It’s not surprising that the story is framed this way, since it’s surely an Employment Policies Institute press release-driven piece. The Star Tribune and Orange County Register both had stories noting the rise in state minimum wages the day before the Journal piece. Both also cited the Employment Policies Institute and neither noted its background.
A big boo. You can’t cite something with one of those names that makes it seem like a dowdy think tank without pointing out that it’s a front group for corporate interests. Readers have a right to know where their information comes from.
The Journal does give us some numbers down in the story on how a company’s costs might increase:
Martin O’Dowd estimates a pending 36-cent increase in the minimum wage in Florida to $7.67 an hour will add up to more than $1 million in annual operating expenses for the 30 Hurricane Grill & Wings restaurants outlets he owns there.
But even this isn’t worth much without context. How much are the company’s overall operating expenses? What’s its profit? Does it expect to pass on higher labor costs to customers via slightly higher menu prices? We’re not told.
There’s also no context here about how low the minimum wage has gotten. Back in the 1960s, the minimum wage was about $10.41 an hour, or 44 percent more than it is now, and the economy was good. The highest minimum wage in the country today is in San Francisco, an astronomically expensive city, where it’s $9.92 an hour ($10.24 next month).
I don’t mean to imply that the story is all bad. If you make it that far, the Journal’s kicker is nice, for instance:
Initially, he paid some plant workers the lowest wages possible. But when he later decided to give out raises that exceeded the minimum required, he says he gained a more loyal work force. Today his lowest-paid staffers earn $11 an hour. The minimum hourly wage that employers must pay in Montana will rise 30 cents to $7.65 next month. “Our turnover dramatically reduced and the engagement level from our employees rose,” he says.
But framing matters, as does context, particularly when quoting astroturf shops.
Hate to see the Journal transform into a house organ. Such a waste from where it once was. I used to read it first everyday. And many of those reporters know better. We need more CJR's to continually monitor these media outlets and to call them out. Eventually more people will catch on to the game, or this form of "journalism" will die on the vine.
#1 Posted by brad, CJR on Fri 2 Dec 2011 at 02:16 PM
Gee, do you think left/libera/Democratic groups fund groups who get quoted in newspapers? What a distorted view of the press CJR presents. The minimum wage is not the only cause of lower employment, but is a contributor. Ask some real employers. Some will say it has no effect on them, some won't. (George McGovern famously acknowledged that when he went into private business after his political career, the minimum wage and other mandates caused him to have to lay off an employee.) But the ones who say it does are the ones who matter, aren't they?
#2 Posted by Mark Richard, CJR on Fri 2 Dec 2011 at 05:00 PM
That a boy, Ryan. Don't dispute assertions on their merits; just attack the person and their associations. Keep it political and partisan. Allow only the State-approved opinion, and none of that "he-said/she-said," a.k.a., "healthy debate." I'm sure you'll get to the root of the issue in no time! *smh*
#3 Posted by Dan A., CJR on Fri 2 Dec 2011 at 08:18 PM
In a mainstream, "objective" story about the minimum wage, disclosing the total compensation of a man who opposes a 31-cent hourly increase for his employees would be considered inflammatory--editorializing, even.
I'll bet the reporter didn't even ask the guy. And if he had, the guy would've gotten snitty & maybe called the reporter a "socialist."
What are you trying to do, Ryan? Get the reporter fired?
And why do you hate job creators?
#4 Posted by edward ericson jr., CJR on Sat 3 Dec 2011 at 01:28 PM
Ryan, our resident "Advocate of Government-Endorsed Redistribution of Wealth" (who can no longer be called a "commie" under Pravda's... er, I mean CJR's new comment censorship policy) as usual is out in front in telling other people what to do with their money.
If only the Gubmint can be persuaded to force the "rich" guy to part with a sliver of his money in a Chittum-approved manner, then "fairness" would ensue and the Gubmint Money Fairy will sprinkle cash in all sectors of the economy.
There is, of course, never any end to this stupidity. This year, 37 cents. Next year, more. The $160,000 that this raise would cost Vallee's would fund more than 15 jobs. That's 15 people without work due to Gubmint meddling in the markets.
The REALITY, that Ryan chooses to ignore, is that screwing with fair market wages costs jobs.
What Ryan and his ilk (who are no longer permitted to be called "commies" here) want to see is simple snatching of money at gupoint. The people who run business forced to dole more money to the people who work for them. In Chittumland, this forced redistribution of wealth accomplishes positive things for society. Workers paid more, managers paid less - a policy ultimately enforced at gunpoint upon pain of imprisonment.
