Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

What harm do minimum wages do?

economist.com

Post reply on HN
Print view View original

71–80 of 776 posts

Re: What harm do minimum wages do?

#71

Post by MuffinFlavored »

AnotherGoodName wrote: post #29

Look i get that USA has a lot of billionaires and the GDP per capita looks great for the USA but I want US citizens to please take a look at median wealth per adult and see how far you have to scroll down to find the USA: https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe... This is a great way to rule out outliers. My home country Australia has 3X the median wealth per adult of the USA. This is similar to…

> But i believe we should start doing this for US companies as well.

We can "call out" whatever you want. People vote with their dollar. Target, Walmart, cheap resellers on AliExpress/Amazon are "winning" every day because the most important thing most consumers care about is rock bottom price. I don't think "calling out" will do much other than virtue signal.

Re: What harm do minimum wages do?

#72

Post by Fargren »

colinmhayes wrote: post #39
oivey wrote: post #31

Earlier quoted context omitted.

It’s also obviously untrue given the fact that wages in the US have stagnated while productivity has continued to grow. That’s despite a floor on wages.

No it's not obviously untrue. Productivity growth has been driven by capital, not labor.

If I dig one hole a day with my hands and ten holes a day with a shovel, I still dug the nine extra holes even if I don't own the shovel.

Re: What harm do minimum wages do?

#74

Post by abvdasker »

cmrdporcupine wrote: post #67
abvdasker wrote: post #59

Earlier quoted context omitted.

The Marxist perspective is that the employer is incentivized to pay as little as possible to extract the maximum amount of value from the person's labor, realizing the difference as profit (even though crucially that value was created by the worker). An example of this would be software engineers at companies like Apple and Google, whose labor has been shown to produce several times the value of their compensation. U…

I think it's more correct to say that the Marxist (well, labour theory of value) perspective is not that the employer is incentivized as such, but they _have_ to. That the capitalist market _requires_ it or it doesn't work, business won't survive. It's intrinsic to the profit / wage-labour model, even if you switch to something like cooperatives or state ownership. The theory is that surplus value (which can become p…

Thank you for the more precise definition. Broadly I think Hacker News could use a little more discussion of Marx, which is why I brought it up.

Re: What harm do minimum wages do?

#75

Post by pratik661 »

dannyw wrote: post #16
strbean wrote: post #11

Earlier quoted context omitted.

> companies have more power in negotiation, they have more information and, most important of all, they can deal with a job opening not being covered most of the time This will be the case as long as we have monetary policy based on the idea that "100% employment is the apocalypse". It seems like it is accepted as fact that 100% employment would lead to hyperinflation, despite the fact that this has never occurred. I…

Monetary policy is to benefit the owners; not the workers. 100% employment will drive wage growth as demand exceeds supply. That’s not good for the stock market.

Source? That is an extraordinarily broad statement to make.

Central Banks' (the primary institutions behind monetary policy) primary goal is to promote a stable environment for commerce. This typically means maintaining a stable rate of inflation (2-4% for mature economies, 4-7% for frontier economies). This often requires performing a balancing act between managing unemployment and inflation. We have PLENTY of evidence to suggest that inflation is harmful for everyone, ESPECIALLY for low income workers. The stock market usually has ZERO consideration in the decisions central bankers typically make.

Re: What harm do minimum wages do?

#76

Post by claudiawerner »

colinmhayes wrote: post #39
oivey wrote: post #31

Earlier quoted context omitted.

It’s also obviously untrue given the fact that wages in the US have stagnated while productivity has continued to grow. That’s despite a floor on wages.

No it's not obviously untrue. Productivity growth has been driven by capital, not labor.

But if you follow that logic further, which you should, it's also true that part of that capital is "human capital", or what some economists called variable capital. I can't think of any increase in productivity which has not been the result of human labour (whether technical, scientific, in discovery of new natural materials, or otherwise). Non-labour ("constant") capital is inert (literally, as physical goods, it just sits in a warehouse) without labourers to work on or with it.

Re: What harm do minimum wages do?

#77

Post by strbean »

Analemma_ wrote: post #26
strbean wrote: post #11

Earlier quoted context omitted.

