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Labour – Raise the minimum wage

Written By: - Date published: 4:05 pm, August 1st, 2014 - 298 comments
Categories: employment, jobs, labour, wages - Tags: ,

Labour is promising to raise the minimum wage to $16.25. “But that will cost jobs!!!” is the usual right-wing response, and we hear it from some economists and most business interests. Other economists disagree, and they get much better support from the actual data, like this recent example from America:

US states with higher minimum wages gain more jobs

The 13 U.S. states that raised their minimum wages at the beginning of this year are adding jobs at a faster pace than those that did not, providing some counter-intuitive fuel to the debate over what impact a higher minimum has on hiring trends. …

Just last week, Obama cited the better performance by the 13 states in support of his proposal for boosting the minimum wage nationwide.

“When … you raise the minimum wage, you give a bigger chance to folks who are climbing the ladder, working hard…. And the whole economy does better, including businesses,” Obama said in Denver.

In the 13 states that boosted their minimums at the beginning of the year, the number of jobs grew an average of 0.85 percent from January through June. The average for the other 37 states was 0.61 percent. …

Raising the minimum wage is the right thing to do, and it doesn’t cost jobs…

 

Labour-minimum-wage

298 comments on “Labour – Raise the minimum wage”

  1. jepenseque 1

    Hi all

    This page http://en.m.wikipedia.org/wiki/List_of_U.S._minimum_wages

    shows US min wages which seem to range from about $5 to $9.25 per hour or basically up to about $10.90 NZD. Any study about increases from such low levels is hardly relevant nz when thinking about the impact of moving from 14.25 to 16.25 surely? This is the crux of the matter, at what level of min wage does labour substitution start to occur? Surely at some level it does. We shouldn’t just bury our heads in the sand and hope for the best, consigning the opportunities for you and low skill workers to the scrapheap.

    • One Anonymous Bloke 1.1

      Is “labour substitution” an observed phenomenon or a faith-based prediction?

      • McFlock 1.1.1

        meh.

        How about we keep raising the minimum wage incrementally until we start observing it causing increases in inflation and unemployment? That way if it’s faith-based we can keep going, but if there is a trool under the bridge we can stop before it leaps out at us.

        • One Anonymous Bloke 1.1.1.1

          Oh noes! Common sense!

          • McFlock 1.1.1.1.1

            You’re right.
            The heirophantic Lords of the Economy have said it mustn’t be so, therefore we must dare not look reality in the face in case reality is heretical.

        • Richard@Down South 1.1.1.2

          The trouble is inflation is a distorted measure… things which go up at an extreme amount compared to normal are ‘managed’ and things you dont buy every day distort it (cars and TV’s are much cheaper now than 10 years ago, but rent is 77% higher now than 30 years ago, even taking inflation into account)

        • Harriet 1.1.1.3

          “……How about we keep raising the minimum wage incrementally until we start observing it causing increases in inflation and unemployment?….”

          If you keep doing that then those at the bottom of the company ladder will not see the need to progress any further.

          That then denies young people from getting a foothold in the workforce.

          • Draco T Bastard 1.1.1.3.1

            Considering that a) most people don’t get to progress up the company ladder anyway because there just isn’t room for everyone at the top, b) that the people at the top will still be paid more – just not a lot more and c) that cooperatives that have a flatter pay scale than the traditional company and often do better EDIT: and d) it’s not wages that create jobs there’s really only one thing to say to that:

            What a load of friggen bollocks.

          • One Anonymous Bloke 1.1.1.3.2

            [citation needed]

            Like, one, yes just one, example of that happening on Earth.

            Just so we know you aren’t lying, Harriet.

          • McFlock 1.1.1.3.3

            Well, that’s bunk too. If that were true it would mean there’d be nobody to fill the higher-paid positions, so the vacancy’s pay would go up until it reaches a level where people do seek promotion.

            So we simply add it to the list of indicators that we monitor for any adverse effects, just in case your religious terror happens to be the one that coincides with reality.

          • tricledrown 1.1.1.3.4

            harriet what utter BS how come Goldman Sachs research proves your pathetic propaganda is not true the republican party in New York no less hired GS to research your theory and came unstuck when it was proven the opposite. That increasing the minimum wage undoubtedly increases employment our treasury found the same result after National commissioned them to do the research.
            Epic Fail harriet
            this myth has been well and truly busted !

  2. Grumpy 2

    As an employer who would never dream of employing anyone at the minimum wage, I have no problem with this. Everyone in business should support higher real incomes for the workforce, it does not make sense to oppose it.
    Likewise, it makes no sense to push for a lower dollar, that would lead to lower real wages.
    The fact is that businesses who only exist because they are cheap should be weeded out. Whether that cheapness comes via low wages or a low dollar is irrelevant, sound profitable businesses are what we need.

    • One Anonymous Bloke 2.1

      This is what divides the better wingnuts from the also-rans: the ability to recognise evidence in the face of received dogma.

      Grumpy still adheres to the wingnut worship of the dollar sign, despite implicitly rejecting the wealth destroying practices of #teamkey.

      Well done, Grumpy.

      • Grumpy 2.1.1

        Well, gee………if we are to disregard the $ sign, why are we talking about $16.25?

    • RedLogix 2.2

      The fact is that businesses who only exist because they are cheap should be weeded out. Whether that cheapness comes via low wages or a low dollar is irrelevant, sound profitable businesses are what we need.

      Best evidence yet that Grumpy does indeed run a real business in the real world. I’ve always argued that SME business owners and ordinary workers have far more interests in common than they commonly realise.

      And when they sit down together and actually work this truth out for themselves – well let’s put it this way – it’s probably the last thing the financiers and uber-wealthy would want.

  3. steve bradley 3

    Has anybody noticed any of the mainstream media quizzing Mobie about their assertion that increasing the minimum wage towards a living wage will jeopardise jobs? If Mobie have evidence to back their claims they should be encouraged to produce it. Fifty years of research has not proved conclusive either way. In which case why shouldn’t we give the working poor, our fellow citizens, neighbours, and relatives a hand up if only as a controlled positive experiment.
    Or perhaps that won’t sell as much advertising space as a good old shock horror story about widening income and wealth gaps where we the consumers of the spectacle are rendered incapable of doing anything about it. NZ Labour needs to substantially re-jig labour law in this country so New Zealand workers can fight for wage increases on more favourable terrain than they’ve had since the passage of the Employment Contracts Act under National in 1991. Increasing the minimum wage faster that price inflation is a solid plank in any platform under all wages.

    • john 3.1

      If raising wages doesn’t cost jobs, why don’t we all just pay everyone $100 an hour?

      Of course it makes a difference. McDonalds can replace THREE minimum wage burger flippers with ONE machine, and in the last year it’s just become cost effective to do that.

      Put their wages up by $4000 a year each, and it suddenly makes no sense to keep the workers on.

      It’s a highly competitive industry where Burger King are currently losing millions in NZ. Only the fittest will survive.

      If wages are too high, workers will get replaced by machines, like they have with bank tellers, road gangs, railway gangs, typists, checkout operators, phone operators, photo printers, mail sorters, printers, parking attendants, auctioneers, paper delivery, factory workers etc etc.

      Treasury figures are a rise to $16/hr means a loss of 6000 jobs, $18/hr is a loss of 18,000 jobs.

      It’s a choice – you can lift a few more out of poverty, but you also dump a few more out of jobs and further into it.

      • McFlock 3.1.1

        Again you spout bullshit without a source.

        Funnily enough, three years ago it was the department of labour threatening 6000 jobs (that number again, hmmm), and treasury was saying they were full of shit.

        And “Wrecking Ball” yesterday provided a nice article that showed the exact opposite happening in a real world rise in a minimum wage. Must thank WB for that, sometime.

        • john 3.1.1.1

          Meanwhile back in the real world, our largest manufacturers – Fisher and Paykel, Methven, and just about EVERY clothing and footware manufacturer, and every publisher – have all moved factories and production offshore because they can’t compete because of NZ’s high wages.

          And we still have idiots so blinded by ideology and ignorance that they say it doesn’t cost jobs.

          • McFlock 3.1.1.1.1

            Was high wages the only factor?

            Or was it a mix of the high New Zealand dollar, high interest rates and free trade agreements as well as labour and freight (never forget the costs of shipping it from the arse-end of the planet)?

            Or are you just incapable of looking at more than one factor at a time? The funny thing is that you were initially talking fast food, and when I referred you to an article that expressly looked at the benefits for the hospo industry of a minimum wage increase, you shifted the goalposts.

            Oh, here’re some quotes from companies that closed or moved offshore, and their explanations for the closures. Labour costs are there, but they’re sure not alone. The killer seems to have been a high dollar and free trade. Religious zealots like you are to thank.

            • john 3.1.1.1.1.1

              Funny you try to blame the right for factories moving out, and give examples from April 2008, when Labour was in power.

              Whoops!!!.

            • infused 3.1.1.1.1.2

              Just like the actual post of this page. Contains nothing but some bs taken from the US, with no other factors that play a part.

              gg.

            • Grumpy 3.1.1.1.1.3

              They have moved offshore to be close to major markets. The savings they make in freight cost and delivery lead times are the reason, not wage rates.

          • tricledrown 3.1.1.1.2

            John you know very little about business you should go and fester away on WO.Where they accept your silly naive unresearched BS.
            Fisher and Paykel left New Zealand because WTO rules allow developing countries to subsidize industry unabated F&P got a brand new factory built for free no charge for 15 years virtually no tax for 15 years.
            China and Bangladesh don’t require companies to make a profit quite the reverse they are aloud to break WTO rules willy nilly.Their govts print money to subsidize them until they have dumped they wares into our market destroying all competition then they start putting the prices up ie look at the price of good shoes now all over a $100 a pair when they were dumping to destroy our manufacturing capability cutting out the competition they were mostly under $ a 100 a pair.
            John your name in th US means what its time you pulled the chain instead of trying to pull the wool a sheep shagger!

        • john 3.1.1.2

          McFlock says “and treasury was saying they were full of shit.”

          Treasury figures from the 2013 minimum wage review (link below) were
          – 5000 fewer jobs if the minimum wage increased to $15/hr
          – 24000 fewer jobs if the minimum wage was increase to $18.40/hr
          See P 13
          http://www.treasury.govt.nz/publications/informationreleases/ris/pdfs/ris-mbie-mmw-feb14.pdf

          • McFlock 3.1.1.2.1

            awww, you learned a new skill. That’s sweet. Now you can actually link to shit.

            Now learn to read.
            Although on the treasury site, they aren’t treasury’s figures. The review was prepared by some MoBIE dick. The same ones who said 6000 jobs in 2011 (i.e. after the mobie amalgamation).

            13
            41.
            The Ministry’s modelling, both this year and in previous reviews, indicate that only when changes to the minimum wage significantly increase the ratio of the minimum wa
            ge to the average wage, do they start to notably constrain employment growth. This is
            consistent with the domestic and international literature.
            42.
            The Ministry’s model predicts employment impacts from changes in the relativity
            between the minimum wage and the average wage by using a range of employment
            elasticities derived from econometric analysis of historical data. This analysis has focused on groups that are most sensitive to changes in the minimum wage (young people, women, and Pacific people) and the employment impacts presented are the sum of the impacts on these groups
            43.
            The Ministry’s employment forecasts are used as a benchmark to estimate the impacts
            on employment growth of the various minimum wage options. The benchmark projected job growth is 1.3 per cent for the year to March 2014.
            44.
            The Ministry’s modelling is able to assess the employment impact of any proposed level of minimum wage. The Ministry’s modelling suggests that an increase
            in the minimum wage of up to 5 per cent in the current economic climate (a rate of approximately $14.40 an hour) is not likely to inhibit overall employment growth. Out of the options be ing considered, only option 5 ($15.00 an hour) and option 6 ($18.40 an hour) are predicted to restrain employment growth.

            I have two main issues with that toilet paper.
            Firstly, it’s now out of date. We’re not talking about a jump from $13.25 to $15. We’re currently at $14.25 and the economy has changed. So it’s no longer applicable.

            Secondly, as “modelling” goes, it doesn’t have confidence intervals or thelike. They can apparently calculate all the outputs with no margin for error. Yeah, right. Even treasury thought they were full of shit last time.

            • john 3.1.1.2.1.1

              If you really believe raising the minimum wages doesn’t cost jobs, why didn’t you answer the very first question?

              Why don’t we increase the minimum wage to $20/hr, or $50/hr, or $100/hr?

              • Colonial Viper

                Irrelevant. Companies which cannot pay a living wage are clearly be subsidised by the rest of society and need to be phased out of business in NZ. This makes room for truly competitive businesses which are able to live up to their responsibility to workers and to communities.

                • john

                  So your idea is to dump all those companies who employ large number of workers on low wages, and replace them with highly efficient companies who do the same work with far fewer people on higher wages.

                  And throw all those not needed on the scrap heap.

                  I thought you wanted more jobs, but it turns out you want less.

                  • Colonial Viper

                    Hey john, people get what I am saying, and they get what you are saying. You can stop pretending mate, everyone knows that you are a serf and a shill to the 0.1%.

                    • john

                      If you run out of intelligent things to say, you should just resort to brainless abuse.

                      Oh….you have already.

                      If you put quarter the effort into improving your life, as you do into whinging here for zero effect, you’d have much better life.

                      And the 0.1%, is actually around 50%.

                    • McFlock

                      John, you make stuff up, ask absurd questions, and constantly misunderstand what others seem to find easy to comprehend.

                      Saying that isn’t brainless abuse, it’s a clear and accurate description of your behaviour.

                      But thanks for admitting you’re a shill, even if your math is off by a factor of 100.

                    • john

                      So wasting your life away whinging and whining here has achieved how much change in NZ?

                      How many hours/days/weeks/months/years/ have you given away to this that you’ll never have again? That vast amount time is gone – what a waste – you’ll never get it back.

                      You go on about productivity, but all this constant whinging is the MOST productive thing you can do with your time?

                    • Colonial Viper

                      Hey john, your caring and concern is so touching, especially for such a fucktard 0.1%’er servant.

