Jansing and Co | February 21, 2013
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>>> a new poll out this morning finds wide support for raising the minimum wage by a nearly 3:1 margin. from 7.25 to $9 an hour. while most americans obviously support the idea, economists and lawmakers are at odds over the impact on the economy, particularly in hiring. here to help us sort it out, jared bernstein. always good to see you. good morning.
>> good morning. thank you.
>>> look, the republicans' in congress argument will frankly small business in particular just can't afford it. what does history tell us.
>> that's exactly the right question. we have dozens of federal minimum wage increases that have taken place, but we also have something like 19 stays -- by the way i was trying to figure out if these were the happy states. i have to go back and do a cross tab on that. but we have about 19 states that have raised their own minimum pages. so we have something unusual and helpful, a set of signal experiments over time and across states. this research has been extremely conclusive. these job loss effects hover around zero. some fin small loss effects, but on net, the benefits of the increase by a large margin fall to the people they're supposed to, low-wage workers get a boost.
>> at some point where does this money come from? the order argument is the businesses have to pass on the costs.
>> that's exactly right. i have a simple acronym -- product activity, prices and profits.
>> some pretty inefficient things get squeezed out a bit. rakances, turnovers, you pay people more, you have a more productive staff. but it's a small margin. i think an important effect comes from profitability. we know that corporations and firms are more highly profitable than they have ever been while the compensation share of national income is at a historical low. workers are getting less, profit act is high. we talked to your friend peet are morici. this is what they told us, that in domestic work, for example, he told us more middle-class families will go without somebody to clean their homes or have someone do it less. could that be unintended consequences that we haven't studied?
>> it certainly could not. we have studied it. that kind of statement from my friend peter betrays a lack of understanding of the literature i was just describing. again it's not 1, 2, 3, 10 studies, it's hundreds of studies, studies that do support the textbook model that says there is some job loss effect, but you have to look at the magnitude of the negative impacts, and they're small. there are studies on the other side that show small positive effects the the point is the vast majority benefit from the increase in the pay. peter and the republicans you cited earlier simply don't like that evidence or they ignore it.
>> thank you for coming in, jared. when you do the cross-tab on happiness, please come back.
>>> today's tweet of the day comes from catherine rampel. the u.s. would have fewer jobs today than it had in