Here in Realityville, however, we see that such collectivist money-grabbing kills economies and decimates societies in every single instance. As 1% millionaire Paul Krugman plainly stated (before he decided that becoming the "Conscience of a Liberal" would compensate him better than consulting for Enron) "low paying jobs are better than no jobs". This is just the R E A L I T Y.
#5 Posted by padikiller, CJR on Sun 4 Dec 2011 at 10:57 AM
Ah, I see the trolls are out in force today. The fact is that countless non-partisan economic study organizations with no horse in the race either way, have found repeatedly that increases in minimum wage rates do not negatively affect employment. Jobs simply do not get killed because a company has to pay an employee an extra few cents per hour.
Beyond this, the real point of this article is that the Wall Street Journal story was distorted - and thus gave readers a biased perspective. Legitimate news organizations reveal when a quoted source has an axe to grind.
#6 Posted by Charley James, CJR on Mon 5 Dec 2011 at 10:30 AM
Charley James wrote: The fact is that countless non-partisan economic study organizations with no horse in the race either way, have found repeatedly that increases in minimum wage rates do not negatively affect employment.
padikiller tolls the Reality Bell: Although the goals of the minimum wage are widely accepted as proper, there is great disagreement as to whether the minimum wage is effective in attaining its goals. From the time of their introduction, minimum wage laws have been highly controversial politically, and have received much less support from economists than from the general public. Despite decades of experience and economic research, debates about the costs and benefits of minimum wages continue today.
The classic exposition of the minimum wage's shortcomings in reducing poverty was provided by George Stigler in 1946:
Employment may fall more than in proportion to the wage increase, thereby reducing overall earnings;
As uncovered sectors of the economy absorb workers released from the covered sectors, the decrease in wages in the uncovered sectors may exceed the increase in wages in the covered ones;
The impact of the minimum wage on family income distribution may be negative unless the fewer but better jobs are allocated to members of needy families rather than to, for example, teenagers from families not in poverty;
Forbidding employers to pay less than a legal minimum is equivalent to forbidding workers to sell their labour for less than the minimum wage. The legal restriction that employers cannot pay less than a legislated wage is equivalent to the legal restriction that workers cannot work at all in the protected sector unless they can find employers willing to hire them at that wage.
#7 Posted by padikiller, CJR on Mon 5 Dec 2011 at 10:54 AM
According to Chittum's logic , a job-creator should not complain that the government is artificially increasing his labor costs unless the job-creator's increased costs will result in his insolvency. Otherwise, it really no big deal.
Why does Chittum care so much about other people's income. How much does Chittum make?
#8 Posted by Andy A, CJR on Mon 5 Dec 2011 at 10:00 PM
Ryan specializes in telling other people what they should be doing with their money instead of doing the things they chose to do with it.
In Chittumland, capitalists and entrepreneurs (except for Paul Krugman, Michael Moore and George Soros) are filthy, greedy scum, workers are saints, and the unemployed are victims of corporate greed and undertaxation.
In Chittumland, "profit" is cursed word and picking a couple of dozen bushels of tomatoes in a day is a "body destroying" torture. The workers should rule the roost and climate controlled workspaces are a Natural Right... All managers are stupid or corrupt, and the Gubmint can (and should) fix everything to ensure "inequality" (of income and not effort, of course). Screwing with markets has no deleterious effect in Chittumland, and the answer to failed regulation is always to have more of it. In Chittumland, people are far too stupid to be permitted to buy their own health insurance, sign their own mortgage contracts, or buy their own used cars - we need the Gubmint to step in and handle these people's affairs for them. But of course, these same stupid minions who lack the intellectual capacity to manage their own lives should also be given more power and more control over capital. They can't buy their own used cars, but they should be empowered to run a government or a pharmaceutical company.
If Chittumland seems like Moscow, circa 1964, the resemblance is more than passing.
#9 Posted by padikiller, CJR on Mon 5 Dec 2011 at 10:54 PM
The part that is telling for me is that these raises are almost in line with inflation. Which means that the "big bad gummint" is just adjusting for inflation. So yes, if trends stay the same then minimum wages will continue to rise -- along with earnings. Since the vast majority of retail and food service places pay the bare minimum anyways, this isn't really a raise at all.
#10 Posted by wallawalla, CJR on Tue 6 Dec 2011 at 02:09 AM
"Ah, I see the trolls are out in force today. "
You said it.
