As We've Been Saying, California's Minimum Wage Rises Increase Unemployment

[I Push Buttons]

But you are ignoring every other issue as if it is in a vacuum. Whats really hurting small business is an inability to compete, many were shutting down just by wal-mart being near by, even before wage increases.

Shhhh, we don't allow arguments against capitalism here.

Those businesses went out of business because Democrats, taxes, and black people... Walmart had nothing to do with it.

[PC2]

I don't think $10 is enough to make a huge difference. It just needs to be competitive enough in relation to other nearby developed countries.

However, it is economics 101 that the further the min wage is from the equilibrium wage the easier it is to get unemployment.

[Orange Joe]

0.2% increase in unemployment, when unemployment also increased nationally. And you want to blame minimum wage? This is an extremely premature judgement.

Secondly, even if there was an increase in unemployment due to an increase in minimum wage, it would likely be temporary.

Careful. I was told that by pointing this out I was personally attacking him.

[Huulo]

raising the minimum wage will help big businesses most of all because they have economies of scale. Big businesses can absorb increases in costs in a way that small businesses cannot and big business will always find a way to come out ahead when government meddles with wages and regulation, because they can afford to lobby.

In short, Minimum wages enable big business to further dominate the market.

You might be interested to learn that Walmart profits enormously from keeping minimum wage low, in the form of food stamps and public assistance for their underpaid employees.

http://www.motherjones.com/mojo/2013...dole-taxpayers

http://www.nationalmemo.com/how-mcdo...elfare-queens/

[Masark]

or a syndicated columnist for a major economics magazine....

Not syndicated, not a columnist. Anything that is forbes/sites is a blog hosted by forbes, not anything controlled by the actual magazine.

[RickJamesLich]

A lot of small businesses by me cant even handle a much lower minimum wage. They couldnt even handle it when it was much lower. Small business suffers mostly because Wal-mart exists, and target, Khols, and other department stores. They just sell more stuff and its convenient, and you simply cant beat that.

Minimum wage increases are a lot more likely to negatively effect small business though, places like Wal Mart can afford to take the hit, a small business competitor that's trying to stay afloat on the flip side will have a lot more trouble adjusting.

[GennGreymane]

but if there wasn't a minimum wage they could pay employees less and then compete.. win/win right? right?!?!?

I understand this is a sarcastic comment, but I did edit mine before answering this as if a totally serious response

Small businesses will will go out of business even if the minimum wage is cut in half.

[Crissi]

I just think a business isn't necessarily super valuable purely on the basis of it being a business. The one thing I'd like is to stop companies from moving out of the country. That is far more damaging. Keeping our wages low isn't going to stop that cause we can't compete with Mexico or Vietnam style wages.

[Masark]

However, it is economics 101 that the further the min wage is from the equilibrium wage the easier it is to get unemployment.

And then you might advance to economics 102 where you learn that such simplistic models do not reflect reality.

[Hotmail]

The truth is, nobody knows exactly how everything will unfold for California's retail industry. It is possible that the increased minimum wage will result in less employee turnover and increased consumer spending (which could help to offset the higher operational costs). It is also possible that a significant number of retail jobs will be cut, and some entire companies will have to close because they can't keep up with overhead. It's too soon to tell exactly what impact the wage increase will have - companies that are agile and effectively balance fewer but higher-skilled labor costs are most likely to prevail long-term.

[GennGreymane]

Minimum wage increases are a lot more likely to negatively effect small business though, places like Wal Mart can afford to take the hit, a small business competitor that's trying to stay afloat on the flip side will have a lot more trouble adjusting.

But like Tony, you are ignoring how minimal it is compared to other major factors. Even if minimum wages were lowered now, they would still be going out, because they were going out of business before any major increases. They are not going out of business because of wages, but because they cannot compete with the convenience of larger stores.

[alexw]

Hmmm....who do I believe is posting nonsense...

Some random dude on the internet who is left of marx

or a syndicated columnist for a major economics magazine....
hmmmm choices.

