Job loss predictions over rising minimum wages haven't come true • Hacker News Board

Re: Job loss predictions over rising minimum wages haven't come true

#261

Post by Scapeghost » Tue, Nov 26, 2019, 1:40 AM UTC

bb88 wrote: post #127

hinkley wrote: post #60

Earlier quoted context omitted.

I'm old enough to remember this conversation happening three times, and wise enough to know that this conversation happens every ten years or so probably since the first wage was paid in currency instead of goods. A certain pay rate creates supply. Conditions make it hard to switch jobs. And every year you ever so slowly reduce the effective pay to those employees and they slowly give up little luxuries to make ends…

I'm cynical. I think it's frankly worse than that. When we talk about economic and market forces, we don't talk about "greed" as a major economic force. We know it's the creation of capitalism, but economists seem to do everything in their power to ignore it. Standard economic models breaks down when people are powerful enough to create their own supply/demand curves. We've had the term "working poor" for a while. I…

While not exactly homeless, employed people not being able to afford their own house is the norm instead of the exception in the majority of the world.

In the "East" and Middle East, many employed young adults live with their parents instead of moving out, even after getting married. In the UAE for example, many expats live in crammed conditions with as many as 6 people in a single room! and sharing a single bathroom.

Employment == Your Own House is largely a first world expectation.

Re: Job loss predictions over rising minimum wages haven't come true

#262

Post by gridlockd » Tue, Nov 26, 2019, 1:41 AM UTC

ryan_j_naughton wrote: post #125

xinsight wrote: post #90

Earlier quoted context omitted.

If it is difficult, then it's not a very good business. Serious question: Why would you want to run a business that can only survive by paying people poverty wages?

This is a very naive view of economics. Ideally everyone's income should be derived from the value they generate. So ideally wages continue to rise because productivity continues to rise. But there are many cases where it make more sense to pay 4 low skilled workers to do a job instead of paying the costs of automation plus the cost of the higher skilled worker to use the automated solution. It's why so many jobs in…

> This is a very naive view of economics. Ideally everyone's income should be derived from the value they generate. So ideally wages continue to rise because productivity continues to rise.

This is an ideal with no basis in reality. Wages are, to a first approximation, set by supply and demand, not "value generated". If I hire somebody, I pay the going rate for that type of employee, but only if I estimate that I can still make a profit. I take all the profit, I don't pay more than necessary just because there's more profit, unless I expect to generate even more profit as a result. If I estimate I don't make a profit, I don't hire at all.

Of course I want the most productive workers, so in theory I would be incentivized to reward more productive workers. In practice, actually measuring productivity is extremely difficult in most cases. Also, paying workers differently sows discord. Further, let's say I run an assembly line, I actually have no use for workers that are more productive than the average.

There's a narrow band between minimum wage being completely ineffectual (i.e. real wages are already higher than minimum wage) and pricing people out of the market (i.e. business becomes unprofitable). Only within that band, workers get higher wages, paid for by business profits. There can't be any one "correct" number here for all regions or all professions. Without a safety net to take over those priced out of the market, raising minimum wage is therefore completely irresponsible.

Re: Job loss predictions over rising minimum wages haven't come true

#263

Post by pstuart » Tue, Nov 26, 2019, 1:43 AM UTC

pbhjpbhj wrote: post #179

xinsight wrote: post #90

Earlier quoted context omitted.

If it is difficult, then it's not a very good business. Serious question: Why would you want to run a business that can only survive by paying people poverty wages?

Serious answer: to achieve a particular lifestyle that's not available to you any other way. We ran a pottery studio for 15 years whilst we raised our kids; very low wages, below minimum wage but paid our workers minimum wage (despite not needing to, because of age [in UK]). The market we wanted to serve, a relatively poor UK city, couldn't take higher costs. So to provide that service - which brought us and many oth…

Thank you.

Re: Job loss predictions over rising minimum wages haven't come true

#264

Post by gwright » Tue, Nov 26, 2019, 1:46 AM UTC

krnlpnc wrote: post #208

qzx_pierri wrote: post #180

Earlier quoted context omitted.

