St. Louis Just Hiked Minimum Wage By 43%; Guess What Happens Next

Tyler Durden's picture

Seemingly no amount of empirical evidence will ever convince progressives that raising minimum wages to artificially elevated levels is a bad idea.  Somehow the basic idea that raising the cost of a good ultimately results in lower consumption of that good just doesn't compute. 

And while roughly 50% of the country will promptly ignore it, below is yet another study, from Dr. David Macpherson of Trinity University and Dr. William Even or Miami University, pointing out the devastating consequences of minimum wage hikes.

This study takes a look at the city of St. Louis and its decision to hike minimum wage rates 43% by 2018 from $7.70 per hour to $11.00.  Macpherson figures such a hike will cost the city roughly 1,000 jobs and, as usual, will hurt the "young and less-skilled" workers the most.

Minimum wage proponents in the city have portrayed the proposed increase as a no-lose proposition. The labor union funded group Missouri Jobs With Justice has even suggested a minimum wage hike would help local businesses and the economy. But a wide body of economic research, including a 2014 Congressional Budget Office (CBO) report, concludes that minimum wage hikes reduce job opportunities especially for the young and less-skilled.

 

A new analysis by Dr. David Macpherson of Trinity University and Dr. William Even of Miami University finds that an $11 minimum wage in St. Louis would cost the city roughly 1,000 jobs, with the job loss mostly occurring among the city’s most vulnerable populations.

Meanwhile, Macpherson notes that minimum wage hikes often don't even help poor families, at least those that are able to keep their jobs after the layoff notices are passed out, but instead flow to the teenage workers of more affluent families. 

Beyond the consequences to the labor market, raising the minimum wage has been criticized on the grounds that it’s poorly-targeted to low income families. For instance, an earlier analysis found that the average family income of a beneficiary of a $12 minimum in Missouri exceeds $57,000 a year. (Many of the employees are second- or third-earners in higher-income households.) Similarly, Census Bureau data show that over half (52 percent) of the state’s poor residents don’t work, and wouldn’t be impacted by a raise.

And here's a look at who will get crushed the most by St. Louis' 'progressive' policies.

Women...

SL

 

Teens...

SL

 

Low-skilled...

SL

 

Of course, when all of these minimum wage hikes prove to be miserable failures, the responsible 'progressives will effortlessly lay the blame at the feet of the wealthy 1%'ers who are behind all the layoffs.  Checkmate.

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Darktarra's picture

For low skilled and low educated people, good luck finding employment!  People just don't think things completely through anymore and well they have to pay the price! 

VWAndy's picture

 Yep. Maybe next time they will do the math themselves.

ShorTed's picture

Statism:  Ideas so good they have to be mandatory.

-borrowed from AgainstCronyCapitalism.com

PrayingMantis's picture

 

..."St. Louis Just Hiked Minimum Wage By 43%; Guess What Happens Next." ...

... next headline ... "St. Louis Small Businesses Just Reduced Minimum Wage Employees By 43%" ...

 

ejmoosa's picture

Overheard on a St Louis transit bus:

"The boss wants to see me this afternoon.  Hot damn...i"m gettin'a a raise."

 

Overheard later that afternoon in a local St Louis bar:

"F&@ that shit.  Now I got nothin'"

 

Squid Viscous's picture

East St. Louis Toodle-Oo?

 

Son of Loki's picture
'Keeping American Jobs Act' introduced to prevent replacement of US tech workers by H-1Bs.

 

In the latest onslaught against the H-1B program -- or specifically, the alleged misuse of the H-1B program by cost-cutting American companies and Indian IT firms -- another Bill was re-introduced late last week that aimed to choke off the undermining of American tech workers by foreign ones.

The Keeping American Jobs Act was brought back into the fray by Derek Kilmer (Democrat) and Doug Collins (Republican) that aims to prevent companies from making their existing American workers train H-1B tech workers in the country before permanently moving those jobs overseas, a process popularly known as "offshoring". 

 

http://www.zdnet.com/article/keeping-american-jobs-act-introduced-to-pre...

techpriest's picture

If you want to help the poor, do not create a law that prevents the poor from doing what they are currently doing.

