Perennially Dishonest L.A. Times Writer Michael Hiltzik: The CBO Report Saying 500,000 People Will Lose Jobs From an Increase in the Minimum Wage Is a Slam Dunk for Increasing the Minimum Wage
Typical dishonesty from a dishonest writer. Here’s Hiltzik:
Here are the main points. See if you can guess which one has gotten the most headline play in the news.
1. Wages would rise for 16.5 million workers.
2. Income for families living below the poverty line would rise by a combined $5 billion, and by $12 billion for those earning less than three times the poverty level.
3. About 900,000 people would be moved out of poverty.
4. The raise would reduce total employment by about 500,000 workers.
Those are the main points? How about I quote, in its entirety, the summary at the head of the report:
Increasing the minimum wage would have two principal effects on low-wage workers. Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly.
The way Hiltzik explains it, there is only one “main point” that is negative — yet the full summary I just quoted notes not only that half a million people would likely be out of work, but that (duh) their incomes would “fall substantially” and that the general effect on employment for low-wage workers would be bad.
The report also notes near the top:
Moreover, the increased earnings for some workers would be accompanied by reductions in real (inflation-adjusted) income for the people who became jobless because of the minimum-wage increase, for business owners, and for consumers facing higher prices.
Funny, I don’t see higher prices for consumers among Hiltzik’s “main points.” Nor do I see lower income for business owners among Hiltzik’ “main points.”
And while Hiltzik is happy to tell us about the $5 billion increase in income for those in so-called “poverty” and the $12 billion increase in income for some relatively less well-off people, the report actually lists three different effects on income in one place, and four in another. Hiltzik gives us the two rosiest income effects, but fails to mention this one:
Real income would decrease, on net, by $17 billion for families whose income would otherwise have been six times the poverty threshold or more, lowering their average family income by 0.4 percent.
Funny how increases in income for some are among the reports “main points” — but decreases in income for others are . . . not.
After a while, it starts to look like Hiltzik’s “main points” have been cherry picked by a reporter with a history of dishonesty and sneakiness, who wants to sell readers his partisan and slanted view of the report’s findings.
Shockingly.
Thanks to Dana.
Ding.
Patterico (9c670f) — 2/19/2014 @ 10:26 pmI had my hourly salary increased once in my life, from 9 dollars to 10 dollars, and my hour increased when I was given summer assignments (mid 2000, before the financial crash).
Needless to say, I was not risen out of “poverty” in any meaningful fashion. FICA eats up some of the raise, and student loan debt and other financial obligations remained.
16.5 million workers might get pay raises – in a nation of over 350 million people. This means the min wage raise is a moot point for many who already earn way above it. For the retail and service industry workers, their lives improve by maybe 30 more dollars a month, unless you were working full time at min wage.
There won’t be much massive layoffs outside of some fast food joints. Others will cut hours slightly, dump workers on ACA, or just raise prices on consumers.
And lots of small businesses pay their workers cash under the table.
lee (b2dfc0) — 2/19/2014 @ 11:34 pmIt is obvious that Michael Hiltzik needs to have his salary adjusted to the Minimum Wage here in CA, as it would bring his compensation more in line with his contribution to the the quality of the LAT.
askeptic (2bb434) — 2/19/2014 @ 11:42 pmA true level of compensation would have him reimbursing the Times for the costs of his office and related equipment/service that they provide him.
But Patterico, those workers who lost their jobs would have unemployment insurance and food stamps and Medicaid and all the other trappings of the good life on the dole. Funemployment!
What’s your point? It seems like win-win to these statists.
Kevin M (dbcba4) — 2/19/2014 @ 11:44 pmI note that Hiltzik hates the new season of House of Cards. Just another reason to think it’s pretty good.
Kevin M (dbcba4) — 2/19/2014 @ 11:46 pmThe downside of reading this blog is I discovered Michael Hiltzik exists. And somehow he has a job.
Steve57 (a7ff60) — 2/20/2014 @ 12:04 amunexpectedly?
redc1c4 (abd49e) — 2/20/2014 @ 12:54 amRed, Michael Hiltzik is like the Spanish Inquisition.
http://www.youtube.com/watch?v=P1iBbBL1040
Or food poisoning. Nobody ever expects it. Especially when it’s writing for a newspaper.
Steve57 (a7ff60) — 2/20/2014 @ 1:11 amIf they do not work they get welfare. The total welfare package can be vastly more remunerative than even the $10.10 minimum wage for a 40 hour week. So the welfare package is a practical minimum wage for people who are willing to accept the loss of self-worth of taking the handouts. There are plenty of them already. The minimum wage jobs are stepping stones out of welfare. What should be done is cut the welfare payments by 50% of what is earned on the outside so that even SOME work is a boost for them. And tax welfare and pay all at the same rates so there is no hidden tax hit.
