Minimum Wage

New York's Crazy Plan to Experiment With a $15 Minimum Wage for Fast Food Workers

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Patja / photo on flickr

Somehow, over the last few years, the conventional wisdom about raising the minimum wage has moved from "it would probably reduce employment" to "it's a great idea that (probably) wouldn't cost any jobs at all." Or, as White House economic adviser Jason Furman said last year, "zero is a perfectly reasonable estimate of the impact of minimum wage on employment."

Furman, of course, was careful enough to say that zero was "a perfectly reasonable estimate," leaving open the possibility that other, higher estimates might also be reasonable. And Furman's remark was in response to a Congressional Budget Office (CBO) report looking at the consequences of raising the federal minimum wage from its current $7.25 an hour to $10.10—a report that, it should be noted, found that such a hike would most likely cost about 500,000 jobs.

But careful-enough remarks like Furman's from prominent left-leaning wonks have created an environment where less-careful Democratic politicians act as if they can be entirely confident that minimum wage hikes, even those much higher than the one Furman and the CBO were discussing, have no meaningful consequences for employment. 

Look at Seattle. When the city embarked on its first-of-a-kind experiment with raising the city's minimum wage to $15, one of the background papers the city commissioned led its conclusion section by noting a seminal 1994 study finding that a minimum wage hike on fast food restaurants in New Jersey had no "no measurable negative impact on employment" when judged against fast-food restaurants just across the Pennsylvania border, and by further noting the "large body of research" that has built upon that work. The first line of the executive summary's section on the "effects of minimum wage laws on businesses" says that "economists have increasingly recognized that raising the minimum wage does not automatically mean that employment will fall." True, the paper also goes on to note that the existing research on minimum wage hikes has some limitations. But the emphasis is clearly on the data suggesting that a higher minimum wage will have great benefits at a minimum cost. It's difficult to avoid the sense that the report was meant to encourage Seattle to adopt a higher minimum wage. 

So it's worth highlighting how little the existing research tells us about the likely outcomes of the sort of minimum wage hikes now being considered around the country. A governor's panel in the state of New York, for example, recommended last week that most fast-food chains in the state be required to pay workers $15 an hour over the next few years. It's generally expected that the proposal will soon be implemented.

Yet as today's New York Times reports, there's little precedent for this sort of hike, and thus little real-world data to suggest its effects. The studies that have looked at minimum wage hikes and found minimal effects on employment tell us very little about hikes this large.

The move would lift the wage floor for such fast food employees to about 60 percent of the average worker in New York City, which, as the Times notes, "lies at the outer limit of the country's historical experience with the minimum wage."

Outside of New York City, where fast food restaurants would have until 2021 to comply with the new policy, the effect would be even more dramatic: "The minimum wage for fast-food workers could rise to 75 percent or more of the wage for a typical worker in a number of cities across the state, like Binghamton, Buffalo and Utica," the Times story states. "There is little precedent for an increase of this magnitude." This isn't something that anyone has tried, or studied, before.

In addition, as Jordan Weissmann notes in a good piece for Slate, the proposal would only apply to fast food chains with 30 or more chains. That adds another layer of complexity. As Weismann writes, the rule will in some sense reward restaurants that pay less by giving small chains "that hand their workers relatively low pay a business edge." 

At minimum, it seems likely that the policy will lead to unpredictable, and unintended, consequences. Will large fast-food chains pull out of upstate New York entirely, or will they just charge more? Will this create a market for low-paying, inexpensive boutique fast-food chains that never expand beyond 29 stores? Investors will have an obvious incentive to put their money into smaller chains, but it may also turn out to be that small chains are difficult to launch once you move far from New York City, and that the fast-industry—and the employment that goes with it—declines as a result. 

The point is that the evidence so far tells us relatively little about the likely results of New York's policy experiment. This is a crazy, badly designed, unpredictable plan, even if you're inclined to think there's some wiggle room to raise the minimum wage without a lot of job loss. (Notably, there's still a fair amount of solid research suggesting that minimum wage increases do cost jobs.) No matter what, I think it's safe to say that the results, whatever they are, won't be exactly what was intended, or expected, and that the negative consequences—to consumers, to workers, and to business owners—could be significant.

Perhaps the worst possible consequence would be for other cities and states to quickly follow with large minimum wage hikes of their own before the results of these first few policy experiments are in. (A ballot measure lifting the minimum wage to $15 is gaining traction in Washington, D.C.) Although creating a model for other states to copy certainly seems to be New York Gov. Andrew Cuomo's idea. Announcing the wage hike plan, he said that "when New York acts, the rest of the states follow." In this case, let's hope they don't. If the idea is to follow the evidence, then other potential minimum wage hikers should probably wait until there is some. 

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227 responses to “New York's Crazy Plan to Experiment With a $15 Minimum Wage for Fast Food Workers

  1. “a report that…found that such a hike would most likely cost about 500,000 jobs.”

    To be fair, thats still just mostly zeros

    1. The average of the digits in 5*10^5 is 2.75. It would cost 2.75 jobs. Math, fuckers.

  2. I didn’t realize until today that this was only for “fast-food chains.” I thought it was a general increase to $15, but advertised under the fast-food “struggle” or whatever the fuck.

    But it’s targeted to “fast-food chains”? Everything about this proposal is idiotic, moronic, toxic!

    1. A governor’s panel in the state of New York, for example, recommended…

      You are being redundant.

      1. I just thought that nearly doubling the minimum wage was stupid enough. I didn’t think they could jam even more stupidity into this plan.

        1. It is pretty easy to do the economics on this one. Raise the primary cost (labor) for chain fast-food restaurants by nearly double, but not their competitors – small chains, single store fast food, low-end regular restaurants….. hmmm…. what could happen?

          It couldn’t be that the chains just close up shop, could it? I mean, they can absorb a 15% increase in costs, right? Their profit margins are probably 80% or something, right?

          1. “Their profit margins are probably 80% or something, right?”

            80%? Piker!
            I see you still feed your orphans rather than letting them simply dumpster-dive out back

    2. It is a Cuomo plan, that goes witjout saying. That family has been trying to destroy NYS for two genetations now.

      1. Look what it’s done to education and basic speling.,

        1. And basic punctuation.

        2. My spelling is fine, my ability to type on a phone touchpad is middling to atrocious.

          1. That’s why they invented autocorrect, so your sentence would have read “It is a coma plane, Van Goghs banjo soya. That famous has-been turtle to decide news for two gestations ahoy.”
            See? Now it makes sense.