                    • felix

                      john, you are most welcome to stop participating in this massive waste of time at your earliest convenience.

                    • tricledrown

                      John i don’t know CV personally but he is most likely much better educated than you has a very successful business .
                      which gives him time to blog on here and usurp your pathetic dogma that you can only repeat from the ACT manual as you have no original ideas of your own.
                      keep the blinkers on john you are just a puppet who can only repeat the propaganda you have been brain washed with.

                • Grumpy

                  Bloody hell CV, on the same page with this…..

              • McFlock

                Because it’s an absurd question.
                Nobody has said that a stratospheric rise in minimum wage wouldn’t have harm that outweighs the benefits.
                The fact is that nobody knows what the effects will be of any given change in economic regulation, because economics is not a predictive science. It’s a pseudoscience that is usedto support political preconceptions.

                So my inclination is that we should advance with caution – but we should still advance. Heck, a $1000/hr minimum wage might be economically fine, but let’s make sure we can get people up to a living wage before a luxury wage.

                • john

                  If you drive around Central Otago in autumn, you’ll see orchards with thousands of apples rotting on the ground, because they are now cost more to pick than they are worth.

                  It’s blatantly obvious that higher wages cost jobs in many businesses and industries.

                  It’s just a matter of how many people and businesses you are prepared to put on the scrapheap, so others can have slightly more.

                  When Labour abolished youth rates, youth unemployment skyrocketed from 15% to 25%.

                  An employer could get someone with experience, a work record, and references, or have to pay the same for a young person with none of those.

                  For most small business owners, their business (and mortgage payments for theior house) rely on having the best workers possible.

                  Why would anybody employ a spotty faced teenager with no experience, when they cost the same as much more experienced workers?

                  • Colonial Viper

                    Oh john, give up your fictions. We’re not going to continue to go down your dumb road of making Kiwis compete against US prison labour and Chinese serf labour.

                    Get serious you shill for the 0.1%. Everyone can see who you stand for and how amoral you are.

                    BTW lets take apart the corporate supermarket duopoly and those apples from Central you are so concerned about will pay the orchards very decent prices. You’ll support that right? Dick.

                    • Grumpy

                      True, to follow John’s well intentioned argument, if we paid everybody nothing, we would be the richest country in the world.

                    • vto

                      grumpy, New Zealand is one of the worlds richest countries. The problem is how that wealth is distributed by the current set of rules and regulations. It is distorted all to hell.

                      Raising minimum wages is one plank to help rebalance the current wicked imbalance.

                    • Grumpy

                      Vto, it’s all very well to raise wages but if it just results in raised prices we are worse off. This needs to be a well thought out, integrated process.

                    • vto

                      I don’t think that is the way it would work. The amount of money spinning around the NZ economy would remain unchanged so the net effect would be unchanged. However, there would be a greater chunk of that spin in the hands of th lower waged and a lesser chunk in the hands of the higher waged.

                      That would be a good thing methinks

                  • Grumpy

                    John, while I agree with some of your statements, they are not enough to make an argument. Businesses that cannot pay decent wages have no place in the modern NZ and should go. The increase to the living wage is bugger all and Treasury are talking rubbish.
                    If I can use your analogy about Otago orchards……..if the wage rises and they are uneconomic, they close. Mind you the available land would probably be picked up for a less labour intensive but higher paying use like dairying which would be unlikely to be the preferred result to many on this page, but, hey, that’s economics.

                    • vto

                      Grumpy, John Key admitted last week that the cost of repairing the environmental damage wrought by farming and in particular dairying runs into the multi-billions.

                      This cost needs to be borne by those farmers instead of dumped on the taxpayer.

                      As such dairying is not higher paying at all.

                    • Grumpy

                      Vto, you are talking about exceptional circumstances which should be covered by insurance. As you may realize, dairy farming will not be on the same scale much longer. The whole idea of Central Plains Water Scheme is to convert to arable. Crops are the future.

                    • vto

                      Excellent grumpy, I have always thought that NZ would end up being horticulture rather than agriculture. It is a simple truism that a farm with plants can support more people than a farm with animals. Plus or minus.

                      I have never really heard that about CPW put out there though. It makes sense. Perhaps the people getting the benefit of that scheme should make that clear to the public. Take the public along with them.

                    • Grumpy

                      Vto, it’s all about protein and reliable arable farming produces more than diary, much more. Of course arable farming involves heaps of chemicals, so maybe some might find cows hire preferable?

                  • vto

                    John “you’ll see orchards with thousands of apples rotting on the ground, because they are now cost more to pick than they are worth”

                    Wrong

                    You’ll see orchards with thousands of apples rotting on the ground because the orchardists are not prepared to pay a decent wage to pick them.

                    Pretty bloody simple.

                    And if the decent wage sends the orchardists under then it is clearly not a viable business. I cant stand pricks who expect wage earners to subsidise their business

                  • tricledrown

                    John.
                    Its your rotten free market that is the reason why apples and other fruit is left on the ground unlike you I didn’t just drive by I stopped and talked to these growers they all had the same story the monopoly of turners and growers and the 2 supermarket duopoly that is the problem !
                    Growers haven’t had a am increase in payout for years yet the monopoly cartels have been creaming it putting prices up regularly.
                    farmers markets are the only alternative theirs only so much any one can sell their as well + even their supermarket monopolies force councils to put rules around what and who is aloud to sell their as well.

                  • McFlock

                    When Labour abolished youth rates, youth unemployment skyrocketed from 15% to 25%.

                    putting thosetwo together neglectsthe GFC and the historical fact that depressions hurt inexperienced and unskilled workers – i.e. youth.

                    But blame minimum wage rates, feel free.

                • tricledrown

                  +$16.25 Mc
                  Fundamentalists are never reasonable look at the middle east.
                  John Gos spyland steve wrathall BM are all fundamentalists economic funda mentalists their place of worship is the ACT party <1% yet with all the money and bought Media people see right through their pathetic propaganda.
                  its sad.
                  cup of tea anyone.

              • Draco T Bastard

                Why don’t we increase the minimum wage to $20/hr, or $50/hr, or $100/hr?

                And there’s the extreme BS that we expect from RWNJs.

                Of course, the minimum wage should be at least $20/hour and I’m interested in knowing just what figure Labour have in mind when they say that they want to increase it to two thirds of the average wage. Are they talking median, mean or mode.

                Oh, and it’s not jobs that should be cut when the minimum wage is raised but the high incomes. The one thing we cannot afford is the rich.

      • Ergo Robertina 3.1.2

        New Zealand workers get the third lowest share of national income out of OECD countries. Automation and competition exist in other nations so your argument is rubbish.

        • john 3.1.2.1

          And we have one of the highest minimum wages in the world.

          http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country

          • Ergo Robertina 3.1.2.1.1

            So what? How does that negate the fact that overall NZ workers receive one of the lowest shares of national income in the developed world?

            • john 3.1.2.1.1.1

              We also have very low productivity compared to other countries.

              Do you expect people to get paid for MORE than they actually produce?

              • Ergo Robertina

                Productivity gains occur when workers are treated well and paid fairly, and workplaces are properly equipped and invested in.

                • Ergo Robertina

                  and your line here is disingenous as productivity has increased significantly in the past 30 years and workers’ wages have not kept pace at all.

                  • john

                    Of course they haven’t kept pace

                    Otherwise the microwave oven or colour TV that cost $1000 in 1978 would now cost over $6000, instead of a few hundred.

                    And the crappy Hillman Hunter car that cost $30,000 would now cost over $100,000.

                    A music CD used to cost me more than a days wages.

                    • Colonial Viper

                      Thanks for accepting that workers have been fucked over. The reason you give is false however, as can be seen by where the increased value produced by workers has actually gone: into CEO pay, massive shareholder dividends and financier ticket clipping which have all kept up just fine.

                    • john

                      Please show me where the massive shareholder dividends are. I’d like to buy into the company.

                      5% dividend is about average in NZ. That’s about 3.5% after tax.

                      As for wages – they more than kept up with inflation, especially the minimum wage.

                      Since 1999 it’s gone up from $7 to $14.25 – that’s a 103% increase

                      Inflation over the same period is just 42%.

                      So sine 1999, the minimum wage has gone up 61% MORE than inflation.

                    • One Anonymous Bloke

                      Own goal John.

                      #teamkey has matched inflation with minimum wage rises, therefore there were larger increases under Lab5. Unemployment went down to the lowest level in NZ history.

                      Oh dear John, you just destroyed your own false beliefs :lol:

                      Clutch at them, John, clutch at them :lol:

                    • Grumpy

                      John, no point talking prices without also noting volumes……

                    • tricledrown

                      john we are largely a commodity based economy ie pre industrial you naive idiot.
                      The National party have made sure of that but as a largely commodity based country we have some of the most efficient farm practices in the world but if farming is to be sustainable it needs a huge wake up call and National have been dithering and fuckin up left right and center allowing the invisible hand to take care of business while every other country subsidizes and spends far higher amounts on research and development .

                • john

                  There was a great example a few months ago, that backs your argument up.

                  There were two similar US mail order companies. One paid substantially more than the other, and productivity was so much better that they could do the same work with 40% fewer workers.

                  So economically, it made a lot of sense, for both the workers and the company, which was the argument put forward by the unions.

                  The didn’t seem to see the elephant in the room.

                  40% fewer workers.

                  • McFlock

                    so that’s the tory dream, eh: an underpaid, under-represented, and underproductive workforce funding a few wealthy folk.

                    Sounds awfully antebellum.

                    • john

                      That was the strong argument from the union.

                      The didn’t even realise they were arguing for 40% fewer jobs.

                      If you want to make wage laws that means there will be fewer and fewer low skilled jobs, that’s your choice.

                      It’s already a major issue. We now have one person in a tamper doing more work than work 100 men in railway gangs.

                      We simply don’t have the number or low skilled jobs there use to be, but we have an excess of low skilled workers.

                      Cost of producing items with machines is coming down all the time. Cost of producing goods with workers goes up.

                      There comes a point where factory workers get replaced with machines, typists get replace with computers, film developers get replaced with photo machines, road workers get replaced with diggers, stop/go men get replaced with temporary traffic lights, etc.

                    • Colonial Viper

                      Actually its the useless executive management and rentier ownership class who needs replacing.

                      As well as the rest of this economic structure which is driving our world into a deteriorating hell hole.

                    • McFlock
                      so that’s the tory dream, eh: an underpaid, under-represented, and underproductive workforce funding a few wealthy folk.

                      Sounds awfully antebellum.

                      That was the strong argument from the union.

                      The didn’t even realise they were arguing for 40% fewer jobs.

                      That’s the exact opposite of what I described. Learn to read.

                    • tricledrown

                      John you are cherry picking facts in the US states that follow your simplistic ideology have the highest rates of poverty lowest wages are the least democratic and surprisingly vote Republican.

                  • Grumpy

                    Under free market theory, the remaining workers should have been paid more’ you know, the revenue product of labour??
                    Bet the free market didn’t quite go that far, eh?

            • john 3.1.2.1.1.2

              Per hour of work the average NZ worker produces just 59% of what the average American worker produces.

              And most European counties are 50% more productive than NZ.

              http://stats.oecd.org/Index.aspx?DatasetCode=LEVEL

              • Colonial Viper

                Hey fuck head

                That’s because by in large, the capitalist class in this country are a bunch of low rent resource extractors who refuse to invest in their workers, in R&D or in new plant and machinery.

                The way to sort this out is to increase the bottom 50% of wages by a third.

                • john

                  Spoken like someone who’s never run so much as a lemonade stall business in their life.

                  You complain about struggling manufacturers, but you’d happily put most of them out of business overnight – few things could be so idiotic.

                  • Colonial Viper

                    It was good enough for Roger Douglas and Ruth Richardson, two of your favourite neoliberal anti-worker idols, so why not?

                    As for your accusation about the lemonade stand etc, fuck you lol.

                    • miravox

                      :-) cv.

                      In other words john, most high income European countries have more automation, more research and development and comparably higher wages than NZ. Higher wages may, therefore, encourage greater innovation and higher productivity.

                      The New Zealand government and a large proportion of employers are reluctant to invest in workers, plant or R&D.

                      Also:

                      Countries such as Denmark, Norway, Germany* and Austria etc, etc, don’t show in minimum wage stats because there minimums are set by trade [unions] rather than nationally, which of course, affects your assertion that NZ’s actual minimum wage is one of the highest around. You would have seen that on the wiki page you linked to. These countries also have rent controls and other benefits for low(er) income workers (well, for nearly everybody, really) that NZ doesn’t. So your implication that NZ low income workers are comparably well-paid isn’t supported by the data in the way you think it is.

                      Some of these countries have also managed to upskill workers and keep unemployment at comparable or lower levels than NZ.

                      *I think Germany has recently legislated for a national minimum wage.

                    • RedLogix

                      The most profitable and successful car industry for many decades has been in Germany.

                      And theirs are the most highly paid workers in the world.

                  • One Anonymous Bloke

                    They’ll only go out of business if your fantasies come true, and on Earth, they don’t. When are the facts going to permeate the fundamentalist fog you live in, John?

                    Minimum wage rises don’t cost jobs, not according to some theory, according to the real world evidence, John.

                    Now, clutch your dogma as hard as you can and attack the messenger.

                  • tricledrown

                    John.CV runs a successful business you naive idiot. a business has more customers able to afford it services because of higher wages f/wit!
                    Goldman Sachs and our own treasury have spent millions research on increasing the minimum wage and the results john are bad news for you it creates more jobs!

              • Per hour of work the average NZ worker produces just 59% of what the average American worker produces.

                Kind of funny you should mention that, because one of the main reasons for that low productivity is cheap labour making automation less attractive to the country’s employers. That preference for cheap labour over capital equipment improvements is evident throughout your comments, which are mostly of the “100 men with shovels could still have work if you hadn’t bought that digger” variety.

                Also: this one is a real logic fail:

                If raising wages doesn’t cost jobs, why don’t we all just pay everyone $100 an hour?

