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A Basic Income Is Smarter Than a Minimum Wage

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Re: A Basic Income Is Smarter Than a Minimum Wage

#71

Post by ryanmonroe »

a3n wrote: post #43
kough wrote: post #29

> No one wants to hire them at a high minimum wage, especially when locals are readily available The main drawback to a minimum wage is that it artificially increases the cost of labor, to the point where it's no longer worth it to an employer to hire a low-output employee. I think we'd all agree that increasing employment is a good goal, but an increased minimum wage actually hinders progress on that front. As the m…

> The main drawback to a minimum wage is that it artificially increases the cost of labor, And? Why is that artificial increase a problem. Every law on the books is an artificial act. I don't see many people wringing their hands over the mortgage interest deduction, another of those artificial changes to the economy.

Read the rest of the sentence

>it's no longer worth it to an employer to hire a low-output employee

Re: A Basic Income Is Smarter Than a Minimum Wage

#72

Post by spinlock »

harryh wrote: post #2

$10,000 * US_POPULATION ~= $3.2T ~= The total annual tax revenue of the US federal government. Just something to keep in mind when discussing this topic.

This is a very good back of the envelope calculation. But, I think you need to take a similar look at the cost of social security, etc...

Re: A Basic Income Is Smarter Than a Minimum Wage

#73

Post by alttab »

a3n wrote: post #43
kough wrote: post #29

> No one wants to hire them at a high minimum wage, especially when locals are readily available The main drawback to a minimum wage is that it artificially increases the cost of labor, to the point where it's no longer worth it to an employer to hire a low-output employee. I think we'd all agree that increasing employment is a good goal, but an increased minimum wage actually hinders progress on that front. As the m…

> The main drawback to a minimum wage is that it artificially increases the cost of labor, And? Why is that artificial increase a problem. Every law on the books is an artificial act. I don't see many people wringing their hands over the mortgage interest deduction, another of those artificial changes to the economy.

The mortgage interest deduction "hurts" only government tax revenues. Raising the tide on minimum wage impacts every business that has employees, regardless of what their cost structure is.

What if your business worked in such a way that a single employee wouldn't even produce $15 of revenue in an hour? You can't lose money on every sale and make up for it in volume.

The artificial increase is a problem because it goes against supply and demand, which is a natural law of economics.

Re: A Basic Income Is Smarter Than a Minimum Wage

#74

Post by [deleted] »

a3n wrote: post #43
kough wrote: post #29

> No one wants to hire them at a high minimum wage, especially when locals are readily available The main drawback to a minimum wage is that it artificially increases the cost of labor, to the point where it's no longer worth it to an employer to hire a low-output employee. I think we'd all agree that increasing employment is a good goal, but an increased minimum wage actually hinders progress on that front. As the m…

> The main drawback to a minimum wage is that it artificially increases the cost of labor, And? Why is that artificial increase a problem. Every law on the books is an artificial act. I don't see many people wringing their hands over the mortgage interest deduction, another of those artificial changes to the economy.

[deleted]

Re: A Basic Income Is Smarter Than a Minimum Wage

#75

Post by grahamburger »

Permit wrote: post #41
seibelj wrote: post #11

Earlier quoted context omitted.

Don't have an opinion on any of this, but how many of the population you calculate are citizens over the age of 18? And what would be saved from the US budget by eliminating various existing programs that would be superfluous by UBI?

Do children not typically receive the universal basic income? If not, is it fair to give a parent of three children the same allowance as I (a single person) receive? I also wonder about whether or not $10,000 is more or less than someone on disability currently receives. Is there a risk here that the more vulnerable members of society will end up receiving less money?

I've often wondered this too. I suspect that a family making use of WIC, medicaid / medicare and/or disability is commonly using more than $10k/person/year or gov't assistance, and would lose money going to UBI at that rate. I also wonder what could be done to avoid the UBI version of the two-income trap[0] - seems like UBI would naturally pressure entry level wages downward.

http://www.amazon.com/The-Two-Income-Trap-Middle-Class-Paren...

Re: A Basic Income Is Smarter Than a Minimum Wage

#76

Post by anoonmoose »

a3n wrote: post #43
kough wrote: post #29

> No one wants to hire them at a high minimum wage, especially when locals are readily available The main drawback to a minimum wage is that it artificially increases the cost of labor, to the point where it's no longer worth it to an employer to hire a low-output employee. I think we'd all agree that increasing employment is a good goal, but an increased minimum wage actually hinders progress on that front. As the m…

> The main drawback to a minimum wage is that it artificially increases the cost of labor, And? Why is that artificial increase a problem. Every law on the books is an artificial act. I don't see many people wringing their hands over the mortgage interest deduction, another of those artificial changes to the economy.

He gave the "and" in his comment- artificially increasing the cost of labor can potentially prevent people whose contribution is worth less than that cost from ever entering the market.

Re: A Basic Income Is Smarter Than a Minimum Wage

#77

Post by harryh »

a3n wrote: post #43
kough wrote: post #29

> No one wants to hire them at a high minimum wage, especially when locals are readily available The main drawback to a minimum wage is that it artificially increases the cost of labor, to the point where it's no longer worth it to an employer to hire a low-output employee. I think we'd all agree that increasing employment is a good goal, but an increased minimum wage actually hinders progress on that front. As the m…

> The main drawback to a minimum wage is that it artificially increases the cost of labor, And? Why is that artificial increase a problem. Every law on the books is an artificial act. I don't see many people wringing their hands over the mortgage interest deduction, another of those artificial changes to the economy.

The majority of economists (as well as many other people) think that the mortgage interest deduction is bad policy.

Re: A Basic Income Is Smarter Than a Minimum Wage

#78

Post by p4wnc6 »

a3n wrote: post #43
kough wrote: post #29

> No one wants to hire them at a high minimum wage, especially when locals are readily available The main drawback to a minimum wage is that it artificially increases the cost of labor, to the point where it's no longer worth it to an employer to hire a low-output employee. I think we'd all agree that increasing employment is a good goal, but an increased minimum wage actually hinders progress on that front. As the m…

> The main drawback to a minimum wage is that it artificially increases the cost of labor, And? Why is that artificial increase a problem. Every law on the books is an artificial act. I don't see many people wringing their hands over the mortgage interest deduction, another of those artificial changes to the economy.

It is a problem if all of the would-be employers look at you and say, "Well, for what you bring to the table, I would be willing to pay $3/hour, but no more. If I have to pay more than that, I will simply make do with life having fewer employees."

You would prefer $7/hr instead of $3/hr, but you would prefer $3/hr instead of $0/hr.

Re: A Basic Income Is Smarter Than a Minimum Wage

#80

Post by savanaly »

a3n wrote: post #43
kough wrote: post #29

> No one wants to hire them at a high minimum wage, especially when locals are readily available The main drawback to a minimum wage is that it artificially increases the cost of labor, to the point where it's no longer worth it to an employer to hire a low-output employee. I think we'd all agree that increasing employment is a good goal, but an increased minimum wage actually hinders progress on that front. As the m…

> The main drawback to a minimum wage is that it artificially increases the cost of labor, And? Why is that artificial increase a problem. Every law on the books is an artificial act. I don't see many people wringing their hands over the mortgage interest deduction, another of those artificial changes to the economy.

I usually really, really hate when people trot out the "go back to econ 101" argument, but in this case it applies. The reasons why a minimum wage might be inefficient (to what degree is very much debatable and dependent on the cirumstances) are explained thoroughly in any introductory microeconomics educational resource.
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