Does a minimum wage increase decrease jobs?
The truth is, it depends. It depends on the mobility of the jobs, on the strength on the economy, on the amount of jobs that pay under the new minimum which, if the increase isn't very high, it isn't that big a deal.
It's a complex question.
However, employment isn't the only useful metric. Wage increases produce inflation, which the depressed economy really needs. Minimum wages produce a bottom floor for labor compensation, which is useful in a depressed economy where employers try to save costs through salary cuts. Minnimum wage increases alone can hurt minimum wage businesses because there's a delay between increased labor expenses and increased consumer spending, though this really affects situations when the wage is jumping by 10-25%, not three dimes an hour.
What helps ease the pain of a minimum wage increase is a jobs program that offers a competitive wage and will produce a surge in consumer spending while forcing employer competition for the labor pool which will bid up wages higher than minimum.
They could be, Ida know, FIXING BRIDGES and WATER MAINS that are 50 to 100 years old. Then everybody gets to work, spend money, and pay debt.
Where's the problem? Why isn't it getting done?
#11 Posted by Thimbles, CJR on Tue 6 Dec 2011 at 04:08 AM
I will never understand the logic of those who believe that people who are too stupid to be permitted to enter into contracts on their own, also believe that these same incompetent morons can somehow collectively run an economy better than private enterprise can.
The notion is patently absurd, yet so widespread.
Anyone who has ever actually signed paychecks or run a business can see through this stupidity immediately.
#12 Posted by padikiller, CJR on Tue 6 Dec 2011 at 10:32 AM
I don't understand the logic of people who think FIXING BRIDGES and WATER MAINS that are 50 to 100 years old is a bad idea. It's like they believe the public commons from which they drink and on which they drive needs no maintenance and requires no money.
And I really don't understand the logic of people who ridicule victims of predatory lending for signing contracts they couldn't understand without a lawyer and, in many cases, a translator yelping "I will never understand the logic of those who believe that people who are too stupid to be permitted to enter into contracts on their own."
You're the one who believes these people are stupid. You've said so many times. It's your excuse for the.banks being allowed to fleece them. One second you claim these people should not have signed on to these dangerous products, the next you're attacking someone for suggesting people need help in avoiding these dangerous products. Which is it? Are you "calling people stupid" because "they are stupid" or are we "calling people stupid" by claiming people need help navigating complex products?
#13 Posted by Thimbles, CJR on Tue 6 Dec 2011 at 11:26 AM
Thimbles wrote: You're the one who believes these people are stupid.
padikiller responds: Many of them are, certainly. But the School of Hard Knocks is fast teacher.
If, for example, you're a physician's assistant in Seattle, and you're stupid enough to believe that you can refinance the 4.5% fixed rate mortgage on your $750,000 house and somehow end up with a payment of only $1000 per month... And if you're too stupid the read the plain English in the three page mortgage contract and rely on a broker instead to interpret the contract...
Then you deserve to get a education from the School of Hard Knocks.
Keeping the Gubmint out of private business and making people accountable for their own decisions is the fast path out of the commie misery that 80 years of liberalism have created.
#14 Posted by padikiller, CJR on Tue 6 Dec 2011 at 12:00 PM
"And if you're too stupid the read the plain English in the three page mortgage contract and rely on a broker..."
I assume padi was in the room and reading over the shoulder of this guy when he signed his contract. Otherwise he might not know a goddamn thing about what he's talking about.
#15 Posted by Thimbles, CJR on Tue 6 Dec 2011 at 05:29 PM
I've got an idea, let's have Thimbles set the wage rate for Vallee's employees. It is clear that Vallee doesn't understand the applicable social science and shouldn't be allowed to operate his own business without input from Thimbles. Maybe Vallee should be compelled to pay Thimbles for his insight into appropriate wage rates.
#16 Posted by Andy A, CJR on Tue 6 Dec 2011 at 08:21 PM
"I've got an idea, let's have Thimbles set the wage rate for Vallee's employees blahdidee blah blah.."
Where is this coming from? I didn't tell Vallee anything to do with his workers salary. I just put out some economics, not all of which was helpful to the raise minimum wage arguement.
When did I insult your mother?
#17 Posted by Thimbles, CJR on Wed 7 Dec 2011 at 02:32 AM
But since you brought Vallee up, Gotcha!
#18 Posted by Thimbles, CJR on Wed 7 Dec 2011 at 11:04 AM