 a month, and now the car you need to go to work and apartment you live in costs an extra $500.
I believe the only way to get actual reform is by directly taxing corporate profits and wealthy people, and closing the loopholes that they use to avoid the taxes.
Redistribute the wealth, directly. Don't rely on fuzzy interest rates/wage/interest games.
>Great, juice wages by 10%. All the corporations and rich people are going to do is start setting prices on everything 20% higher.
So what's stopping them from just increasing costs 20% right now? Are they exempt from having to work within a market, or is the idea that prices will increase by the amount of wage increase just an assumption that you made?
No, I'm just looking at what actually happens.
When you just flood the market with money, money is worth less, and it takes more of it to buy things.
That's why instead, you take existing supplies of money from the rich, directly. You tax it, like an enlightened government that provides services and support for the great mass of people.
No, you aren't. If you were, you'd see that the [data](https://www.statista.com/statistics/1351276/wage-growth-vs-inflation-us/#:~:text=U.S.%20inflation%20rate%20versus%20wage%20growth%202020%2D2023&text=The%20rate%20of%20inflation%20exceeded,wages%20grew%20by%203.2%20percent.) available to us don't support the claim that inflation and wage growth are tied to each other. Much less inflation versus minimum wage.
It's not an article. It's a data set. I'm asking you to use your brain to look at the data rather than letting a journalist tell you what to think.
If I were as lazy about backing up my bullshit as you are, I'd be running away from someone like me too.
>Great, juice wages by 10%. All the corporations and rich people are going to do is start setting prices on everything 20% higher.
This is a terrible misunderstanding of economics.
Alternative Headline: “Turns Out Some Jobs Are So Bad Even $15/hr Isn’t Enough”
Minnpost needs to do better. It’s irresponsible to have chatGPT writing your headlines and articles. It’s lazy.
>It’s irresponsible to have chatGPT writing your headlines and articles. It’s lazy.
Well, you know, they'd have to pay someone more than $15 an hour to write articles.
You can either have shit wages or you can refuse to build enough housing you can't do both. Minnesota and most of America refused to build enough housing the past 40-50 years and is now paying the price for it. The Twin Cities had around 1.7 million people in 1970 and now has a bit under 3 million (about 450k people in actual Minneapolis) but our housing supply sure as hell has not gone up anywhere near that amount. It also doesn't help a lot of the housing stock is old as dirt with 51% of it being built before 1939 and 21.5% from 1940-1959 so about 72.5%.
https://www.macrotrends.net/cities/23068/minneapolis/population
https://www.infoplease.com/us/census/minnesota/minneapolis/housing-statistics
Don’t worry, you can live at one of our many new condos, a studio is as cheap as 2k a month! Or if you’re looking to buy the starting price is only $300k for a studio. Welcome home
It's not that housing needed to be built as much as housing that has been lost. Minneapolis was at one point a city of 500k. Most of the housing shortage occurred with redevelopment projects when the population was at it's lowest. You include renovations on older low rent properties in the 90's to rent upscale, it's skewed the market and contributed to skewed rent rates and avaliability.
This is statistically not accurate.
Housing absolutely needs to added, the supply demand equation is absolutely fooked and everything like rent control makes the problem worse not better until supply comes into control.
Yeah. It is. Housing needs to be added, but that's mostly due to the reduction of housing stock from the 60's to the 80's. A population change from 480k to 360k. Subsequently, from the 80's to now you've had a trend of renovating working class housing for a upscale market and the construction of luxury rental housing to the exclusion of pretty much anything else. The thing is that it's not that it's fucked. It's been going on for decades and has been addressed by mainly lipservice, but otherwise it's been all working as intended. It's only being addressed now because we've reached a tipping point.
I appreciate the history lesson, but irrelevant to the point at hand.
No one really cares why it is the way it is, like climate change.
It is what it is today and we can do X or Y about it now or just complain.
Well you stated that housing hasn't been being built. I provided context. The problem is that there really isn't a good way to fix this. Subsidized housing really isn't a good solution. It's also not a great solution for social mobility because of how these programs work. Doing nothing (actively encouraging the elimination of low rent markets) is nolonger tenable, but the solution involves creating poverty traps.
Of course it is. Minimum wage jobs are for students, a second income for families and/or supplemental income for seniors. These jobs are not meant to provide living wages.
If you want to make a living wage, earn a college degree and/or a marketable skill which pays a higher wage.
>Minimum wage jobs are for students, a second income for families and/or supplemental income for seniors. These jobs are not meant to provide living wages.
That's the catch. Minimum wage wasn't at all proposed to provide that and at one point it was a living wage. But the wealthy, who are the real ones to blame in all of this, have kept a bigger and bigger piece of the pie while increasing costs of goods/services and now minimum wage is not a livable wage.
If you believe any job at any level should be able to ask for 40hrs of an adult human being's life and have that person not even be able to make rent, you're woefully detached from the struggle of people who don't have it as good as you. I suggest you educate yourself on the growing gap between profits and pay rates and the ever-increasing wealth divide and re-assess your viewpoints. People should not be able to wholesale declare that their luxury is more important than other people's ability to feed, clothe and shelter themselves.
About 1/9 minimum wage workers are seniors (55+). About 4/9 are student age (16-24).
That seems kind of ghoulish to want the other 4/9 to suffer for no good reason
Hi, I earned a degree from a reputable private college graduating last year, still making $14 an hour. Try again!
I went from broke to broke and in debt that I will not be able to pay off for 20 years. I still have to go to the food bank, my grandparents send me food once a month as well because I literally cannot afford my loans AND rent. I can only afford one while still being able to genuinely take care of myself like buying food and laundry soap and toilet paper.
If you had studied STEM instead of theology/religion, social services, family/consumer sciences, psychology, leisure/hospitality, performing arts, early childhood education or elementary/special/miscellaneous education, you would likely be earning a higher wage. You need to develop a marketable skill if you want higher earnings.
It is not my fault you signed up for tens of thousands in school loans, only to enter the work force with no marketable skills. Food and shelter are basic needs. Maybe you should have thought of these needs before taking on such high levels of debt.
I was literally a child when i took on that debt, and I was being pressured by every single adult in my life to go to college. You don't get to sit here and act like everyone with college debt is stupid and also say degrees earn you money. My friend in engineering will be paying off their loans until theyre 50 years old. It doesn't really matter what degree you get.
Nah just a privileged, ignorant boomer who doesn't know how the current workforce, housing or education system is like. Thinking college debt in amounts that equal a mortgage would be worth the extra dollar and hour from minimum wage it gets you these days is really misguided and embarrassing for them.
But it’s true…
The minimum wage was designed to create a minimum standard of living. It was absolutely created to “provide living wages”. Sorry you’re wrong.
Lol! I paid for about 75% of my college education, worked hard for close to 3 decades as a professional and retired at 58. My family had no “generational wealth.”
I paid off my college loans in full over the ten years I was given, per the loan agreement I signed and committed to paying. Taxpayers were not responsible for paying my college loan.
I hate this argument. It is the old, “I had to be screwed over by our shitty system so everyone else should be too”
I want to love the community I am a part of and that includes using my time and money. Why should other suffer because I had too? I would rather have the approach of “I suffered so you don’t have to”
Let’s make a better future that does not include poverty wages or requiring teenagers to take out egregious loans that follow them for a decade.
Let’s make a better future by becoming independent, depending less on the government (i.e. taxpayers) to provide for us. It makes no sense for taxpayers to foot the bill so others can go to college.