                One pictures John at cooking: “Bullshit – if a pinch of salt would improve this, why don’t we just put a kilo in?”

                Or in the emergency room: “If giving this guy morphine would do any good, why don’t we just shoot him up with the whole vial of it?”

                In short, like many, many things, there is some point between 0 and infinity at which the benefits of a minimum wage are maximised while keeping negative effects non-existent or within an acceptable range. Tbe location of that point is open for discussion – sensible discussion that is, preferably not involving irrational outbursts by the ignorant.

              • Grumpy

                John, I import from major European manufacturers in Denmark, France and Germany. I can tell you that if your figures are true it has bugger all to do with NZ workers who have a higher work ethic and longer hours than workers in those countries. It may have a lot to do with exposure to larger markets, thus making production techniques, automation etc. more viable.
                On the whole NZ workers do a bloody good job and should be paid better…..oh, and I freely admit, that to my surprise, I have finished up one of the 1%.

              • tricledrown

                john you are shallow and naive US companies invest a lot more in technology education and modern more productive machinery plus as CV has pointed out the concentration of population makes them more productive your silly unresearched BS is straight out of the ACT party bullying manual.

  4. Mary 4

    Where’s Labour’s commitment to the living wage? Answer: same place as national’s, just like everything else.

    • One Anonymous Bloke 4.1

      National will implement the living wage for all public sector employees, and then you woke up.

      • Ergo Robertina 4.1.1

        Window dressing. Those most in need are employed in the private sector. This is Labour’s third way sop for the argument that ‘we’re moving away from neoliberalism’, without having to confront the real issue.

      • Mary 4.1.2

        Labour: saviour of the modern world.

        • One Anonymous Bloke 4.1.2.1

          Is that the best you can do? Make the absurd allegation that there’s no difference between them and National and then come back with an equally absurd retort when one difference is pointed out to you?

          Pfft.

          • Mary 4.1.2.1.1

            Just keep sticking to the labour can do no wrong line and your masters will be pleased.

            • blue leopard 4.1.2.1.1.1

              Where has One Anonymous Bloke asserted Labour ‘can do no wrong’?

              What advantage do you gain from sticking the knife in to a party who will work with other left-wing parties?

              What advantage do you gain from attacking those who are presumably working on the same ‘side’ as yourself?

              One Anonymous Bloke supports the left-wing – but it would appear that he is not voting for Labour.

              Do you support the left-wing political approach, Mary?

              The biggest weakness I view the Left has is their astonishing lack of ability to see the advantage of working harmoniously together to get rid of this rotten government.

              • Mary

                Where’s the disadvantage to the left by sticking the knife into labour?

                • blue leopard

                  I have already stated that.

                  Labour is one of the parties that will cause a left-wing government to be voted in.

                  Furthermore, Labour is currently the largest left-wing party and if you condemn them, especially with no positive support for the other left-wing options in your message, you have no idea whether people reading are in a binary mode and simply decide to move toward supporting National.

                  Even with a positive message of support for who you think those of the left should be voting for – you cannot be certain that people won’t read your views and consider the left as unstable because they seem incapable of supporting the diversity of approaches that the left consists of.

                  I note you have not answered any of my questions.

                  • Mary

                    My criticism of labour is that they’ve moved so far away from what we thought were core labour principles that I don’t consider them part of the left anymore. I think, for example, that most of Mana’s policies are pretty much based on traditional labour beliefs.

                    Surely expressing this view helps support a shift towards the left (including labour for the purposes of this discussion) because the votes labour will lose go to the Greens, Mana et al; and labour will pick votes up from those in the centre who see that perhaps labour isn’t so “radically left wing” after all. As far as the loss of votes from those who see this as a recipe for unstable government goes, well I just don’t think that’s the case, and would be small compared to the other factors we’re talking about. Heck, you’ve got the same criticisms happening on the right with Act slating national at every opportunity.

                    Your question about “attacking those who are presumably working on the same ‘side’ as yourself” is interesting. Someone expresses their disdain for labour, for what ever reason, and they get personal abuse hurled at them. Then when they respond, they’re the one who’s being unnecessarily aggressive towards someone who’s apparently on the same side. It’s this kind of communication, from OAB, for example, that feeds the “astonishing lack of ability to see the advantage of working harmoniously together to get rid of this rotten government”, a criticism of yours I agree with. It’s this sort of communication that for many just shuts dialogue down. Who’d want to engage in such vileness?

                    • One Anonymous Bloke

                      I hadn’t levelled any personal abuse at you when you wrote this, which confirms my opinion of you: see below.

                      If you want dialogue I suggest you pull your head out of your rectum and quit the absurdist bile.

                    • Mary

                      There you go again, big boy.

                    • blue leopard

                      @ Mary,

                      Thanks for the explanation, Mary. I am going to have a think about what you have written and respond later (I have something I have to do now)

                      I have to say I, also, am struggling to find where OAB had hurled personal abuse at you ….? perhaps was it the ‘wake up’ bit? (Although since your last comment OAB has indeed hurled personal abuse … :| …)

                    • One Anonymous Bloke

                      Mary, I don’t suppose you’re a member of the NZLP. Neither am I. Recent changes to the party’s constitution provides for members having much more say in party policy. So if you don’t like where they are you can do something about it.

                      I note your whining about my hostility and your insulting tone at 4.1.2 and 4.1.2.1.1 explains it. The hostility, that is.

                      I bet you aren’t even a Mana member, let alone Labour.

                    • Mary

                      Yes, that was one example, and there have been others on various occasions elsewhere. Even the one above at 7.23am is at least disrespectful. There’s just no point in responding to that. To argue about whether something was absurd or not? In this case you’d even have to first work out what was being called absurd, let alone there being a jot of utility in such an exchange.

                    • Mary

                      What makes you think I’m not a member of Mana, big boy?

                    • One Anonymous Bloke

                      I think you sound like someone who can only snipe negatively from the sidelines, since that’s all you’ve done.

                    • Mary

                      So, according to you, those who comment on TS are merely ‘sniping negatively from the sidelines’ because they’re not a member of a political party?

                    • One Anonymous Bloke

                      You aren’t in the same league as most commenters here :)

                    • Mary

                      The fact that what you consider are “negative snipes from the sideline” must come from someone who’s not a member of a political party certainly lifts the curtain on the league you’re in, big boy.

                    • blue leopard

                      @ Mary,

                      Have been a bit tardy responding, sorry – I am a bit weirded out by the way this conversation has gone. I thought this was a site where people debated ideas?

                      You put forward an idea,
                      OAK responded by challenging that idea
                      You perceived that as a personal attack
                      It turned into a slagging match

                      I don’t think OAK’s comment was a personal attack – he was challenging the view you put forward – not you personally. (What he went on to do was a personal attack!).

                      If you put forward the idea that Labour and National are the same and someone responds to you suggesting that you need to wake up – how about providing some reasons as to why you think what you do?

                      I like this site because I can learn different perspectives – yet those of you (and there are a few) asserting that National and Labour are just as bad as one another – or that they are both neo-liberal – when challenged or simply questioned – don’t appear to be able to provide many reasons for why you think the way you do?

                      It gets a bit sad if the conversation runs:

                      Person A: I think this
                      Person B: Well I disagree I think another thing.
                      [repeat however many times]
                      [end of ‘conversation’]

                      For example As far as the loss of votes from those who see this as a recipe for unstable government goes, well I just don’t think that’s the case,

                      Why? Why don’t you think this is the case?

                      Labour are, in fact, attempting to appeal to swing/centrist types as well as lefties – this means there is a very real chance of putting off the more centristy types when instability is shown. It may also leave people not voting. Others, such as myself will simply vote for another left-wing party (I haven’t decided who to vote for anyway) Initially I was pretty peeved when Labour went a bit conservative on it, in order to appeal to the more conservative lefties, yet have since felt that someone has to do it (it may as well be Labour, poor things) and the bonus is it means they don’t compete as much for votes with the Greens and Mana.

                      I do acknowledge some worry that there are some idiots in the Labour caucus/candidates (as Adam below puts forward) and if there are too many shows of idiocy, like Shearer on Q&A not capable of saying ‘no I won’t challenge the leadership after the election’ then they certainly lose my vote.

                      Labour and National have some similarities because they are both attempting to appeal to centrists. There are a huge amount of New Zealander’s who are pretty comfortable and don’t appear to give a fuck about anyone but themselves – these are the people I view as the centrists/swings. However there are differences between the two parties too – some big ones – and the message I am getting out of Labour so far is there is going to be a huge difference between a Labour government and this circus we have now even with some watering down of the rhetoric that has been evident.

            • One Anonymous Bloke 4.1.2.1.1.2

              What BL said: you’d inflict three more years of National on the country because Labour aren’t Left enough for you. What a tosser.

              • adam

                So rather than deal with the wolves in sheep clothing, your going to support the neo-cons inside the labour party OAB? See there is the major problem – and why we will be stuck with this neo-liberal revolution for at least another 12 years. It’s people like you OAB, who are the problem. The revolution happen, the neo-cons won. Your just sounding like an apologist for neo-liberalism.

                • One Anonymous Bloke

                  In fact. Adam, all I did was point out a difference between them and the National Party. I further pointed out (since you obviously need to get a fucking clue) changes to the party’s constitution which give party members far more say in policy.

                  If you can’t figure out who is responsible for NZLP policies after you’ve assimilated that information, I can’t help you. By all means blame me though, if you want to look stupid.

                  • Ergo Robertina

                    Members can be thwarted though, like the watering down of opposition to the TPP, effected by the very person they trusted and chose to lead the party in a new direction.
                    Cunliffe personally intervened to get the change through according to reports of the November 2013 conference.
                    As a threat to our economic autonomy, it needs to be opposed without prevarication or pretending it might be beneficial.

                    • One Anonymous Bloke

                      The version the US wants us to sign certainly won’t be beneficial. There are other versions though, aren’t there. That’s not a question.

                      Labour would no doubt argue that their ChinaFTA has been a good thing, so they tread a fine line here: they clearly aren’t opposed to trade agreements per se.

                      I see nothing wrong with talking: at the very least it indicates what we’re up against.

                    • Ergo Robertina

                      That’s your view, but it wasn’t the approach of the TPP opponents in the party, of which I understand you aren’t a member.
                      This isn’t about your wishes for Labour’s policies, but the question of whether the members control the party’s destiny.

                    • One Anonymous Bloke

                      Members now have more control over policy than they used to. That said, some of the opposition to the TPP has been based more on ignorance than ethics.

                      Perhaps the party’s stance is a reflection of this.

                      “…withholds support for the TPP until full details are made available and there is clear evidence that the agreement is in the best interests of New Zealand.”

                    • Ergo Robertina

                      Right, so caucus can still overrule members when they are ‘wrong’, and you support that.
                      Fine, but perhaps you oughtn’t be so dismissive to commenters who point out that Labour is still wedded to neoliberal policies, and from their perspective supporting it merely enables it further in that harmful direction.

                    • One Anonymous Bloke

                      No, that isn’t what I said. Was it caucus that overruled the members? Or did the unions have a say too? What gave you the impression that I “support” it?

                      I’ll be “dismissive” with anyone who addresses me the way Adam did. I’m not too fussed on people who put words in my mouth either, chum.

                      PS: if you think withholding support for a treaty is “neo-liberalism” I suggest a dictionary may be of more use to you than I can be.

                    • Ergo Robertina

                      Technically, the party’s ‘withholding support’, but look at the detail.
                      The party requires the release of the text two weeks before signing. Two weeks is grossly inadequate to examine the fishhooks and allow time for public debate.
                      And more broadly that position implies there might be benefits for New Zealand, which effectively removes TPP from the public’s radar. It should be used to skewer National on every possible occasion.

                    • One Anonymous Bloke

                      How is that going to play out when Lab5 initiated the process? Think.

                    • Ergo Robertina

                      Ah, so after all your bluster and attacks you have effectively acknowledged nothing has changed.
                      I suggest the line ”we’ve learnt the lesson from our past, and National should to”, which is used to counter the charge that Labour has sold asset, would be suitable.

                    • One Anonymous Bloke

                      What’s the matter, is your position so hard to defend that you have to use these feeble strawmen to prop it up?

                      I point out changes to Labour’s constitution and you translate that as I’m in total support of the party and everything it does. A wingnut could run rings around you. Lift your game.

                      You’re the one “blustering” (aka “lying”), pretending a union vote is caucus over-ruling the members. Perhaps you thought I wouldn’t check your assertions. :lol:

                    • Colonial Viper

                      The party members at last years Conference gave caucus carte blanche in setting the Super eligibility age as they saw was necessary. (No cap at 67 either). Hence the crap vote losing anti-worker position for increasing the retirement age that Labour has now.

                    • Ergo Robertina

                      I’m not interested in whether you agree with Labour policies OAB, but about you portraying the party’s power structure and direction as other than what it is, and attempting to shut down those who voice that.
                      On how this control is effected, it is instructive to remember the words of your sage Sun Tzu:
                      “The supreme art of war is to subdue the enemy without fighting.”
                      “The greatest victory is that which requires no battle.”

                      I agree with you on one thing: attempting discussion with you is similar to a wingnut because of the bombastic and sneering way in which you engage.

                    • Ergo Robertina

                      You also misrepresent what has been said. My first comment said: ‘Cunliffe personally intervened to get the change through according to reports of the November 2013 conference.’

                      The unions are not a homogenous entity; the EPMU wanted outright opposition, which was the agreed position of the CTU. The free trade friendly release the text two weeks before signing position was what Goff wanted, and Cunliffe brokered it.

                    • One Anonymous Bloke

                      You seem to enjoy a military metaphor, so remind me what Sun Tzu said about people who arrive at the big table with arguments made of straw.

                    • Ergo Robertina

                      Indeed, you should take that advice, and stop doing that.

                    • One Anonymous Bloke

                      “Free trade friendly”

                      The US version of the TPPA is not a free-trade agreement. It is a restraint of trade agreement.

                      Are you opposed to treaties, or just free trade treaties? Or just the US stance on the TPP?