    3. When fast food isn’t the cheapest option what can they do but go out of business? I’m price sensitive with my junk food and tend to try for maximum protein/dollar.

      1. I doubt they’ll go out of business, but they’ll sell to someone who’ll operate under another name.

        1. Welcome to McDarnald’s!

        2. Or say fuck it and break up the chain by selling off all current corporate owned stores except for the top performing 29 and never moving past that point again. You can be sure that there are teams of lawyers and accountants who already have plans to get around this idiocy.

          I love the weep-pieces that have been appearing in the proggy press and on NPR. I heard one the other day fraught with pearl clutching over some 49 year old schlub who couldn’t wait to get his raise to $15.00/hr so that he could “do more” for his 6 children. Methinks that if you’re 49, have six children STILL LIVING AT HOME, and are working at a minimum wage fast food job you’ve got issues that $15.00/hr ain’t gonna fix.

          1. “You can be sure that there are teams of lawyers and accountants who already have plans to get around this idiocy.”
            The SF city gov’t outlawed ‘happy meals’ with the free toy. Micky D’s started charging an extra $0.25 for tghe top and donating it to charity. The oh-so-virtuous supervisors who voted to outlaw it haven’t said a word.

            “I love the weep-pieces that have been appearing in the proggy press and on NPR. I heard one the other day fraught with pearl clutching over some 49 year old schlub who couldn’t wait to get his raise to $15.00/hr so that he could “do more” for his 6 children. Methinks that if you’re 49, have six children STILL LIVING AT HOME, and are working at a minimum wage fast food job you’ve got issues that $15.00/hr ain’t gonna fix.”
            *$50/hr* doesn’t solve stupidity.

    4. When Bloomberg tried imposing the 32oz soda-ban, it got nixed because it was “arbitrary and capricious”, and would disadvantage foodservice locations while ignoring convenience stores or other places that could sell whatever sized beverages they pleased.

      “, the court focused on the law’s loopholes, which exempted businesses not under the auspices of the city’s health department and left certain drinks, such as milk-based beverages, unaffected.

      As a result, grocery and convenience stores – such as 7 Eleven and its 64-ounce Big Gulp – were protected from the ban’s reach, even as restaurants, sandwich shops and movie theaters were not”

      By trying to impose a ‘minimum wage’ on a specific class of business, its possible that they may run into the same kind of objection.

      Even if not, after the higher wages force fast-food chains to raise prices, and subsequently lose customers to street vendors/food-trucks…. there will just be another “problem” to solve with Moar Regulation. OMG the sordid underbelly of hot-dog vendor franchisees!? EXPLOITASHUNS!! NYT INVESTIGATIVE REPORTER, PRINCESS PARK AVENUE, SAVIOR OF TEH POORS! IS ON IT

      1. When any old NYer can afford luxuries like halal lunch carts, you should know they rest on a foundation of exploitation.

        1. That article really got to you, huh?

      2. There is so much about that photo I don’t understand.

      3. That is entire point of the cynical plan to begin with.

        Cuomo doesn’t actually want anything to change, he just wants to go on record as “having the right feelz but can’t change the Constitution.”

    5. They’re trying to take down McDonald’s.

      1. First McDonald’s, then Walmart. That’s most of the evil empire, right there.

    6. I find the singling out of industries – particularly based-on popularity – to be even more disturbing than minimum wage increases. Capricious application of laws/regulations is becoming standard behavior.

  3. OT: anyone want to comment on this possibility?

    What if Trump is running his campaign only as a negotiating tactic to show what draw he would get for a third party run. I think it is pretty clear he would hand the election to the Democrat candidate if he ran third party. If he exchanged his hypothetical third party run for a favor from the Republican primary winner, where would he stand to profit the most? Is there a cabinet position or other appointment that fills out his influence in a way that he can expand his investments? Maybe something State Department focused?

    1. What difference, as long as he’s still in the news, does it make?

      1. You are right of course. The easiest explanation is that he wants to be seen and heard more for the sake of ego. I am just curious what he might be up to if he is actually trying to increase his wealth or power.

        1. He’s just building his celebrity cred in advance of snookering another round of investors for his next project, Trump World, America’s Favorite Reality Show Theme Park

          1. This.

            I wouldn’t be surprised if he had the whole first season of some stupid “reality” show waiting in the wings. He just wants to keep his name fresh in the public’s mind.

            1. He’s too high in the polls now. He’s starting to give better interviews.

              I think he’s being told now that he has a chance, so why not try.

              The GOP is stuck because they played political theater too much so the base doens’t care anymore.

    2. Is there a cabinet position or other appointment that fills out his influence in a way that he can expand his investments?

      Head of Fannie Mae/ Freddie Mac?

      1. How appropriate that would be.

  4. Damn, time to dust off my business plan for a Carl’s Jr. franchise in Newark.

    1. I thought it was all Hardee’s on the East Coast?

      1. It is, but i’m going for the novelty.

        1. +1 In ‘n’ Out

          1. No time for the In ‘n’ Out, just come to read the meter.

  5. What has bern proposed also has exceptions for table service, so if you sit down at a table and pay after your food arrives, the $15 wage does not apply.

    Though I’d like to have some explanation of how and when the executive branch of NYS government acquired far reaching dictatorial powers. It is unclear how this is at all legal in a supposed representative republican form of government.

    1. well nyc’s restaurant scene is a big draw, and like 7% is considered a good profit margin for a restaurant (a sit down restaurant, maybe fast food is higher i dunno). if they had to pay dishwashers $15 an hour they’d all go out of business

      1. So the waitstaff makes more money on a percentage basis than the owner?

  6. Wait, this is for the entire state? So franchise owners upstate are going to be punished for NYC being expensive to live in?

    I mean, I used to live in upstate NY. I know that the state government doesn’t give a shit about anything north or west of Westchester County. But this is more blatant than most of what they do.

    1. Life the SAFE Act, maybe the rest of the state will ignore it?

  7. The proposal isn’t meant to pass any form of judicial review. It’s merely a toe in the water by pols intent on imposing this scheme on everybody. They do it and it gets promptly overturned by the courts since it is a gross violation of the equal protection clause. Then they say how so many people have adjusted to a life with a “living” wage and to change it back for just those workers would be akin to “marching them to the ovens”. So the legislature, not keen to be viewed as heartless, change the wage to be for all workers.