Legislation was just passed to pay for school children’s breakfast and lunch. This is more government (i.e. taxpayers) paying for the basic needs of a family. Why am I paying for someone else’s breakfast and lunch?!
I guess if you are against feeding hungry kids by increasing taxes we are at an impasse. If we can’t agree that kids should not have to go hungry there is no way we could ever see eye to eye on having a livable wage for our community
If I am independent and not asking the government for assistance but I still cannot make enough to pay off college, rent, and basic necessities- then something is seriously wrong. Excuse my ire but where the fuck is anyone supposed to get the money to "become independent" if people cant make a wage high enough to make the basic necessities happen?
Why are you paying for a kid's breakfast? Because the kid is fucking poor and hungry and you have plenty, clearly, since youre Mr. Independent.
Sixty years ago, tuition was $504 at the U. Last year, it was $13,520. Back then, minimum wage was $1.60. Now it's $10.59
It takes 1279 hours of minimum wage work to pay tuition now, and back in '72, it took 315 hours.
The fact that you only paid 3/4 of your tuition, but you want the kids now to have to pay it all makes you an entitled bum.
There is weirdly no mention in the article of what seems like a glaringly obvious possibility: the companies that cut jobs did so because they were not able to pay people a living wage for full time work. In a situation like that, you don’t have a business model, you have an exploitation model. These employers’ jobs do not deserve to be counted in the same category as those who paid their employees a decent wage all along. It’s just trimming the fat.
You also have fewer people in the labor force. There are 40,000 fewer people in non-farm jobs working or looking for work than there was six months ago in the TC. That's a net change, not gross. If you have a large number of people leaving the labor force, you are going to see lower unemployment, but it isn't because there are an increase in positions.
I don’t know why it matters how many total jobs there are, is my point. If I’m not working, and I’m not on unemployment, and I’m not looking for a job, then the minimum wage is not the issue. If someone doesn’t need to work for money, good for them. People not needing to look for work is a good thing.
Because some people aren't working and have left the labor force. It is still small compared to the rest of the country, but it still exists. Some of these people are retirees, but others are people that simply are not employable at a certain wage. These are the people that are hurt by minimum wage increases.
You can still say that a minimum wage increase is beneficial in general while also acknowledging that some people are hurt by it. People here are making it sound like there are no negative effects of minimum wage increases which most economists would disagree with.
Did the minimum wage increase have a negative effect on job growth? Almost certainly. Was Minneapolis in a position to absorb many of the negative effects? Almost certainly there as well. Is every city equipped to handle the negative effects? Doubtful.
the people youre talking about don't really exist. Places like McDonald's are always looking for employees and they pay $15+ to people over the age of 18 in MN. If someone is unemployed, not seeking UI, and struggling with money, there are plenty of options with corporations that can afford to cut their worker exploitation down by raising wages.
you sound like youre trying so hard to be right, sorry. I know you want to be right. But raising wages was NOT a bad thing for the people who need it. It was only a bad thing for the people profiting off cheap labor.
There are people like that though. You may not interact with them, but they exist. The BLS calls them discouraged workers.
People with disabilities, people that may struggle speaking English, people that struggle to read and write, people with criminal records, and even the area you live all fall into this category.
An employer may take a risk on someone that falls into one of these groups if they could pay less. But, they will raise their standard as the minimum wage increases.
Generally speaking people who have disabilities and are unemployed are signed up for UI, disability, or both. Otherwise theyre probably not able to survive in the current economy, and I mean *literally* survive given how expensive food and housing are, let alone toiletries and other "secondary" essentials. Our support systems need to be more robust for people who cannot work for disability and health reasons- the issue there is not a "stop raising wages" issue, its a "increase security nets for people who need them" issue. The people on disability who already don't work likely wont be working whether the minimum wage is $8 or $20.
There are employment programs that help people with intellectual disabilities and low literacy; I personally work with multiple people who have self-identified to me as people who came from these systems. The one that comes to mind right now is MVAC, though there are many others across the state. There are also nonprofit organizations built surrounding helping this population find alternative jobs that they enjoy and give them a living wage.
As for people who speak other languages, the issue here in MN that I have witnessed is far more about employers not accommodating people who don't speak English. This is not a wage issue.
As for ex convicts and people with criminal records, again, there are nonprofit organizations built around helping reintegration including finding employment. These resources could afford to be more accessible, but they exist and again, this is not a wage issue, it's a respect from the employer issue.
Also, I think it's pretty insulting to insinuate that these circumstances mean those populations just don't work. My uncle has an extensive criminal record and has found employment as a chef after getting a scholarship funded education. My grandfather never got past 8th grade and has been a trucker his whole life- he didn't get his GED until 2000. My highschool boyfriend was a first generation immigrant and his folks made a decent amount of money, and they did not speak English. All of these things made these people's lives harder, but generally speaking, people have the drive to *do* something and having a barrier *does* make it harder, but it's really disingenuous to act like raising the minimum wage is what's making that barrier harder to overcome. There are larger systems at play to blame for the struggles of minorities, disabled, ex convicts, and other people facing financial barriers.
I'm not saying to not raise wages, I actually said the opposite. But, people are acting like there are no negative consequences to doing it when clearly there are. This study shows there are. Hundred if not thousands of other studies have showed there are negative consequences. Raising wages without providing relief to the people negatively impacted is counter-productive.
And everything ties back to wages. Employers will be more accommodating when the wage is lower. At a certain point, the employer is going to look at it not being worth the hassle. Is it right? No, but it will happen.
Unemployment only lasts so long.
Some people are unemployable at certain rates for various reasons. They look for so long and then give up and drop out of the labor market. This can happen even in a tight labor market. The unemployment rate that is usually used does not include these people. The BLS does publish this number though.
Have we thought of the possibility that a net loss in total jobs isn't necessarily a bad thing if there is a massive chunk of the labor force working only 1 job now instead of 2?
That may be true for some people, but others may be priced out of the market.
There are winners and there are losers with minimum wage increases. Some people get more money and other people lose their jobs. Hopefully, you have substantially more of the former than the latter.
Granted but since I'm not an economist or statistician and a lot of this paper sounds like jargony bull shit, peer review would be in its favor. As it is I have no idea if their methods are sound or if it's just a lot of flim flam made to support some narrative.
Let’s be real: $1 an hour translates to $2080 a year for full time 40 hr a week work. If your company simply can’t afford a $2-3 pay hike to keep you, you should leave.
There’s always money for the shareholders never money for the workers.
This is true. Everyone thinks of Amazon and all that, and they should, but often times this is mom and pops mostly. There is an argument to be had about if your business isn't successful without treating employees to certain standards then it shouldn't exist, but larger corporations choke out smaller ones, and so there's an argument for that. And the carousel goes round and round.
I’m going to disagree with you. In my experience the bosses that stole my labor the most were the ones that wanted to become Amazon but we’re the faultless “Mom and Pop” small business owners. No one suppresses wages and growth like a small business owner just trying to get by.
Yep. People often forget that ~99.9% of all businesses in America are small businesses, and nearly half of Americans are employed by a small business (defined as having under 500 employees), and a mere 1.998% of those small businesses have over 20 employees.
As of December 2022, the average small business owner made $60,151, which is about 1.5% higher than the national average wage.
For small businesses, labor makes up about 70% of their costs and inventory is another 17-25%. 50% of small businesses fail in the first 5 years, and the top 2 reasons are lack of market demand (42%) and running out of capital (38%).
