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

121–130 of 776 posts

Re: What harm do minimum wages do?

#121

Post by seiferteric »

fulafel wrote: post #110
seiferteric wrote: post #100

I know that in economics it is difficult to do proper studies hence the "dismal science", but my understanding is that most economists agree that minimum wages don't work right? So why is it still pushed? Shouldn't we "listen to the experts"? Besides there are other tools like the EITC.

There doesn't appear to be consensus like that - but not because lack of trying: https://www.anderson.ucla.edu/faculty-and-research/anderson-...

Sorry but that seems to be an opinion article by a non economist? Or am I mistaken?

Re: What harm do minimum wages do?

#122

Post by eesmith »

calkuta wrote: post #79

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 i…

Indeed we should - demand the repeal of Taft–Hartley Act and other laws which have nerfed collective bargaining power far from any "natural" point.

Jurisdictional strikes, wildcat strikes, solidarity or political strikes, secondary boycotts, secondary and mass picketing, closed shops, and monetary donations by unions to federal political campaigns are all part of the freedom to negotiate the terms of our employment, which we are currently disallowed from doing.

Re: What harm do minimum wages do?

#123

Post by kenhwang »

clairity wrote: post #63
pchristensen wrote: post #6

(can't read the article, but I've read and thought a lot about it) I'm on the fence about the net cost/benefit of localized minimum wages. I think that a federal minimum wage (or at least, a high one), and to some extent, state minimum wages, are a bad idea. The Fight for $15 movement came from expensive cities, and it might be the right policy for those places. But it would severely distort and crush lower-cost citi…

i'm generally in favor of state-level control of such things, but i'd be remiss not to point out that that's a great way to further entrench inequality across america. i mean, if $15/hour is a little more than subsistence level in rural north dakota or the hills of west virginia, so be it. maybe it means they can buy a laptop for the kids, but it won't be mansions and teslas everywhere. current labor markets are prof…

It's one thing to be unfair when the government is footing the bill, like basic income or tax brackets. It's a good incentive to balance out rising cost of living.

It's another when it's small businesses footing the bill. There's a very painful lag time between being required to pay employees more and when employees have more spending power. Typically all that happens is local business don't have the finances to cover that lag, but national businesses do, and the latter survives and dominates.

Re: What harm do minimum wages do?

#124

Post by strbean »

sumtechguy wrote: post #105
strbean wrote: post #77

Earlier quoted context omitted.

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]…

For it to be basically unlimited inflation would mean there is an unlimited amount of cash and capital and capital in the system. That seems on the surface improbable. It strikes more as one of the formulas has gone off the chart and someone is making assumptions.

Well, my own view is that NAIRU is a complete crock. shrug

Re: What harm do minimum wages do?

#125

Post by fulafel »

jldugger wrote: post #18
alex_young wrote: post #13

Why don't we index the minimum wage to inflation? The 1968 minimum, in todays dollars, is over a third higher than our federal minimum wage today. [0] [0] https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_Sta...

You probably know this but the opponents of raising the minimum wage fear that it will lead to inflation. The old adage "labor is 2/3rds the cost of everything."

Many countries effectively do this and it doesn't make inflation get out of habd.

Re: What harm do minimum wages do?

#126

Post by aNoob7000 »

pratik661 wrote: post #75
dannyw wrote: post #16

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…

The Federal Reserve has been trying to get inflation above 2% consistently for over 10 years. What are the chances that they get that even now with rates at zero?

Also, I would disagree with you about the Federal Reserve not targeting the stock market or other assets. Anytime in the past couple of years that the stock market in the USA has dropped roughly 10-15%, the Federal Reserve has jumped in dropped rates. They might say the don't target the market, but in reality that is what they are doing.

I think biggest issue in the future will be how will the Federal Reserve ever raise rates. They can't even go above 2.5% without the market collapsing.

Re: What harm do minimum wages do?

#127

Post by AnotherGoodName »

grandmczeb wrote: post #104
AnotherGoodName wrote: post #64

Earlier quoted context omitted.

I disagree simply because expenditures are completely different for more socialist countries. Eg. Total healthcare expenditure per capita is well below the USA in Australia. Less than half in fact. https://onthewards.org/the-inside-scoop-part-one-a-compariso... So that's $4500 a year more the average US citizen has in total expenditure that isn't some type of luxury good or indicator of a better life. It's just survi…

If you add American's median household healthcare expenditure (~$8,200) to Australia's consumption, America's consumption is still 20% higher. > I mean Australia beats the USA by any quality of life index out there. I don't think it's worth it to get into an argument about which country is "better", except to say a lot of indexes are designed to advocate for the creator's goals rather than as a useful comparison. E.g…

>If you add American's median household healthcare expenditure (~$8,200) to Australia's consumption, America's consumption is still 20% higher.

Yes but the point is that's one example. I'm not going to got through the full list but i can't think of one USA government provided service that's better quality or requires less private intervention compared to social democracies like Australia and it shows up in so many intangible ways. eg. little things like the Australian government provided online tax filing. In the USA people need to pay to file taxes online (sure paper is free but ugh what a hassle). More private toll roads in the USA. Public housing is more common per capita in Australia. Australias national broadband network (i still can't get fibre here in the USA but i had it in regional Australia), etc. Again i'm not going to keep going except to say that i've lived in both nations and it's really obvious.

In more socialist countries per capita spending can be seen as lower but the services are better despite no spending from consumers going to them. The spending comes from the government. You can't compare spending between the USA and Australia for this reason.

Re: What harm do minimum wages do?

#128

Post by wccrawford »

ghayes wrote: post #41
eloff wrote: post #14

Earlier quoted context omitted.

I think you're very right that this is policy best done locally, because cost of living varies wildly even in the same state.

My only fear is that wouldn't businesses constantly relocate to new areas with lower minimum wages? If the area you're located in goes from $5 to $8 (possibly due to your factory), why not relocate three counties over to an area that's still at $5? A national standard mitigates this issue.

That is already what happens with factories. They find cheap land and cheap labor.

They generally don't move factories unless the wages are enough different to justify all the other pain and expenses that moving would entail, including hiring almost all of their low-pay workers from scratch in the new area.

Re: What harm do minimum wages do?

#129

Post by nemothekid »

prostoalex wrote: post #17
danenania wrote: post #10

Earlier quoted context omitted.

Right, many minimum wage opponents focus on the scenario where someone is worth e.g. $14/hr to a business, and rightly point out that this person won't be hired with a $15/hr min wage. BUT without a minimum wage, someone worth $50/hr can be paid $5/hr if anyone can do the job. It strikes me that this situation is far more common than the first scenario, and minimum wage opponents tend to ignore it in their arguments.…

> someone worth $50/hr can be paid $5/hr if anyone can do the job What business sectors enjoy consistent 90% gross margins?

I know you were trying to make a broader point, but Facebook has been flirting with 90% gross margins for more than 5 years.

Re: What harm do minimum wages do?

#130

Post by klmadfejno »

_ah wrote: post #98

The direct effect of the minimum wage is to make certain low-productivity jobs illegal . Consider that for a moment: a person with limited skills and/or needs is simply prohibited from doing low-productivity work regardless of desire. The counter-argument is that many workers do not have a choice; they will always accept wages vs nothing, but have no power or ability to negotiate. With a minimum wage we've made the d…

I don't think that's a reasonable point of view. Most minimum wage jobs are not productivity jobs, but jobs that need to get done by someone but require no special skills. That is, you can't easily define the value of the sanitation worker who keeps a restaurant clean enough to pass health standards. You just observe that there's enough people willing to do it that you can offer a low wage.

What jobs are being made illegal?

Post reply on HN