Minimum Wage Fallacy?

Actually the majority of studies haven't shown the link. It's very even and since you're trying to prove a causal link you simply have to offer concrete, strong evidence.
I don't have to prove there is no link, you're arguing that there is a causal link, you have to prove it.

It's a bit like if someone says ' guys I have a theory that wearing hats makes you do better in exams', it would be up for them to prove a causal link, not up to everyone else to disprove it.


They haven't been able to do that and many many studies have shown the impact to be negligible.
There is no solid evidence tor even strong evidence that raising the minimum wage causes unemployment. It's contentiousat best.

I have explicitly shown you research which shows that the majority of published studies on the subject show strong evidence that there is a link, and that there is very little published evidence for the absence of a link. It's certainly not 'just one study'. It's pretty decent evidence, and you have not explained why you think it is OK to ignore it.

You, in reply, have instead decided to bleat instead about the 'many, many' (but as yet unnamed) studies which prove me wrong.

Let me be clear, you are ignoring the weight of the evidence in favour of blindly reciting whatever received wisdom you read in the Guardian. It's not a very strong argument.

http://www.theguardian.com/commentisfree/2014/jun/11/the-evidence-is-clear-increasing-the-minimum-wage-doesnt-cause-unemployment

http://www.businessforafairminimumwage.org/news/00135/research-shows-minimum-wage-increases-do-not-cause-job-loss

http://americanactionforum.org/research/how-minimum-wage-increased-unemployment-and-reduced-job-creation-in-2013

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/14/why-economists-are-so-puzzled-by-the-minimum-wage/

http://www.iea.org.uk/blog/unemployment-and-the-minimum-wage

These are a few links also taking into account all of the reports into it.
Some studies suggest a link, some don't. The only conclusion that can be drawn is that it is a contentious issue with no real proof either way.

Since you're side is arguing for the existence of a causal link, the burden of proof is on you. The evidence for raising the minimum wage causing unemployment is hazy at best.

To argue that we shouldn't raise the minimum wage slightly on the basis of the unproven claim that it will cause mass unemployment is totally absurd.

So what we have established is this. There is lots of evidence that the minimum wage has a negative effect on employment. Then there are lots of studies which have been unable to show a statistically significant effect, which is not of course evidence that one does not exist, and is unsurprising given the variance in economy systems.

So OK, you are right to say the link has not been absolutely proven, but there is still a pretty strong case. What we can say for certain is that your assertion earlier that there was 'no evidence' was a load of rubbish.

QFA

Do you deny though that given the complexities of the system and the time scales involved for any effect to be felt that the absence of evidence in favour of a link is not in and of itself evidence for there not being a link?

Now with regards to the minimum wage, there is no consensus and many different reports and investigations have shown different things. Some have shown a link, some have shown no link, some have shown something but impossible to say whether other factors were involved and skewed the result. The result of all these experiments taken in conjunction has largely been inconclusive. That's not to say it absolutely does not exist, but much stronger proof and evidence are needed before it can be accepted to be true.
To therefore argue we shouldn't increase the minimum wage as it will cause mass unemployment on the back of inconclusive, inconsistent, contested evidence is in my opinion, ridiculous.


I'll look at the data you posted tomorrow.

The default position is logic and reason when arguing for a causal link between x and y is that there is no link and it's up to the people claiming there is to prove it. As I said before if someone claims that 'people who wear hats do better in exams', they have to prove it, it's not up to the person questioning it to disprove it. In the same way that it is up to those who claim global warming exists to prove it for it to be accepted, not up to others to disprove it. They also can't go 'well you haven't disproven it so therefore it must be true'.

The reality of this minimum wage fallacy is that there is inconclusive data. The academic opinion is quite balanced. Some studies have shown a link, other studies have shown no link, there is no consistent unanimous academic or even statistical opinion.

One thing that's certain is there has been no strong evidence that undoubtedly proves the point.

So to argue that we shouldn't raise the minimum wage slightly on the basis of inconclusive and contentious data is silly.

That isn't how scientific reasoning works. Setting out to disprove things is an legitimate and vital line of scientific enquiry.

I actually don't see why you think causality is so all-important. Yes, I made an argument and I should be expected to back it up. But you also made an argument of a relationship between factors—albeit, mainly the lack of one—and should be expected to back that up too. Let's not forget, I replied initially to you saying higher minimum wages lower benefit uptake; let's see some stats for that!



I'm not sure why the burden of proof is entirely upon my shoulders. If you're arguing to do something active, like raise the minimum wage, shouldn't you be able to show it will have a net positive effect?

I'm quite concerned about the lack of debate over the minimum wage, especially in the current election climate. I really dislike the fact that there is this assumption that the minimum wage is a wonderful thing and should always be pushed higher and higher. When you actually give this issue some thought a clear argument against the minimum wage develops.