> companies have more power in negotiation, they have more information and, most important of all, they can deal with a job opening not being covered most of the time This will be the case as long as we have monetary policy based on the idea that "100% employment is the apocalypse". It seems like it is accepted as fact that 100% employment would lead to hyperinflation, despite the fact that this has never occurred. I…

I don't enough to say whether 100% employment is good or not, but I do know that this: > It seems like it is accepted as fact that 100% employment would lead to hyperinflation is a strawman. The argument is that 100% employment will cause an undesirably high inflation, but serious economists almost never talk about hyperinflation. (It tends to be a boogeyman used by deficit hawks and the like, since it almost never h…

It isn't a straw man. The theory states that inflation will continuously increase at an accelerating rate as long as employment is above the "natural level". For any definition of hyper-inflation, proponents of NAIRU believe that we will meet that definition at some point if employment stays too high.

> Only with continuously accelerating inflation could rates of unemployment below the natural rate be maintained. [0]

[0]: https://en.wikipedia.org/wiki/NAIRU#The_natural_rate_hypothe...

Re: What harm do minimum wages do?

#78

Post by javert »

abdullahkhalids wrote: post #60
ccffpphh wrote: post #47

Earlier quoted context omitted.

The issue is that nobody is entitled to anything. You aren't de facto entitled to receiving money for any services you may or may not provide, regardless of whether you're skilled or not, just because you exist. A company exists because one or more people risked wealth in order to create a net positive system - their existence is not as riskless as one would believe.

Universal Declaration of Human Rights Article 3 Everyone has the right to life, liberty and the security of person. Article 22 Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dign…

> Universal Declaration of Human Rights

Well, I declare differently. Words are wind (unless backed up by an argument).

> You can't deprive people of a dignified life by ignoring them.

Ignoring someone is not depriving them of anything.

Sacrificing some people for the sake of other people--what you are advocating--deprives both groups of a dignified life.

Human sacrifice is utterly barbaric and would be outlawed in a truly civilized society.

Re: What harm do minimum wages do?

#79

Post by calkuta »

What I find important to remember about minimum wage is that it constitutes a restriction on the freedom of workers to negotiate for their labor. The existence of a meaningful minimum wage implies that there are people in the society who desire to negotiate for lower compensation (because they are more motivated to get the job for whatever reason), but they are disallowed from doing so. It might be our opinion that it is undignified or exploitative to work for a certain wage, but we should not have the right to bar others from doing so if they wish.

As individuals, we should demand the freedom to negotiate the terms of our employment without government influence, including wages, benefits, and even working conditions. Using the government to coerce employers into giving greater compensation is appealing in the short term, but ultimately it disenfranchises others by blocking them out of jobs and results in long term economic stagnation.

Mandatory minimum wage significantly above the "natural" level dictated by prevailing economic conditions unquestionably causes harm, mostly to workers who, if they choose to continue to work for less money, are now doing so illegally. Mostly they just don't get work. This is why politicians tend to let minimum wages lapse behind the market rate - economies work better without this restriction. And when a significant minimum wage hike is imposed, like $15/hour in some places today, the economic harm to workers quickly becomes apparent.

Re: What harm do minimum wages do?

#80

Post by endtime »

adrr wrote: post #66
prostoalex wrote: post #28

Earlier quoted context omitted.

> That's why minimum wage laws and workers rights are important. How do you translate that into numbers? If $15/hr is better than $14/hr, wouldn’t $150/hr be 10x better, and if so, what’s wrong with a comfortable $1,500/hr? I think that’s where economists start to differ.

Rate that allows the employee to live without government assistance like food stamps and Medicaid. Otherwise the government is just subsidizing the company.

To "live" at what standard of living? A smartphone? A recent one? What standard of medical care? What about entertainment? What if someone wants only to eat organic, fair trade food?

When you pay for yourself, you're price sensitive and try to choose what makes sense for you. When you're not price sensitive, you run into a major incentive problem. If your life is funded by taxpayers, you have no reason not to argue that basic subsistence requires a lifestyle as expensive as you can get away with.

Post reply on HN