    They are doing this because they know trying to sell this hike across the board now is a nonstarter. This way they can blame it on activist judges.

    1. This.

      It’s is meant to get shot down by the courts , so they can pretend they are doing this economically populist thing without actually doing it. Because they aren’t dumb, they’re just pandering.

  8. The increase is such an unvarnished good that we will only subject particular sub-sectors of a larger industry to it.

    Sometimes I get the feeling the people who propose these kinds of things aren’t being entirely forthright.

    1. Why do you hate fast-food workers, PM? WHY?!

  9. Doubling the wage of anyone. What POSSIBLE impact could that have? Let’s double EVERYONE’S wages! More for everyone!

    God DAMN why has no one one thought of this before?

    1. Cutting edge political innovation. The likes of which we have never seen before.

  10. Yeah, I’m not sure an increase to $10 would make much of a difference but I would have a hard time believing $15 would not have a significant negative impact on the people that typically start out in those kind of jobs to get experience or to reestablish a good work record.

    1. My guess would be that the non-English speaking would be the hardest hit.

    2. Don’t have a college degree? McDonalds is not interested.

        1. Poop-On-You? That’s awesome. Is Marv Albert the President?

          1. I believe the President is Poop Jimbo.

          2. Mark E. Desodd, CEO.

        2. Perfecr for me. I have no less than 8 kinds of mustard in my fridge.

    3. The last round of increase to $7.25 pretty much eliminated all jobs for anyone under 17 or 18. $15 an hour is going to snuff out remaining jobs for 17 year old kids and 18 year old people still in high school.

      Part time jobs for college students? Good luck! At $15 an hour, employers will be looking for people able to put in full time for such an investment.

  11. New York’s Crazy Plan to Experiment With a $15 Minimum Wage for Fast Food Workers

    Well we need an experiment because the outcome of this policy isn’t 100% predictable by basic theory and all the experience gleaned from such laws in the past that did not achieve the stated premise. We can’t be sure that socialism doesn’t work until every last human being is made destitute or dead. So we have a duty to try damn it!

    1. I do appreciate the fact that the experimenting is taking place 1,800 miles away from me.

    2. Funny how the precautionary principle never applies to socialism…

  12. You stooooopid mammals seem so determined to help out your machine masters

    1. You don’t see me complaining, now, do you?

    2. Overlord Lizard, we frequently Rage Against the Machine. You have much to learn of our culture.

  13. a seminal 1994 study finding that a minimum wage hike on fast food restaurants in New Jersey had no “no measurable negative impact on employment” judged against fast-food restaurants just across the Pennsylvania border
    .
    There are some criticisms of the study.
    .
    First of all, the self-reporting that no serious researcher would take seriously, plus the fact that they were looking at year-before-implementation to year-after-implementation changes when employers, knowing the law was due to go into effect, changed their hiring behavior the year before the year before the law took effect. (Obamacare studies showing no hiring effect have the same problem – comparing this year to last year is BS when employers were told ahead of time that Obamacare would affect them based on last years figures and therefore any employer with a lick of sense changed their hiring practices two years ago.Try comparing 2015 to 2013. The figures for 2014 already took into account what 2015 was bringing.)

    1. Yea, I was bout to chime in on that “seminal” study. To me the biggest problem with the study was it didn’t even try to calculate the number of new jobs created in New Jersey Vs. Pennsylvania after the hike went into effect. Sure, restaurants in New Jersey didn’t lay people off after the hike went into effect because they where already running at a bare minimum. So, I guess it’s plausible to say that hiking the minimum wage won’t affect current employment. But, what does it do to future employment? The question I’ve always had is which state did better in fast-food restaurant growth 2 or 3 years after the minimum wage was raised? My money is on Pennsylvania, but I could be wrong.

    2. Suderman’s links at the end of the piece directly refute the card and krueger outlier. He just did a poor job of describing the problem in his surrounding text.

  14. In completely unrelated news, fast food restaurants in NYC announced plans to automate…

    1. Hmmmm.

    2. Market failure! Ban automation! Power to the people!

      1. Some progressives I know have actually said that there should be a tax on automation and the proceeds should be paid to the workers who were “displaced”.

        1. So what, like, anyone who’s applied for a job at McDonalds, and didn’t get it, could apply for a special welfare check from the government paid for by the automation tax? That would work out just fine.

          1. Why are you trying to deny all those who failed to apply for a job their rightful government check? Racist!

  15. It’s actually a job creation program. The manufacturing of automatic POS systems and cooking equipment requires a lot of workers.

    1. “The manufacturing of automatic POS systems and cooking equipment requires a lot of workers.”

      In Malasya, doesn’t really help a 16 year old kid in NYC looking for his first job however.

    2. I hope they think of a better acronym than “POS”.

      1. I’m site the first-gen systems will fully live up to that acronym.

      2. “Oh, very well. ‘POV’, then.”

      1. A job is a job, Lacist!

  16. I think it’s pretty neat how keeping young people from getting employed has become a plank of the progressive platform.

    1. Why else do you think Obamacare allows them to stay on their parent’s insurance until they’re 26? They won’t be able to get a job with benefits until at that age, if ever.

    2. Keeps them voting for more free stuff, paying for more worthless education, and artificially keeps unemployment numbers low.

      1. Well that’s how some elected Democrats show that they “did stuff” to help people and have an amazing “track record.” Also if you criticize them their supporters will say they “saved the country” or something similar.

        Artificial, fake, and outright lies are fine so long as you voted for them right.

  17. $15 per hour? That’s great! I’ll be sure to move up there and get myself a job! And when I get that job, the economy surely won’t react to all those extra dollars in the economy, thus negating whatever gains I made! And then, if that were to happen but why would it, because when they say “minimum wage” they surely mean “with no inflationary effects”, I wouldn’t be stuck making no money at a shit job, ready to agitate and protest toward a new $25 minimum wage! I’M GONNA BE RICH!

    1. According to some, if you make 200-250k per year you’re rich. Maybe that’s what they pay McDonald’s employees! Hell why stop there?