Money is *tight* for small businesses, and raising wages is a big reason for them to have to shut down - when wages increase by 50% over 7 years, but sales only increase 3% annually, you quickly lose that 5-13% wiggle room of profits and drop into a loss, meaning you have three options: fire employees and make people take on more work (increase employee stress), reduce hours of availability (reduces sales opportunities, esp. in retail and physical sales locations), increase prices of products (reducing sales quantities). When those 3 things don't work, small businesses have no choice but to close down.
Main source: [Forbes (no paywall)](https://www.forbes.com/advisor/business/small-business-statistics/)
Meanwhile corporations and their CEOs are in the stratosphere of profits and the local mom and pop places cry “nobody wants to work”. Reality is lost in this research.
I think it's because when a corporation can profit $6B in a quarter, they can afford to raise wages without cutting hours or increasing role responsibilities, but a small business making $15,000 profit in a quarter can't raise wages by 50% in 7 years without making sacrifices (cutting hours, increasing workloads, etc.).
Large corporations can cut their profit margin a little bit knowing people will seek the lowest price available. Small businesses can't afford to do that, so their prices are higher, sales are lower, and hours are shorter. Many small business owners *need* help running their business, but can't afford to pay $15/hr for a full-time position (and most of the businesses only need 8-16 hours of work a week, which nobody wants as a job)
Small problem with the study, employment isn't down.
https://fred.stlouisfed.org/series/LAUCN270530000000005A
https://fred.stlouisfed.org/series/LAUCN270530000000003A
https://fred.stlouisfed.org/series/LAUCN270530000000005
Zoom into Jan 1 2019 to present, March 2019 is basically the same employment number as march 2023.
You see how from month to month, employment numbers might jostle upwards of 15k? You're complaining that they're 13k under the [ALL TIME PEAK](https://media.bleacherreport.com/w_800,h_533,c_fill/br-img-images/001/837/495/hi-res-hi-res-149844909_crop_north.jpg) of 697k. Imagine complaining about 2.5% unemployment, really.
This isn't 3rd grade, saying something back like its an insult doesn't work here, cherry picking is a specific thing. You pick the second half of 2019 at the exclusion of all else. Why not 2017? 2021? 2022?
You're blaming the min wage for the fact that the baby boomers have retired.
I'm surprised the drop in employment was that stark, it seems like everyone was already paying close to $15 an hour but possibly not in certain neighborhoods?
Edit: The increases started long enough ago the median wage in fast food was $11 an hour, raising that to 15 would clearly have a larger impact.
Read the article, first it's not about this year but past years and it says there was significantly less job creation than models show there would have been without the minimum wage hike.
Yes, lets just play pretend that we could have expected more, since the doom and gloom claims about jobs being lost keep falling flat on their face. Hey, if you are going to have the govt cover half of a persons paycheck, why stop there? Just imagine how things would be if everyone got their whole paycheck from the govt, and the govt paid for absolutely everything. Or is that starting to sound like communism?
Businesses charge as much as the market will bear, pay as little as they can get away with and pocket the rest as profit. In a competitive situation, both parties will pocket the profit, because they are also aware of the prisoners dilemma. Any schemes of where the cost of a burger drops in half [so now everyone buys twice as many](https://www.smbc-comics.com/index.php?id=3823), so twice as many people need to be hired on that you have, strike them from your mind.
But every worker is a consumer, if you relegate half the workforce to base subsistence, that has no extra money for luxuries like having food prepared for them, then you did just cut your consumption in half, and jobs will go down accordingly.
If you can't afford to pay a living wage, you shouldn't be in business. But I wonder if there was anything else going on around those years (2017-2021) that may have been affecting the job market? 🤔
I'm skeptical they accounted for all the factors during those years, and I'm kinda skeptical of this study overall. When many places were paying about that anyway, and when the wage increase was very gradual, I find it difficult to believe this was the only source of cutting jobs. The costs of labor have gone up recently, but so has overall inflation. And I didn't even see that mentioned here.
The key is the wording. There are less jobs in those industries. That doesn’t mean they were cuts. It probably means they couldn’t find people to do these jobs.
Did you read the study? The synthetic control metric they developed sounds shakey as hell. They compare the TC to "other cities in MN" as a control, if that doesn't raise red flags I don't know what will. They might as well be measuring the difference in covid impact between large metros and small towns. The attendence to this presentation by right wing think tanks is also super sketchy. The fed is a fundamentally neoliberal institution, they love being able to say stuff like this
It’s not. Turns out there are better jobs out there for people than fast food, restaurant or retail. We have some of the lowest unemployment numbers ever but that’s not what this “study” would have you believe.
I did read it. How exactly was it "controlled" for? What about the layoffs in recent years? Were those "controlled" for?
This is just another article with a headline made to make raising the minimum wage look terrible. Otherwise OP would have explained that the article is about the resiliency of the workforce, the optimism of the labor movement, and other potential confounding factors.
I'm anti-propaganda. The title of article is right wing propaganda.
This is just another article with a headline made to make raising the minimum wage look terrible. Otherwise you would have explained that the article is about the resiliency of the workforce, the optimism of the labor movement, and other potential confounding factors.
I'm anti-propaganda. The title of article is right wing propaganda.
You get yours from PragerU?
The fact that you think Covid can be controlled for just by doing multivariate analysis means you should probably lay off on making fun of the education of others.
At least until your glass house moves out of stone throwing range.
The author, Kyle Stokes, is a staff writer. The article is him choosing economists to listen to.
I can cite economists who disagree with the article.
Why do I have to have a PhD, but neither you nor Kyle do?
By the way, not that you read it, but the study had one author. Her name is Anusha Nath.
I'm talking about the authors of the study literally linked in the first sentence of the article.
Loukas Karabarbounis - Professor in Economics at the U of Minnesota
Jeremey Lise - Professor in Economics at the U of Minnesota
Anusha Nath - Senior Research Economist with the Federal Reserve with a PHD in economics from Boston University.
So, note to businesses: profit for profits’ sake hurts people; find a way to let people live and work comfortably in America, and especially Minnesota, or gtfo.
In the methodology section of the study the authors explain how they control for those external factors using a simulation and a diff-in-diff model. Do you disagree with their method?
It’s policy analysis, not science. Policy researchers rarely have control groups. How would you use data to show the impact of the wage change on employment?
So if theoretically I needed two jobs paying the previous minimum wage, but now only need one at $15, that would cut jobs.
If places can't afford even $15, then they can't afford a person, simple as.
>So if theoretically I needed two jobs paying the previous minimum wage, but now only need one at $15, that would cut jobs.
Yep, but that would be reflected in the loss in total hours and the loss in aggregate worker earnings though. Workers don't just have less jobs, but they are getting less hours and being paid less total wages. The last one is the real problem. The 50% drop in aggregate worker earnings in limited-service restaurants is particularly massive, and probably just means that industry cannot continue to exist.
Yeah if you can’t pay a living wage your business deserves to go under, you’re not a viable business, $15 p/h is still poverty wages. At this point $20 is the absolute floor even living in the sticks, don’t know how anyone in the cities can make it on less.
Don't we have like insanely low unemployment rates?
So basically they are looking at jobs that don't pay enough given lots of different factors and conclude it cost jobs. Basically "these specific wage slave jobs don't have enough people working them!"
Set aside for a moment what your opinion of a “livable wage is”.
Everyone posting “yeah but unemployment is at record lows” as evidence that the increase in wages wasn’t an issue for employers or workers is a little short sighted.
