Saturday, August 20, 2016

Will the Fight for Fifteen knock out 9 million jobs?

Will the Fight for Fifteen knock out 9 million jobs? « Hot Air:
"Will a new minimum-wage law trump the law of supply and demand in the labor market?
Despite recent experiences in Seattle, California, and other places that have hiked the minimum wage, activists lobby through the “Fight for Fifteen” movement still agitate for a drastic increase in the base rate.
In a new Heritage Foundation “issue brief,” James Sherk estimates that the impact of such an increase would be the loss of seven million jobs nationwide.
Image result for unintended consequencesThe most obvious problem is a sudden increase in costs for businesses that force an evaluation of staffing (via Jeff Dunetz):
Companies hire workers when the additional earnings their labor creates exceeds the cost of employing them.
Starting wages of $15.00 per hour mean full-time employees must create at least $38,700 a year in value for their employers (including wages, employer payroll taxes, and Obamacare-mandate penalties).[4]
Such a high hurdle would make it much harder for less-experienced and less-skilled workers to find full-time jobs.
Many of these workers are not yet productive enough to create that much value for their employers and businesses will not hire them at a loss.
Consequently, many businesses might respond to a $15 mandate by eliminating positions, cutting hours, and looking for new ways to implement labor-saving technology.
Some companies might have to face shutting down or leaving America entirely to cope with the additional expenses.
...Nationwide, such state minimum-wage hikes would result in the loss of approximately 9 million jobs."

No comments: