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A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

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Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#171

Post by boona »

lend000 wrote: post #42

The problem I have with the minimum wage is that it transfers wealth from the very poorest to the mid-working class/lower middle class. Who am I to tell a homeless person that she is legally forbidden to engage in a voluntary, hourly employment contract for less than $15/hr? I would effectively be guaranteeing that she stays unemployed/homeless. Regardless of practical effects (which are ambiguous at best), it's wron…

This. What's unfortunate is that depending on what narrative you subscribe to around minimum wage, it can sound like an obviously good thing, or an obviously bad thing. It sounds great that you want to increase the wages of workers by increasing the minimum wage. It sounds awful when you want to exclude certain individuals from the job market by increasing minimum wages and making it against the law for low skilled workers to get jobs. The cold hard fact is that is that no matter your intention, you can't get one without the unintended consequences of the other. So yes you'll get an increase in wage for certain individuals, but you'll also exclude out of the market those who cannot yet produce at that rate. It's sad but true.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#172

Post by coldpie »

dreta wrote: post #154
nkoren wrote: post #142

Earlier quoted context omitted.

> You just can't afford a new iPhone. Or a home. Or a car. Or healthcare. The idea that minimum-wage life in America is in any way up to developed-world standards is horribly, laughably, tragically wrong. Not saying that minimum wage is the answer. Personally, I support abolishing it in favor of a Universal basic Income. But suggesting that the problem it is trying to address isn't even real is... just not correct.

Yes, it does afford you healthcare the way US works right now, if it doesn't, that's a failing of Obamacare. Also, you want to be able to afford a car and a home by working at McDonald's? What are you talking about? And your solution is to not even have people work, just be given money. That's borderline insane. What cozy life do you have to be living to think that you're entitled to these things.

You support, and vote for, universal healthcare and advanced and subsidized public transportation systems, right?

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#173

Post by clavalle »

SamReidHughes wrote: post #169
clavalle wrote: post #162

Earlier quoted context omitted.

A long-term contract isn't necessary; only a continued razor thin margin of financial error that can devolve, more or less immediately, into desperation again. /Tens of Millions/ of Americans live their lives there.

You have to remember that the guy's other option in this example is not working at all, and getting no money. He demonstrably prefers the working situation, by doing it. It's of no risk to him and he can back out at any time. Edit: I also think your expectations of relative difficulty in finding new work and doing it might be the result of minimum wage and other legally imposed on boarding costs. There would, for exa…

Yes, but the 'why' of his preference is important here. Preferring something to avoid pain or death doesn't lead to net positive transactions, in general.

If I ask you whether you want your leg or your left hand cut off (and I have the power to make either happen) you can have a preference and still lose.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#174

Post by turtleofdeath »

tptacek wrote: post #43

I really dislike this framing. By any contemporary definition I'm a "liberal": * I support higher taxes, particularly on higher income people, almost for its own sake. * I oppose almost all military intervention abroad. * I believe the federal government needs to intervene with local governments to prevent police abuses. * I strongly support public schools and oppose public-funded charters. ... and I could go on and…

I know this is unrelated to the post but I am genuinely/respectfully curious (since you left it as a bullet) as to the chain of logic that makes it okay to tax higher income people more. I've never understood that.

Full disclosure: if it were up to me, we would go with either a flat tax or something more sensible that an economist has proposed (i.e. Friedman's negative income tax). But that would, of course, largely abolish the need for the IRS and the thousands of jobs tied to figuring out taxes each year. In other words, I am definitely more keen on a strong vector toward Libertarianism.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#175

Post by greggyb »

clavalle wrote: post #170
greggyb wrote: post #165

Earlier quoted context omitted.

I didn't say that the person should take the exploitative job. The term you're looking for is opportunity cost. And yes, the opportunity cost of A is !B. Similarly the opportunity cost for B is !A. We could come up with all sorts of stuff that happens in the time that would otherwise be devoted to the exploitative job, but that wouldn't clarify the point being made here. We are in adversarial agreement.

Exploitative employment can be defined as one being paid much less than one's time is worth. So the 'slightly less bad' assessment of the exploitative employment is incorrect because having all of the time at full value is better than selling some for lesser value.

You do realize that you're adding a third scenario?

You are saying that I can choose (no employment | exploitative employment | non-exploitative employment), whereas my post you originally responded to had (no employment | exploitative employment).

I agree with you. Expanding the set of choices is a good thing.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#176

Post by hirundo »

PatentTroll wrote: post #152
hirundo wrote: post #53

Opponents of a minimum wage need only believe that increasing the price of a thing tends to proportionally decrease the demand for that thing. This is simply a statement of the law of supply and demand, which is (though weaker) the economic equivalent of physics' F=MA. Proponents of a minimum wage need to believe that in this particular case, raising a price does not proportionally decrease demand. While this may be…

Your conclusion lies on the assumption that rational economists must oppose any measure which decreases demand.