This is true, but people who argue for it most vocally refuse to acknowledge the fact that it’s not economically feasible to reward the lowest paid people with a MUCH MORE than comfortable lifestyle. The minimum wage is for two things: To prevent the exploitation of workers at a certain level, and to allow workers to support themselves. Some people also fail to realize that there will always be poor people. The only…

Minimum wage works out to about $2500/mo before taxes where I live. That’s not enough to pay for rent, utilities, food and incidentals. Not to mention insurance(s). Not to mention a car if your commute requires it. Not to mention family/dependents. Not to mention emergency savings. Not to mention retirement. The list goes on. It’s not about a “much more than comfortable lifestyle”. It’s about establishing a baseline…

Is a minimum wage intended to provide support for one person or for a family (including dependents)? You aren't really clear in your comment on this point, which is common confusion in much discussion of this topic.

If it is for an entire family, then shouldn't there be a different, lower minimum wage for an individual without a family? What about a teenager with an after school job? What about a retiree who is just trying to keep busy but doesn't need a living wage at all?

Re: Job loss predictions over rising minimum wages haven't come true

#265

Post by pg_bot » Tue, Nov 26, 2019, 1:48 AM UTC

take_a_breath wrote: post #220

pg_bot wrote: post #157

Earlier quoted context omitted.

While no system works exactly like models do, there is nothing magical about the economics of labor. Free markets do not depend on equal information. Almost every single market has some level of asymmetric information, and yet markets function. Plus it's not like a lot of information is hidden by minimum wage employers, almost every single job description will include expected wages in the description. It's fairly ea…

This article isn’t a justification for raising the minimum wage, it is a commentary on how the arguments against raising the minimum wage have proved false in the recent wave of minimum wage increases. You seem to ignore that to attack strawmen and throw arguments at the wall. Monopsonies certainly exist, it’s why we study them in labor economics courses.M and why economists write reports about their existence. [0] B…

To quote the conclusion of the article.

"Opposition to higher minimum wage laws is increasingly based in ideology and orthodoxy rather than real-world evidence, economists say."

The article does not make a persuasive argument or provide any relevant data to prove this point. At best there are quotes from two economists and takes that as consensus. I would want to see at least a longitudinal survey of those who oppose the minimum wage and why in order to make that statement.

I didn't say that monopsonies did not exist, but that they are extremely rare. I think that "many companies enjoy a monopsony on local labor which distorts the traditional relationship between supply and demand" would be considered a fringe opinion by most professional economists. Even the article you've linked does not agree with that statement.

"Monopsony does not appear to have been important in company mining towns, a standard textbook example, or in markets for teachers and nurses, early suspects. In fact, the largest plausible estimates of monopsony exploitation to date are not for blue-collar workers but rather for professional athletes and possibly college professors."

Information dictates the efficiency of markets not their ability to exist. In reality there are plenty of asymmetries that can exist within functional markets. Trade secrets for example, are quite common in industry and give advantage to firms that can keep them. Markets can develop in surprising places, for example kidnapping is a surprisingly orderly business when you consider the circumstances.

Re: Job loss predictions over rising minimum wages haven't come true

#266

Post by gnaritas » Tue, Nov 26, 2019, 1:50 AM UTC

jancsika wrote: post #255

aianus wrote: post #211

Earlier quoted context omitted.

That’s nuts, I lived a luxurious life in college on less than that. It’s certainly enough money for a room and food and a car and savings left over in nearly every US municipality.

2500/month - 400 taxes - 600 rent (at least there's a listing for something at that price in San Jose, whether it's legit or not I don't know...) - 0 car (Happy Birthday, college student) - 100 gas - 125 groceries (warning: not luxurious!) - 440 health care - 100 electricity - 60 water - 16 netflix premium (you said luxurious) - 13 amazon prime - 46 gym membership - 30 internet - 160 clothing - 125 car insurance - 0…

That list is a bit absurd and full of luxury items and not remotely how poor people live; I see you've never been poor.