                      PS: Sun Tzu didn’t say it, I did, but he does discuss ground.

                    • Ergo Robertina

                      Yes, it restrains trade and services; however by signing NZ reaffirms the economic consensus which is known as free trade, however deceptive that term might be.
                      But as explained to you repeatedly, this isn’t about whether you or I support the TPP, but whether caucus controls its own destiny, or if party members have any meaningful influence.

                    • One Anonymous Bloke

                      Your position is that they don’t?

                      Perhaps they’re too disorganised or something.

                      PS: no-one has signed shit at this point, do you see what I mean about arguments made of straw? I think our interests are well served by hearing what the enemy has to say.

                    • One Anonymous Bloke

                      Is free trade a deceptive term? I guess it must be: two words can barely be expected to describe a global phenomenon. I think it’s axiomatic that trade is freer now than ever: Amazon anyone?

                      Does this affect the lives of people all over the world, yes it does. Check Hans Rosling’s presentations of population statistics (TED) though, before you assume it’s all been bad.

                    • Ergo Robertina

                      Again, this discussion isn’t a platform for you to proselytize the benefits of free trade.

                    • One Anonymous Bloke

                      That’s right, Ego (sp?), it’s a platform for you to advance bad faith arguments and dishonesty (caucus overruling members) then claim I’m off topic, and you still can’t even articulate your actual position, just make snide allegations about mine.

                      You were on the losing side of an internal NZLP policy debate. Is it because you can’t argue for shite?

                      It’s ok for you to dribble about the TPP, and if mention it it’s the living end. Pfft.

                      Raise the double standard.

                    • Ergo Robertina

                      Whereas I consider you a bombastic bully. To my mind you have an aggressive and unpleasant style of engagement (and a propensity to over-italicise, which tends to detract rather than add to what you’re trying to say).

                • One Anonymous Bloke

                  As for the neo Liberal revolution, if you mean market fundamentalism, perhaps you can explain how re-acquiring power companies, building thousands of low-cost houses and having a minimum wage qualify?

                  Personally, I think Lovelock’s suggestion of a managed retreat will probably prove to be the best solution once hindsight can be applied. No political party is proposing this. Does that make them “all the same”, to be despised the way you clearly despise Labour? Good luck with that.

                  • adam

                    So you keep defending the right of labour OAB, and why again do you expect people to accept this? You expect everyone else to swallow it and shut up, then resort to personal abuse to support your line of argument. Man your tactics are so like Joyce it funny/ironic/sad.

                    I think what people are saying quite clearly and you are missing, is they are sick of labour being a infested with neo-cons. Who care what the rules are, who cares what policy is – it’s the people, its the people, it’s the people. And quite frankly, some of the candidates for labour are, Tory scum.

                    • One Anonymous Bloke

                      Defending them how? With what? I note the goalposts have shifted from “Labour” to “the right of Labour”, though.

                      Are you a member of the NZLP, Adam, since you’re so concerned with their candidate selection and policy making procedures?

                  • adam

                    Nope your reading what you want to read, my point has not changes. The problem, which you seem to ignore, is that labour,and some of their supporters – expect working people to roll with these neo-cons/right wing labour/wolves in red.

                    Again, with the defection OAB – I’m saying if labour wants to win, and lead a left wing collation, get rid of the wolves. The liberals who are really conservatives.

                    Why shouldn’t people be concerned with candidates that political parties put up?

                    And when you defend something, as vigorously as you have, you do come across as a party hack, not saying you are OAB, but you come across as one.

                    • One Anonymous Bloke

                      Where you allege people “expect” x y or z, I don’t think you have any grounds to speak for anyone other than yourself.

                      What you really mean is if Labour wants you to vote for them they’ll agree to your demands. Vote for someone else, like I do.

    • infused 4.2

      Living wage is over $20 now… where is the commitment?

      • Colonial Viper 4.2.1

        $16.25 is a good start for the first year of a Labour govt.

        • Grumpy 4.2.1.1

          At least it gets to discussion going so we can sort out the woolly headed thinking. Labour is as much in thrall to the wonks in Treasury as National, probably more as they have bugger all real world business experience.
          But never mind, Labour are unlikely to be in the position of having to implement it but the arguments might become useful for arguing with the incoming National Government.

          • Mary 4.2.1.1.1

            And even if labour is in a position to implement it their track record to date suggests they’d renege on the promise, anyway.

            • Tautoko Viper 4.2.1.1.1.1

              The thing is, if we are to get rid of the current government, then it can only happen if Labour and the other progressive parties form a coalition. This should help lessen the influence of the more right wing of the Labour caucus and this will be a good thing as far as I am concerned. This is why I am putting my effort in to support Labour because although my politics are to the left of the current Labour position, I know if Labour fails, then we get this corrupt government back in to wreck our education system, etc. Let’s not snipe among ourselves. Vote for the party which best suits your politics and put your energy into getting that party over the line. Undermining our allies makes no sense to me. It’s disaffected Nat vote or didn’t-vote–last-time vote I’m after for Labour.

            • One Anonymous Bloke 4.2.1.1.1.2

              If Labour is in a position to form a government it will be in spite of you, Mary. Their track record, by the way, is of lifting the minimum wage nine times in nine years, but it’s obvious you have the same relationship with reality as the average wingnut.

              • Mary

                You just have to put that final sting in at the end, eh? Why are you so rude?

                • One Anonymous Bloke

                  Think of me as a mirror. There are plenty of substantive criticisms of the NZLP to choose from; resorting to pure invention is absurd, so I said so, and off you went – “your masters will be pleased” – then you complain when I send more back than you cared for.

                  The discussion on the minimum wage has already had some right winger haul out how much it rose between 1999 and the present, outpacing inflation. Since 2008, #teamJoyce have pegged it to inflation. Do you see where this is going?

                  Politics is the art of the possible, partisan smears just make things harder.

        • blue leopard 4.2.1.2

          +1 CV

  5. vto 5

    It is cheaper for bosses to pay the minimum wage than it is to keep a slave.

    That makes bosses who pay the minimum wage worse than slave-keepers.

  6. adam 6

    Crumbs of masters plate. $25 an hour, minimum wage, no bloody less. All the growth from 1984 to now has been off workers backs. If business can’t cut it, then there out of here.

    Stop arguing with the trolls over the bloody pitiful rise labour is offering – it’s unsightly, piffling, and at the end of the day achieves sweet bugger all.

    Stop thinking so bloody small – these neo-liberal apologists are are crying into there milk.

  7. NZJester 7

    Trickle down economics as the right like to worship is shown to fail again and again when they try to implement it by giving tax breaks to the rich. This is because those at the top who get the extra money tend to invest it long term outside this country or let it sit gathering interest in bank accounts. Very little if any trickles down to the workers.
    When workers get the extra money however they tend to spend it and it makes its way up the chain of those offering needed services, goods or investing in local businesses. Those who choose not to invest in local businesses or let their money sit in bank accounts will see little of it and that is a good thing. Real business growth is achieved and the higher wages more than made up for by the improved profits that outweigh the losses from paying the higher wages. Workers that are less financially stressed also tend to be happy more productive workers. Production costs and quality of goods also tend to go up helping to improve profit.
    The right says it will cost jobs, but it will give businesses that offer what Kiwi workers want the money to grow and increase jobs.
    Pay it forward works and trickle down fails!
    Raise the Minimum wage and see businesses grow!

  8. anker 8

    No evidence here as other commentators on this post have already done a superb job of that…

    But all those advocates of the current minimum wage, if its so o.k etc, would you be willing/able to survive on it????? Like not for a week or even a month? Honest answer now. NO! So why should others who most often do the essential jobs that others would prefer not to do…..think hospital cleaners service workers.

    So lets pay people a decent days pay for a decent days work. Fair’s fair. And stop the bullshit about it will cost jobs.

    • One Anonymous Bloke 8.1

      I think you’ll find that most of the people you’re addressing don’t think there should be a minimum wage at all: they endure it for political expediency, the poor things.

  9. If you really want to know what most economists think about the effects of the minimum wage see the book “Minimum Wages” by David Neumark and William L. Wascher, Cambridge Mass.: MIT Press, 2008. Its the most comprehensive single work discussion of the theory and evidence on the effects of the minimum wage. And yes, the evidence really does show a loss in employment mainly for the young and low skilled.

    • One Anonymous Bloke 9.1

      Pfft.

      …an objective reading of their data supports the conclusions reached in our papers…

      Card, Katz & Krueger.

      • Paul Walker 9.1.1

        Your quote comes from an article published in 1994 whereas the book was published in 2008. You don’t see a problem there?

        • One Anonymous Bloke 9.1.1.1

          Nope. The word “objective” is a clue.

          Perhaps you can link to the peer-reviewed papers the book cites. If not, well, it’s just a book, and these two have lots of “working papers” out there.

          • Paul Walker 9.1.1.1.1

            You do get the point that the book will have been peer-reviewed in the same way as journal articles? The book has 23 pages of references, all of which you can peruse at your leisure. Their chapter on the employment effects of the minimum wage is an abbreviated and updated version of their paper Neumark and Wascher (2007). “Minimum wages and employment”, Foundations and Trends in Microeconomics, 3 (1-2): 1-182. Yes it really does go for 182 pages!

            http://www.nowpublishers.com/articles/foundations-and-trends-in-microeconomics/MIC-015

            Abstract
            We review the burgeoning literature on the employment effects of minimum wages – in the United States and in other countries – that was spurred by the new minimum wage research beginning in the early 1990s. Our review indicates that there is a wide range of existing estimates and, accordingly, a lack of consensus about the overall effects on low-wage employment of an increase in the minimum wage. However, the oft-stated assertion that recent research fails to support the conclusion that the minimum wage reduces employment of low-skilled workers is clearly incorrect. A sizable majority of the studies surveyed in this monograph give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages. In addition, among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries. Two other important conclusions emerge from our review. First, we see very few – if any – studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model generally predicts disemployment effects. Second, the studies that focus on the least-skilled groups that are likely most directly affected by minimum wage increases provide relatively overwhelming evidence of stronger disemployment effects for these groups.

            • One Anonymous Bloke 9.1.1.1.1.1

              Two guys saying the science isn’t settled.

              This is your article of faith? The last word?

              ROFLMAO :lol:

              • No. Its a summary of the theory and evidence as it is known thus far. Its what we known about the effects of minimum wages from the literature on the subject. No science is every fully settled. We have no ideas what we will find in the future, that’s the nature of research. but note this bit from the abstract:

                “Two other important conclusions emerge from our review. First, we see very few – if any – studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model generally predicts disemployment effects. Second, the studies that focus on the least-skilled groups that are likely most directly affected by minimum wage increases provide relatively overwhelming evidence of stronger disemployment effects for these groups.”

                • Colonial Viper

                  That’s a bunch of nonsense.

                  If unemployment unexpectedly increases by 1%-2%, the government can boost spending into the economy and reduce it again.

                  That invalidates the rubbish research ASAP.

                • One Anonymous Bloke

                  When your comment at 5:13 contradicts your comment at 3:27, I know my work here is done.

                  • paul walker

                    No it doesn’t. Take a look at the second point from the bit of the abstract I quoted.

            • McFlock 9.1.1.1.1.2

              lol

              A sizable majority of the studies surveyed in this monograph give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages.

              translation: “most of the studies we cherry-picked based on our internal biases didn’t show a relationship between conventional minimum wage changes and unemployment, so we included the ones that showed a random variation to make it look good”.

              In addition, among the papers we view as providing the most credible evidence,

              “…But the ones we were particularly biased towards based on our own preconceptions…”

              almost all point to negative employment effects, both for the United States as well as for many other countries.

              “…agreed with our preconceptions, and this reinforces out selection bias for next time”

              Two other important conclusions emerge from our review. First, we see very few – if any – studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model generally predicts disemployment effects.

              even if they’re common enough for a wingnut here a couple of days ago to post one by accident, it’s still a straw man that doesn’t contribute to the argument against a living wage for all workers.

              Second, the studies that focus on the least-skilled groups that are likely most directly affected by minimum wage increases provide relatively overwhelming evidence of stronger disemployment effects for these groups.

              “relatively overwhelming”? Except the ones that don’t.

              This is exactly why economics isn’t a science. Not even psychologists would wipe their arse with the equivocations and fudging language expressed there.

              • McFlock you seem confused. Perhaps a little more detailed discussion of the results will help. I hope so. Neumark and Wascher’s conclusions are:

                “What may be most striking to the reader who has managed to wade through our lengthy review of the new minimum wage research is the wide range of estimates of the effects of the minimum wage on employment, especially when compared to the review of the earlier literature by Brown et al. in 1982. For example, few of the studies in the Brown et al. survey were outside of the consensus range of −.1 to −.3 for the elasticity of teenage employment with respect to the minimum wage. In contrast, even limiting the sample of studies to those focused on the effects of the minimum wage of teenagers in the United States, the range of studies comprising the new minimum wage research extends from well below −1 to well above zero. This wider range for the United States undoubtedly reflects both the new sources of variation used to identify minimum wage effects—notably the greater state-level variation in minimum wages—and the new approaches and methods used to estimate these effects. And, the range would be considerably wider if we were to include estimates for narrower subsets of workers and industries or estimates from other countries.

                Although the wide range of estimates is striking, the oft-stated assertion that the new minimum wage research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect. Indeed, in our view, the preponderance of the evidence points to disemployment effects. For example, the studies surveyed in this monograph correspond to 102 entries in our summary tables. Of these, by our reckoning nearly two-thirds give a relatively consistent (although by no means always statistically significant) indication of negative employment effects of minimum wages, while only eight give a relatively consistent indication of positive employment effects. In addition, we have highlighted in the tables 33 studies (or entries) that we view as providing the most credible evidence; 28 (85 percent) of these point to negative employment effects. Moreover, when researchers focus on the least-skilled groups most likely to be adversely affected by minimum wages, the evidence for disemployment effects seems especially strong. In contrast, we see very few—if any—cases where a study provides convincing evidence of positive employment effects of minimum wages, especially among the studies that focus on broader groups for which the competitive model predicts disemployment effects.