{^_^}
JDow (c4e4c5) — 2/20/2014 @ 4:16 amthe 500,000 out of work will lose $7 billion in income as well …
JeffC (8ad636) — 2/20/2014 @ 6:17 amPatterico, interpreting the CBO Report summary:
You’re misreading it.
The CBO considers jobs not to the only source of income for low wage workers.
There’s unemployment insurance.
And there’s also less, but not no work, (in talking about incomes the CBO estimates annual totals, so less seasonal or temporary or part time work or fewer hours in one job would result in lower incomes, in spite of higher wages.)
And maybe pensions, or some forms of welfare also. I don’t know what they count as “income.”
Sammy Finkelman (3015b5) — 2/20/2014 @ 7:13 amYou could maybe still say “became jobless” to describe longer periods of unemployment between jobs.
Sammy Finkelman (3015b5) — 2/20/2014 @ 7:15 amWhether by direction or just like-thinking, all that the esteemed Mr Hiltzik was doing was echoing the White House.
Bought and paid for is bought and paid for; at least he’s doing the job he agreed to do.
The Dana who spotted it (3e4784) — 2/20/2014 @ 8:40 amwisdom thy name is;
https://twitter.com/robinabcarian
narciso (3fec35) — 2/20/2014 @ 9:11 amMany union conracts are tied to the minimum wage. Union salaries automatically go up when the minimum wage rises. It’s a payoff to the unions.
luagha (48ca8a) — 2/20/2014 @ 11:33 amSammy,
I did not misread anything. Read the sentence I wrote again.
Patterico (a21054) — 2/20/2014 @ 12:18 pm#15 nailed it.
steveg (794291) — 2/20/2014 @ 7:00 pmIt is a payoff to the unions.
This is also a callous shove out the door for the middle aged underachiever, and a barrier to re-entry.
Young people will find that there is less and less to do once they are out of high school.
About 20 years ago, entry level jobs became careers for the low achievers and at this pay rate there is not enough productivity to justify their pay.
Bottom line, any raise that is not tied to productivity is stupid
16. Comment by Patterico
That was:
I had the idea you said incomes of low-wage workers would fall.
I should have understood the “duh” to mean you were talking about (only the) incomes of people who lost their jobs.
People who currently had higher incomes would find their “real income” declining, on average, (presumably because of higher prices.)
The average for people below 6 times poverty would go up, according to the CBO, because only a few minimum wage people would be unlucky enough to be completely out of a job.
16.5 million people would have higher income and half a million people would lose all or most of their income – giving a ratio of winners to losers of 33 to 1, according to the CBO.
Income would only have to rise by as little as an average of 3% for those who kept jobs, for there to be a net gain among the population of low income earners as a whole, even if all the losers lost all their income!
A raise of 3% is like going from $7.25 to $7.46 an hour, of $8.00 to $8.24, and the minimum wage hikes would be higher, so making it only 3% assumes even fewer hours and assumes some effects on people paid more than the minimum wage.
That leaves out, however, the cumultative effect of people never getting on the first rung of the ladder, or having that greatly delayed
Sammy Finkelman (6a010c) — 2/24/2014 @ 5:20 pmLet’s put this is a way the left will understand -they wish to institute a 100% income tax on the poorest 500,000 working Americans and distribute that to 16.5 million slightly less poor Americans. Wouldn’t that be exactly the same thing?
Laborite (291f30) — 2/24/2014 @ 5:43 pm19. Comment by Laborite (291f30) — 2/24/2014 @ 5:43 pm
Let’s put this is a way the left will understand -they wish to institute a 100% income tax on the poorest 500,000 working Americans and distribute that to 16.5 million slightly less poor Americans. Wouldn’t that be exactly the same thing?
Not the poorest. The least skilled, maybe, or the ones who have the most difficulty getting hired.
Sammy Finkelman (6a010c) — 2/24/2014 @ 5:48 pmAlso the losers are not actually taxed – the money to pay those slightly better off comes from higher prices paid mostly by people making somewhat more, or from the increased productivity the higher minimum wage law forces.
People are not employed at the job or in the way in which their labor is worth the most per unit of time.
Sammy Finkelman (6a010c) — 2/24/2014 @ 5:51 pmOn second thought, you could say that some peole are taxed at 100% and the money given to those slightly better off, if there was a place or collection of places where the number of jobs went down, but the remaining workers were paid more.
Sammy Finkelman (20d02d) — 2/25/2014 @ 12:19 pm