Posted on 12/16/2019 5:09:42 AM PST by karpov
Here’s another volley in the debate over the “Fight for $15”: As the federal minimum wage rose from 1989-2013, small businesses in affected states suffered “lower bank credit, higher loan defaults, lower employment, a lower entry and a higher exit rate.”
That’s according to a study last week from the National Bureau of Economic Research. The analysis by three professors at the Georgia Institute of Technology exploits the fact that many states—now more than half—set their own minimum wages higher than the federal standard. This provides a natural control group. When the nationwide minimum goes up, how do the states where it applies fare in comparison?
Start with data on one million loans, averaging around $100,000, made through the Small Business Administration. For each $1 increase in the minimum wage, the authors estimate that loan amounts dropped 9% more in the affected states. The risk of default was 12% higher. The average credit score for small companies in those states showed “a sharp decline.” Business entries fell 4% in the year the minimum wage went up. A year later, business exits rose 5%.
These results, the authors say, hold throughout various statistical analyses, such as while controlling for local economic conditions. The effects are stronger in businesses like restaurants and retail, which rely on low-skilled labor. Smaller and younger companies are more severely affected as well. In short, the authors conclude: “We find that increases in the federal minimum wage worsen the financial health of small businesses in the affected states.”
By now some readers are probably thinking: Well, duh. It does not take a University of Chicago Ph.D. to suspect that raising the price of labor will make it harder to sustain a small, labor-intensive business. Don’t forget that there’s no cost-of-living adjustment
(Excerpt) Read more at wsj.com ...
The minimum wage should be $125.00 per hour.
If you didn’t have so much ‘under-the-table’ labor (illegals for past forty years), then none of this discussion would be necessary, and most all labor rates would have gone up to $12...maybe even $16 an hour in some regions....as minimum wage. Once you accepted illegal labor existing, everyone looked the other way and kept going.
No different than the Jooz and Israel. The left just doesn’t care.
The government does not have the right to set a minimum or maximum hourly rate of pay.
Paging Pennsylvania....
DUH! That’s why giants such as Amazon and Walmart raced to get onboard.
LET’S BRING BACK THE 5 CENT CANDY BAR
When politicians particularly members of today’s in name only democrat party started pushing for a higher minimum wage. The focus should have been on purchasing power of the lowest coin of the realm. Each time it was passed the price of an item like an individual candy bar and everything else increased. What began at 5 cents in the 1940’s steadily increased to what it is today. The result has always been since it began devaluing the purchasing power of the dollar.
I think if Trump is able to put 2 more justices on the Supreme Court (i.e., another term), our side should look to taking the OFFENSIVE and fighting laws like the $15 minimum wage for what they are - A TAKING OF PRIVATE PROPERTY, that being the businesses that are affected, many of which become worthless.
...of course that assumes that OUR SIDE stops being petty and votes REPUBLICAN next November, even if it means re-electing (or electing) some RINOs.
Otherwise, ignore my first paragraph, as fighting these laws will be futile and we’ll most likely will have to fight to just stay out of re-education camps.
The government does not have the right to set a minimum or maximum hourly rate of pay.
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Sure it does, it’s right under the right to kill babies clause.
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