                Based on our review of the literature, we would also highlight some important considerations that economists and policymakers should keep in mind when assessing the empirical evidence from future studies of the employment effects of minimum wages. First, longer panel studies that incorporate both state and time variation in minimum wages tend, on the whole, to find negative and statistically significant employment effects from minimum wage increases, while the majority of the U.S. studies that found zero or positive effects of the minimum wage on low-skill employment were either short panel data studies or case studies of the effects of a state-specific change in the minimum wage on a particular industry. This raises the question, highlighted in the reviews of Myth and Measurement by both Brown (1995) and Hamermesh (1995), of whether the latter analyses encompass too short of a time period with which to capture the full effects of minimum wage changes given the time that is often needed to adjust the production process to economize on low-skilled labor. Indeed, when they are considered, the inclusion of lagged effects seems to help in reconciling alternative estimates of minimum wage effects, and, in our view, the need to allow for sufficient time to observe the consequences of a minimum wage change is an important lesson for researchers and policymakers.

                Second, the concerns raised in the literature about the case study approach seem especially problematic. Even aside from the question of whether the authors’ own surveys provide accurate estimates of employment and other indicators, the doubts expressed about the adequacy of the so-called natural experiments used in the case study approach, along with the fact that the standard competitive model provides little guidance as to the expected sign of the employment effects of the minimum wage in the narrow industries usually considered in these studies, makes the results from them difficult to interpret. As a result, it is not clear to us that these studies have much to say either about the adequacy of the neoclassical model or about the broader implications of changes in either the federal minimum wage or state minimum wages.

                Third, even aside from the estimates of the effects of the minimum wage on low-wage workers as a whole, there seems to be substantial evidence of labor-labor substitution within low-skill groups. Although the choice of the aggregate teenage employment rate as the dependent variable in much of the literature is due to the fact that a sizable portion of this group consists of low-wage workers, not all teenagers are low-wage workers and not all low-wage workers are teenagers, and, from a policy standpoint, the effect of the minimum wage on teenage employment is probably of less interest than its effect on other less-skilled individuals. Some of the more recent literature has attempted to identify these substitution effects more directly or has focused more specifically on those individuals whose wage and employment opportunities are most likely to be affected by the minimum wage, and the estimates from this line of research tend to support the notion that employers replace their lowest-skilled labor with close substitutes in response to an increase in the wage floor. As a result, minimum wages may harm the least-skilled workers more than is suggested by the net disemployment effects estimated in many studies.

                Finally, our review of the literature leads us to suggest a number of areas where additional research may prove to be especially fruitful. One question that is relevant to much of the literature is how to address the potential endogeneity of minimum wage policy with respect to economic conditions and other policy choices. To date, most studies have largely ignored this issue, with the result that many of the estimates reported in the literature may be biased to some degree. A principal difficulty is that in specifications that include cross-sectional fixed effects, the researcher needs a set of instrumental variables that vary over time. In addition, although much of the literature has focused on the employment effects of the minimum wage, the predictions of theory tend to be about overall labor input rather than employment specifically. A few studies have attempted to disentangle the implications for aggregate hours from those for employment, and the differences in results reported in rather similar studies suggests that this remains an area for further research. Another useful extension of the literature would be to bring more direct evidence to bear on whether the monopsony model or the competitive model better characterizes the low-wage labor market. The evidence presented in much of the existing research is indirect in nature, and given the ambiguous predictions of the competitive model in specific circumstances, more structural approaches to this question may ultimately prove more informative.

                Finally, a systematic assessment of the sources of differences in the estimates across studies using meta-analysis techniques (rather than simply combining estimates across studies to obtain one “meta” estimate) could provide complementary evidence to this survey and improve our understanding of how to interpret the literature. In sum, we view the literature—when read broadly and critically—as largely solidifying the conventional view that minimum wages reduce employment among low-skilled workers, and as suggesting that the low-wage labor market can be reasonably approximated by the neoclassical competitive model. Of course, as we have argued elsewhere, the effect of the minimum wage on employment represents only one piece of the analysis necessary to assess whether minimum wages are a useful policy tool for improving the economic position of those at the bottom of the income distribution—which we believe is the ultimate goal of minimum wage policy. In particular, a more comprehensive review that includes the implications of the minimum wage for the levels and distributions of wages, employment and hours, incomes, and human capital accumulation, as well as consideration of alternative policies, is ultimately needed to assess whether raising the minimum wage is good economic policy. But given that the weight of the evidence points to disemployment effects, the wisdom of pursuing higher minimum wages hinges on the tradeoffs between the effects of minimum wages on different workers and other economic agents, and on whether other policies present more favorable tradeoffs.”

                As a matter of interest I checked their “Table 3: International Studies of Minimum Wage Employment Effects, Industrialized Countries” looking for New Zealand studies. There are 3; the results of which are summarised as follows:

                “Effect of adult minimum: 20-24 [age range]: −.1 to −.4
                15-19: −.1 to .4
                No effect of introduction of teen minimum on teen employment”

                “Time-series: 20-24 [age range]: −.17 to −.34
                Cross-industry: −.06 to −.10
                Separate time-series by industry: estimates centered on zero”

                “Employment of 16-17 and 18-19 year-olds rose relative to 20-25 year-olds, but fell relative to 20-21 year-olds in years corresponding to largest minimum wage increases”

                The numbers are estimated elasticities with negatives saying employment falls, positives saying it increases as the relevant minimum wage increases.

                • One Anonymous Bloke

                  New Zealand, 1999 to 2008. Cullen raised the MW, outpacing inflation.

                  Unemployment went down. To the lowest level in our history.

                  Even the Treasury department noticed.

                  Still,

                  Well established hierarchies are not easily uprooted;
                  Closely held beliefs are not easily released;
                  So religion enthralls generation after generation.

                  Lao Tzu.

                  • paul walker

                    You don’t think that the demand curve for labour was moving out at the time?

                    • One Anonymous Bloke

                      Seriously, have you counted the number of weasel words in your lengthy quote above? “May”, “by our reckoning”, “seems”, etc.

                      No wonder they can’t get published in any of the top journals.

                • McFlock

                  Not confused at all.

                  It’s bunk, for the reasons I ripped shit out of it earlier.

                • tricledrown

                  Paul Walker baffle them with bullshit your Koch bros economists are the center of ridicule in the US!

          • Paul Walker 9.1.1.1.2

            “Nope. The word “objective” is a clue.”

            Yes, but how can the response be “objective” when it was written 14 years before the book was published? If fact how can it be any sort of response to the book?

            • One Anonymous Bloke 9.1.1.1.2.1

              First you have to show your partisan heroes gained some objectivity in the interim (they didn’t), show how many of the books citations are less than fourteen years old, and still you’ve only got two guys arguing against three. Card et al have also written books, just like Neumark and Wascher.

              Then there’s Seattle: the city with the highest minimum wage and the lowest unemployment level. An outlier, or just yet another example of reality’s Liberal bias?

              • Simple point. You gave a quote as a response to the book but the quote simply can not be a response to the book, it was written 14 years before the book was published!

                • One Anonymous Bloke

                  I’ll explain it one more time then: the quote challenges Neumark and Wascher’s objectivity on this very topic. Then, it transpires than Wascher is a senior member of an partisan shill-shack – The Federal Reserve, cf: Alan Greenspan’s self-confessed errors and subsequent back-sliding.

                  So Wascher’s credibility is suspect, to say the least. Banging away on the same tin drum as he was in 1994, while brighter minds look at the evidence and prove him wrong.

                  How much post 1994 research does the book cite?

                  • Right. So when you can’t play the ball you play the man. Got it.

                    And many very good economists work for the Fed and its regional banks. Also you gave a quote as a response to the book but the quote simply can not be a response to the book, it was written 14 years before the book was published. But the major point is that the evidence doesn’t prove their position wrong. Read their paper and their book and you will see this.

                    • One Anonymous Bloke

                      That’s because their weasel words don’t constitute a position at all: that’s what weasel words do.

                      First two rules of baloney detection: How reliable is the source of the claim and Does the source often make similar claims. You’re holding Wascher up as some sort of neutral authority, and reality shows otherwise.

            • One Anonymous Bloke 9.1.1.1.2.2

              PS: Foundations in Microeconomics and Trends isn’t exactly what you call a top notch journal. Card, Katz & Krueger publish in The American Economic Review.

              Make of that what you will.

              • paul walker

                The AER don’t publish suvery articles and don’t publish articles of that length.

                • One Anonymous Bloke

                  I further note that Wascher was on the Board of Governors of the Federal Reserve System, Division of Research and Statistics.

                  Do you suppose he owes Alan Greenspan an apology, or is the Fed a deeply partisan shill-shack?

                    • One Anonymous Bloke

                      Greenspan’s famous admittance of the “flaw in my reasoning” – do you suppose that was a result of his own Objectivist bias or was someone feeding him bad “research and statistics”?

                      It fucked the global economy a little while ago – you may have heard about it.

                      Perhaps Wascher owes everyone an apology.

                    • adam

                      On points, I think OAB has you Paul. It’s called flogging a dead horse, and your doing a lot of pointless, unconvincing flogging there Paul

    • If you really want to know what most economists think about the effects of the minimum wage…

      I’m not sure that’s particularly relevant, Paul. I realise the post mentions some economic research (and that’s probably the bait your biting at) but I’m more impressed by the simple point that “it’s the right thing to do” than I am in the minutiae of the economic debate.

      Here’s why.

      Let’s assume that you (and Neumark and Wascher) are correct – raising the minimum wage has a noticeable but not massive disemployment effect. So what?

      Immediately, we all jump to conclusions about what follows from ‘disemployment’ effects. Unemployment is seen as an unmitigated and, more importantly, immutable ‘bad’ – especially for ‘vulnerable’ and/or young people – and therefore is to be avoided at all costs.

      Well, I’d beg to differ: It doesn’t have to be so.

      If we assume that, collectively, via state and other mechanisms, any ‘vulnerable’ and young people can be gainfully occupied and be helped to live good lives outside the ‘labour market’ in a way that increases their dignity along with their present and future potential to contribute to society then ‘unemployment’ need not be such a thoroughly bad experience.

      Imagine a society that is so concerned about the ‘vulnerable’ and the young that it does something far more active than simply cast them onto the impersonal depredations awaiting them in a market setting. Imagine that, instead, such a society democratically asserts its ability to ensure that their lives have dignity, opportunity and status irrespective of their ability to find a job that pays so low that they are repeatedly given the message that they are worth very little ‘in the market’.

      If we are so worried about the ‘vulnerable’ and the young then how about we provide them with opportunities to be engaged in further education, voluntary activity, entrepreneurial efforts, artistic efforts, or whatever?

      How about we stop the corrosive notion that worth and wellbeing fundamentally depend upon and come from employment, no matter how menial, no matter how poorly paid, no matter how precarious, no matter how powerless, no matter how exploited?

      At the very least how about we run with the notion that every member of our society deserves to be collectively supported in a range of activities that contribute – to community, to neighbourhood, to creativity – until our economy can generate work that is decently remunerated and available for them?

      Working for desperately low wages is not good for people, Paul. I don’t care if that’s what the impersonal processes of the market decree – it’s not good for them.

      In fact, the only reason that subjective wellbeing is found to increase with ‘employment’ is that unemployment is such an horrendous condition in this individualistic, market-oriented world that damages all who are dumped into it.

      I have always thought that the soul-destroying experience of unemployment in today’s world is actually more a call for a social reformation to eradicate that kind of social abandonment to the bare vicissitudes of the market than it is a call to abolish minimum wages and so reduce the ‘cost’ of employment.

      Put another way, my point is that we need to factor in to policy far more of what we know about people – their psychology, their social being – to leaven the overwhelming serving of economics that currently frames and dominates policy discussions.

      At present there seems to be this almost puritanically dismissive discounting of human actions and reactions as the fly in the otherwise pure market ointment – if only people weren’t envious; if only they’d buckle down to hard work for pittances without getting depressed, falling into ‘learned helplessness’ or even becoming violent and criminal; if only people would pull up their socks and start acting like proper market actors; if only they would just stop being so flawed all would be well! People obviously need much more ‘stick’ to learn how to act properly.

      Have a read of this easily digestible link. (There’s one bit in brackets that – as an economist – you’ll take umbrage at but have a read nevertheless.)

      Sure, the blog is not peer-reviewed but the edited books referred to in it (by Biswas-Diener and the blog’s author) have presumably gone through a similar process to that of Neumark and Wascher’s book.

      Here’s an extract:

      A higher minimum wage may help families avoid the food banks, but it won’t make them any happier unless their wages hit a level where they feel fairly compensated for the work they do and their wages are positioned-well when compared with the paycheques of others. In other words, more money does not equal happiness unless it brings with it social justice. And that, of course, isn’t on the bargaining table.

      This challenge to old school positive psychology is coming from many corners. Within the field of positive psychology itself, Robert Biswas-Diener’s recent edited volume Positive Psychology as Social Change does a wonderful job of showing us that happiness is more complicated than thinking happy thoughts. It depends on our economic opportunities, treatment by others, community cohesion, and the services and social policies that shape our day-to-day interactions with a world that is either fair or marginalizing.

      Resilience researchers have been arguing much the same of late. My own edited volume, The Social Ecology of Resilience, brings together international experts who argue that we can only be resilient to the extent that our environments help to make us so. And that means ensuring our economic wellbeing is just as certain as our psychological. In other words, if we raised the minimum wage we’d being taking a right step towards making people more resilient.

  10. Richard McGrath 10

    Logic dictates that raising minimum wage will disincentivise employers whose profits are minimal from taking on new staff, or letting existing staff go.

    There are many factors involved in job growth, and a link between growth in jobs and a rise in minimum wage is likely to be association/correlation and not cause and effect.

    Otherwise why not raise the minimum wage to $100 an hour, as I have suggested in the past?

    • blue leopard 10.1

      If logic were the guiding principle there would be a fair few economic theories that we wouldn’t be following.

      If more people have more money to afford to buy things/services logic dictates that employers would be taking on more staff to cope with the increased business.