  18. Come on! Those greedy businesses are just rolling in immoral profit! They’re rich! And they’re not paying their fair share! How could they? They’re still rich! So forcing them to pay a living wage will simply cut into their obscene profits! Make them pay their fair share! Power to the people!

    1. I know, right? It’s simply deplorable. You can’t raise a family of seven on minimum wage!!

  19. Is a “living wage” like a living bra?

    1. I offered to do that for my wife but she politely declined.

      1. “It’s all right — we’re *married*!”

  20. The thing is, anyone against raising the minimum wage has the burden of proving they aren’t basically slavers whose *true* motives are to increase the profits of the monocle-and-tophat crowd.

    Whereas the advocates of minimum wages get the credit for being kind and compassionate, and once you’re the kind and compassionate people in the debate, you get the benefit of any doubt in the debate over economic consequences.

    I mean, *of course* the Koch whores who want lower wages will try to confuse the public with statistics. Meanwhile, the forces of compassion need only wave away all that green-eyeshade stuff and talk about how nobody can live in NY at less than $15 an hour (which is probably true), and the public gets to breathe a sigh of relief and forget all the confusing math-y stuff.

    1. Greed means wanting to keep your money, while altruism means wanting to spend money that belongs to someone else.

    2. It must be pointed out (again) that a large part of the point of the minimum wage was to cause unemployment. It was a racist, sexist, eugenics measure.

      1. Funny how laws that were originally meant to harm people are now being sold as a means to help the very people they were originally mean to harm.

        1. Yes! I think this is a devastating argument against the minimum wage. Force progressives to try to explain that.

          1. It’ll work the way we want it to now, because we have the right goodfeeling non-racist Top. Men. in power.

      2. Yep. The origin of the phrase “You pay peanuts you get monkeys.”

      3. ha, someone made an interested point in the comments about a parable told by Jesus which basically supports the free market.


        13 “But he answered one of them, ‘I am not being unfair to you, friend. Didn’t you agree to work for a denarius? 14 Take your pay and go. I want to give the one who was hired last the same as I gave you. 15 Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’

        Progs must conveniently overlook that when asserting that Jesus was a commie

        1. Progs must conveniently overlook that when asserting that Jesus was a commie

          This is particularly moronic seeing as Jesus is pretty blatantly anti-materialist throughout all the New Testament, while progressives/communists are both massively materialistic. It’s all about preparing for the afterlife, not about creating a utopia on Earth (God’s supposed to do that some day).

          1. If Jesus would have been a prog, he would have led his band of followers to protest in front of Caeser’s palace for free healthcare, free college, ponies, and throw those teabaggers to the lions if they don’t stop saying mean things.

            1. These are also groups that are massively obsessed with having power and maintaining it, while again, Jesus, the anti-materialist, specifically rejects political power numerous times. He’s tempted with control over all the kingdoms he can see in the desert, and he rejects it. He talks about the Roman state, and explicitly separates God’s power from political and economic power. He rejects the political title of ‘king of the Jews’ in favour of a spiritual role.

              Unless you’re making some Nietzschean argument about slave moralities and modern political ideologies simply attempting to secularize traditional Judeo-Christian ethics there’s really no way progressives can claim Jesus as ‘theirs’.

          2. Jesus was pro bidders
            He tells a parable of the master who went away and gave each SD errant some $before he left
            When he came back he bragged on the servants who madeone and chastised the one who hid the money for safe keeping.

            And nobody got there head cut off and no body got 72 virgins for dieing while cutting off heads

            The end.

            1. Pro biddness

              You would think this phone knows that when I correct it over and over I don’t want it to change what I typed.

    3. Well if it’s all about having enough money to live in the city, why not make it $100 an hour? Portland/Oregon is considering the $15 minimum wage, but a recent study stated to actually afford to live in Portland you need about $32 per hour.

      Meanwhile, another group of do-gooders chimed in to propose a $13.50 min. I guess it’s too much to hope they will go to war and annihilate each other, leaving us in peace.

  21. The issue is that unemployment in the immediate short term consequence of a minimum wage hike may be minimal. The real negative consequences are many and varied, and ultimately result in higher prices and higher cost of living for everyone, creating an environment which makes raising the minimum wage further, more attractive.

    A higher minimum wage literally begets the need for higher minimum wages, and exacerbates the so-called wage gap over which the proponents of higher MW are most likely to wring their collective hands.

    1. The issue is that unemployment in the immediate short term consequence of a minimum wage hike may be minimal unseen.

      A higher minimum wage literally begets the need for higher minimum wages, and exacerbates the so-called wage gap over which the proponents of higher MW are most likely to wring their collective hands.

      I think the inflationary model is of course true but overstated. The first causalities are low skilled workers that find themselves without a niche. It may indeed not cause a net loss in employment immediately, but it does immediately slow the growth of jobs, wages and capital from whatever they would have been in a future without the wage law. That unseen cost can be profound.

    2. The bulk research (consensus, bitches) shows that it leads to slower job griwth and hence higher unemployment in the most affected demographics. In other news water is wet, gravity attracts, and reality is real.

  22. I’m wondering how “chain” will be defined. Will it include franchises operating by a single trademarked name? Will it include outlets operating under different names but w the same majority ownership? Is the count of 30 restaurants to include those outside the state, so if there’s 1 in NY & 29 elsewhere, the 1 in NY is covered?

    1. I believe so. I believe the definition is that if you have 30 “outlets” anywhere, you’re a chain. Boom, you’re greedy, pay up.

    2. I’m wondering which chains were able to successfully lobby to be exempt.

      You just *know* that some slimy pol has a chain of restaurants of 28 stores.

      1. My thinking too. I’ve worked for several small businesses with politically-connected owners who do this shit all of the time. Unions are often the culprits, but just as often it’s some sleazy business owner with friends in high places who thinks he’s entitled to as little competition as possible.

      2. But I doubt there are actually any chains of 30 McDonald’s, for instance. Somebody may own a few of those, but 30?

        So I’m wondering whether they actually mean not just chains but also franchisees of a name with 30 or more franchises.

        1. Blake Casper has 53 McDonald’s franchises in Florida. Don’t know about New York state.

  23. The first line of the executive summary’s section on the “effects of minimum wage laws on businesses” says that “economists have increasingly recognized that raising the minimum wage does not automatically mean that employment will fall.”

    Of course. Labor is the only commodity in the universe that doesn’t magically fall in demand in response to higher prices.

