Min Wage Increase Doesn't Impact Employement

[Captainant 28589]

4 minutes ago, Nice Guy Eddie said:

This doesn’t happen overnight but it does happen.

Lol we've been waiting over 40 years for the trickle to reach it's way all the way down. I'm pretty sure it doesn't happen at fuckin all, just based on my having eyes and all that 

[Nice Guy Eddie 13741]

14 minutes ago, Captainant said:

Lol we've been waiting over 40 years for the trickle to reach it's way all the way down. I'm pretty sure it doesn't happen at fuckin all, just based on my having eyes and all that 

I wasn’t describing the trickle down economics.

[Foosters 18287]

On 6/9/2024 at 5:52 AM, bernorange said:

https://cabia.org/full-page-ad-calls-out-governor-newsom-highlights-victims-of-recent-minimum-wage-hike/

 

Surprise, surprise:

https://www.latimes.com/business/story/2024-06-12/the-fast-food-industry-claims-the-california-minimum-wage-law-is-costing-jobs-its-numbers-are-fake

Quote

The fast-food industry has been wringing its hands over the devastating impact on its business from California’s new minimum wage law for its workers.

Their raw figures certainly seems to bear that out. A full-page ad recently placed in USA Today by the California Business and Industrial Alliance asserted that nearly 10,000 fast-food jobs had been lost in the state since Gov. Gavin Newsom signed the law in September.

The ad listed a dozen chains, from Pizza Hut to Cinnabon, whose local franchisees had cut employment or raised prices, or are considering taking those steps. According to the ad, the chains were “victims of Newsom’s minimum wage,” which increased the minimum wage in fast food to $20 from $16, starting April 1.

Here’s something you might want to know about this claim. It’s baloney, sliced thick. In fact, from September through January, the period covered by the ad, fast-food employment in California has gone up, as tracked by the Bureau of Labor Statistics and the Federal Reserve. The claim that it has fallen represents a flagrant misrepresentation of government employment figures.

Something else the ad doesn’t tell you is that after January, fast-food employment continued to rise. As of April, employment in the limited-service restaurant sector that includes fast-food establishments was higher by nearly 7,000 jobs than it was in April 2023, months before Newsom signed the minimum wage bill.

 

Quote

That brings us back to the claim that job losses among California’s fast-food restaurants are due to the new minimum wage law.

The assertion appears to have originated with the Wall Street Journal, which reported on March 25 that restaurants across California were cutting jobs in anticipation of the minimum wage increase taking effect on April 1.

The article stated that employment in California’s fast food and “other limited-service eateries was 726,600 in January, “down 1.3% from last September,” when Newsom signed the minimum wage law. That worked out to employment of 736,170 in September, for a purported loss of 9,570 jobs from September through January.

The Journal’s numbers were used as grist by UCLA economics professor Lee E. Ohanian for an article he published on April 24 on the website of the Hoover Institution, where he is a senior fellow.

Ohanian wrote that the pace of the job loss in fast-food was far greater than the overall decline in private employment in California from September through January, “which makes it tempting to conclude that many of those lost fast-food jobs resulted from the higher labor costs employers would need to pay” when the new law kicked in.

CABIA cited Ohanian’s article as the source for its claim in its USA Today ad that “nearly 10,000” fast-food jobs were lost due to the minimum wage law. “The rapid job cuts, rising prices, and business closures are a direct result of Governor Newsom and this short-sighted legislation,” CABIA founder and president Tom Manzo says on the organization’s website.

Here’s the problem with that figure: It’s derived from a government statistic that is not seasonally adjusted. That’s crucial when tracking jobs in seasonal industries, such as restaurants, because their business and consequently employment fluctuate in predictable patterns through the year. For this reason, economists vastly prefer seasonally adjusted figures when plotting out employment trendlines in those industries.

The Wall Street Journal’s figures correspond to non-seasonally adjusted figures for California fast-food employment published by the Bureau of Labor Statistics. (I’m indebted to nonpareil financial blogger Barry Ritholtz and his colleague, the pseudonymous Invictus, for spotlighting this issue.)

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Figures for California fast-food restaurants from the Federal Reserve Bank of St. Louis show that on a seasonally adjusted basis employment actually rose in the September-to-January period by 6,335 jobs, from 736,160 to 742,495.

