At Work

Higher minimum wage raises higher wages too. Of course it does.

“However, this study also finds that Seattle’s minimum wage increase led to increased earnings for high-wage workers. A finding which is inconsistent with the general understanding of wage dynamics.” MIT paper.

Really? Inconsistent? There is a thing called salary compression that is part of wage dynamics. Why would it be a surprise to researchers if wages for those earning above the new minimum wage increase in response to a rise in the MW?

If you earn $15.00 an hour with the MW at $7.25 or anything below what you earn, and the MW goes to $15 would you not expect a ripple effect to take place and all wages eventually adjust upward?

If that did not happen you would be increasing the number of minimum wage jobs.

The very fact other wages increase and thus increase spending and costs and prices is exactly why raising the minimum for people who remain in MW jobs has little or no real long-term value, but is simply “a rising tide raises all boats” scenario.

Real progress promised to minimum wage workers only comes from getting out of a minimum wage job.

Advertisements

1 reply »

  1. Of course it does. That is why represented employee unions back the $15 minimum wage, even though many already have wage rates > $15.

    Like

What's your opinion on this post? Readers would like your point of view.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s