    “Why yes, I’d buy just as much of this, if the price suddenly increased by 50%.”

    1. “Because now I’m making a *living wage*!”

    2. Well, there is a difference between employment falling and unemployment rising. So, it’s entirely plausible to say that raising the minimum wage won’t automatically decrease current employment. Of course they don’t say under what scenarios it won’t decrease employment. And, of course they never say what impact it will have on future unemployment because fewer new jobs will be created. But, if you parse that sentence like a politician would, then it’s absolutely a true statement.

  24. The reason why historical hikes in the minimum wage have not really shown much in the way of decreased employment is because whatever you set the legal minimum to be inflation and market forced will gradually cause the market price for that “minimum wage” level labor to increase above the mandated minimum.

    Once this happens to a sufficient degree raising the legal minimum will have almost no impact because the number of jobs that only pay the minimum will be negligible.

    Historically this is what has happened. Market wages even for low to no skill jobs like dishwasher, fast food service, or working in a convienence store rose to the point where the average teenager even in low cost of living markets who wanted a job could pretty easily get one paying 10 – 15% above the minimum wage and then the legal minimum would be raised to right around that same amount.

    The net effect on the economy was therefore negligible.

    1. For example, when the miminum was raised from $5.15 to $7.50 in 2009 I lived in Louisville Ky, not exactly a high wage area and before the increase went into effect I routinely saw fast food restaurants and gas stations advertising help wanted and offering starting pay of $8 to $9 per hour, Wal Mart’s starting pay in Louisville at the time was $7.50 an hour. So when the wage increase went into effect almost no one was impacted.

      The problem with the $15 minimum wage that is being proposed is that market wages for entry level jobs are nowhere near that level and likely won’t be for decades (barring a bout of hyper inflation which is certainly possible). This means the cost for massive numbers of workers going up and that will have to lead to either significant job losses or general price inflation to compensate.

      1. I make more than 15, but not by a huge percentage. Sure i live in Colorado, its fairly inexpensive living, but I have a job that has a lot of responsibilities, and i handle banking and insurance accounts for my companys clients. If folks around here started making 15 an hr minimum, there might be a lot of qualified people leaving thier field to flip burgers, or demand a huge pay increase to fill in the percentage gap.
        That would devestate our economy, however I know NY is crazy expensive in the city , so my 40k here would get me a box im sure. I dont think its fair to upstate, white plains, etc. Stll a lot of rural areas up there.
        besides, we all iknow you order fast food, it will be wrong, if my percentage of errors at my work were anywere near the numbers they screw up, id be let go…
        its all so strange.

        1. If folks around here started making 15 an hr minimum, there might be a lot of qualified people leaving thier field to flip burgers, or demand a huge pay increase to fill in the percentage gap.

          This.

          If the minimum wage is 10$ (I’m keeping the number simple here!) and then raised to 15$, those making 15$ will become minimum wage workers. They will demand a raise to 20$. When that happens, the people making 20$ an hour will demand a raise to 25$…

          So it’ll all trickle up. It’ll take some time, but the previous status quo in the ratios of workers’ pay will restore itself, just at a larger base rate.

    2. All that said, there are places where a $10.10 minimum and possibly even a $12 minimum wage might work because general market wages are already at or near those levels but they are all the highest cost of living areas like NYC, Boston, San Fran, and DC, applying them on a national scale this soon however would be a disaster.

      1. “work” is not really a good word for it, because even if it’s only a few people who are negatively impacted, the minimum wage is still supporting the relatively well off at the expense of the relatively poor.

      2. “work” is not really a good word for it, because even if it’s only a few people who are negatively impacted, the minimum wage is still supporting the relatively well off at the expense of the relatively poor.

    3. That’s a good point. In the past, minimum wage as followed prevailing wages. Now they want to use it to force an artificial increase in wages.

  25. “economists have increasingly recognized that raising the minimum wage does not automatically mean that employment will fall.”

    Seen and the unseen. What is seen is people keeping their jobs even after the minimum wage is raised. What is unseen is all the young and unskilled workers who remain unemployed because they are priced out of a job.

    A good economist recognizes the unseen. But good economists are not popular because they don’t say what politicians and their media lapdogs want to hear.

    1. Winner. But it’s not even that hard to see the unseen, really.

  26. At minimum, it seems likely that the design of the policy will lead to unpredictable, and unintended, consequences. Will large fast-food chains pull out of upstate New York more or less entirely, or will they just charge more? Will this create a market for low-paying, inexpensive boutique fast-food chains that never expand beyond 29 stores?

    There isn’t enough money in the world to get me to open a low-skill, retail operation today.

    This infectious stupidity will spread to to other states.

  27. Didn’t some court elsewhere already toss out the concept of $15 minimum wages only for certain businesses as unconstitutional?
    You can’t just raise them only for fast food joints, or big box stores. The minimum wage has to be applied equally to all businesses. You can’t single out certain disfavored industries.

    1. Like sloopy said above, that is probably intentional. Right now there isn’t sufficient political will to raise the minimum for everyone. This law will likely go into effect before it is challenged. By then people will be used to their larger paychecks. That will create the political will to raise it for everyone.

    2. The selective nature of this proposal is what sticks out for me as well. All minimum wage laws tend to be protectionist at heart, but this is blatantly so. It’s obvious that certain businesses would disproportionately benefit from it. There’s no way it’s a coincidence.

    3. I’m not sure why. FMLA, for instance, is only applied to businesses in excess of 50 employees. I mean, don’t get me wrong, I think all of it is unadulterated bullshit, but there seems to be precedent that the government treats business entities entirely arbitrarily.

      1. It honestly just depends on the judge and how he or she applies the rational basis test. Economic legislation and regulations are generally upheld because of the extremely deferential nature of the test, but, as Hazel notes, every now and then a judge will actually scrutinize such law and find it wanting, especially if the judge believes the law is centered on racism, sexism, etc.

        This is the rational basis test as applied to the federal constitution. Perhaps some state constitutions have stronger protections for businesses?

    4. I know that’s not true w.r.t. the federal minimum wage, which for at least a very long time exempted farm employment. I don’t think there’s anything in the NYS constitution that would prohibit different minimum wages for different industries.

      1. True. Although “fast food” seems to be too narrow a definition, considering it’s a subset of a larger food service industry. It’s also unclear how many establishments it encompasses. Are all counter-service restaurants considered fast food?