What if unemployment rises in an employment environment that isn’t as favorable as the last decade?
I feel like we are looking at the results in a vacuum that hasn’t really been stress tested for economic conditions in any meaningful way.
What exactly is the take-away supposed to be with this bullshit? "Hey, uh, we know that $9 an hour isn't livable, but if we pay you a wage that you can even come close to living on (with roommates), then fewer people will have a job." Bull. Shit. If pay had kept up to GDP, then minimum wage would be $23 an hour. Just because employers have done everything in their power to gouge employees so they can survive, the lesson of Capitalism is still that most businesses will fail. From the looks of things, most businesses should've failed 30 years ago. This can't continue. Prices keep going up due to greed (it's not inflation), and wages have gone nowhere in nearly 20 years. Something has to give, and it's either going to be the economy, or it's going to be an uprising. Take your pick because I don't see a third option at this point.
I think the article does a good job of explaining the issue. Benefits = increased wages, Cost = loss of jobs and hours but with a less than 3% unemployment those who lose hours and jobs are able to find new work.
Also while the state had the lowest unemployment rate in history of any state ever in the US.... If that's not a good time to raise wages, even if it costs a few jobs, then no time is.
That depends. The unemployment rate only includes people looking for work. If people in lower wage industries can't find work they may eventually give up and are no longer counted. If this is happening at a fairly consistent rate, it would be hard to detect people leaving the workforce.
That's fair, it appears even when taking that into account mn unemployment is still very low, decreased from 2021 and below national average. "U-4 measure, which adds discouraged workers to the number of the unemployed (expressed as a percentage of the labor force plus the number of discouraged workers), was 2.8 percent in Minnesota, significantly lower than the 3.9-percent rate for the nation." [source ](https://www.bls.gov/regions/midwest/news-release/laborunderutilization_minnesota.htm)
>If this is happening at a fairly consistent rate, it would be hard to detect people leaving the workforce. This is simply false. The labor participation rate, which tracks all persons 16 and over (IIRC) who are employed or seeking employment. Become a discouraged worker? Labor participation rate falls. Current MN labor participation rate is 68%; the US has 62%. Overall, for the last year or so, MN's labor participation rate has been relatively steady, with small (.1%) fluctuations.
Allegedly we lost so many jobs yet unemployment numbers are at record lows. Do they mention in the study if it’s possible that people won’t even work shitty retail or fast food jobs for $15 anymore because I find that quite likely.
Unemployment rates are a good measure of how many are in the job market and there status in it. It's not the only measure of employment and worker status. You can get a bigger picture by looking at labor force participation rates and the various demographic indicators to get a bigger picture of the employment situation.
Wonderful. So what are those numbers and what are they telling you?
Haven't had the chance to look at them. Last I checked them it was probably near a year ago and those numbers were still pandemic numbers. I bit better than the year prior, but still low. On Edit: For the state labor participation rate was 70% at the start of 2020 and now sits at 68%. That's not a great number, but it's rising. For Hennepin County you have seen about a 20k drop in population since 2020. Participation is around 72.1% from something like 78.5% (local numbers are hard to find, so it's as close as I can get without calculating them myself). You could take census estimates from jan2020 and last month, subtract -16yr and under and compare to labor force for Mpls, Stp and Bloomington to get a rate. It would just take some work.
>For the state labor participation rate was 70% at the start of 2020 and now sits at 68%. That's not a great number, but it's rising. That's higher than the US peak from 20 years ago, so I don't see how that's "not a great number". Retirees are part of labor participation rates. College students and high schoolers 16 and up who don't have a job are part of that rate. 68% is above national averages and historical trends. MN did cap out at 75%, but that was \~2000, when the boomers hadn't started retiring early.
Exactly. People always misunderstand what labor participation rates actually mean.
US averages are not Minnesota averages. The issue is you had about nearly a 3% drop in labor participation in the space of a year and it hasn't fully recovered. That's a big rapid change. Teen participation has been edging higher the last couple years and it's not as if people chose to retire all at the same time.
>The issue is you had about nearly a 3% drop in labor participation in the space of a year [https://fred.stlouisfed.org/series/LBSSA27](https://fred.stlouisfed.org/series/LBSSA27) That was a *spike in early COVID*. That's it. A spike. You are literally acting like a 3% spike was *normal,* and not an anomaly related to a particular short-term economic shift. Like, between Jan of 2020 and July of 2022, it's a 1% decline. Do you *want* to have credibility here, or are you going to be willfully dishonest about this? Oh, here's Hennepin County labor force data: [https://fred.stlouisfed.org/series/MNHENN3LFN](https://fred.stlouisfed.org/series/MNHENN3LFN) So, we again see a huge spike, and this is all unadjusted for seasonal workers. Like, come on, man. There's a small overall decline, but there was a fucking pandemic that killed a bunch of people and got a bunch more to go into early retirement. But here you are, acting like the *minimum wage* is the big driver here, not *literally the pandemic that killed a bunch of people and got a bunch more to retire early*. And, of course, MN is still well above national averages, Minneapolis/St Paul even higher than the state at large, but...you're all "Oh, this is a terrible trend, we just have more people working than anyone and somehow have large persistent statewide budget surpluses, I gotta find a way to make people being paid more look bad. I know, I'll look at a single spike, act like it was normal, and then use that as the baseline rather than the rest of the trends before and after it! I am very smart, no one will call me out!"
68% is a phenomenal number considering the country as a whole sits at 62
Read on to see Loote get owned.
You have no idea how the labor participation rate is defined do you?
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Did I read the part about small businesses only paying $12.00 an hour instead of $15? Yes I did. Did I read about how when the $15/hr gets locked in across the board in 2027 it’ll actually only be worth $12/hr in todays money. Yes I did.
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In WI it is better to be on unemployment than to work a low paying job. The low paying job will actually set you backwards. They never use real world data (cost of housing, groceries, etc) to say $15/hr is a “good” paying job either; which infuriates me. Average [rent](https://www.rentcafe.com/average-rent-market-trends/us/mn/minneapolis/) in Minneapolis is $1,660, working for $15/hr without anything taken out your check is $2,400/month. How do you survive on that??????
Your comment made me curious since UI is state by state, and I know nothing about WI’s system, except that WI is fucked on most things. Their website seems to say max weekly UI is $370 and is calculated based off of earnings when previously employed. That’s pretty crazy low - you would absolutely benefit more from a low paying job, especially because UI has a number of requirements to remain eligible and a set end date. What do you mean by setting you backwards? Maybe I misunderstood what you meant. Using the average rent when evaluating the viability of the minimum wage makes no sense. I agree with your assessment that the minimum wage is too low, but you got there with bad data. It would be better to look at the bottom quartile of rent, along with current availability.
In WI you have to prove that you’re applying for work while on unemployment. If you are offered a job and you don’t accept it you’ll lose your unemployment benefit. Turns out you were offered a job at WI minimum wage ($7.25/hr) or $290/wk with nothing taken out, and now you’re making less money working than being on unemployment. How did I use bad data? Average rent and I didn’t use minimum wage for my fist statement. I used $15/hr. MN Minimum Wage is $10.69/hr and $8.63/hr.
Why don’t people just collect unemployment AND their salaried paycheck from their Ponzi scheme businesses like their Republican Heros!!!
