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What harm do minimum wages do?

economist.com

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Re: What harm do minimum wages do?

#221

Post by kennywinker »

cynicalkane wrote: post #184
mdoms wrote: post #164

Earlier quoted context omitted.

Yikes. Measuring wellbeing by consumption is a VERY American perspective.

Consumption is the income and wealth that you end up using. Measuring wellbeing by consumption is the standard economic perspective, since it describes how much of society's goods and services one ends up using. More simply, if you save then spend, wealth-based measures will rate you as better off than a person with higher income who just spends. That doesn't make sense.

This is confusing. If you save, you have more wealth. If you have more wealth, you are more resilient to hardships (economic, health, etc.) - a population of people with large savings accounts and low debt seems obviously better than a population that makes a ton of money but lives close to the wire or carries large debts

Re: What harm do minimum wages do?

#222

Post by seiferteric »

fulafel wrote: post #149
seiferteric wrote: post #121

Earlier quoted context omitted.

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

I thought it was a pretty even handed piece covering the debate in the field. Here are personally penned unedited opinions from econ nobelists etc if you prefer :) https://www.nytimes.com/2015/07/17/opinion/paul-krugman-libe... https://www.epi.org/publication/raise-minimum-wage/

Thanks, those are a bit better, though still single opinions. I guess I am looking more for a survey of economists opinions. What was interesting about Krugman's piece was that he said minimum wage used to not work, but now it might due to changes in the economy, which is surprising if true. To me, neither one was a resounding affirmation of minimum wage, both said that $15 did not seem to hurt, and might help slightly.

Re: What harm do minimum wages do?

#223

Post by dnautics »

fsckboy wrote: post #95
throwaway894345 wrote: post #85

Earlier quoted context omitted.

> 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…

> I'm not aware of any definition of "free market" which supposes that all players have equal leverage. bog standard microeconomics 101 uses as an assumption that no player can thru individual choices affect prices in the market, i.e. all players do have equal leverage, zero. "free market" has more than one usage, but economics's conclusions are valid only if the assumptions are met.

> no player can thru individual choices affect prices in the market

That might be Econ 101 with fully continuous utility curves, and realized price equilbria, but anyone who has traded on a market knows that as soon as most bids are fulfilled it causes a dislocation of the price, so in reality the opposite is true: all individual choices affect prices in the market.

There is an old concept that rolls through bernanke, krugman, keynes, marx, smith, and aristotle (you're in very smart company if you make this mistake), that somehow prices represent an equivalence class of values. That's a very mistaken view of the world and also, in a perverse way, considering the progressive bona fides of some of those smart people, reflects an illiberal fetishization of the power of money and numericism.

Re: What harm do minimum wages do?

#224

Post by dragonwriter »

prostoalex wrote: post #154
adrr wrote: post #66

Earlier quoted context omitted.

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

Thanks, that seems to be the most rational approach and can be tied to a specific formula. I wonder why states/municipalities don't just leave it at that - a specific consumption basket whose cost is recalculated annually, vs having recurrent loud debates about it with some arbitrary round numbers.

> I wonder why states/municipalities don't just leave it at that - a specific consumption basket whose cost is recalculated annually, vs having recurrent loud debates about it with some arbitrary round numbers.

Because the level at which it is safe to set local minimum wage without net adverse effects from job loss depends on a variety of conditions besides price levels, including prevailing low-end wages in localities that compete to attract employment. Building a formula that fully addresses this is nontrivial, and even with one that worked locally there would be a reason for broader regional/national campaigns to kick the floor up.

Re: What harm do minimum wages do?

#225

Post by pwinnski »

AnthonyMouse wrote: post #205
gjulianm wrote: post #4

> 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…

> companies have more power in negotiation, they have more information You're just asserting this without any argument or evidence. > 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. Workers don't specifically need a job at that company. Even if they need a job, they can go work somewhere else. And if that isn't…

Yes, there are some circumstances in which labor ends up more concentrated after a minimum wage hike, but other circumstances in which that is not the case.

The article at hand does a decent job summarizing the different observations people have made.

Re: What harm do minimum wages do?

#226

Post by seiferteric »

mdoms wrote: post #170
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's "economics" and then there's real world effects. Take some time to study what actually happens in countries with a living wage.

My point is about questioning minimum wage specifically, as opposed to other tools like EITC or negative income tax.

Re: What harm do minimum wages do?

#227

Post by Ekaros »

pchristensen wrote: post #48
crooked-v wrote: post #22

Earlier quoted context omitted.

See, for example, how Wal-Mart has the single largest collection of workers who get food stamps in the US.

Not defending Wal-Mart's labor practices, but there are probably very, very many companies where they have the single largest collection of workers who $INSERT_CONDITION_HERE.

I would actually say that it is the opposite... As there is few very large employers. Wal-mart being largest one of them. Companies employing lot of people also has largest collection of workers with $INSERT_CONDITION_HERE.

Not that the whole sector couldn't do better. Wal-Mart just having that statistic because they employ the most.

Re: What harm do minimum wages do?

#228

Post by pwinnski »

_ah wrote: post #173
mdoms wrote: post #157

Earlier quoted context omitted.

> 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. Has this ever been shown to be the case? Use real data or case studies.

Walmart eliminated all greeters last year.

And yet this year I see people standing outside the front door with a box of masks, ensuring everyone is masked before entering, and greeting people at the same time.

Re: What harm do minimum wages do?

#229

Post by kennywinker »

pchristensen wrote: post #48
crooked-v wrote: post #22

Earlier quoted context omitted.

See, for example, how Wal-Mart has the single largest collection of workers who get food stamps in the US.

Not defending Wal-Mart's labor practices, but there are probably very, very many companies where they have the single largest collection of workers who $INSERT_CONDITION_HERE.

This is a puzzling comment. Yes, you can probably find a unique characteristic among various groups... but this specific value of $INSERT_CONDITION_HERE is relevant to the discussion, and probably a negative force in our society. Seems like you're trying to dismiss it for some reason?

Re: What harm do minimum wages do?

#230

Post by gjulianm »

tastyfreeze wrote: post #190
nakedlunch wrote: post #152

Earlier quoted context omitted.

Is the freedom to accept a contract for poverty wages to avoid starvation a desirable feature in our society?

If labor costs less products as a result cost less. How do you reconcile your view with the success of Singapore? A country with no minimum wage and a comparatively free market. There is income disparity in every time and every place. The question to ask is do the rules of the game allow anybody to succeed. Minimum wage is a rule that says some people just don't get to play.

> How do you reconcile your view with the success of Singapore?

A country general success does not equal the success of its poor people. There are not many income inequality stats of Singapore, but the ones I've seen [1] actually put Singapore with a similar income inequality to the US.

Furthermore, it is a small country (5M people) with a pretty high GDP per capita (8th in the world). I don't think you can extract too many conclusions that would be applicable to other, bigger countries.

> The question to ask is do the rules of the game allow anybody to succeed. Minimum wage is a rule that says some people just don't get to play.

And without a livable minimum wage, you'll get people that are working full time for peanuts. They won't be able to save, get healthcare, provide their kids with good education, etc. Are those people succeeding?

1: https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...

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