        I think you could set a minimum wage for the entire food service industry, but you couldn’t target only those that serve burgers and fries. Targeting fast food sounds similar to me.

    5. This proposed law is insanely arbitrary– like passing a law that applies only those with middle initial “M”. I’m outraged that more people aren’t outraged.

  28. I’m amazed (but really shouldn’t be I suppose) that some people think a $15/hr min wage has no negative consequences. Where do they think the extra money comes from? There are two possible sources: 1. raised prices and/or 2. reduced profit. In both cases someone has less money to spend or invest. If they spend less, then jobs somewhere will be lost. If they invest less, new jobs that might otherwise have been created will not be.

    Related to that, AFAIK the studies that claim no significant job loss look only at the industry in question (that was the case for the NJ study). But job losses can occur in other industries, too, as noted above. So even if the NJ study was done correctly (which it wasn’t), it does not give the whole picture.

    1. Where do they think the extra money comes from?

      Don’t you know? The CEOs of evil fast food KKKochporations have Scrooge Mcduck-style pools of gold coins that they swim in, they can just take money out of them to pay their employees a living wage!

    2. “Where do they think the extra money comes from? There are two possible sources: 1. raised prices and/or 2. reduced profit.”

      Number two is your answer. Minimum wage supporters have this image in their minds of ALL business owners just swimming around in coins like Scrooge McDuck, and they think that the minimum wage is a way to stick it to those evil rich capitalists.

      It’s just a natural result of the “profits are pure evil” thinking. They don’t understand that when rich people spend tons of money on a lavish lifestyle, they’re giving money back to working people. Who picks up the hammer and builds those mansions? Who assembles those fancy cars? Who cooks and serves those steak and lobster dinners?

      1. Capitalism has failed!

    3. The consequences are fully intended.

      If mcdonalds passing the extra costs on to consumers means fewer big macs purchased. Boom. Obesity solved.

      If mcdonalds fires jose the janitor, thats just one more grievance for bernie or some other populist degenerate to exploit.

      Im constantly baffled that libertarians still attribute to stupidity that which is clearly malicious.

  29. I was just thinking. Until ten or so years ago, restaurants, hotels, and a few other industries were exempt from having to pay overtime. (Though in the ten years or so that I worked as a cook, only one restaurant I worked for refused to pay overtime) Even now, tipped employees don’t have to be paid the full minimum wage. When I was a waiter my hourly was like three buck an hour while minimum was six or seven. Based upon that, perhaps this targeted minimum wage hike will pass judicial review.

    1. I think that’s under federal law and many states. Some (mine for instance) don’t allow a tip credit to be counted as part of the minimum wage.

  30. So the whole “New York is good for business” campaign…

  31. Or, as White House economic adviser Jason Furman said last year, “zero is a perfectly reasonable estimate of the impact of minimum wage on employment.”
    .
    A judgement based upon expertise gained from years as an entrepreneur in customer service businesses a government flunky.
    Sounds legit.

    1. I believe he meant reasonable as opposed to factual.

  32. And don’t worry, no one will have an issue with paying $30 for a chicken McNugget meal. And the people who are the typical clientele of these establishments can totally afford it. And we’re just nudging them in the right direction anyway, eat less. Or just shop at the Wholefoods across the street for healthier options.

    1. You think the same people that ban soda want to make burgers and fries affordable???

  33. Finally! A law that makes it possible for illegal aliens to obtain employment.

  34. How many Big Macs do you have to slide across the counter in an hour to pay a $15/hr wage to the kids behind that counter?

    “Who knows? Cost accounting is HAAARD,” sez Politician Barbie.

    1. Wait, first you don’t want to pay these people a living wage and now you want them to work more for their pay? Heartless glibertarian.

    2. What’s Sarah Palin got to do with this?

      1. You haven’t heard about the all new caribou burger ?

        1. You haven’t heard about the all new caribou burger ?

          New?? They have been around for centuries. And they are delicious!!

    1. Yeah. I know a couple who have been on every form of government assistance possible for around a decade. These are healthy, well as healthy as possible when you sit around drinking and smoking all day watching TV, young people, in their 30s. The guy is always bragging to me how their freezer is so full of lobster and filet, that they occasionally have to clean it out and feed some of it to the dogs. 10 years, this guy has not worked a day. I make pretty damn good salary and I can’t afford to feed lobster and filet to dogs.

    2. In San Francisco, if you are elderly, disabled, or homeless, you can use EBT cards at many restaurants.

      1. the wait staff must love those customers

    3. “We’re out of Special Sauce! I’ll go put some more mayonnaise in the sun.”

      1. If all comrades faithfully execute their shared duties to the glorious state, we can increase rations of special sauce next week to 5 grams per person!

  35. OUTSIDE LINK ALERT

    I’ll put a hole right through your head

    Autostart video alert, as well.

    If this has been linked to already then FUDGE YOU MOTHERFUDGERS

    1. He was overdue for a nice vacation.

    2. “I am troubled by what I have seen on the video,” said Medford Police Chief Leo Sacco. “I was upset to see one of my officers involved in this kind of activity.”

      More training required. Training pay to be added to officer’s paycheck.

      (Editor’s note: The date on the dash cam video of July 28 is the result of an incorrect setting on the camera. The video was record July 26.)

      Union arbitration points this fact out, argues that dashcam video is therefore not reliable, should be thrown out. Officer has incident expunged from file, police chief apologizes, officer receives $30,000 payout for stress-related disability payment.

        1. “He’s a very effective police officer but last night’s incident that’s on video, at least that portion of the video that I saw, is troubling to say the least.”

          So there it is… too valuable, can’t fire him. If only the cop had yelled “nigger!” at some point during his tirade, then we’d get some traction on getting this problem under control.

          Mike repeatedly informed Lebert that he had a dash camera and was filming the exchange. Massachusetts is a “two-party consent” state, which means it’s illegal to record audio without the knowledge and permission of the person being recorded.

          Officer didn’t give consent. The DA is considering charges against “mike”.

          Also Monday a 2012 video resurfaced of Lebert confronting a man trying to film him. In the 2012 video, he is seen licking his finger and trying to wipe it on the lens. (You can watch the full video here.)

          Each case is held in a vacuum. Any other incidents are neither here nor there, and don’t contribute to any pattern of behavior.