      Why not raise the minimum wage to $100 dollars an hour?

      I guess Labour took in to account the hysterical and illogical reactions of their opponents when formulating how much to raise the minimum wage :lol:

    • McFlock 10.2

      real world says otherwise.

    • felix 10.3

      “Otherwise why not raise the minimum wage to $100 an hour, as I have suggested in the past?”

      If it’s ok to drive after having two beers, why not make the limit 100 beers?

      If it’s ok to eat takeaways now and then, why not have takeaways 3 times a day?

      If 7 hours sleep is better than 10 hours sleep, why not make it 5 minutes sleep?

      …and other absurd reductions that idiots think are killer arguments.

    • tricledrown 10.4

      Dickhead Mcgrath why not jut forget about wages altogether this is the same reasoning you being a fundamentalist spreading fanatical propaganda bullying BS artist,
      New Zealand is at the bottom of the OECD when it comes to income and that has happened since rogernomics came a long and unions were busted!

  11. “Seriously, have you counted the number of weasel words in your lengthy quote above? “May”, “by our reckoning”, “seems”, etc.”

    Yes, you mean don’t understand sentences like:

    “Although the wide range of estimates is striking, the oft-stated assertion that the new minimum wage research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect.”

    What is unclear about this?

    “No wonder they can’t get published in any of the top journals.”

    If you had published in econ journals you would have discovered one basic point. Papers over about 30-40 papers don’t get published. For many journals 10,000 words is the upper limit so I would have thought that getting a paper of the size that the Neumark and Wascher paper is would have been next to impossible. Also Foundations and Trends in Microeconomics is ok. It publishes some good papers and papers of much greater length than standard journals.

    • One Anonymous Bloke 11.1

      “…is clearly incorrect. Indeed, in our view…”

      More weasel words: no wonder you cut your quote off short.

      Card et al specifically criticised their objectivity, remember. “Relatively consistent…the competitive model…” I can do this all day.

      You’re citing a partisan hack with a track record of failure.

    • tricledrown 11.2

      More Koch bros crap

  12. “It fucked the global economy a little while ago – you may have heard about it.

    Perhaps Wascher owes everyone an apology.”

    What???? Are you seriously trying to say that work on the effects of the minimum caused the financial crisis?!!

    • One Anonymous Bloke 12.1

      No. He was on the Fed’s board for research and statistics. No doubt research and statistics played some part in Greenspan’s “flaws”. Are you seriously disputing the partisan bias evident at the Fed?

      A partisan hack who uses lots of weasel words can be wrong more than once about more than one thing. My argument is that Wascher is a hack projecting his own bias onto data, just as Card et al concluded in 1994.

      • Paul Walker 12.1.1

        It would be difficult to conclude that any amount of research and/or statistics on the minimum wage had anything to do with Greenspans errors – of which there were many. John Taylor, for example, has been pointing out the “too low for too long” problem with US interest rates for many years now. But no one has ever claimed that the minimum wage had anything to do with the financial crisis.

        • One Anonymous Bloke 12.1.1.1

          Well it’s good that isn’t what I’m concluding then. Are you a bit slow or just arguing in bad faith?

          • McFlock 12.1.1.1.1

            bit of both, by the look of it

          • Paul Walker 12.1.1.1.2

            Then what the hell does the Neumark and Wascher work have to do with the financial crisis then?

            • One Anonymous Bloke 12.1.1.1.2.1

              Nothing, except inasmuch as the Fed’s role in the GFC affects our opinion of Wascher’s credibility, already so severely tarnished by the multitude of weasel words in his dogma.

              • But why? What has work on the minimum wage got to do with financial crisis? Also you have yet to show that anything Wascher did had anything to do with the way the Fed acted before and during the GFC. If Wascher was working on labour markets its hard to see a link between his work and the GFC.

                • McFlock

                  GFC had nothing to do with labour markets?
                  Didn’t enter into the Fed’s radar when figuring out options?
                  Seriously?

                  • Who knows what goes on at the upper levels of the Fed. But my guess would be that what drove the thinking around the time of the start of the GFC were macro issues to do with GDP growth, inflation, interest rates, tech buubles etc. Micro issues like whats happening in different labour market not so much. Could be wrong but thats my guess.

                    • McFlock

                      funny
                      I would have thought that how it actually affects people would be the primary concern of policy-makers. Silly me.

            • McFlock 12.1.1.1.2.2

              Because the piece you c&p from repeatedly uses phrases like “in our view”, “by our reckoning”, and so on. So there’s a significant amount of subjective judgement involved in the publication.

              To judge the validity of that subjective judgement, it’s logical to examine the influence that judgement has had in other areas (in this case the economic actions and advice of the fed chair).

              If someone is relying heavily on their personal judgement of a situation, and they have a history of working in an organisation that shows poor collective judgement, a normal boss wouldn’t exactly rush to give them a job. Although an economist might, because real-world evidence is only regarded as valid if it agrees with the economist’s expectations.

              • “Because the piece you c&p from repeatedly uses phrases like “in our view”, “by our reckoning”, and so on. So there’s a significant amount of subjective judgement involved in the publication.”

                In any survey that is what you will always get. Let me try to make this point using another example. Recently I have had accepted for publication a couple of surveys on different aspects of the theory of the firm. Now in both cases what you are getting is based on my knowledge of the subject matter – there may be papers out there I have missed – my selection of what is important and interesting – may be I’m wrong on these matters – and my interpretation of what the papers say – again may be I’m wrong in my interpretations. And certainly if someone else had written these papers you would have gotten different decisions on these issues. They are, have to be, matters of judgement. Different people will make different calls on these issues. So the fact that you have Neumark and Wascher giving “their view”, “their reckoning” is because its the only way it can be. The control on what you say in a survey is the same control on all academic papers, peer review. Whether it be my papers or Neumarks and Wascher’s article or book, the referees are the gatekeepers. They are ones who ultimately say ok, we accept that this piece of work meets the standard to be published. But what you get in any survey, be it on the theory of the firm or the effects of the minimum wage, are in the end the views of the author. That is the only way it can be.

                • One Anonymous Bloke

                  So, in summation, the evidence clearly shows that reality is subjective.

                • McFlock

                  lol
                  Nope.
                  Maybe that’s how they do it in economics, but not in a high-quality science.

                  A lit review details the research located according to documented methods with clearly defined boundaries for exclusion. These can then be reviewed alongside the actual analyses. If your search or exclusion methodology isn’t up to scratch, sooner or later you get called out on it.

                  And then you stick with the data: if a result is not statistically significant, then it is an “indication” of precisely nothing.

  13. “First two rules of baloney detection: How reliable is the source of the claim and Does the source often make similar claims. You’re holding Wascher up as some sort of neutral authority, and reality shows otherwise.”

    Actually I’m pointing out that the Neumark and Wascher book is the best survey of the literature on the effects of the minimum wage available. I can do little to deal with he fact that people who have never read the book still, magically, seem to know exactly what it says and thta it doesn’t confirm their prejudices and thus must, must, be wrong..

    • One Anonymous Bloke 13.1

      “The best survey” – according to who? Why does it have so many weasel words in it, or did you just manage to find the only passage with so many?

      • Paul Walker 13.1.1

        But I haven’t quoted from the book.

        • One Anonymous Bloke 13.1.1.1

          No, just from a paper which forms the basis of their chapter on the MW.

          Meanwhile, other economists differ: “Finally a chance for facts to decide”.

          …we should acknowledge the limits of our knowledge about how local economies respond to a minimum wage. In my opinion, the best evidence suggests that state and federal minimum wage increases have had a very small impact on employment, while moderately reducing turnover, poverty and inequality. The limited evidence from other cities corroborates this. However, we cannot reliably apply those estimates to predict the effects of an increase the size of Seattle’s.

          The good news is that the somewhat long ramp-up period in Seattle will provide us with an occasion to learn from this experiment and offer opportunities for course corrections. So we need to be open to evidence on what we see on the ground.

          Arindrajit Dube.

          • Paul Walker 13.1.1.1.1

            “In my opinion, the best evidence suggests that state and federal minimum wage increases have had a very small impact on employment,”

            This could be true depending on exactly he means. The affect of the minimum wage changes on overall unemployment are most likely zero. Most, if not all, economists agree on that. This is because changes in minimum wages tend to be small and those, therefore, affected are a small part of those employed. The debate among economists concerns those at the lower end of the wage distribution. People with few skills, the young and inexperienced, those returning to work after a long time out of the work force etc. This is why most of the empirical work concentrates on these disadvantaged groups and it is among these groups that affects on employment are found. So if Dube is referring to the overall level of employment he is most likely right but if he is referring to the disadvantaged groups there would be more debate about his statement.

            Also with Seattle it has to be remembered that it is doing pretty well right now. So the demand foe labour is high. Think of it this way. Taking a standard supply and demand diagram for labour and set a minimum wage above the equilibrium wage. There will be unemployment. (If the wage is below the equilibrium it would have no effect on the amount and price of labour traded) Now let the demand curve for labour move out and up to the right. You will see that the amount of unemployment is reduced and if the demand curve moves far enough there could be a labour shortage at the minimum wage. This may well be what is happening in Seattle right now. Or to put it another way, we have a positive correlation between economic activity and the minimum wage but what is the causation. Is activity up because the minimum wage is up, or is the minimum wage up because economic activity is high? That is, if Seattle is doing well economically then it can afford to increase the minimum wage knowing that because the demand curve for labour is shifting rightward it will have little effect on employment.

    • McFlock 13.2

      Actually, we’re just pointing out that if your excerpts are anything to go by, the book is bunk regardless of its conclusions.

      It might be the best survey in your opinion, but that doesn’t seem to be worth all that much, either.

      Your excerpts have contained as many equivocations as any actual information, which tends to suggest that nobody really knows what would happen if the NZ minimum wage was e.g. boosted by 10% every six months for the next three years. Oh, you tories would scream to high heaven about theory, but the real-world data doesn’t show a definitive step-wise change in total or segmented unemployment whenever a minimum wage is altered. I suspect that any effects that become plausibly evident as a result of significant minimum wage increases could be addressed by other macroeconomic policies, such as more accessible tertiary education. Those policies that cost would be at least partially funded by the higher tax take from the increased economic activity the wage increases would generate.

      • Paul Walker 13.2.1

        “Actually, we’re just pointing out that if your excerpts are anything to go by, the book is bunk regardless of its conclusions”

        But I haven’t quotes from the book.

        “Your excerpts have contained as many equivocations as any actual information, which tends to suggest that nobody really knows what would happen if the NZ minimum wage was e.g. boosted by 10% every six months for the next three years. ”

        I think every economist in world would tell you the answer to that one. There would be an unemployment effect no doubt. Even economists who support the minimum wage will tell you that you can only increase it so far before the unemployment effects take over. If there were never any unemployment effects then why not increase the minimum wage to $100 an hour, why not $1000 an hour. No economist would argue that such an increase would have no effect on employment.

        “Those policies that cost would be at least partially funded by the higher tax take from the increased economic activity the wage increases would generate.”

        But would there be an increase economic activity? The money that would go into the higher wage even assuming no employment effect has an opportunity cost. The extra wages must come from somewhere. May be if comes out of profits, but that would reduce either investment and/or consumption by the owners of the firm. May be would be offset by a reduction in spending by the employer in other areas. This would effect the income/consumption of those people who supplied the goods/services now cut. And so on. In short there is no reason to think that economic activity must rise because of an increase the minimum wage.

        • One Anonymous Bloke 13.2.1.1

          Yeah yeah blah blah you’re all about the theory, if we do this then this would happen according to the model. Whose model? It’s clear from Dube’s remarks that there is no concensus among economics Mullahs and the smart ones are waiting for more evidence to accumulate.

          If the best you can offer is a Federal Reserve party member with a track record of backing bad theory then I’m happy to let the evidence decide. Nine MW wage rises in nine years and unemployment went down to the lowest level in New Zealand history.

          Who needs Seattle?

        • McFlock 13.2.1.2

          But I haven’t quotes from the book.

          then I probably got my wires crossed when you c&p’d all that crap.

          I think every economist in world would tell you the answer to that one. There would be an unemployment effect no doubt.

          But if there’s no clear effect at the current change levels, we can afford to work more quickly to introduce a minimum wage, no? Maybe $1000 an hour is reasonable, maybe it would result in economic cataclysm. But $20 an hour would certainly not impose irreversible damage to the economy if it were phased in over a year or so. And if it does start to show an effect, we can stop phasing it in so quickly.

          But would there be an increase economic activity? The money that would go into the higher wage even assuming no employment effect has an opportunity cost. The extra wages must come from somewhere. May be if comes out of profits, but that would reduce either investment and/or consumption by the owners of the firm. May be would be offset by a reduction in spending by the employer in other areas. This would effect the income/consumption of those people who supplied the goods/services now cut. And so on. In short there is no reason to think that economic activity must rise because of an increase the minimum wage.

          Apart from the fact that in some instances it seems to have actually been observed in the real world, poor people have higher and faster turnover that rich folk and companies. No savings means that whatever comes in then goes out that week. Not so much for people and corps that might keep it in the bank for a while – yes, that gets reinvested by the bank, but then interest rates are influenced by reserve bank policy and wider macro issues. Lots more buffers of elasticity and also counterweights.

          But low income people: moneyin = moneyout almost immediately. Increases velocity of money circulation.

          • Paul Walker 13.2.1.2.1

            There would be little in the way of effects on the overall level of employment. The trade-off here is between the effects on those in the disadvantaged groups who would lose employment and those who keep their jobs but receive a higher income.

            The marginal propensity to consume is higher at the lower levels of income for sure. As you say they save less and thus consume a higher percentage of their income. But savings are important. Basically saving are investment and its investment that leads to increases in the capital stock which increases productivity which results in higher future incomes. Think of savings as future consumption as opposed to now consumption. So you have a trade-off. More now consumption, which helps the economy now, but less tomorrow consumption. So what you get is more production today of consumption goods but less production today of investment goods (which lowers consumption tomorrow). Its not clear what the net effect of the consumption/investment trade-off is.

