Minimum wage rises cost jobs. People just will not employ workers when doing so loses them money. Harsh, unfair, and also true.

One-time economic adviser to President Biden, Jared Bernstein, notes that any significant minimum raise will indeed kill some jobs. But the folks who gain will gain so much that it’s all worth it. Well, worth it from the point of view of a Swamp-dweller planning other peoples’ lives, perhaps.

We never do get the offer to explain this logic — not just from Bernstein but from anyone — directly and in-person to the employee about to move to lose their job as a result. “Sure, you’re screwed, but look how much better off those other folks are!” would be an interesting message to watch being delivered within fist-to-nose distance. Perhaps we could sell tickets to aid in paying down the deficit or something?

13 thoughts on “Elsewhere”

  1. Dennis, Non-Swamp Dweller

    Job losses at the margin are not a bug. They are a feature. When 90% of unemployed, underemployed and poor African-American and Latinos vote Democrat, Democrats will take measures to ensure that the pool of those A-As and Latinos remains as large as possible.

    Is it any wonder that they all looked on in horror when Trump and the Republicans took steps to improve the chances of the those at the margin getting a real job?

  2. Last time I was laid off and told “it’s not personal” I replied they needn’t worry as my employment tribunal claim against them wouldn’t be personal either

  3. @ Tim,
    Well, unless Tony Blair is PM and passes a law saying you can’t sack people just because New Labour has introduced a National Minimum Wage that is more than they are worth. Any businesses that didn’t go bankrupt were stuck with unprofitable employees.
    Just because most firms in the British textile industry *did* go bankrupt …

  4. Most minimum wage jobs have a high turnover. You don’t sack them when the minimum wage goes up, you wait for them to quit. That way you don’t have to pay unemployment. Then you install more automation. Unfortunately the low productivity worker never realized the got the shaft from the minimum wage increase. They just wonder why it is so hard to find a new job.

  5. While I can’t fault the logic, I take issue with this argument, because it is not applied uniformly.

    When (you?) people defend immigration, they always gloss over the fact that while overall it might make ‘everyone’ richer, a lot of people at the bottom of the pyramid will lose out.

  6. I think that our host has frequently pointed out that, while neutral on the morals of immigration, it increases the pool of labour, and thereby reduces that pool of labour’s bargaining power – if you don’t like this job, there’s millions waiting outside to take over – thereby making the original pool of labour worse off.

  7. If increases in the minimum wage do not cause a majority of minimum wage workers to lose their jobs the Democrats consider that a victory. If 25% lose their jobs that is a massive success because they figure they’ve improved the lot of 75% and that they’ll figure out a way to take care of the last 25% one of these days.

  8. It’s fairly obvious why immigration will tend to increase GDP. It’s less obvious why it would increase GDP/capita, which is what matters to the individual.

  9. Minimum wage rises cost jobs.

    Fine. Let’s do it. The UK’s problem in recent decades has not been lack of jobs, but the creation of shit, low-paid jobs and importing 300k people a year – largely semi-literate rapey peasants and their extended families – to do them.

    Better to have fewer jobs which pay better; the native population might be more inclined to do them. Companies might bother to invest in training. Hell, the state might bother investing in training nurses etc.

    @Chris Miller – indeed. Osborne used to boast all the time about GDP rising, but never mentioned a per capita figure. I read once that Japan had better per capita GDP growth than the UK in the 2010s thanks to minimal growth but a falling population.

    I don’t object to immigrants (especially if they are really expats), if they add value overall. However, bringing in huge numbers of people whose value is keeping tuppence off Uber fares, at a cost of crime, social upheaval and strained resources, no thanks.

    Perhaps Tim would prefer a minimum wage if he viewed it as a Pigou tax, to cover the externalities of importing backwards peasants by the boatload.

    Please note I take an entirely UK-centric view on this; I don’t care what the septics do.

  10. It is actually me – myself and I as these things must be done in P³s, right? – that has been pointing out that the very reason for the lack of wage growth has been the residence of that reserve army of the unemployed in Europe…..

  11. This is an odd take coming from an economics commentator.

    Economics is almost entirely the science of trade-offs; of understanding that we should do a thing if the benefits outweigh the costs, rather than myopically looking at the few individuals who’ll be made worse off.

    Turning it into a “well, would *you* tell the people who are losing their jobs?” question is just as daft as when Corbyn-ish types use the same argument in favour of the state propping up bankrupt steelworks or defunct pizza chains.

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