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I had a really hard time understanding this paragraph. Did anyone else?
> Textbooks state that, in the absence of a minimum wage, a worker is paid his “marginal product of labour”, which means the value of what he produces. > Just as a monopolist can set prices higher than would be the case in a competitive market, a monopsonist can set prices artificially lower. A lot of economic arguments forget these ideas. The labor market is not a free market: companies have more power in negotiatio…
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.
That's an ideological statement. You may subscribe to it, but not everyone has to. Society is fundamentally based on the notion of shared rights and duties, what these rights and duties entail can be up for debate, but if you don't want to owe anyone, you will have to live a pretty lonely, primitive existance in Siberia or Alaska.
> Textbooks state that, in the absence of a minimum wage, a worker is paid his “marginal product of labour”, which means the value of what he produces. > Just as a monopolist can set prices higher than would be the case in a competitive market, a monopsonist can set prices artificially lower. A lot of economic arguments forget these ideas. The labor market is not a free market: companies have more power in negotiatio…
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.
> Textbooks state that, in the absence of a minimum wage, a worker is paid his “marginal product of labour”, which means the value of what he produces. > Just as a monopolist can set prices higher than would be the case in a competitive market, a monopsonist can set prices artificially lower. A lot of economic arguments forget these ideas. The labor market is not a free market: companies have more power in negotiatio…
> A lot of economic arguments forget these ideas. The labor market is not a free market: 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. Workers can't usually live too much without finding a job. I'm generally in favor of stronger job protections and so on, but I'm not aware of any definition of "free…
>the situation prevailing in a market in which buyers and sellers are so numerous and well informed that all elements of monopoly are absent and the market price of a commodity is beyond the control of individual buyers and sellers.
so everyone has equal leverage (zero).
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.
I think the better solution is to set a reasonable rate, fix it to inflation, and use corporate taxes to fund social safety nets.
> Textbooks state that, in the absence of a minimum wage, a worker is paid his “marginal product of labour”, which means the value of what he produces. > Just as a monopolist can set prices higher than would be the case in a competitive market, a monopsonist can set prices artificially lower. A lot of economic arguments forget these ideas. The labor market is not a free market: companies have more power in negotiatio…
If the minimum wage is set too high to plant grapes for example, grapes will not be grown.
$15/h too high to flip burgers? Ok, I guess we don’t need fast food. Oh wait. Except it somehow doesn’t put the corps out of business.
If you raise the price of labor through minimum wage, you fix poverty. Opposed to literally everything else plus evidence.
Earlier quoted context omitted.
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 evide…
If economic growth is more than the interest rate, the owners pocket the difference. If economic growth is less than the interest rate, the owners get bailed out. But in all cases, growth for the sellers of labor always lag the growth for the owners of capital.
> Textbooks state that, in the absence of a minimum wage, a worker is paid his “marginal product of labour”, which means the value of what he produces. > Just as a monopolist can set prices higher than would be the case in a competitive market, a monopsonist can set prices artificially lower. A lot of economic arguments forget these ideas. The labor market is not a free market: companies have more power in negotiatio…
A free market does not mean that both sides want something with equal desire. I need food to survive much more than Krogers needs my business to survive. This does not mean that grocery sales are not a free market. A free market means that the supply and demand of goods rely on price signals rather than a centralized planner. Labour is absolutely a free market. As wages in one particular area increase, people respond…
That's one definition but it's not one of the more common ones.
It also begs the question what counts as a centralized planner. Does Boeing count if it sets the price of jet planes that only it and Airbus sell? What about when Singapore fixes the price of medical care even though anybody who wants can cross the border to have it done? Or Venezuela that fixes the price of its own money - at a rate literally nobody pays?
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…
> There is no third way
You can give them a piece of fertile land.