            • McFlock 13.2.1.2.1.1

              So now you’re also arguing that an increase in the minimum wage would also lower savings?

              Seems odd, given that much of what poor people spend immediately ends up right back in the hands of corporations and their shareholders.

  14. “Nine MW wage rises in nine years and unemployment went down to the lowest level in New Zealand history.”

    Yes but correlation is not causation. My point about Seattle would also apply to NZ at that time. This is one of the problems when doing empirical work on this issue. Getting controls for everything you need to control for and being able to sort out causation makes such research interesting … and just a bit difficult.

    • One Anonymous Bloke 14.1

      My point is that you were all about how you had the last word on the issue yesterday afternoon, and now it’s all uncertain and challenging. Meanwhile, reality stubbornly fails to confirm the model.

      • Paul Walker 14.1.1

        But what I’ve said hasn’t changed.

      • Paul Walker 14.1.2

        But what I’ve said hasn’t changed.

        • One Anonymous Bloke 14.1.2.1

          Yesterday: “the evidence really does show a loss in employment mainly for the young and low skilled.”

          Today: “This is one of the problems when doing empirical work on this issue. Getting controls for everything you need to control for and being able to sort out causation makes such research interesting … and just a bit difficult.”

          Difficult, unless your partisan bias is resting on it, then you profess no equivocation.

        • tricledrown 14.1.2.2

          Paul Wanker Neuman &Wascher what ever work for the KOCH bros propaganda network you pathetic Jerk.
          Propaganda is not research Time Magazine has published data from the US bureau of statistics that show low tax low wage States in the US have the highest unemployment poverty health outcomes higher crime rates poorer education crumbling infrastructure denial of access to voting they are right wing states governed by Republicans who have put in place policies your are advocating.!
          while the high tax states have much better outcomes you get what you pay for you wouldn’t buy a cheap Chinese made cherry car would you would most likely by a born to rule BMW!

          • Paul Walker 14.1.2.2.1

            “Paul Wanker Neuman &Wascher what ever work for the KOCH bros propaganda network you pathetic Jerk.”

            So this is your idea of rational, intellectual argument.

        • tricledrown 14.1.2.3

          You are dead Right Paul its not your own information its Koch bros propaganda pathetic Paul no original research involved in regurgitating lies fermented by extremely wealthy robber barons.
          Your a tool!
          of these elitist extremist power brokers .
          you can’t think for yourself a drone!
          Ironic keep repeating a lie and someone will believe you so far the only person that believes you is yourself!

  15. One Anonymous Bloke 15

    My point is that you were all about how you had the last word on the issue yesterday afternoon, and now it’s all uncertain and challenging. Meanwhile, reality stubbornly fails to confirm the model.

  16. “A lit review details the research located according to documented methods with clearly defined boundaries for exclusion. These can then be reviewed alongside the actual analyses. If your search or exclusion methodology isn’t up to scratch, sooner or later you get called out on it.

    And then you stick with the data: if a result is not statistically significant, then it is an “indication” of precisely nothing.”

    I have to call crap on that. You can by definition only ever review material you have read and as no one has read everything on any topic you only get a review of what the author has read. There is always the possibility that you have missed something. Also there are no clearly defined boundaries for exclusion. The boundaries themselves are a matter of judgement. Also different people can, and do, differ as to what should covered in the review even for given boundaries. For example when dealing with a discussion of the mainstream views on the theory of the firm should one include works such as Foss and Klein’s book on “Organizing Entrepreneurial Judgement”. They offer a theory of the entrepreneur centred around a combination of Knightian uncertainty and Austrian capital theory. Such a basis places their work outside the conventional theory of the firm but they deal with the three standard questions to do with the existence, organisation and boundaries of the firm which places them inside the conventional theory. So are they in or out? Its a judgement call. As it turns out FK see themselves ‘not as radical, hostile critics, but as friendly insiders’. And what of Spulber’s book on “The Theory of the Firm”? Its method of approach to modelling the firm are conventional, this puts it inside the mainstream, but it deals with issues outside of the standard three questions, which places it outside the mainstream. So is it in or out? As it turns out I put them both in. I took the view of the great Cambridge economist Alfred Marshall:

    “Some of the best work of the present generation has indeed appeared at first sight to be antagonistic to that of earlier writers ; but when it has had time to settle down into its proper place, and its rough edges have been worn away, it has been found to involve no real breach of continuity in the development of the science. The new doctrines have supplemented the older, have extended, developed, and sometimes corrected them, and often have given them a different tone by a new distribution of emphasis ; but very seldom have subverted them”

    Then even after you have decided what to put it you have issue of have you understood the material correctly. You always have to accept you could be in error in your interpretation of the material covered. In addition there is the possibility that people will interpret the same material differently. The most obvious example here is that of Keynes (JM not JN). You could not list the number of different interpretations there are of The General Theory. Keynes’s work has given rise to the old Keynesians, the new Keynesians, the post-Keynesians etc etc. And god only knows how many interpretations here are of Plato or Aristotle. Even Adam Smith. There area number of different views on Smith on emerging. Same work, just many interpretations.

    The ex ante control to make sure you don’t, hopefully, go wrong its the refereeing process. You have to convince other experts in the field what you say is reasonable. Both my reviews and the works of Neumark and Wascher have gone though that process. Ex post control, of course, is that others are able to say you are wrong. Replies to papers pointing out errors are always possible as are other article on the same subject taking different views.

    • “And then you stick with the data: if a result is not statistically significant, then it is an “indication” of precisely nothing.”

      I should have added to my previous post that there is a growing literature on the difference between statistical significance and economic significance. A good place to start with this is the book by Stephen Ziliak and Deirdre McCloskey “The Cult of Statistical Significance”. One response to this is by Thomas Mayer who writes,

      “Stephen Ziliak and D. N. McCloskey have sharply criticized the prevailing use of significance tests. Their work has, in turn, come under vigorous attack. The vehemence of the debate may induce readers to wrongly dismiss it as a “he said-she said” debate, or else to take sides in an unbending way that does not do justice to valid points raised by the other side. This paper aims at a more balanced reading. While Ziliak and McCloskey claim that a substantial majority of economists who use significance tests confuse statistical with substantive significance, or commit the logical error of the transposed conditional, I argue that such errors are much less frequent than they claim, though still much too pervasive. They also argue that since significance tests focus on the existence of an effect rather than on its size, the tests do not answer scientific questions. I respond with counter-examples. Ziliak and McCloskey also complain that significance tests ignore loss functions. I argue that loss functions should be introduced only at a later stage. Ziliak and McCloskey are correct, however, that confidence intervals deserve much more emphasis. The most valuable message of their work is that significance tests should be treated less mechanically.”

      And the debate is ongoing.

      • One Anonymous Bloke 16.1.1

        Yeah, teach the controversy.

        • Paul Walker 16.1.1.1

          Yes! This is one controversy that should be taught. Not just to economists but to everyone who does empirical work.

          • tricledrown 16.1.1.1.1

            Paul Walker you are using respected research to quantify Koch bros Bullshit.
            Commonly known as shifting the blame but it has backfired on you as your neuman and waescher koch bros funded research is made up to suit the funder.
            you are a big KOCH head!

            • One Anonymous Bloke 16.1.1.1.1.1

              I sort of get where you’re coming from but this is nonsense: minimum wage economics – and the notions Paul is wedded to – have been around a lot longer than those trash.

            • Paul Walker 16.1.1.1.1.2

              But the Koch brothers had nothing to do with the research.

      • Paul Walker 16.1.2

        Let me add a note to my first note. I have just found a copy of the paper “The Cult of Statistical Significance” by By Stephen T. Ziliak and Deirdre N. McCloskey given at the 2009 Joint Statistical Meetings in Washington.

        http://www.deirdremccloskey.com/docs/jsm.pdf

        The abstract reads:

        “We want to persuade you of one claim: that William Sealy Gosset (1876-1937)—aka “Student” of “Student’s” t-test—was right, and that his difficult friend, Ronald A. Fisher (1890-1962), though a genius, was wrong. Fit is not the same thing as importance. Statistical significance is not the same thing as scientific importance or economic sense. But the mistaken equation is made, we find, in 8 or 9 of every 10 articles appearing in the leading journals of science, economics to medicine. The history of this “standard error” of science involves varied characters and plot twists, but especially R. A. Fisher’s canonical translation of “Student’s” t. William S. Gosset aka “Student,” who was for most of his life Head Experimental Brewer at Guinness, took an economic approach to the logic of uncertainty. Against Gosset’s wishes his friend Fisher erased the consciously economic element, Gosset’s “real error.” We want to bring it back.”

      • McFlock 16.1.3

        I’ll file that right beside you quoting ad nauseum a work that relies on correlation to support your argument about minimum wage, then coming out with “correlation is not causation” when someone brings up a counter-example.

        • Paul Walker 16.1.3.1

          If you actually bothered to literature on the minimum wage you would see that one of the big and difficult issues the studies deal with is tying to workout causation. The studies don’t mistake correlation for causation. One reason the Zilliak-McCloskey work is controversial is what it says about the results of many empirical studies, not just in economics but science, medicine, applied stats etc. I think Mayer is right when he says that the most valuable message of their work is that significance tests should be treated less mechanically. A big t-stat is not the end of thinking about results.

          • McFlock 16.1.3.1.1

            If you actually bothered to literature on the minimum wage you would see that one of the big and difficult issues the studies deal with is tying to workout causation. The studies don’t mistake correlation for causation.

            cf:

            Actually I’m pointing out that the Neumark and Wascher book is the best survey of the literature on the effects of the minimum wage available

            A good statistical significance is only the start of thinking about results. But without it, by definition, you’re looking at a random artifact that has null meaning.

            • Paul Walker 16.1.3.1.1.1

              By and large I agree but if you look at some of the material in the stat/econ significance debate having econ significance is important even if the stats significance is weak. Confidence intervals are important.

              • McFlock

                “Economic significance”, after a quick search, just seems to mean an assumption that has no basis beyond reinforcing the pre-existing bias of the researcher.

                Confidence intervals are a statistical report, just like p-values.

                • Very simply, Zilliak-McCloskey (Z-M) challenge the use of significance tests on four grounds. First, they claim that most people do not realize that substantive significance, that is, the size of the effect that an independent variable has on the dependent variable
                  (which Z-M call “oomph”), is vastly more important than statistical significance,
                  or what is even worse, people confound the two. Second, people often commit the logical fallacy of the transposed conditional; third, they ignore the loss function; and fourth, instead of reporting confidence intervals, they usually present their results in terms of t-values, p’s, or F-ratios. The debate they started is widespread as Thomas Mayer notes with regard to the reception of the Z-M book:

                  “The Cult of Statistical Significance has been widely, and in many cases very favorably, reviewed by journals in diverse fields, such as Science, Administrative Science Quarterly, Contemporary Sociology, SIAM News, Nature, Medicine, and Notices of the American Mathematical Society, as well as by some economics journals. Few, if any, books by contemporary economists have stirred interest in so many fields.”

                  There are a lot of people so take the issues raised by Z-M very seriously.

                  • McFlock

                    But none of that addresses the fact that if there is a real-world relationship between two factors to the point that an observer can say “increasing X would increase Y”, it would be a statistically significant relationship. It’s the first step to determining the extent and nature of any relationship.

                    If there is no statistically demonstrable relationship, then in the real world increasing X does not necessarily increase Y, or even have anything to do with a change in Y. No matter what theory dictates.

                    • I think the question would be, say increasing X does increase Y but the coefficient on X is near to zero, but stats significant, Why do we care? On the other hand what if X has a coefficient of 10 on it, but not stats significant, should we care? That is to say if the fit of the equation the only thing we should worry about? Or does “oomph” matter?

                    • I think the question would be, say increasing X does increase Y but the coefficient on X is near to zero, but stats significant, Why do we care? On the other hand what if X has a coefficient of 10 on it, but not stats significant, should we care? That is to say if the fit of the equation the only thing we should worry about? Or does “oomph” matter?

                    • McFlock

                      “big oomph” which might just be the result of chance in your dataset is meaningless. If you have “big oomph” without statistical significance, that just means your dataset is patently inadequate for the information you’re trying to extra from it.

                      If there is an effect, then we can go on to look at whether the effect is significant enough to affect policy decisions.

                    • “I think the question would be, say increasing X does increase Y but the coefficient on X is near to zero, but stats significant, Why do we care? On the other hand what if X has a coefficient of 10 on it, but not stats significant, should we care? That is to say if the fit of the equation the only thing we should worry about? Or does “oomph” matter?”

                      Let me add this: Consider, as a thought experiment, a situation where the dependent variable is poverty reduction and the two independent variables are consumer spending (C) and investment spending (I). The coefficient on C is close to zero but stats significant while the coefficient on I is 10 but not stats significant, at least at the same level as C. What is important for poverty reduction? And why?

                    • McFlock

                      Neither.

                      C might be useful for tuning once the bulk of the problem has been sorted with other policy mechanisms, but var I might have an impact of 30 when actually tweaked, or -5. We just don’t know.

                      And that assumes repeatability, which is another debate I believe we’ve had before.

        • Paul Walker 16.1.3.2

          If you actually bothered to literature on the minimum wage you would see that one of the big and difficult issues the studies deal with is tying to workout causation. The studies don’t mistake correlation for causation. One reason the Zilliak-McCloskey work is controversial is what it says about the results of many empirical studies, not just in economics but science, medicine, applied stats etc. I think Mayer is right when he says that the most valuable message of their work is that significance tests should be treated less mechanically. A big t-stat is not the end of thinking about results.

          • Colonial Viper 16.1.3.2.1

            Oh for fucks sake, I already told you, if per chance unemployment goes up because of a large minimum wage increase, government can always counter it by either spending more directly into the economy, or hiring those people itself.

            Big deal, stupid useless academic economists, have barely helped a single country in the history of the discipline, but has literally destroyed or near-destroyed dozens on the hoof. Then wrote up papers about it.