Stuck on Zero's picture

Employers will have to a) send the job overseas, or b) hire illegal aliens.

wren's picture

But they have a right to that extra money. It is their right. In fact, why have jobs at all? The Fed should just do a direct deposit into every minimum wage or unemployed person and drop $4,000 per month into their accounts. That would solve everything!

Well, I'd like to see that happen nationally. Get this hyperinflation thing going full stream!

Rich Stoehner's picture

I live in stl, the people running the show are extremely undereducated and under qualified

All_Your_Base's picture

City resident here as well. When I heard we were going forward with this nonsense, I suggested if we are going to do it, then make it $25/hour instead so our city could become the tip of the automation spear. Forward!

DaveA's picture

Why not just double the minimum wage for H-1B workers? I believe it's now $65,000/year. If you really need a Japanese teacher or an Indian programmer that badly, pay up.

post turtle saver's picture

no one in East St Louis works... especially since that's the Illinois side lol

Offthebeach's picture

Better off moving you buisness to Allepo, Syria. 

Giant Meteor's picture

Should be good for a healthy drop in the official unemployment rate ..

Probably can get this thing down to 2%, soon everyone will have jobs .. not being counted ..

JRobby's picture

Food Service, Housekeeping & Retail COLLAPSE!

Congratulations! Your sales tax and income tax projections just evaporated!!!!!!

This is called shooting yourself in the foot deep, deep, deep in the forest. You bleed to death.

CheapBastard's picture

<< For low skilled and low educated people, good luck finding employment!>>

 

Well, not as bad as you might think. There's 1) government jobs [if you are AA]; 2) teaching [if you are a left wing lib with ties to the DNC or soros]; and, 3) barrista at Starbucks [if you are a refugee].

 

So. There's that.

aardvarkk's picture

2) teaching [if you are a left wing lib with ties to the DNC or soros]

A few years back I got into an identity crisis and thought I wanted to change careers.  I had a new daughter who looked like she might have behavioral issues plus I like working with kids, so I took a master's program and got a degree in special education (emotional/behavioral disorders).  The coursework was, as I expected, a cakewalk, so long as I remembered to include lots of platitudes in my papers about the wonders of diversity and how each child is special and deserves unicorns and so forth, but student teaching for that thing was a real eye-opener.

By the end of it, I was ready to continue on and finish my tech career...but after the first semester I knew one thing for sure.  If I did end up teaching, I was going to be a subversive.  I was going to work with parents against the school.  I was going to sneak into the gym and put up anti-teacher-union posters.  I was going to run a blog/website for disaffected teachers to call out their messed-up superiors and name names.

Oh, sure, I would have been fired inside of 6 months.  But it would have been a glorious 6 months.  I still dream about it sometimes, and my teaching license doesn't run out until next spring....one never knows.

Bungbo's picture

20 years ago or so, I had a professor that told me that he was going to prevent my graduation and get me kicked out of the education program.  He accused me of being a fundamentalist and a radical because I wanted to change things.  Apparently, I didn't play along to get along.  I am still in education, but I don't teach in the states.  Public schools in the states are an abomination.  Oh, and by the way, fuck you Dr. Fox.

 

shocktherapy's picture

Ya, because if your smart nothing like this can happen.

 

5 white-collar jobs robots already have taken

http://fortune.com/2015/02/25/5-jobs-that-robots-already-are-taking/

nope-1004's picture

+1.  I'm seeing more "professionals" around me lose their jobs than the blue collar worker.

 

aardvarkk's picture

Since 1992 I've worked in tech shops.  I've seen a lot of people lose their jobs, including myself.  Company reorgs, managers making bad bets, companies going under, people showing up wasted to work or getting wasted while there or not showing up at all or mouthing off to their superiors.  Not one white-collar person I have ever known has lost their job to any form of automation except redundant front-desk secretaries and mail handlers (and some of those successfully transitioned into positions that actually added value).  NOBODY that does anything technical.