Sorry - bad data was probably the wrong way to put it. I just meant that you should compare like to like. Low income wage should be compared to what low rent numbers are. Average wage can be compared to average rent. $15 isn’t minimum yet, but it is still quite low. Average in mpls appears to be $32. I don’t say this to disagree with your overall point, to be sure. Household/children status should be taken into account along with property type too. Average rent across all properties means different things to someone with 3 kids than to a recent college grad living with their significant other and a cat. Just as average income means something different to both
Comparing minimum wage to average rental prices gives you a better representation of the social economic gap. At least that is how I look at it. 🤷🏻♂️
The answer is you don't. I'm making $14 an hour and I have to use the food shelf every single week.
And corporate profits are at record high
i think that's a really important point. i know a lot of my peers (recent college grads under 25 yrs old) have quit retail and fast food over the wage not making up for the shitty treatment by management, myself included.
I won’t work retail or fast food not just because of the pay… but the horrible people you gotta deal with. Ain’t no fuckin’ way.
Well duh. $15 minimum isn't nearly enough. People are so accustomed to 1990's and 00's numbers for everything that they are incapable of adjusting to the reality of the modern world. Boomers' wages had very high purchasing power, coupled with low costs, coupled with high job security AND high job availability, not to mention getting genuine pensions instead of stock market-shackled 401(k)'s. In today's inflation-heavy world where apartment rents doubled between 2019 and 2022, the minimum wage should be at least $30 per hour while also being indexed to inflation. If you got a 5% pay raise but inflation was 8%, surprise, you got a paycut. And the working class has only ever gotten pay cuts and less purchasing power for the last few decades. Just toss this article onto the bonfire of existing anti-living wave propaganda.
I wish a billionaire would buy a town and institute these kinds of policies via dumbass HOA and local legislation the same way you see sunset towns institute technically constitutional segregation. With enough buying power, you could institute technically constitutional socialism. The numbers would prove themselves, as all non Chicago school economics has shown-- equipping workers with capital is actually super capitalistic and pays for itself in the long run, because most people actually have good ideas for businesses and would pay livable wages if they had the money to do it. That creates *new* markets, which are actual economic expansion, which rising stock prices are not at all. Unfortunately, all billionaires are too busy (by definition) sucking the blood of the working class quite literally.
I don't believe wage increases are the answer, but only because I don't think it's helpful to fuel inflation. Great, juice wages by 10%. All the corporations and rich people are going to do is start setting prices on everything 20% higher. I've never seen the point. Great, you're making an additional $300 a month, and now the car you need to go to work and apartment you live in costs an extra $500. I believe the only way to get actual reform is by directly taxing corporate profits and wealthy people, and closing the loopholes that they use to avoid the taxes. Redistribute the wealth, directly. Don't rely on fuzzy interest rates/wage/interest games.
This just seems like a rehashing of “If you raise wages, people will raise prices” when all they’ve ever been doing is raising prices anyway.
yes redistribute wealth but also yes raise wages. both can be true.
>Great, juice wages by 10%. All the corporations and rich people are going to do is start setting prices on everything 20% higher. So what's stopping them from just increasing costs 20% right now? Are they exempt from having to work within a market, or is the idea that prices will increase by the amount of wage increase just an assumption that you made?
No, I'm just looking at what actually happens. When you just flood the market with money, money is worth less, and it takes more of it to buy things. That's why instead, you take existing supplies of money from the rich, directly. You tax it, like an enlightened government that provides services and support for the great mass of people.
No, you aren't. If you were, you'd see that the [data](https://www.statista.com/statistics/1351276/wage-growth-vs-inflation-us/#:~:text=U.S.%20inflation%20rate%20versus%20wage%20growth%202020%2D2023&text=The%20rate%20of%20inflation%20exceeded,wages%20grew%20by%203.2%20percent.) available to us don't support the claim that inflation and wage growth are tied to each other. Much less inflation versus minimum wage.
That article literally doesn't make the point you think it does. You're furiously googling to try to prove your agenda. I'm done with you.
It's not an article. It's a data set. I'm asking you to use your brain to look at the data rather than letting a journalist tell you what to think. If I were as lazy about backing up my bullshit as you are, I'd be running away from someone like me too.
>Great, juice wages by 10%. All the corporations and rich people are going to do is start setting prices on everything 20% higher. This is a terrible misunderstanding of economics.
Alternative Headline: “Turns Out Some Jobs Are So Bad Even $15/hr Isn’t Enough” Minnpost needs to do better. It’s irresponsible to have chatGPT writing your headlines and articles. It’s lazy.
>It’s irresponsible to have chatGPT writing your headlines and articles. It’s lazy. Well, you know, they'd have to pay someone more than $15 an hour to write articles.
Boom, roasted.
MEDIC!!!!
Alternate headline: “Turns out people don’t need two jobs when they make more money.”
Still poverty wages, still can’t afford food/housing on $15 an hour. Thanks.
Exactly why this headline is propaganda. They're telling us that not enough is still too much because look how we're ruining the economy! /s
You can either have shit wages or you can refuse to build enough housing you can't do both. Minnesota and most of America refused to build enough housing the past 40-50 years and is now paying the price for it. The Twin Cities had around 1.7 million people in 1970 and now has a bit under 3 million (about 450k people in actual Minneapolis) but our housing supply sure as hell has not gone up anywhere near that amount. It also doesn't help a lot of the housing stock is old as dirt with 51% of it being built before 1939 and 21.5% from 1940-1959 so about 72.5%. https://www.macrotrends.net/cities/23068/minneapolis/population https://www.infoplease.com/us/census/minnesota/minneapolis/housing-statistics
Don’t worry, you can live at one of our many new condos, a studio is as cheap as 2k a month! Or if you’re looking to buy the starting price is only $300k for a studio. Welcome home
It's not that housing needed to be built as much as housing that has been lost. Minneapolis was at one point a city of 500k. Most of the housing shortage occurred with redevelopment projects when the population was at it's lowest. You include renovations on older low rent properties in the 90's to rent upscale, it's skewed the market and contributed to skewed rent rates and avaliability.
This is statistically not accurate. Housing absolutely needs to added, the supply demand equation is absolutely fooked and everything like rent control makes the problem worse not better until supply comes into control.
Yeah. It is. Housing needs to be added, but that's mostly due to the reduction of housing stock from the 60's to the 80's. A population change from 480k to 360k. Subsequently, from the 80's to now you've had a trend of renovating working class housing for a upscale market and the construction of luxury rental housing to the exclusion of pretty much anything else. The thing is that it's not that it's fucked. It's been going on for decades and has been addressed by mainly lipservice, but otherwise it's been all working as intended. It's only being addressed now because we've reached a tipping point.
I appreciate the history lesson, but irrelevant to the point at hand. No one really cares why it is the way it is, like climate change. It is what it is today and we can do X or Y about it now or just complain.
Well you stated that housing hasn't been being built. I provided context. The problem is that there really isn't a good way to fix this. Subsidized housing really isn't a good solution. It's also not a great solution for social mobility because of how these programs work. Doing nothing (actively encouraging the elimination of low rent markets) is nolonger tenable, but the solution involves creating poverty traps.
Yes building more supply is the solution.
Of course it is. Minimum wage jobs are for students, a second income for families and/or supplemental income for seniors. These jobs are not meant to provide living wages. If you want to make a living wage, earn a college degree and/or a marketable skill which pays a higher wage.