  36. It’s communism by legislation — trying to change society by diktat. It will fail, of course, because the productive class will simply outsmart the moocher class where they can by turning to increased automation and use of contract labor (where possible), or they’ll just stop producing and innovating where they can no longer do so at a decent profit.

    1. Or we’ll just inflate our way out of the whole debacle. The “value menu” will be items costing just $10 each!

  37. OT: The limetards have finally went full on authoritarian:

    3 year old on government watch list

    1. Import a bunch of Muslims, and then act surprised when some turn out to be radical. Brilliant. Well, the Labour Party got what they wanted: more non-whites and more Labour voters. Take that, white Christian patriarchy!

      1. Yeah, let as many middle eastern immigrants in as want to come, note that they are not assimilating into society, give them welfare. Listen to them openly brag that they will use the welfare to stage terrorists attacks. Then take away everyone’s rights in a half ass effort to stop them.

        Sounds like a government in action to me.

    2. To be fair, ISIS is having 8-year-olds behead people.

      Think of all the biological warfare he or she could engage in using his or her diaper!

      1. Stop punching down! They’re on our side!

        /the proglotards

    3. 3 year old on government watch list

      “The so-called ‘diaper bomber’ ….”

    4. At this point, wouldn’t it be easier and more simple to have a non-watch list? If home things list, you can step through the gate…

      The list:

      Barack Obama
      Hillary Clinton

  38. This just in: Democrats hate minorities, teenagers, and the handicapped. But what else is new?

  39. Since raising the minimum wage will have no negative impact on employment, the only conclusion is that the progs think fast-food workers are only worth $15/hr. Otherwise, why not more?

    Hell, for $50,000 an hour, they could raise a family, and educate their children at private schools! And eat organic produce! Apparently they don’t deserve to, otherwise the minimum wage being legislated could be higher.

    So either they hate fast-food worker (in other words, the poors), or they know that the wage raise will have a negative impact and don’t give a shit.

    Wait, it can be both.

    It’s both.

  40. Why $15? Why has that number been seized upon? Why not $13.35 or something?

  41. I don’t go to Taco Bell very much, but when I went to one in a rural area earlier this year, they were encouraging you to use the app to order rather than go up to the register.

    1. I would highly advise it, as there is at least some remote possibility that the app may get your order right. Not that the person putting it in the bag will actually put YOUR order into the bag. But at least we’ve made 50% progress here.

      If we can just replace all fast food workers and politicians with machines, we’ve made tremendous progress.

      1. If we can just replace all politicians with machines piles of wood chips, we’ve made tremendous progress.

      2. When the tornado took out the local dialysis clinic, we had to start driving up to OKC for my wife’s treatments, about thirty minutes on whatever interstate that is, I40 maybe.
        We had at least 4 McDonald’s to choose from; finally, the third one would give us our correct order. Interestingly, it was staffed by Mexican immigrants.
        The one closest to our house was horrible. It was like 430 am when we would get there, and I know the white kids were stoned, and, at the end of their shift, probably drunk. They would get out order wrong 100% of the time.

  42. Go ahead and raise wages across the nation for fast food workers. Why stop at $15/hr? Why not give them $50/hr. Doesn’t matter to me. At most, I may eat fast food four or five times a year. If it cost any more than it already does, I just won’t eat it even once a year.

    1. $50? Greedy heartless rat fucking bea tagger! $100! I challenge the Democrats to make it worth it. $100 per hour minimum wage for all!

      Wait, how much per hour does Hillary make for a speech? Why doesn’t everyone get that? Does Hillary hate poor people?

      It’s not fair! Let social justice ring! Everyone gets what Hillary gets!

      1. Everyone gets what Hillary gets!

        Thirty years in Leavenworth?

        1. In a just world, Rich, in a just world…

        2. It’s fun to dream of impossible things.

          Hillary in Leavenworth, or even in cell for a couple hours? Unpossible!

          Royalty is not bound by the Law!

      2. Not so fast now! I’m backing $2,550.00/hour for all fast food workers. And not just because I believe in a “living wage” for all who work, but because I’m sick and tired of having young people on their way to and from their jobs driving past my house every day. They won’t be driving by bothering me when none of them have jobs anymore!

    2. I think that’s a feature of all this, not a bug.

  43. $30,000 a year for flipping burgers?

    I had to work several years at a real job with responsibilities and stuff before I made that much. Now, that’s not a lot in NYC, but where I live it was enough to start thinking about buying a house about 10 years ago.

    Why is it impossible for people to accept that some jobs just aren’t worth that much?

    1. I have a broom. I like my broom. It’s a nice broom. Sorry I didn’t finish 4th grade. I didn’t feel like it. I want the same pay as the engineers get. It’s only fair. Equal pay for all!

  44. I honestly this was going to be a joke, but after a cursory glance, its exactly what it purports to be

    Vice Magazine expos? = The Hard Lives of Britain’s Synthetic Marijuana Addicts

    yes, Vice, the mag that used to run fashion spreads where the “models” would snort heroin and puke in their own lap (C-CLICK! Edgy!) is now jumping on the “OMG SPICE BATH SALTS UNREGULATED MADE-UP DRUG NIGHTMARE HURTS CHILDREN”-bandwagon. Not enough public-services to help these horrible addicts!!

    Brass Eye mocked this sort of thing over a decade ago…and now life is imitating art. I mean, its hilarious how identical the production-M.O. between “Cake” and “Spice” is. It just shows how lazy and cookie-cutter this kind of ‘journalism’ is.

    1. Vice has become quite the disappointment, parroting largely mainstream perspectives on many topics.

      Side note: with the global markets crashing, has that made today a slow news day?

      1. “global markets crashing, “

        Mmm? Nikkei, FTSE, CAC, etc are all moving about -2%, which is basically like any other day (generally higher volatility than US mkts)

        Chinese stocks (aside from a handful of things like BIDU, BABA) are basically ‘frontier markets’ investments. A 20% correction to the shanghai index still wouldn’t make anyone blink, because YoY they’re up over 100%. Froth.

        1. What’s interesting is the China market drop is “in spite off” the so-called government dam to keep it from further sliding. What did they call today? Biggest drop since 2007? You know what else happened in ’07?