            • Paul Walker 16.1.3.2.1.1

              “Oh for fucks sake, I already told you, if per chance unemployment goes up because of a large minimum wage increase, government can always counter it by either spending more directly into the economy, or hiring those people itself.”

              Yes and as I have already said, economists are aware of such things and control for them in their empirical work.

          • tricledrown 16.1.3.2.2

            Paul you should join the chemtrail party

          • tricledrown 16.1.3.2.3

            Piffle Waffler retarded and furious trying to discredit research from credible peer reviewed researchers is so idiotic when you tthink about it you have shot yourself in foot on this.
            Not that you can think as you ate just repeating cynical propaganda to undermine real statistics something latent smith gave up on about 10 years ago.
            when a liar tells a lie he has to tell more lies to cover the original lie.
            your digging a deeper hole for yourself so go crawl back into .it
            Koch head.

    • McFlock 16.2

      have to call crap on that. You can by definition only ever review material you have read and as no one has read everything on any topic you only get a review of what the author has read. There is always the possibility that you have missed something. Also there are no clearly defined boundaries for exclusion. The boundaries themselves are a matter of judgement. Also different people can, and do, differ as to what should covered in the review even for given boundaries.

      That is what peer review is for.
      But that’s another reason why economics is not a science, I guess.

      Then even after you have decided what to put it you have issue of have you understood the material correctly. You always have to accept you could be in error in your interpretation of the material covered. In addition there is the possibility that people will interpret the same material differently. The most obvious example here is that of Keynes (JM not JN). You could not list the number of different interpretations there are of The General Theory. Keynes’s work has given rise to the old Keynesians, the new Keynesians, the post-Keynesians etc etc. And god only knows how many interpretations here are of Plato or Aristotle. Even Adam Smith. There area number of different views on Smith on emerging. Same work, just many interpretations.

      And yet physics and other sciences tend to coalesce in opinion, rather than diverge.

      The ex ante control to make sure you don’t, hopefully, go wrong its the refereeing process. You have to convince other experts in the field what you say is reasonable. Both my reviews and the works of Neumark and Wascher have gone though that process. Ex post control, of course, is that others are able to say you are wrong. Replies to papers pointing out errors are always possible as are other article on the same subject taking different views.

      If the peer review process is rigorous, equivocations in one’s lit review aren’t needed.
      Otherwise there’s no point to having it.

      • Paul Walker 16.2.1

        “have to call crap on that. You can by definition only ever review material you have read and as no one has read everything on any topic you only get a review of what the author has read. There is always the possibility that you have missed something. Also there are no clearly defined boundaries for exclusion. The boundaries themselves are a matter of judgement. Also different people can, and do, differ as to what should covered in the review even for given boundaries.

        That is what peer review is for.”

        Which is the point I made. Are you really claiming that in areas other than economics every survey article covers every single paper that has been written on a subject or do they have to leave some material out? If they do leave stuff out then the author has to make a call as to what to leave in and what to leave out.

        “Then even after you have decided what to put it you have issue of have you understood the material correctly. You always have to accept you could be in error in your interpretation of the material covered. In addition there is the possibility that people will interpret the same material differently. The most obvious example here is that of Keynes (JM not JN). You could not list the number of different interpretations there are of The General Theory. Keynes’s work has given rise to the old Keynesians, the new Keynesians, the post-Keynesians etc etc. And god only knows how many interpretations here are of Plato or Aristotle. Even Adam Smith. There area number of different views on Smith on emerging. Same work, just many interpretations.

        And yet physics and other sciences tend to coalesce in opinion, rather than diverge.”

        And in economics on many issues opinion coalesce. Most economists think that increasing the minimum wage increases unemployment for some groups of workers. Most economists think that free trade increases average incomes. Most economists think that Giffin goods don’t exist but Giffin behaviour does. Most economists think that increasing the money supply will cause inflation. And so on and so on. There are many things that economists agree on but there are, thankfully, things we still don’t agree on. And there are lots things that physicists and geologists and biologists and chemists and philosophers don’t agree on as well. That’s what keeps us all in business. If we all agreed on everything there would be no point in having any of these disciplines.

        • McFlock 16.2.1.1

          Which is the point I made. Are you really claiming that in areas other than economics every survey article covers every single paper that has been written on a subject or do they have to leave some material out? If they do leave stuff out then the author has to make a call as to what to leave in and what to leave out.

          what I’m saying is that we define explicitly the subject area and the grounds for including or excluding research. And the methodology of the search. And if we miss a relevant publication (especially one that disagrees with our work), that’s grounds for at the least an erratum or even a retraction.

          And in economics on many issues opinion coalesce. Most economists think that increasing the minimum wage increases unemployment for some groups of workers. Most economists think that free trade increases average incomes. Most economists think that Giffin goods don’t exist but Giffin behaviour does. Most economists think that increasing the money supply will cause inflation. And so on and so on. There are many things that economists agree on but there are, thankfully, things we still don’t agree on. And there are lots things that physicists and geologists and biologists and chemists and philosophers don’t agree on as well.

          The thing is that for a science, many theories are tested with real-world data (e.g. steady state vs big bang) and the testing makes the consensus emerge.
          Economists often seem to agree on the perfect competition theory then argue about the data.

          And philosophy isn’t a science.

          • Paul Walker 16.2.1.1.1

            “what I’m saying is that we define explicitly the subject area and the grounds for including or excluding research. And the methodology of the search. And if we miss a relevant publication (especially one that disagrees with our work), that’s grounds for at the least an erratum or even a retraction.”

            Yes the ex post control mechanism I mentioned. As to defining thing, I sure all subject try to define the material to be covered in any survey but its not always possible to do completely. And such definitions have to be determined and this require the judgement of the author. Again I have to ask are you really claiming that in areas other than economics every survey article covers every single paper that has been written on a subject or do they have to leave some material out? If they do leave stuff out then the author has to make a call as to what to leave in and what to leave out.On what basis do they do this? To return to the example i gave before: when dealing with a discussion of the mainstream views on the theory of the firm should one include works such as Foss and Klein’s book on “Organizing Entrepreneurial Judgement”. They offer a theory of the entrepreneur centred around a combination of Knightian uncertainty and Austrian capital theory. Such a basis places their work outside the conventional theory of the firm but they deal with the three standard questions to do with the existence, organisation and boundaries of the firm which places them inside the conventional theory. So are they in or out? Its a judgement call. As it turns out FK see themselves ‘not as radical, hostile critics, but as friendly insiders’. And what of Spulber’s book on “The Theory of the Firm”? Its method of approach to modelling the firm are conventional, this puts it inside the mainstream, but it deals with issues outside of the standard three questions, which places it outside the mainstream. So is it in or out?

            “The thing is that for a science, many theories are tested with real-world data (e.g. steady state vs big bang) and the testing makes the consensus emerge.
            Economists often seem to agree on the perfect competition theory then argue about the data.”

            No. The perfectly competitive model is till used for cases where it is thought that there is enough competition to justify it. An example would foreign exchange trading. Or as as starting point to think about some issue. But not since the 1920s has it been the only model used. Imperfect competition models took off in the early 1930s with the publication of Robinson’s “The Economics of Imperfect Competition” and Chamberlin’s “The Theory of Monopolistic Competition” and got a real move on when game theory started to be applied to things like the theory of oligopoly. Oligopoly modes are the standard workhouse of IO and competition policy among other areas.

            As to testing, both empirical and experimental methods are commonly used to test theory and develop policy. Are there problems with showing causation given the data available, yes, but more and more better data is becoming available and better methods are being applied to the data.

            Philosophy may not be science but science may be philosophy. There used to be a chair in applied philosophy at one the Scottish Universities and it was the physics chair.

            • McFlock 16.2.1.1.1.1

              I have to ask are you really claiming that in areas other than economics every survey article covers every single paper that has been written on a subject or do they have to leave some material out? If they do leave stuff out then the author has to make a call as to what to leave in and what to leave out.On what basis do they do this?

              It’s actually an issue a colleague has at the moment. It’s part of the research process.
              What we do is if a subject area is flooded with too many publications to consider, we focus our research. Go for a finer-grain issue within the original subject area. But missing out relevant research in the review is a professional error. It means the search was not thorough enough.

              Frankly, if the minimum wage / unemployment literature was as clear cut as you claim most economists think it is, they could have limited their subject area to statistically-significant findings. There would have been oodles.

              • I’m guessing that they are trying to do two things. One cover as much of the literature as possible and two highlight what they think are the best papers giving the most reliable results. Now clearly the first group of papers will be larger than the second and will include papers were the results are not as strong as they could be. At the end of the “Foundations and Trends in Microeconomics” review there are a series of table which list the papers in the review, gives what groups are studied in that paper, gives what data are used, gives a very brief summary of estimated elasticities (or other effects) and comments on methods and gives any criticisms of the paper. Within those tables they highlight the papers they think give the most reliable results. This mean you can see quickly what each paper says how the papers covered compare.

                • McFlock

                  I’m guessing that they are trying to do two things. One cover as much of the literature as possible and two highlight what they think are the best papers giving the most reliable results.

                  One: yes.
                  Two: no. If there is too much statistically significant research to cover, we focus our research subject area until there is not. Our field is not about repeating first-year experiments for the upteenth time, it’s about adding something useful.

                  It’s super that your folk give a list of papers that they reviewed. The point I am making is that if they had focused their research like scientists rather than lobbyists, and if the minimum wage vs unemployment debate were clear cut, they would not have had to rely on “economically significant” (aka “statistically meaningless”) papers to pad out their lit review.

                  • I’m sure they are not padding their paper. Hell its over 150 pages long! They could do away with a lot of the papers and still have a normal sized article. Its more completeness that they are after. All they are saying is that this is the literature, the good, the bad and the ugly. People read it and make up tier own mind. They do,as I said, highlight what they see as the most significant results but everything is there so people can see it all and make up their own minds as to what is significant and disagree with them if they see so fit. As to the economic v. stats significance debate, its a lot wider than just econ and not something that’s going to go away anytime soon. The issues that they been raised are too important for that.

                    • One Anonymous Bloke

                      “Make up their own mind”.

                      There you go again: ‘reality is subjective’.

                    • McFlock

                      funnily enough, if there was any relationship between minimum wage and employment then they would only need the statistically significant papers.

                      In my experience, when many bullshitters lack actual evidence they substitute quality with quantity. Hence the padding.

                    • One Anonymous Bloke

                      +1

                      The fact that the authors were so indiscriminate speaks volumes.

        • tricledrown 16.2.1.2

          Pretty Week arguments Baffling people with bullshit Paul!Most people is not science!

  17. tricledrown 17

    Pathetic Waffler you need an electric chair spreading cynicism the best evidence you have got their Paul!
    Fox news and the tea party Murdoch and the Koch bros they are your masters you have no original thoughts paul no peer reviewed evidence bullying and baffling with bullshit trot off now to your ACT meeting you boring drone

  18. “In my experience, when many bullshitters lack actual evidence they substitute quality with quantity. Hence the padding.”

    Or they were being comprehensive. Looks like a good thing to me.

    • McFlock 18.1

      “Comprehensive” means thorough coverage of relevant information.

      Supplementing significant findings with random noise is more in the lines of “a tale told by an idiot, full of sound and fury, signifying nothing.”

      Was was the quote in your excerpt – “nearly two-thirds give a relatively consistent (although by no means always statistically significant) indication”. Sounds a lot like “seven of the eight criteria associated with Confidence Point Two have been met, or are close to being met”.

      Weasel words mean nothing, and if they are needed then it means an explicit statement is being hidden.

      • Paul Walker 18.1.1

        But the fact that you have studies out there that give different results is relevant. It is only by knowing about there studies that you can evaluate the choice of the papers they say are the most significant.

        • McFlock 18.1.1.1

          That’s where you write something along the lines of “the search method above found 300 papers in this field (listed in appendix b). Of those papers, only fifty met the [p] level of statistical significance required for this review”.

          • paul walker 18.1.1.1.1

            Yes but oomph matters too. So how to decide what s in and out?

            • McFlock 18.1.1.1.1.1

              no it doesn’t.

              Oomph doesn’t matter because if it’s not statistically likely to happen again, it’s not oomph at all – just a loud noise produced by random chance.

              • paul walker

                Say C significant at 1% level, I at 5% level, now what?

                • McFlock

                  Insufficient data.

                  Do either of the the confidence intervals overlap zero?

                • McFlock

                  sorry, bit drunk.
                  So you’re asking which factor is more important if both are significant at 95%?

                  And yes, 95% is a conventionaly give-a-fuck level. If you show be something a magnitude more important but with only 94% bounds not overlapping zero, I might look more closely at it. But I’d still be reluctant to make a major policy decision on the basis of a single study that comes close (but misses) the conventional level of significance.

                  “Close” is a lingerie shop without windows.

  19. ““big oomph” which might just be the result of chance in your dataset is meaningless. If you have “big oomph” without statistical significance, that just means your dataset is patently inadequate for the information you’re trying to extra from it.”

    Unfortunately the data is the data. The real world doesn’t run , normally, lots of random experiments so you get nice datasets. You have to deal with the data as it is.

    • McFlock 19.1

      Indeed.
      So if the real world data is patently inadequate for the information you’re trying to extract from it, all that “indicates” is that any correlation is undetectable.

      Reporting the “oomph” and quietly whispering a “but really, it might be nothing” is a bit silly, isn’t it?

      • paul walker 19.1.1

        Not all real world data is useless. And as its the only data we have in many caes its what you have to deal with. Now by using experimental methods you can get very good data but it comes at a cost. The Rand Health Insurance Experiment that ran in the US in the late 70s cost in 1984 US dollars $130 million (I hate to think what that would be in current NZ dollars). So if you have that to spare I’m sure I get great data on whatever you want.

        • McFlock 19.1.1.1

          I didn’t say all real-world data was inadequate.
          I didn’t even say any real world data was inadequate.

          Just that the characteristics of the data dictate what you can plausibly use it for. The RHIE data might be useful for some questions and inadequate for others. In the latter case, if you’re limited to that data then you use it to answer the questions that it can answer.

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