Lol. Do you even understand the slightest thing about economics? Do you understand that you cannot correlate tiny short term movements like that when there are huge variables at play in an economy? Anyone trying to make such an argument is talking pure garbage and immediately discredits themselves by trying to make such an argument. No competent economist would ever ever try to do such a thing - ergo he is not one.

[Crissi]

But like Tony, you are ignoring how minimal it is compared to other major factors. Even if minimum wages were lowered now, they would still be going out, because they were going out of business before any major increases. They are not going out of business because of wages, but because they cannot compete with the convenience of larger stores.

Or really bad road planning. The combination of Walmart and my city deciding to completely redo a main lifeline road shuttered like 6 businesses in my area lol.

Seriously, it's hard to turn in to any businesses now cause of the construction.

[Korlok]

I'm going to go with the free market alternative: if a business cannot survive a wage increase, they don't deserve to be in business and will make way for businesses that can.

Protecting jobs at all costs isn't really economically beneficial imo

I'm with crissi on this one. No business deserves to enjoy the glut of the american market if they cannot stand to pay their workers a living wage.
Full stop.

[PC2]

And then you might advance to economics 102 where you learn that such simplistic models do not reflect reality.

The chart does represent one aspect of reality, that there is a correlation between labor supply/demand and wage. Economics has many more complexities other than that concept, I don't think anyone is claiming otherwise.

[GennGreymane]

I mean at the end of the day, capitalism does need businesses to go out of business for other businesses to grow. Capitalism is not bad at all, I prefer this system, but its foolish to deny that these businesses going out because they cant compete because of wages (and they couldn't compete before wage increases either) because they are not convenient, they dont have the stock, they dont have the man power, and wouldnt if wages were cut in half) Its simply capitalism working as intended.

[Vanyali]

Or really bad road planning. The combination of Walmart and my city deciding to completely redo a main lifeline road shuttered like 6 businesses in my area lol.

Seriously, it's hard to turn in to any businesses now cause of the construction.

They put concrete planter-shit in all our major roads in Coprus... suddenly you couldn't get to any fast food place without going down at least half a block and flipping a u-turn if you weren't on the same side. You could see the loss of business when you drove by, was the dumbest decision.

Why does texas like to fuck with their roads :|

[alexw]

Because you're only shifting money around, your not actually creating wealth. The only way to create wealth is by creating new business, which isn't going to happen when you price startups out of the market.

This is meaningless gibberish and you have not explained anything in economic terms. Again I ask if the minimum wage rises causing both a rise in cost and a rise in income from higher demand how exactly in net aggregate are businesses worse off overall?

[GennGreymane]

A ton of resturants in my area just went out of business, since I knew the owners, I asked and they simply were not getting customers, and they also regretted locations due to them being very inconvenient. Sure a corner store in a residential area sounds nice, but since that 7-11 opened and was open all the time and had more items, people would go there. The sandwich shop my dad liked (it was so basic though... I never liked it.) went out because no one would drive to him (no parking) and they didnt deliver.

[Deleted]

A lot of small businesses by me cant even handle a much lower minimum wage. They couldnt even handle it when it was much lower. Small business suffers mostly because Wal-mart exists, and target, Khols, and other department stores. They just sell more stuff and its convenient, and you simply cant beat that.

Small business can manage, they just have to raise the productivity for the wage increase. It's that simple.

People that get paid more are happier, and thus will 99% of the time want to work harder and will work more efficiently due to less thinking about making bills meet at the end of the month (you have no idea how many workers nowadays get hindered/distracted by that).

We had to do that with one of our companies a decade ago and it ended up increasing our revenue by 4 times within that same decade because our workers efficiency and happiness went up. As a result we raise their wages by around 1.4% on an annually basis, about 0.5% above the national average in our country.

I think since the minimum wage was forced, we haven't even lost one worker, besides one that retired.

If a company fails by the minimum wage, no matter the size, it's because they were not financially stable and spent money in areas where it shouldn't have been spent in the first place. A well run company, with a good buffer isn't really going to struggle much more because of minimum wage especially not when the wage is being built up over the course of multiple years. There's plenty of time to adjust to it, without anything happening to your company.