That’s not to say that there haven’t been employment cutbacks this year by some fast-food chains and other companies in hospitality industries. From the vantage point of laid-off workers, the manipulation of statistics by their employers doesn’t ease the pain of losing their jobs.

Still, as Ritholtz and Invictus point out, it’s hornbook economics that the proper way to deal with non-seasonally adjusted figures is to use year-to-year comparisons, which obviate seasonal trends.

BUSINESS

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Sept. 1, 2023

Doing so with the California fast-food statistics give us a different picture from the one that CABIA paints. In that business sector, September employment rose from a seasonally adjusted 730,000 in 2022 to 741,079 in 2024. In January, employment rose from 732,738 in 2023 to 742,495 this year.

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Restaurant lobbyists can’t pretend that they’re unfamiliar with the concept of seasonality. It’s been a known feature of the business since, like, forever.

The restaurant consultantship Toast even offers tips to restaurant owners on how to manage the phenomenon, noting that “April to September is the busiest season of the year,” largely because that period encompasses Mother’s Day and Father’s Day, “two of the busiest restaurant days of the year,” and because good weather encourages customers to eat out more often.

What’s the slowest period? November to January, “when many people travel for holidays like Thanksgiving or Christmas and spend time cooking and eating with family.”

In other words, the lobbyists, the Journal and their followers all based their expressions of concern on a known pattern in which restaurant employment peaks into September and then slumps through January — every year.

They chose to blame the pattern on the California minimum wage law, which plainly had nothing to do with it. One can’t look into their hearts and souls, but under the circumstances their arguments seem more than a teensy bit cynical.

CABIA’s Manzo said by email that the alliance’s source for the job-loss statistic in its advertisement was the Hoover Institution, whose “work and credibility speaks for itself.”

He’s wrong about the source. Ohanian explicitly drew the number he cited in his Hoover Institution post from the Wall Street Journal; he didn’t do any independent analysis.

Ohanian acknowledged by email that “if the data are not seasonally adjusted, then no conclusions can be drawn from those data regarding AB 1228,” the minimum wage law. He said he interpreted the Wall Street Journal’s figures as seasonally adjusted and said he would query the Journal about the issue in anticipation of writing about it later this summer.

The author of the Wall Street Journal article, Heather Haddon, didn’t reply to my inquiry about why she appeared to use non-seasonally adjusted figures when the adjusted figures were more appropriate.

[Gil Bang 26247]

https://www.theatlantic.com/ideas/archive/2024/12/california-minimum-wage-myth/681145/

The California Job-Killer That Wasn’t

The state raised the minimum wage for fast-food workers—and employment kept rising. So why has the law been proclaimed a failure?

By Rogé Karma

The story seemed to fit into a familiar theme: naive California progressives overreaching and generating a predictable fiasco. “Let me give you the downside,” Donald Trump responded when recently asked whether he would agree to raise the federal minimum wage during his second term. “In California, they raised it up to a very high number, and your restaurants are going out of business all over the place. The population is shrinking. It’s had a very negative impact.”

Except it hasn’t. In the six months after California’s new minimum wage came into effect in April, the state’s fast-food sector actually gained jobs and did so at a faster pace than much of the rest of the country. 

[royiv 9833]

22 minutes ago, Gil Bang said:

https://www.theatlantic.com/ideas/archive/2024/12/california-minimum-wage-myth/681145/

The California Job-Killer That Wasn’t

The state raised the minimum wage for fast-food workers—and employment kept rising. So why has the law been proclaimed a failure?

By Rogé Karma

The story seemed to fit into a familiar theme: naive California progressives overreaching and generating a predictable fiasco. “Let me give you the downside,” Donald Trump responded when recently asked whether he would agree to raise the federal minimum wage during his second term. “In California, they raised it up to a very high number, and your restaurants are going out of business all over the place. The population is shrinking. It’s had a very negative impact.”

Except it hasn’t. In the six months after California’s new minimum wage came into effect in April, the state’s fast-food sector actually gained jobs and did so at a faster pace than much of the rest of the country. 

I have a crazy theory that paying people a living wage makes them more incentivized to work. Secondary to that theory is my theory that happier employees are more productive and actually show up to work.

[Brisketexan 106983]

I have a crazy theory that paying people a living wage makes them more incentivized to work. Secondary to that theory is my theory that happier employees are more productive and actually show up to work.

