The Economy

Buy the dips.

 

Somehow I’m unsurprised by this.

 

Honestly, I don’t believe anything reported about the economy from currently elected officials.

It’s like the fox telling the farmer how many chickens are in the hen house.

 

Same applies to State Department and intelligence services.

If they tell you X, it's because they want you to believe X. X may or may not be true.

 

Because it’s going to come up eventually anyway:

A large body of research has upended the old consensus that higher minimum wages necessarily reduce employment. One recent survey, for instance, examined 138 minimum-wage hikes at the state level and found essentially no effect on payrolls. The open question is how high is too high, Arindrajit Dube, a co-author of that paper and a professor at UMass Amherst, told me.

He and others contend that it might be higher than you would think. The study he worked on showed that setting the minimum wage at up to 59 percent of average wages has no effect on employment. A separate study of minimum-wage hikes in low-wage areas by researchers at UC Berkeley found that setting the floor as high as 80 percent of average wages has no effect either. (Fifteen dollars an hour is roughly two-thirds of the national average wage, and 80 percent of the average in the lowest-wage states, like Mississippi.) Examinations of wage hikes in other countries also suggest that a high minimum wage would not cause major job losses.
…

How about restaurants, which will be asked to cope not only with a shift to a high minimum wage but also with the elimination of the tipped minimum? The food-service industry, battered by the coronavirus recession, is among the most vocal protesting Joe Biden’s proposed policy, arguing that both of those changes would put many restaurants out of business.

But the tipped minimum is a terrible policy. It promotes racism, sexism, lookism, and ableism in the workplace. It facilitates harassment, as waiters, bartenders, and other tipped employees are forced to put up with guests’ obnoxious or even dangerous behavior because their livelihood depends on it. It also allows for wage theft. In many states, tipped employees are supposed to be guaranteed an hourly minimum by their employers. But one in six restaurants stiffs its workers of that guarantee, a Department of Labor investigation found; five in six violate one wage-and-hour law or another.
…

That said, some businesses might not be able to make the math work with a higher wage base. Those tend to be businesses that were struggling to begin with and might not have made it anyway. The minimum wage seems to be Darwinian, driving weak competitors out: One study, for instance, showed that a company with a 3.5-star average on Yelp is more likely to fail after a minimum-wage hike, but a five-star company is not.

Is it worth keeping the minimum wage low to save those firms, or to keep profits high at others? Stepping back even further: Does it make sense to allow businesses offering poverty wages to flourish? Do we want, as a society, to have an economy made up of businesses that rely on poverty wages? The answer, I believe, is clearly no.
…

Finally, there is the concern that higher minimum wages will lead to inflation: Hello, $15 minimum wage; hello, $15 takeout sandwich. Again, these concerns are overblown. Businesses do pass the higher labor costs associated with minimum wages onto consumers. But the price increases tend to be quite small—a buck more for a sandwich, 50 cents more for a taco, a few dollars more for yard work. One study, for instance, found that for every 10 percent increase in the minimum wage, prices for food consumed outside of the home rise just 0.36 percent.

The impact would not be big enough to have more than a marginal effect on prices or on the country’s overall rate of inflation. “A really large part of the incidence of the minimum wage shows up in higher prices, and the contribution of minimum-wage jobs to the [country’s rate of inflation] is very, very small,” Dube said.​

The Counterintuitive Workings of the Minimum Wage — The Atlantic

 

While in general I support higher wages for all, the $15-an-hour minimum strikes me as shortsighted.

1. Even if you give someone $30/hour in some of these major cities, they still will be a paycheck away from the food bank.
1a. $15 an hour in Kalispell goes a lot farther.
2. Higher minimum wages mean higher costs for all of us (and I’m ok with paying in), which means that $15 won’t go as far, etc. It’s cyclical, I’d think.

Just the thoughts of some random guy who steers as far from math as possible.

 

We spend an awful lot of time speaking about the 1.9% of workers making at or below the federal minimum wage.

Yes, it's true the wage has not kept up with inflation, and there's really no excuse for that, but . . .

Forty years ago, 13% of workers (7.7 million) were making at or below the minimum wage. Today it's 1.9% (1.6 million). For however much of a problem the wage is, it's a problem for far fewer people today.

 

But it wasn’t really a problem for them 40 years ago.

 

Your phrasing carries the implicit assumption that anybody making above the minimum wage is sitting pretty. Nobody’s prospering sacking groceries for $9/hour in Tupelo, but they wouldn’t be captured in your 1.9 percent statistic.

 

Well . . . we did have 13.5% inflation in 1980 and even more onerous interest rates.

 

Uber reportedly trying to unload SF office it hasn't moved into yet

Interesting fall out from COVID-19 - I doubt commercial real estate ever recovers.

The other interesting tidbit.
And this is considered "good news."
Uber lost $6.8 billion in 2020 - CNN