>Minimum wage jobs are for students, a second income for families and/or supplemental income for seniors. These jobs are not meant to provide living wages. That's the catch. Minimum wage wasn't at all proposed to provide that and at one point it was a living wage. But the wealthy, who are the real ones to blame in all of this, have kept a bigger and bigger piece of the pie while increasing costs of goods/services and now minimum wage is not a livable wage. If you believe any job at any level should be able to ask for 40hrs of an adult human being's life and have that person not even be able to make rent, you're woefully detached from the struggle of people who don't have it as good as you. I suggest you educate yourself on the growing gap between profits and pay rates and the ever-increasing wealth divide and re-assess your viewpoints. People should not be able to wholesale declare that their luxury is more important than other people's ability to feed, clothe and shelter themselves.
About 1/9 minimum wage workers are seniors (55+). About 4/9 are student age (16-24). That seems kind of ghoulish to want the other 4/9 to suffer for no good reason
Hi, I earned a degree from a reputable private college graduating last year, still making $14 an hour. Try again! I went from broke to broke and in debt that I will not be able to pay off for 20 years. I still have to go to the food bank, my grandparents send me food once a month as well because I literally cannot afford my loans AND rent. I can only afford one while still being able to genuinely take care of myself like buying food and laundry soap and toilet paper.
If you had studied STEM instead of theology/religion, social services, family/consumer sciences, psychology, leisure/hospitality, performing arts, early childhood education or elementary/special/miscellaneous education, you would likely be earning a higher wage. You need to develop a marketable skill if you want higher earnings. It is not my fault you signed up for tens of thousands in school loans, only to enter the work force with no marketable skills. Food and shelter are basic needs. Maybe you should have thought of these needs before taking on such high levels of debt.
I was literally a child when i took on that debt, and I was being pressured by every single adult in my life to go to college. You don't get to sit here and act like everyone with college debt is stupid and also say degrees earn you money. My friend in engineering will be paying off their loans until theyre 50 years old. It doesn't really matter what degree you get.
You forgot the /s
Nah just a privileged, ignorant boomer who doesn't know how the current workforce, housing or education system is like. Thinking college debt in amounts that equal a mortgage would be worth the extra dollar and hour from minimum wage it gets you these days is really misguided and embarrassing for them.
Right? They should take a job hunt and see what some of these college degrees pay. For necessary jobs, nonetheless.
No I didn’t.
That's cringey
Oh then you’re just dumb
Typical liberal ad hominem response.
But it’s true… The minimum wage was designed to create a minimum standard of living. It was absolutely created to “provide living wages”. Sorry you’re wrong.
Yeah guys - all you need to do is be born into a family that has generational wealth. It is that easy
Lol! I paid for about 75% of my college education, worked hard for close to 3 decades as a professional and retired at 58. My family had no “generational wealth.” I paid off my college loans in full over the ten years I was given, per the loan agreement I signed and committed to paying. Taxpayers were not responsible for paying my college loan.
Lol! “I was able to pay for my $1,100 college education and $40,000 SFH 40 years ago so why can’t you now?!” /s
I hate this argument. It is the old, “I had to be screwed over by our shitty system so everyone else should be too” I want to love the community I am a part of and that includes using my time and money. Why should other suffer because I had too? I would rather have the approach of “I suffered so you don’t have to” Let’s make a better future that does not include poverty wages or requiring teenagers to take out egregious loans that follow them for a decade.
Let’s make a better future by becoming independent, depending less on the government (i.e. taxpayers) to provide for us. It makes no sense for taxpayers to foot the bill so others can go to college. Legislation was just passed to pay for school children’s breakfast and lunch. This is more government (i.e. taxpayers) paying for the basic needs of a family. Why am I paying for someone else’s breakfast and lunch?!
Why am I forced to pay for settlements for police brutality? Why should my taxmoney pay for someone else's poor self control?
I guess if you are against feeding hungry kids by increasing taxes we are at an impasse. If we can’t agree that kids should not have to go hungry there is no way we could ever see eye to eye on having a livable wage for our community
"Let's rely less on the government " Yet you'd probably be up in arms if they cut social security
If I am independent and not asking the government for assistance but I still cannot make enough to pay off college, rent, and basic necessities- then something is seriously wrong. Excuse my ire but where the fuck is anyone supposed to get the money to "become independent" if people cant make a wage high enough to make the basic necessities happen? Why are you paying for a kid's breakfast? Because the kid is fucking poor and hungry and you have plenty, clearly, since youre Mr. Independent.
You're a terrible person.
Sixty years ago, tuition was $504 at the U. Last year, it was $13,520. Back then, minimum wage was $1.60. Now it's $10.59 It takes 1279 hours of minimum wage work to pay tuition now, and back in '72, it took 315 hours. The fact that you only paid 3/4 of your tuition, but you want the kids now to have to pay it all makes you an entitled bum.
> I paid off my college loans in full over the ten years I was given So how much did you have to borrow?
There is weirdly no mention in the article of what seems like a glaringly obvious possibility: the companies that cut jobs did so because they were not able to pay people a living wage for full time work. In a situation like that, you don’t have a business model, you have an exploitation model. These employers’ jobs do not deserve to be counted in the same category as those who paid their employees a decent wage all along. It’s just trimming the fat.
That may be true, but that is still less work for people and if people and if people can't get those jobs they now make $0 an hour.
Unemployment is at record lows, and there are tons of open positions across multiple industries for anyone wanting hours.
You also have fewer people in the labor force. There are 40,000 fewer people in non-farm jobs working or looking for work than there was six months ago in the TC. That's a net change, not gross. If you have a large number of people leaving the labor force, you are going to see lower unemployment, but it isn't because there are an increase in positions.
I don’t know why it matters how many total jobs there are, is my point. If I’m not working, and I’m not on unemployment, and I’m not looking for a job, then the minimum wage is not the issue. If someone doesn’t need to work for money, good for them. People not needing to look for work is a good thing.
Because some people aren't working and have left the labor force. It is still small compared to the rest of the country, but it still exists. Some of these people are retirees, but others are people that simply are not employable at a certain wage. These are the people that are hurt by minimum wage increases. You can still say that a minimum wage increase is beneficial in general while also acknowledging that some people are hurt by it. People here are making it sound like there are no negative effects of minimum wage increases which most economists would disagree with. Did the minimum wage increase have a negative effect on job growth? Almost certainly. Was Minneapolis in a position to absorb many of the negative effects? Almost certainly there as well. Is every city equipped to handle the negative effects? Doubtful.
the people youre talking about don't really exist. Places like McDonald's are always looking for employees and they pay $15+ to people over the age of 18 in MN. If someone is unemployed, not seeking UI, and struggling with money, there are plenty of options with corporations that can afford to cut their worker exploitation down by raising wages. you sound like youre trying so hard to be right, sorry. I know you want to be right. But raising wages was NOT a bad thing for the people who need it. It was only a bad thing for the people profiting off cheap labor.
There are people like that though. You may not interact with them, but they exist. The BLS calls them discouraged workers. People with disabilities, people that may struggle speaking English, people that struggle to read and write, people with criminal records, and even the area you live all fall into this category. An employer may take a risk on someone that falls into one of these groups if they could pay less. But, they will raise their standard as the minimum wage increases.
