Higher minimum wages are creating more jobs (with Michael Reich)

Pitchfork Economics with Nick Hanauer

Civic Ventures

Business, Government, News, Politics

4.8 • 1.5K Ratings

🗓️ 23 May 2023

⏱️ 39 minutes

🔗️ Recording | iTunes | RSS

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Summary

Ten years ago, Nick was called "near insane" for saying that substantially raising the minimum wage would create jobs. In retrospect, it seems obvious: After all, if no one has any money, who will buy all the stuff? Researchers at University of California, Berkeley have found more data to support this theory in a first-of-its-kind study on the effects of the $15 minimum wage. Michael Reich, one of the economists who worked on this exciting report, shares his findings with us. Michael Reich is Professor of Economics and Chair of the Center on Wage and Employment Dynamics (CWED) at the Institute for Research on Labor and Employment (IRLE) of the University of California at Berkeley. Twitter: @IRLEUCB High Minimum Wages and the Monopsony Puzzle https://irle.berkeley.edu/publications/working-papers/high-minimum-wages-and-the-monopsony-puzzle New Study Finds a High Minimum Wage Creates Jobs https://nymag.com/intelligencer/2023/05/new-study-finds-a-high-minimum-wage-creates-jobs.html Website: http://pitchforkeconomics.com Twitter: @PitchforkEcon Instagram: @pitchforkeconomics Nick’s twitter: @NickHanauer

Transcript

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0:00.0	The question is not should we raise the minimum wage? The question is, how high should we raise it?
0:04.3	The conventional wisdom that we teach is introductory economics that when something's price has gone up, you buy less of it.
0:10.8	Lots of economists used to think that higher minimum wages would mean clients and jobs, and we're the first to find the actual positive effect.
0:18.2	When workers have more money, businesses have more customers and higher more workers.
0:23.4	Could there be a more obvious thing about economic causing effect?
0:30.0	From the home offices of civic ventures in downtown Seattle, this is Pitchfork Economics, with Nick Hanauer, the best place to get the truth about who gets what and why.
0:49.0	I'm Nick Hanauer, founder of Civic Ventures.
0:52.0	I'm David Goldstein, senior fellow at Civic Ventures.
1:01.0	Nick, I thought we'd share with our listeners a little bit of our origin story.
1:08.0	You and I, we first started working together due to our mutual interest in the $15 minimum wage.
1:17.0	Yeah, in the before times.
1:20.0	Right, you were, you were a big backer of $15, and I was at the time writing for the stranger, Seattle's all weekly.
1:30.0	And I think it was one of my foul-mouthed takedowns of the Seattle Times editorial board on this issue that got us in touch with each other.
1:43.0	Probably, probably.
1:44.0	Yeah, they were the, well, they were and continue to be to a certain extent, the troglotites of the time, right?
1:50.0	Just the voice of the radical orthodoxy raising wages kills jobs.
1:56.0	That's right.
1:57.0	Yeah.
1:58.0	And that throughout that entire battle in Seattle and elsewhere, that's what we kept hearing, that if you raise the minimum wage, it's going to hurt the people.
2:07.0	We're trying to help that when you raise the price of something, people buy less of it, so there will be fewer jobs.
2:16.0	And that's what happens when you mess with that perfectly rational market.
2:21.0	And it turns out that in Seattle, we, we had studies here that ended up showing, no, actually wages rose for the people we were trying to help.
	...

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