I've worked with printers, insurance, banking, financials, electric smart meters, agricultural software, packaging machinery and others, and I'm here to tell you that the low-hanging fruit for eliminating redundant jobs has been picked.  They are now working on the medium-hanging fruit (cab drivers, fast food, truckers, delivery people, etc.) and it will be well past my retirement before they have that in hand.  I'm not convinced they will ever get to automating the higher stuff within the lifetimes of anybody alive today.  There are just too many complications, and people are people.  Especially on the Left, politics rules all and no amount of common sense will break through their force fields (we have begun to build political bullshit into our project schedules and it has really improved our forecasting accuracy).  And if you can't learn, you can't succeed, at least not quickly.

in4mayshun's picture

And at some point people will wake up and realize that the purpose of an economy IS so people have jobs. If everyone's goal is to automate so they have no employees this "society" thing stops working.

rf80412's picture

There was an old Star Trek episode where disembodied brains were endlessly trading paper back and forth in a vault beneath a ruined planet, happy as space clams.

No_More's picture

Nice to know Ray Kurzweil cribbed his crazy transhumanist ideas from a rather poor ST:TOS episode (The Gamesters of Triskellion, the brains are all gambling addicts) & that his bankster friends have no idea of the scam he's pulled on them

JuliaS's picture

Wrong.

People exist because governments subsidize and encourage reproduction, to please industrialists and corporations that thrive on cheap labor. If it were not for them, we would not be reproducing in such vast numbers. We are cattle bread deliberately to run machines. We are also a product of fiat money and credit that distort the real cost of living. When banks print money, somewhere down the line people will spend to set up families they would not have started if they were aware of the true state of the economy.

Labor no longer produces wealth. True cost of energy is rising and along with it the value of raw muscle and brain power goes down. A worker simply becomes an extra mouth to feed.

slightlyskeptical's picture

Not one white collar ob lost...yeah but what about the non-white collar jobs at all the companies you sold your work to?

AGuy's picture

"Not one white-collar person I have ever known has lost their job to any form of automation except redundant front-desk secretaries and mail handlers (and some of those successfully transitioned into positions that actually added value). NOBODY that does anything technical."

Just the opposite here. Lots of technical/skilled white collar jobs have been eliminated and mostly by automation (server virtualization, cloud systems, new IT systems (sales, accounting, legal, etc) that only require about 20% of the workers with older systems. I've seen IT departments get cut by more than 60%. The dead-weight (ie middle managers) have been able to stick around because they now manage cloud systems (working with vendors on support issues, scheduling upgrades, adding/removing users). Usually cloud systems do not need any on-premise technical staff. The semi-technical managers just issue tasks to the vendor to address, and preserve their role as middlemen.

FWIW: I think we will start to see a new wave of jobs cuts beginning later this year as more corporations shift to newer IT systems. The move to migrate to the cloud has just begun. I think we will also see automation outside of corporate/white collar jobs too). ie More self-checkout, order Kiosks, etc. Cost cutting will be the leading agenda for the next few years as consumer spending continues to decline. Over all I expect 1/3 of US jobs to be replace by automation or outsourcing (ie Cloud services) over the next 5 to 7 years.

Perhaps there will be growth in some IT areas (ie cloud system will hire some IT workers) and there will be start ups as more cloud services are created to permit business to outsource on-premise systems. But there won't be a 1:1 replacement ratio. For every 10 IT workers laid off, perhaps 1 or 2 will get a new job at a cloud service company or startup. These companies will also likely be picking the cream off the IT labor pool. They will only be hiring the top skilled IT workers. IT workers that don't have a broad skill set or familiar with the current technologies will become unemployable.

VWAndy's picture

Buggy whip making jobs were not missed. Its on each of us to keep up on marketable skills.

crossroaddemon's picture

You know damn well most labor is unskilled. There will never, ever be enough skilled jos to go around for even a fraction of teh present population. If you want postwar prosperity back, unskilled labor has to make enough money to survive.