Re: Job loss predictions over rising minimum wages haven't come true

#267

Post by gnaritas » Tue, Nov 26, 2019, 1:55 AM UTC

colejohnson66 wrote: post #257

conanbatt wrote: post #212

Earlier quoted context omitted.

Too low for what purpose?

Living.

It's not meant to provide a living. Companies don't exist to provide jobs, jobs are a byproduct of the business, not its reason to exist. Minimum wage jobs are people with no skills who are easily replaceable, usually teenagers learning to enter the workforce.

Re: Job loss predictions over rising minimum wages haven't come true

#268

Post by macinjosh » Tue, Nov 26, 2019, 1:56 AM UTC

This article is self disproving.

1. Federal minimum wage hasn't been increased. In a handful of liberal, urban locations it has been. How do we know the claim is true if it hasn't been tested in the majority of situations? Perhaps localities should be able to decide minimum wage for themselves! $15/hr might be the bare minimum in NY but in small town USA it is beyond what the market can bare for entry level.

2. The article mentions companies like Amazon are taking matters into their own hands and raising their minimum range. This is evidence the labor market does not need wage regulation when companies are making the decision to raise wages themselves.

3. The article mentions only hospitality related industries were studied. All service industries in the US are growing. What about entry level jobs in other parts of the economy?

4. I am not sure why they are comparing minimum wage to economic growth. Seems like apples and oranges to me, not useful. Of course if one economy is growing it can bare higher minimum wage than one that isn't.

Re: Job loss predictions over rising minimum wages haven't come true

#269

Post by bb88 » Tue, Nov 26, 2019, 1:56 AM UTC

Scapeghost wrote: post #261

bb88 wrote: post #127

Earlier quoted context omitted.

I'm cynical. I think it's frankly worse than that. When we talk about economic and market forces, we don't talk about "greed" as a major economic force. We know it's the creation of capitalism, but economists seem to do everything in their power to ignore it. Standard economic models breaks down when people are powerful enough to create their own supply/demand curves. We've had the term "working poor" for a while. I…

While not exactly homeless, employed people not being able to afford their own house is the norm instead of the exception in the majority of the world. In the "East" and Middle East, many employed young adults live with their parents instead of moving out, even after getting married. In the UAE for example, many expats live in crammed conditions with as many as 6 people in a single room ! and sharing a single bathroo…

UAE is not a poor country. They choose to provide for native citizens, not for expatriates. That's on them.

"The wealth gap between rich and poor in the UAE is one of the worst in the world, largely due to the amount of welfare and protection afforded to native Emiratis and the amount of neglect towards migrant workers."

https://borgenproject.org/top-10-facts-about-poverty-in-the-...

Re: Job loss predictions over rising minimum wages haven't come true

#270

Post by ggggtez » Tue, Nov 26, 2019, 1:57 AM UTC

Alex3917 wrote: post #230

danmaz74 wrote: post #229

Earlier quoted context omitted.

> Higher minimum wage is a subsidy for tech companies though By which mechanism?

When you raise the minimum wage, it makes automation more effective in comparison. Which is why in NYC when they raised the minimum wage for fast food workers, most of the people at McDonald's who used to take orders just got replaced with kiosks. This is in effect a subsidy for the tech companies that automate labor, like the company that makes the McDonald's kiosks.

>Which is why in NYC when they raised the minimum wage for fast food workers, most of the people at McDonald's who used to take orders just got replaced with kiosks

Is it really true though? When you actually look at the real world, you'll find those kiosks at McDonalds in airports too, despite not being in districts that raised minimum wage. And what about McDonalds in other wealthy countries, that often have state mandated living wages much higher than in the US? They don't particularly seemed to have rushed to automate any quicker than in the US.

In fact, I think it's more likely that you are overlooking the myriad of other benefits: The kiosk can take orders in any language, for example. Perhaps the Kiosk was always the superior option for McDonalds to use for their store. It just took until the coincidental timing for the technology to become cheaper, and robust enough, to use in practice.