No, see, the only way for capitalism to succeed is to treat employees as shittily as possible, and then treat them even shittier. Anything other than that makes you a woke commie. Why are you a commie who hates truth, justice, and the American way?

I have a crazy theory that paying people a living wage makes them more incentivized to work. Secondary to that theory is my theory that happier employees are more productive and actually show up to work.

No, see, the only way for capitalism to succeed is to treat employees as shittily as possible, and then treat them even shittier. Anything other than that makes you a woke commie. Why are you a commie who hates truth, justice, and the American way?

[RDCanecutter 26909]

1 hour ago, royiv said:

I have a crazy theory that paying people a living wage makes them more incentivized to work. Secondary to that theory is my theory that happier employees are more productive and actually show up to work.

Troof. As a lazy 20-something I coasted in a job that paid the equivalent of $22/hour 2024 money. I caught some double-pay freelance and started staying way late to finish it. Then a year later I had a printing gig where I was paid piece-work (dude thought I'd work alone at a slow hippy pace) for silkscreen art prints of his paintings. I found three hot chicks at the comic book store, hired them all at 50 cents over what they'd been making, and put them to work as rackers so we could blast out prints like a belt-fed M-60. I'm talking going in at dawn, working til dark, goin out drankin, and getting a fine son off one of them as a bonus. Put dude out of business paying for all the work we produced so I ran off to join the Army. Maxed the ASVAB, joined the Cav Scouts anyway because once you're a baller, who gives a fuck about career training.

[TwiceHorn 32094]

1 hour ago, royiv said:

I have a crazy theory that paying people a living wage makes them more incentivized to work. Secondary to that theory is my theory that happier employees are more productive and actually show up to work.

Probably accurate.  But doesn't perhaps account or the addition of jobs.

[royiv 9833]

Just now, TwiceHorn said:

Probably accurate.  But doesn't perhaps account or the addition of jobs.

Owners can expand grow by opening new stores and adding new jobs when it is easier to hire labor.

[RDCanecutter 26909]

Just now, TwiceHorn said:

Probably accurate.  But doesn't perhaps account or the addition of jobs.

People making more money are willing to spend it, support new businesses and/or start them?

[bernorange 8385]

Quote

...
After California's $20 minimum wage for fast-food workers went into effect in April, some economists expected affected restaurants to cut jobs. So what actually happened? They not only added workers but did so at a faster pace than fast-food restaurants in the nation as a whole—or at least that was the claim of a research paper by two labor economists at the University of California, Berkeley, and the University of California, Davis.

If you actually read it, you'll find that the results celebrated in the press release and echoed by the media aren't in the paper. In fact, it barely addresses the effect of the minimum wage increase on fast-food employment in California. It offers no numbers and no models. There's no evidence that fast-food jobs increased after the law was implemented.

The paper's findings were trumpeted as evidence that government-mandated wage increases have no adverse effect and that we should be raising the minimum wage higher and in more places.

Only toward the end of the 25-page study is employment shown. There you'll find a graph that represents the closest thing to an argument in the paper. It shows full-service and fast-food restaurant employment in California, represented by the red line, and in the U.S., represented by the blue line, from 2023 to 2024.

The authors state that the data are prone to sampling errors, and make an inconclusive finding that "we do not detect evidence of an adverse employment effect." But the paper's abstract neglected the fine print caution, boldly asserting, "We find that the policy…did not reduce employment." The accompanying press release, which is likely all that journalists bothered to read, states that "contrary to fears expressed by restaurant groups, the wage increase did not lead to job cuts."

But the solid red line on the chart clearly shows California fast-food employment increasing more slowly than the solid blue line showing national fast-food employment, which is the opposite of the authors' claim. If they suggest anything, these data show that the minimum wage increase reduced California fast-food jobs.
...

https://www.yahoo.com/news/no-californias-20-minimum-wage-164518759.html

[bernorange 8385]

Sorry for the yahoo link.  This is the original source:

https://reason.com/video/2024/12/19/no-californias-20-minimum-wage-for-fast-food-workers-did-not-create-jobs/

[Bozo_Casanova 26898]

Hey @Ag with kids you’re running out of options. 

[Ag with kids 581]

12 hours ago, Bozo_Casanova said:

Hey @Ag with kids you’re running out of options. 

For what?