Actuarial Outpost
 
Go Back   Actuarial Outpost > Cyberchat > Political Issues
FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions

Meet Rhonda Glick, DW Simpson Director of Client Development

Reply
 
Thread Tools Display Modes
  #11  
Old 10-29-2013, 04:47 PM
DanielSong39 DanielSong39 is offline
Member
SOA
 
Join Date: Sep 2009
College: Caltech, Class of 2000
Posts: 5,892
Default

Quote:
Originally Posted by independent View Post
I'd say that the minimum wage in the US impacts so few workers, and the elasticities are so low, that it's impossible to get good empirical data. Any actual impact of minimum wage changes is drowned out by the normal background noise in economic statistics.

That said, if the author wants to go down that road, I think his "conclusion" should have included one more number. It should read

" I estimate that
the pending 14% increase in New Jersey’s minimum wage will increase unemployment
among workers without a high school education (by approximately two percentage
points), increase unemployment among workers without high school diplomas in
general (by approximately one percentage point), and have no effect on unemployment
among college-educated workers."

(The increase was from $7.25 to $8.25)
There are a lot of caveats, many of which was mentioned in my economics thread. There are a lot of hidden costs and the true impact is spread over a period of time. The costs are real, however.

The second problem is that minimum wage increase is always part of a larger political agenda. So you have to consider the entire agenda as a whole. This is tougher than it sounds because much of the agenda is hidden and is only revealed incrementally, over an extended period of time.
Reply With Quote
  #12  
Old 10-29-2013, 04:49 PM
soyleche's Avatar
soyleche soyleche is offline
Member
 
Join Date: Apr 2005
Posts: 12,502
Default

Quote:
Originally Posted by WhyAndHow View Post
What is the correct minimum wage. There must be an optimal amount. Is it $8.25/hour? Why? Maybe $11.17? How does a government decide? Show your work.
__________________
I'll never again say that I could never enjoy Bieber sung by a bunch of Mormons - Ben Folds
Reply With Quote
  #13  
Old 10-29-2013, 04:53 PM
LifeAct LifeAct is offline
Member
SOA AAA
 
Join Date: Aug 2006
Posts: 12,647
Default

Quote:
Originally Posted by soyleche View Post
I hope that you have a lot of popcorn. jas66Kent doesn't have the best track record of actually answering questions.
Reply With Quote
  #14  
Old 10-29-2013, 04:53 PM
Rickyfire's Avatar
Rickyfire Rickyfire is offline
Member
CAS
 
Join Date: Dec 2007
Location: Boston Area
Studying for Exam 4
Favorite beer: None
Posts: 4,887
Default

what about increasing minimum wage by the amount that families get in aid (about $3/hr) and just getting rid of the transfer payments?
Reply With Quote
  #15  
Old 10-29-2013, 04:56 PM
DanielSong39 DanielSong39 is offline
Member
SOA
 
Join Date: Sep 2009
College: Caltech, Class of 2000
Posts: 5,892
Default

I think an hourly rate that corresponds to 25% of the national median household income is a politically feasible metric.

So, a rough calculation would lead to something like:

$52,000*25%/2000 hours = $6.50/hour

When the minimum wage is ~10% below this metric it would be raised 10% so that it is at that 25% level again.

I'm trying to come up with a solution that's politically possible, guys.
Reply With Quote
  #16  
Old 10-29-2013, 04:57 PM
Chuck Chuck is offline
Member
SOA AAA
 
Join Date: Oct 2001
Location: Illinois
Posts: 2,884
Default

Pros should not need a minimum wage. They make enough money.

Cons should not be paid at all. After all, they are criminals.
Reply With Quote
  #17  
Old 10-29-2013, 04:58 PM
jas66Kent's Avatar
jas66Kent jas66Kent is offline
Member
SOA
 
Join Date: May 2012
Location: London
Favorite beer: Corona :)
Posts: 14,838
Default

Quote:
Originally Posted by WhyAndHow View Post
What is the correct minimum wage. There must be an optimal amount. Is it $8.25/hour? Why? Maybe $11.17? How does a government decide? Show your work.
That will vary by state due to COL. The federal minimum wage acts as a minimum MW, and each state can then set it's own MW above the federal MW due to COL considerations.

The federal MW should then be indexed to inflation, and be adjusted every year. The state MW's would move concurrently with these federal yearly increases.
__________________
Quote:

“Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure, or nothing at all."
Reply With Quote
  #18  
Old 10-29-2013, 04:58 PM
DanielSong39 DanielSong39 is offline
Member
SOA
 
Join Date: Sep 2009
College: Caltech, Class of 2000
Posts: 5,892
Default

As for welfare, it would be scaled so that total aid cannot exceed ~50% of wages that can be earned by working minimum wage for 2000 hours. That would put a cap of ~$6500 per year or so per household. This should create plenty of incentive to work.
Reply With Quote
  #19  
Old 10-29-2013, 05:03 PM
independent independent is offline
Member
SOA
 
Join Date: Sep 2001
Posts: 7,510
Default

Quote:
Originally Posted by DanielSong39 View Post
There are a lot of caveats, many of which was mentioned in my economics thread. There are a lot of hidden costs and the true impact is spread over a period of time. The costs are real, however.

The second problem is that minimum wage increase is always part of a larger political agenda. So you have to consider the entire agenda as a whole. This is tougher than it sounds because much of the agenda is hidden and is only revealed incrementally, over an extended period of time.
I'm not sure how that is connected to my post.

I said that if the author is going to claim that a particular mw increase is going to raise unemployment by 1% or 2%, he should specify that the particular mw increase he's talking about is 14%.
Reply With Quote
  #20  
Old 10-29-2013, 05:05 PM
DanielSong39 DanielSong39 is offline
Member
SOA
 
Join Date: Sep 2009
College: Caltech, Class of 2000
Posts: 5,892
Default

I was addressing your first point, and not your comments on the author's claim.
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


All times are GMT -4. The time now is 07:46 AM.


Powered by vBulletin®
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
*PLEASE NOTE: Posts are not checked for accuracy, and do not
represent the views of the Actuarial Outpost or its sponsors.
Page generated in 0.24046 seconds with 7 queries