In general the MW is probably a good thing, but there is a complete lack of discussion over its negative impact. Whilst it may be a good idea it is certainly not a risk free entity and that is what I would like to raise today.

Employment
If I am an employer who is considering whether or not to employ a new member of staff I have two options. I can either employ somebody or push an extra workload on to my existing staff. The MW makes new staff very expensive (relatively speaking) and I am therefore less likely to employ somebody new than if they were cheaper.

This problem is worsened by modern employment law which effectively means it is more difficult than ever to sack an employee if they turn out to not be very good.

Being that I am faced with employing somebody who is expensive and hard to get rid of, should they not be very good, I am far more likely to be risk averse and simply offload the needed work onto my current employees. Indeed, I may choose to invest in previously uneconomical machines to replace my employees altogether as my workers become more expensive.

Inflation
Of course inflation more accurately represents an increase in the money supply rather than just market pressures pushing up prices, but there is of course an effect on the price of commodities relating to the MW.

If I am a businessman and I am forced to pay my employees more then I obviously have to recoup those loses by either firing staff or rising prices. So whilst you as an individual may be earning more, there will be a knock on effect that many of the commodities you buy with your paycheck will end up being more expensive, negating much of the improvement in your standard of living by having a larger pay packet. And indeed if I choose to fire employees instead of raise prices this further worsens the impact of the MW on employment.

Stigma
This is a far more wishy washy debate that I don't think particularly matters, but one I feel worth mentioning even if only as a theoretical downside. There is a slight stigma associated with doing a job that pays MW. Previously you may have earned £7ph for example and not been classed as MW. If the MW then rises to £7ph then all of a sudden you have had that stigma of being a MW employee thrust upon you.

Conclusion
The MW seems like a great idea for those in work, who wouldn't love more money each month right? But it's a dreadful thing for those seeking work. It puts employers off employing people (it certainly won't encourage them right?) meaning greater unemployment and more welfare claiming. This in turn means less people contributing in taxes and more people taking money in the form of benefits.

Of course abolishing the MW may lead to exploitation of individuals, but fundamentally it would lead to the creation of more jobs in the economy. The bottom line is that if I were unemployed I would much rather have a job paying £6ph than no job at all.

To stress once again, I am not necessarily anti-MW, I just dislike the way that there is no debate over its impact and it is assumed to be a de-facto wonderful thing where everyone applauds every time a rise is mentioned.

If you're arguing to do something active, like raise the minimum wage, shouldn't you be able to show it will have a net positive effect?

To those saying that evidence doesn't exist, even though the theory is sound, I have this to say: How do you know it didn't increase unemployment? The impact on employment is in the longer term, it's not an immediate impact. It's a case of not replacing somebody when they leave, that sort of thing, it's in a term long enough it's impossible to prove either way since what you need to ask is "if we hadn't increased it, what would things be like?", an impossible to answer question. Until the final sentence Haddock was actually talking sense, for a change. In some respects it's not dissimilar to asking the question of whether you should take the maintenance loan for greatest personal gain and somebody that doesn't actually NEED it, although at least in hindsight it's clear to see whether you were right or wrong with that one.

Funded by? Let me guess, more taxes on those people who are richer than whoever you ask the question "who should we be taxing more?".

Minimum wage should be like £20 per hour.

It would cost less than the Universal Credit system the Conservatives are proposing.

Go and do this. Put 2 parents and 12 children in the Universal Credit calculator. See how much they get. Include a house hold rent of £450 Per Calender Month. Make sure 1 Parent is working 30 hours a week.

Should come to about £60,000 plus. That is about £50,000 + extra in benefits on top of wages.

Don't talk to me about welfare. The Conservative party are the new welfare party.

http://universal-benefit-calculator.co.uk/universalcredit

Are you on minimum wage? So the people that work really hard , what do they get? £80 an hour. It wouldn't work.

Well over the last 20 years there hasn't been any correlation between employment/unemployment and the minimum wage...

When Einstein presented his theory did we just take it as gospel or did we ask him to prove it? When people first claimed global warming did we accept it as truth or ask them to prove it? It's a bit like if I say 'guys there's this 3 headed monster singing Beatles songs in my room but only I can see it', then you said 'I don't believe it, prove it' and me going 'well can you disprove it? No therefore it must be true'

The default position in science and academia is one of 'innocent until proven guilty'. As in the link you are claiming to exist is held not to, until strong evidence proves otherwise.

The burden is largely on you because you're advocating for a causal link. I' arguing that we can't say there is a link and the overall evidence suggests that. The results have been inconclusive at best.
Until there is strong evidence to suggest that raising the minimum wage will lead to mass unemployment, it's nonsense to argue against raising it by a small amount. When we introduced the NMW in 1998, by 1999 there had been a fall in unemployment. That severely damages the claim that raising the minimum wage causes mass unemployment.

Well that's exactly the argument we've been having. It's an extremely debatable claim you make.