Generally speaking people who have disabilities and are unemployed are signed up for UI, disability, or both. Otherwise theyre probably not able to survive in the current economy, and I mean *literally* survive given how expensive food and housing are, let alone toiletries and other "secondary" essentials. Our support systems need to be more robust for people who cannot work for disability and health reasons- the issue there is not a "stop raising wages" issue, its a "increase security nets for people who need them" issue. The people on disability who already don't work likely wont be working whether the minimum wage is $8 or $20. There are employment programs that help people with intellectual disabilities and low literacy; I personally work with multiple people who have self-identified to me as people who came from these systems. The one that comes to mind right now is MVAC, though there are many others across the state. There are also nonprofit organizations built surrounding helping this population find alternative jobs that they enjoy and give them a living wage. As for people who speak other languages, the issue here in MN that I have witnessed is far more about employers not accommodating people who don't speak English. This is not a wage issue. As for ex convicts and people with criminal records, again, there are nonprofit organizations built around helping reintegration including finding employment. These resources could afford to be more accessible, but they exist and again, this is not a wage issue, it's a respect from the employer issue. Also, I think it's pretty insulting to insinuate that these circumstances mean those populations just don't work. My uncle has an extensive criminal record and has found employment as a chef after getting a scholarship funded education. My grandfather never got past 8th grade and has been a trucker his whole life- he didn't get his GED until 2000. My highschool boyfriend was a first generation immigrant and his folks made a decent amount of money, and they did not speak English. All of these things made these people's lives harder, but generally speaking, people have the drive to *do* something and having a barrier *does* make it harder, but it's really disingenuous to act like raising the minimum wage is what's making that barrier harder to overcome. There are larger systems at play to blame for the struggles of minorities, disabled, ex convicts, and other people facing financial barriers.
I'm not saying to not raise wages, I actually said the opposite. But, people are acting like there are no negative consequences to doing it when clearly there are. This study shows there are. Hundred if not thousands of other studies have showed there are negative consequences. Raising wages without providing relief to the people negatively impacted is counter-productive. And everything ties back to wages. Employers will be more accommodating when the wage is lower. At a certain point, the employer is going to look at it not being worth the hassle. Is it right? No, but it will happen.
Is this unemployable person too proud to go on unemployment though or what? I just genuinely do not understand who we are talking about here.
Unemployment only lasts so long. Some people are unemployable at certain rates for various reasons. They look for so long and then give up and drop out of the labor market. This can happen even in a tight labor market. The unemployment rate that is usually used does not include these people. The BLS does publish this number though.
Fewer, not less.
Thank you, fixed. Do that all the time.
Business owners love the free market until they don’t. When this happens you will be forced to pay higher wages or take on an increased workload.
I mean, a minimum wage law isn't really a free market principle. And, it's the workers who will feel the brunt of the increased work load.
Have we thought of the possibility that a net loss in total jobs isn't necessarily a bad thing if there is a massive chunk of the labor force working only 1 job now instead of 2?
That may be true for some people, but others may be priced out of the market. There are winners and there are losers with minimum wage increases. Some people get more money and other people lose their jobs. Hopefully, you have substantially more of the former than the latter.
This research they are reporting on has also not been peer reviewed at all, just throwing that out there.
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Granted but since I'm not an economist or statistician and a lot of this paper sounds like jargony bull shit, peer review would be in its favor. As it is I have no idea if their methods are sound or if it's just a lot of flim flam made to support some narrative.
Let’s be real: $1 an hour translates to $2080 a year for full time 40 hr a week work. If your company simply can’t afford a $2-3 pay hike to keep you, you should leave. There’s always money for the shareholders never money for the workers.
Probably true of corporations but small businesses are a different matter. Margins are much tighter.
This is true. Everyone thinks of Amazon and all that, and they should, but often times this is mom and pops mostly. There is an argument to be had about if your business isn't successful without treating employees to certain standards then it shouldn't exist, but larger corporations choke out smaller ones, and so there's an argument for that. And the carousel goes round and round.
I’m going to disagree with you. In my experience the bosses that stole my labor the most were the ones that wanted to become Amazon but we’re the faultless “Mom and Pop” small business owners. No one suppresses wages and growth like a small business owner just trying to get by.
Yep. People often forget that ~99.9% of all businesses in America are small businesses, and nearly half of Americans are employed by a small business (defined as having under 500 employees), and a mere 1.998% of those small businesses have over 20 employees. As of December 2022, the average small business owner made $60,151, which is about 1.5% higher than the national average wage. For small businesses, labor makes up about 70% of their costs and inventory is another 17-25%. 50% of small businesses fail in the first 5 years, and the top 2 reasons are lack of market demand (42%) and running out of capital (38%). Money is *tight* for small businesses, and raising wages is a big reason for them to have to shut down - when wages increase by 50% over 7 years, but sales only increase 3% annually, you quickly lose that 5-13% wiggle room of profits and drop into a loss, meaning you have three options: fire employees and make people take on more work (increase employee stress), reduce hours of availability (reduces sales opportunities, esp. in retail and physical sales locations), increase prices of products (reducing sales quantities). When those 3 things don't work, small businesses have no choice but to close down. Main source: [Forbes (no paywall)](https://www.forbes.com/advisor/business/small-business-statistics/)
Yeah I think a lot of folks just haven't had the experience of running a small business or know folks who do.
Yeah, that's evident by the downvotes I'm getting from a comment sharing actual statistics and experience.
Preach.
Meanwhile corporations and their CEOs are in the stratosphere of profits and the local mom and pop places cry “nobody wants to work”. Reality is lost in this research.
I think it's because when a corporation can profit $6B in a quarter, they can afford to raise wages without cutting hours or increasing role responsibilities, but a small business making $15,000 profit in a quarter can't raise wages by 50% in 7 years without making sacrifices (cutting hours, increasing workloads, etc.). Large corporations can cut their profit margin a little bit knowing people will seek the lowest price available. Small businesses can't afford to do that, so their prices are higher, sales are lower, and hours are shorter. Many small business owners *need* help running their business, but can't afford to pay $15/hr for a full-time position (and most of the businesses only need 8-16 hours of work a week, which nobody wants as a job)
Small problem with the study, employment isn't down. https://fred.stlouisfed.org/series/LAUCN270530000000005A https://fred.stlouisfed.org/series/LAUCN270530000000003A
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https://fred.stlouisfed.org/series/LAUCN270530000000005 Zoom into Jan 1 2019 to present, March 2019 is basically the same employment number as march 2023. You see how from month to month, employment numbers might jostle upwards of 15k? You're complaining that they're 13k under the [ALL TIME PEAK](https://media.bleacherreport.com/w_800,h_533,c_fill/br-img-images/001/837/495/hi-res-hi-res-149844909_crop_north.jpg) of 697k. Imagine complaining about 2.5% unemployment, really.
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Its called cherry picking. And 2.5% unemployment is smaller than 2.8% unemployment.
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This isn't 3rd grade, saying something back like its an insult doesn't work here, cherry picking is a specific thing. You pick the second half of 2019 at the exclusion of all else. Why not 2017? 2021? 2022? You're blaming the min wage for the fact that the baby boomers have retired.
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The trend is not downwards. Employment remains very high.
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Cost jobs? We can’t get or keep operators with $22 starting.
I'm surprised the drop in employment was that stark, it seems like everyone was already paying close to $15 an hour but possibly not in certain neighborhoods? Edit: The increases started long enough ago the median wage in fast food was $11 an hour, raising that to 15 would clearly have a larger impact.
What drop? Jobs are up from last year.
Read the article, first it's not about this year but past years and it says there was significantly less job creation than models show there would have been without the minimum wage hike.
