Saturday, June 17, 2017

Never Listen to Economists

They will tell you that feeling morally superior doesn't solve the problem of causing workers at the bottom to lose their jobs.  6/13/17 Fresno Bee:
In a pair of affluent coastal California counties, the canary in the mineshaft has gotten splayed, spatchcocked and plated over a bed of unintended consequences, garnished with sprigs of locally sourced economic distortion and non-GMO, “What the heck were they thinking?”
The result of one early experiment in a citywide $15 minimum wage is an ominous sign for the state’s poorer inland counties as the statewide wage floor creeps toward the mark.Consider San Francisco, an early adopter of the $15 wage. It’s now experiencing a restaurant die-off, minting jobless hash-slingers, cashiers, busboys, scullery engineers and line cooks as they get pink-slipped in increasing numbers. And the wage there hasn’t yet hit $15.
As the East Bay Times reported in January, at least 60 restaurants around the Bay Area had closed since September alone.
A recent study by Michael Luca at Harvard Business School and Dara Lee Luca at Mathematica Policy Research found that every $1 hike in the minimum wage brings a 14 percent increase in the likelihood of a 3.5-star restaurant on Yelp! closing.

1 comment:

  1. When the minimum wage increase was being discussed I recall something about $15 being the amount necessary to put it at the 1967 level. The idiots who pushed this rate forget that subsequent to 1968, the 1969 recession hit so hard that economists were predicting that engineers would never be in demand again, and famously, one columnist wrote, "civilization as we know it, is crumbling". The seventies, of course were the decade of "stagflation", and national ennui, and Carter's era of diminished expectations (I don't give Ford a pass, but I can't think of anything he said).
    Paul Voelker had to wring the inflation out of the economy with 20% interest and Reagan's tax cuts had to get the economy going again.
    From 1967 that's more than 15 years.
    Higher Minimum Wages are anti economics, which is first cousin to anti science. Or rather, Leftist economics is Cargo Cult economics.