Is there a pendulum of low-skilled workplace satisfaction?

One of the reasons given for why we see minimum wage increases leading to smaller drops in the quantity of labor demanded than we’d expect from a simple supply-and-demand graph is that employers don’t like to fire people. It’s easy to imagine that this argument has some merit. How would you feel breaking the news to somebody that he doesn’t have a job anymore, especially a low-skilled worker who was performing acceptably before the increase, especially knowing that you’ll be the one blamed for it? I think this effect is probably weak—the people who would be long-run managers would end up being the kinds of people who accept having to do their unpleasant duties—but it could have some non-negligible effects at the margin.
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A complementary argument is that employers adjust to MW increases by working employees harder to get more value out of them once they have to pay them more. (I also think this is an important puzzle piece.) Putting together the first and the second arguments, it seems like there’d be an important consequence of MW increases in low-skilled environments: more workplace tension. This is hard to measure, of course, but not impossible. Perhaps some workplaces already do this. If this idea holds water, periodic employee surveys, including managers, over a long enough timeline could show periods of increasing dissatisfaction and returns to stable levels of satisfaction. This would help fill in some of the details about labor force adjustments that many researchers are currently grasping at. Again, I don’t expect to see large changes, but they might be big enough to observe.
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Readers, I’m not wedded to this idea but I think it’s interesting to consider. What do you think?where to buy oakley sunglasses

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  • Kevin Erdmann

    Hello. I’m a new visitor to your blog. I don’t know if any of this is novel to you, but here’s a post I did on the topic: http://idiosyncraticwhisk.blogspot.com/2014/04/minimum-wage-hikes-hurt-job-keepers.html
    I think there might be a wider range of non-pecuniary adjustments available here than just working harder. I would suspect that there are more than a couple dollars an hour worth of adjustments that could typically be made. Just think of the recent case at the Supreme Court about Amazon employees waiting in line to check in or check out of work. Each job has many tiny little adjustments like that which would naturally move toward the new clearing price.