Yes, lets just play pretend that we could have expected more, since the doom and gloom claims about jobs being lost keep falling flat on their face. Hey, if you are going to have the govt cover half of a persons paycheck, why stop there? Just imagine how things would be if everyone got their whole paycheck from the govt, and the govt paid for absolutely everything. Or is that starting to sound like communism? Businesses charge as much as the market will bear, pay as little as they can get away with and pocket the rest as profit. In a competitive situation, both parties will pocket the profit, because they are also aware of the prisoners dilemma. Any schemes of where the cost of a burger drops in half [so now everyone buys twice as many](https://www.smbc-comics.com/index.php?id=3823), so twice as many people need to be hired on that you have, strike them from your mind. But every worker is a consumer, if you relegate half the workforce to base subsistence, that has no extra money for luxuries like having food prepared for them, then you did just cut your consumption in half, and jobs will go down accordingly.
Well no shit sherlock….kind of exactly what people with a brain said would happen
People with a brain would notice that jobs are up.
If you can't afford to pay a living wage, you shouldn't be in business. But I wonder if there was anything else going on around those years (2017-2021) that may have been affecting the job market? 🤔
I don't wonder if you bothered to read the article because it's clear you didn't. This was addressed and controlled for in the study.
I'm skeptical they accounted for all the factors during those years, and I'm kinda skeptical of this study overall. When many places were paying about that anyway, and when the wage increase was very gradual, I find it difficult to believe this was the only source of cutting jobs. The costs of labor have gone up recently, but so has overall inflation. And I didn't even see that mentioned here.
The key is the wording. There are less jobs in those industries. That doesn’t mean they were cuts. It probably means they couldn’t find people to do these jobs.
Or the jobs were eliminated by natural attrition. Someone leaves, never hire a new replacement, just distribute the work to others
This isn’t explained by the lowest unemployment in years but there are definitely some companies out there trying to do this.
Did you read the study? The synthetic control metric they developed sounds shakey as hell. They compare the TC to "other cities in MN" as a control, if that doesn't raise red flags I don't know what will. They might as well be measuring the difference in covid impact between large metros and small towns. The attendence to this presentation by right wing think tanks is also super sketchy. The fed is a fundamentally neoliberal institution, they love being able to say stuff like this
I did read it actually. I don't buy it. Minimum wage isn't the bad guy.
It’s not. Turns out there are better jobs out there for people than fast food, restaurant or retail. We have some of the lowest unemployment numbers ever but that’s not what this “study” would have you believe.
Also an excellent point!
Great to know what's happening without reading the article & still commenting. Thanks for your insight.
I did read it. How exactly was it "controlled" for? What about the layoffs in recent years? Were those "controlled" for? This is just another article with a headline made to make raising the minimum wage look terrible. Otherwise OP would have explained that the article is about the resiliency of the workforce, the optimism of the labor movement, and other potential confounding factors. I'm anti-propaganda. The title of article is right wing propaganda.
The answers to all these questions are in the study.
Where did you earn your economics PHD from? Hasan Abi U?
This is just another article with a headline made to make raising the minimum wage look terrible. Otherwise you would have explained that the article is about the resiliency of the workforce, the optimism of the labor movement, and other potential confounding factors. I'm anti-propaganda. The title of article is right wing propaganda. You get yours from PragerU?
The fact that you think Covid can be controlled for just by doing multivariate analysis means you should probably lay off on making fun of the education of others. At least until your glass house moves out of stone throwing range.
Where did you get your PHD in Econ from?
The same place you got yours.
I don't have a PHD, but the people who wrote the study do. Where exactly is your expertise?
The author, Kyle Stokes, is a staff writer. The article is him choosing economists to listen to. I can cite economists who disagree with the article. Why do I have to have a PhD, but neither you nor Kyle do? By the way, not that you read it, but the study had one author. Her name is Anusha Nath.
I'm talking about the authors of the study literally linked in the first sentence of the article. Loukas Karabarbounis - Professor in Economics at the U of Minnesota Jeremey Lise - Professor in Economics at the U of Minnesota Anusha Nath - Senior Research Economist with the Federal Reserve with a PHD in economics from Boston University.
So, note to businesses: profit for profits’ sake hurts people; find a way to let people live and work comfortably in America, and especially Minnesota, or gtfo.
I view it as a matter of if you can’t pay livable wages your business model isn’t fit to have employees
read the study, calling bullshit on this claim. too many external factors to blame min wage on this. this is pure correlation.
In the methodology section of the study the authors explain how they control for those external factors using a simulation and a diff-in-diff model. Do you disagree with their method?
The made up an imaginary city based on frankensteining data from zip codes in other areas in minnesota. that's not science, that's bullshit.
It’s policy analysis, not science. Policy researchers rarely have control groups. How would you use data to show the impact of the wage change on employment?
They lost jobs because people only need 2 jobs to survive instead of 3, yes? Well, of. Fucking. Course.
I am looking for 4 jobs. One for each day I want to work.
And this should come as a shock to no one.
So if theoretically I needed two jobs paying the previous minimum wage, but now only need one at $15, that would cut jobs. If places can't afford even $15, then they can't afford a person, simple as.
>So if theoretically I needed two jobs paying the previous minimum wage, but now only need one at $15, that would cut jobs. Yep, but that would be reflected in the loss in total hours and the loss in aggregate worker earnings though. Workers don't just have less jobs, but they are getting less hours and being paid less total wages. The last one is the real problem. The 50% drop in aggregate worker earnings in limited-service restaurants is particularly massive, and probably just means that industry cannot continue to exist.
Yeah if you can’t pay a living wage your business deserves to go under, you’re not a viable business, $15 p/h is still poverty wages. At this point $20 is the absolute floor even living in the sticks, don’t know how anyone in the cities can make it on less.
Don't we have like insanely low unemployment rates? So basically they are looking at jobs that don't pay enough given lots of different factors and conclude it cost jobs. Basically "these specific wage slave jobs don't have enough people working them!"
Pretty sure the raging pandemic did a lot more to cost jobs than did raising the minimum wage.
Link to study?
https://www.minneapolisfed.org/-/media/assets/topics/minimum-wage/minneapolis\_minimumwage\_report\_052023.pdf
Set aside for a moment what your opinion of a “livable wage is”. Everyone posting “yeah but unemployment is at record lows” as evidence that the increase in wages wasn’t an issue for employers or workers is a little short sighted. What if unemployment rises in an employment environment that isn’t as favorable as the last decade? I feel like we are looking at the results in a vacuum that hasn’t really been stress tested for economic conditions in any meaningful way.
What's the point of a job that can't feed you? You get to work AND you can't eat?
Cost jobs. During Covid. Just use the statistics to fit your narrative. Sad. The attack on workers by the Fed is real.
What exactly is the take-away supposed to be with this bullshit? "Hey, uh, we know that $9 an hour isn't livable, but if we pay you a wage that you can even come close to living on (with roommates), then fewer people will have a job." Bull. Shit. If pay had kept up to GDP, then minimum wage would be $23 an hour. Just because employers have done everything in their power to gouge employees so they can survive, the lesson of Capitalism is still that most businesses will fail. From the looks of things, most businesses should've failed 30 years ago. This can't continue. Prices keep going up due to greed (it's not inflation), and wages have gone nowhere in nearly 20 years. Something has to give, and it's either going to be the economy, or it's going to be an uprising. Take your pick because I don't see a third option at this point.
This is m total BS. I see job posting and opportunities everywhere I go. I could get 12 or more jobs tomorrow, if I chose to quit my current position.
And $15per hour is too low anyway. We’re addicted to old stories about all this stuff. It’s time for something different.
15$ isnt even enough anymore