This particular decrease of demand is of work hour and jobs, and thus an increase in misery of particularly vulnerable people. If an economist is both rational and compassionate, they would need to believe that such price fixing has benefits that outweigh the increased misery.

I'm not familiar with those offsetting benefits. If they exist, please enlighten me.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#177

Post by atemerev »

tptacek wrote: post #123
ancap wrote: post #113

Earlier quoted context omitted.

To address this point I will quote from Walter Block[1]: >Just because Hazlitt has no formal credentials in economics does not render his views fallacious or superficial. There are other highly respected economists, in the modern era, who do not have a PhD in economics: David Friedman (physics PhD), Henry Manne (law degree), Gordon Tullock (law degree). Gary Becker wrote a lot about sociology, but his PhD was in econ…

Hazlitt wasn't a scholar of any sort. He was a writer. He's got about as much authority on this subject as John Stossel. The irony of this citation is that we're commenting on a paper that opens by observing that the theory of minimum wages, derived in effect from economic first principles, hugely oversimplifies the empirical reality. And as support for that study.. Hazlitt.

Is von Mises authoritative enough for you?

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#178

Post by SamReidHughes »

clavalle wrote: post #173
SamReidHughes wrote: post #169

Earlier quoted context omitted.

You have to remember that the guy's other option in this example is not working at all, and getting no money. He demonstrably prefers the working situation, by doing it. It's of no risk to him and he can back out at any time. Edit: I also think your expectations of relative difficulty in finding new work and doing it might be the result of minimum wage and other legally imposed on boarding costs. There would, for exa…

Yes, but the 'why' of his preference is important here. Preferring something to avoid pain or death doesn't lead to net positive transactions, in general. If I ask you whether you want your leg or your left hand cut off (and I have the power to make either happen) you can have a preference and still lose.

> Preferring something to avoid pain or death doesn't lead to net positive transactions, in general.

Actually, it does. Because avoiding pain or death, in a preferable way, is by definition a net positive.

> If I ask you whether you want your leg or your left hand cut off (and I have the power to make either happen) you can have a preference and still lose.

That's not the shape of the example here. The employer isn't the only job in town, and the employer didn't impose a situation of joblessness on the guy. There are other employers he could do menial low-trust work for.

The answer of imposing a minimum wage, by the way, means you get your leg and hand cut off.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#179

Post by TYPE_FASTER »

RussianCow wrote: post #148
tdb7893 wrote: post #127

Earlier quoted context omitted.

A lot of my girlfriend's friends work at or near minimum wage because they just need any job and the fact that there is a minimum wage seems to save them from complete poverty (and it's not like they are trying to start a family or anything yet). I think that there is a optimal minumum wage (15$ seems too high for me) but it's hard for me to argue against it completely having seen the good it has done for people and…

Since we're throwing out anecdotes, I've talked to a few local business owners who are looking at layoffs in the near future as a result of a series of upcoming jumps in minimum wage, because they simply can't afford to pay 50% more (over the next 5 years) and keep the same number of employees. I also met an automation engineer whose business is booming because companies are investing heavily into robotics and other…

> I also met an automation engineer whose business is booming because companies are investing heavily into robotics and other technologies as cheaper alternatives to human beings.

Yes, my guess is increasing the minimum wage, along with the rising cost of healthcare benefits, will be very convenient excuses for automation.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#180

Post by Veelox »

coldpie wrote: post #83
lend000 wrote: post #42

The problem I have with the minimum wage is that it transfers wealth from the very poorest to the mid-working class/lower middle class. Who am I to tell a homeless person that she is legally forbidden to engage in a voluntary, hourly employment contract for less than $15/hr? I would effectively be guaranteeing that she stays unemployed/homeless. Regardless of practical effects (which are ambiguous at best), it's wron…

> On the other hand, the minimum wage definitely benefits middle class teenagers on their first jobs (if they can get a job), and has questionable benefit for millennial humanities college grads who have yet to start a career. This is the problem. Everyone working 40 hours per week deserves a living wage, whether they're fresh out of high school or 8 years into a humanities degree. There's this weird sense out there…

What would you need to be able to afford for it to count as a living wage? I would say enough to cover food, clothing, housing, and healthcare for you and a dependent.

One of my issues with setting a national minimum wage is those last two are very different if you are living in Seattle vs rural Arkansas. How would you set minimum wage in such that it gives the same standard of living to people in both of those places?

As an aside, I think our social safety net should be changed so that any income will increase your standard of living. There are too many situation were going from 0$ to something will decrease your standard of living.

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