VWAndy's picture

 Yep thats why I fully intend to make the robot owners pay thru the nose. Cheap labor is actually harder to beat then most people think. And if the robot owners take the beating they asked for it would be best for everyone.

techpriest's picture

Nobody owes you or me anything.

crossroaddemon's picture

True, but if I'm going to work for you it had damn sure better be worth my time. If I can't live on what you're paying me, it's not worth my time.

techpriest's picture

Then don't work for me. But if you are so unemployable that absolutely no one would take a chance on you for more than $5 an hour, it's not my fault.

For a real-life example, I needed a consultant to help me with a very simple task, and I put out a going rate of $20/hour for the job (sounds like a lot, but there weren't a lot of hours). Just some copy and paste computer stuff. The first guy I talked to was someone I knew before, and he complained a lot about not being able to improve his situation of earning $10k per year and living at home. I told him to send me a resume + W9 (he has an accounting degree and makes the $10k doing tax returns for a bitch boss), and funny enough, he never did. But he sure kept whining.

In the end a friend of mine from college, who had just gotten out of the Marines took me up on it, did a better than expected job (taught himself a way to do it faster and finished the job in half the expected time), and he was able to make rent until he found a full-time gig. I doubt he will ever lack good work.

AGuy's picture

"Buggy whip making jobs were not missed. Its on each of us to keep up on marketable skills."

The problem is, that more than half of the US labor pool only has buggy whip skills. Its not as if a saleman, factory worker, review lawyer, etc can ever be retrained to learn javascript/hadoop/Python/C++/HDL, etc. These people will end up permanently unemployed or get stuck with low paying no-skill jobs (ie walmart greeter, Security Guard, etc).

The US middle class is on its deathbed.

thetruthhurts's picture

 "Yep. Maybe next time they will do the math themselves."

 

They went to public school......they can't.

A Nanny Moose's picture

Da Mafs is a rayciss micro-aggression.

Hitlery_4_Dictator's picture

LOL there is no price to pay for them, they can now just get on the welfare dole. It's a win win for the morons. 

Squid Viscous's picture

didn't anyone ever watch The Jetsons??

for fuck's sake Rosie the Robot could do anything that Tamishqwa can do today, for alot less, and wouldn't burn the fries every other time

that was like 50 years ago, sheesh

Takeaction2's picture
Takeaction2 (not verified) Squid Viscous Mar 29, 2017 2:31 PM

When you said "Tamishqa"  I had to bring up one of my all time favorite "SMILE" videos...You ready?

https://youtu.be/KLsg5Nwy8eU

Squid Viscous's picture

great plus some excellent police work they should make it into a training lesson.

Takeaction2's picture
Takeaction2 (not verified) Darktarra Mar 29, 2017 2:29 PM

Why not make it $150.00 an hour?  

crossroaddemon's picture

On the other side of the coin, what kind of moron even gets out of bed for a job that doesn't pay enough to live on? Sorry, but a working person who can't afford foo and shelter shouldn't even be a thing. ZH readers keep saying they want the prosperity of the 50s and 60s... well fine. In those days minimum wage would be over $20 an hour with modern money. We're not getting it back any other way.

Yog Soggoth's picture

Bullcrap. I know people who are worth 10$ a day and are happy to do some lame job to get it. As an employer I look to pay people what they are worth, because even after work I am busying my self in preparation for the next day. Someone else who does that you want to keep, and will get paid whatever keeps them around. The problem is unskilled/lazy/stupid/self entitled/unreliable labor, not lack of jobs where I live. If you can fix stupid then you are going to make a lot of money.

post turtle saver's picture

I don't know how many times I have to say it, but I guess once more... labor union rates are a function of minimum wage, so of course they lobby to have it raised... and to hell with anyone else who isn't part of their club...

Pew Pew Pew's picture

The missed point here is that those who make such decisions or encourage voters to approve such decisions are fully aware of the inevitable results.

In many ways, increased unemployment of the marginal labor force is a desired effect.  It creates dependents to the entitlement apparatus of the State.

When a significant bloc is "on the dole," it will elect those individuals that will continue the status-quo of so-called "welfare" and other programs.

These people are not idiots.  They're deviants.

thetruthhurts's picture

Just a 1000?

Moar like 10,000.