          Mainland Chinese stocks extended Friday’s losses, with the Shanghai Composite dropping nearly 8.5 percent for its largest one-day loss since 2007. The Hang Seng closed about 3 percent lower.
          The China Securities Regulatory Commission said late Monday night that the local government will increase purchases of stocks in an effort to keep the equity market up.

          So I wonder how big a drop they’d have had there not been any Krugman-style stimulus in China?

  45. Boston just ended its bid for the 2024 Olympics.

    Good for them!

    1. ”We are a world class state without the Olympics. We don’t need to spend billions of tax dollars to prove that fact,” said state Rep. Shaunna O’Connell

      *Wicked* sour grapes, Shaunna.

      1. Shaunna O’Connell

        Ugh, those damn black Irish are the worst.

          1. Everlast managed to simultaneously be more Black and Irish than Barack Obama

            That’s how incompetent Obama is.

      2. Huh, don’t know anything about O’Connell, but that statement taken in a vaccum, is 100% reasonable.

        1. The context is O’Connell runs as a Republican on a fairly standard fiscally conservative platform.

    2. Good. I can’t think of many cities less well suited to hosting the Olympics than Boston. And I like Boston.

  46. I drove past my first ALL SELF SERVE Gas Station for the first time yesterday here in NC….

    No people working there at all…

    I saw drink machines and gas pumps…

    Soon many jobs will be lost because LIBERALS do not understand a thing about economics.

    1. Where in NC?

    2. There used to me more of those around where I live. But you had to get a special card that only worked for gas at those places. I think the only reason you don’t see more of them is that just selling gas is a hard way to make money these days.

  47. I wonder if fast food workers realize that they will soon have to complete for their jobs with many more desirable employees? 30k a year for a close to zero stress job aint all bad.

  48. During the 1990’s-early 2000’s back home in Phoenix, just a few miles from my home, there was a burger joint called “Lenny’s.”

    Lenny’s was quick, but was hardly what is usually considered to be “fast food.” Lenny often did most of the fry work himself; occasionally he’d have a young lady or two helping. One thing he never did back then was scrimp on quality. It was great food at a great price.

    While back home visiting a few times over the years I made the time to stop at Lenny’s, where’d I’d eaten so many meals over the years, just to have a bite to eat. It was very disappointing. Not only was Lenny nowhere around, neither were the good quality meal items. For whatever reason, by choice, or by no choice, he’d lowered the standards.

    Yeah, I can only imagine how bad the food is going to be at all the very marginal, or already outright horrible, eating joints once their forced to cut way back on labor while still trying to provide food that’s somewhat edible. No doubt the food is going to suffer even more.

    1. I thought you were going to tell us he’d been driven out of bidness by a place named “Squiggey’s”.

      I am disappoint.

      1. I’m a disappointer. Always been one.

  49. New York’s Crazy Plan to Experiment With a $15 Minimum Wage for Fast Food Workers

    It took me till about the 50th time I read this to realize what it reminds me of:

    “New York Tries This One, Weird Trick to Drive Out Remaining Businesses!”

  50. Progressive economic theory:

    – Reduce the consumption of cigarettes (or soda or salty snacks) by increasing the cost of said items via taxes

    – Increasing the cost of labor via a $8/hr increase in the hourly wage will not reduce the number of jobs nor will it increase the cost of products and services

    And so endeth the lesson.

  51. No idea what it’s going to do? Here, let me give a common sense lesson. The untrained fast food workers start making $15 an hour. Then Joey, who is somewhat trained at a job and makes $15 an hour says “that’s bullshit! I’m trained, I should make more!” So he goes up to $25 an hour. Then Larry who makes $25 an hour says “hey, that’s bullshit! I am better trained than Joey! I should make more” so he makes $35 an hour. Then Linda says “hey! that’s bullshit, I’m not only better trained than Larry, but I have years more experience! I should make more!” ad nauseum.Of course, prices then rise because in order to pay more you have to generate more money. So if you sell potato chips and all your minimum wage workers now get $15 an hour, plus you’re paying more for the chips because those guys are also increasing their payroll, therefore, within what a year or two? The poor are going to be just as poor and the middle class is going to be shot to shit, but the rich will still be rich.

    Did I miss anything?

    1. Where does the Norwegian Blue fit into this scheme?

      1. He’s pining for the fjords…

  52. “zero is a perfectly reasonable estimate of the impact of minimum wage on employment.”

    Well, if you assume people who work minimum wage and lose their jobs due to an increase are probably perma-banned from employment, then they’ll get discouraged and not be counted as unemployed. So…

  53. Honestly, they already have a hamburger making machine:

    http://www.gizmag.com/hamburger-machine/25159/

    The person in charge of keeping it tuned and stocked should be worth $15 an hour. So I guess it’ll all work out in the end.

  54. Don’t worry, inflation will render the increase irrelevant by 2021.

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  56. One of the biggest problems, as Nate Silver wrote, is separating the signal from the noise. A research model must be properly defined.

    I had a lefty friend tell me that increases in minimum wages did not increase the unemployment rate. I mentioned to him that people who stop looking for work aren’t considered unemployed, so it’s better to look at the labor participation rate.

    Also, MW only affects a portion of the work force, specifically low skilled and inexperienced (who are mostly young).

    I did a Google search and found that since 1990 (a major increase in the MW) labor participation rates nationwide for 18-24 year olds plummeted while remaining stable for other groups.

    Many of the young know they can’t get hired and don’t even look.

  57. Econ 101: price increases result in less demand. Applies both to widgets and workers. You can legislate a higher minimum wage, but you can’t force anyone to hire more workers.

    1. that will be next

  58. $15/hr isn’t enough. In round numbers that’s $30k per year. Try living on that in the NYC area. No, at least $20/hr is more like it. And when this is implemented, we should closely observe the results. I have a friend in the business who swears that the big chains are prepared to automate the entire operation. The prototype stores have lots of glass so the customers can watch the machines prepare their meal. Ordering is done at a station that is similar to an atm. Who knows, the novelty might even help sagging sales.

  59. Of course, when this eventually fails spectacularly, and hundreds of thousands of jobs are lost, many being replaced by automated systems, those who implemented it will inevitably blame capitalism.

  60. im a real cook, in real restaurants, and have been for over ten years. i made $15/hr for like one six month stretch at a catering company, but that’s pretty unusual, in my experience. you just have to work a lot of hours. im the kind of person who’s gonna be pissed when mcdonalds employees start making more money than me

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