251–260 of 776 posts
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Only possible thanks to government policy wielded through regulatory capture. Not a free market outcome.
Ok then. What would taxes look like in a "free market" where "no one is entitled to anything"?
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> 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.
But that's what I'm saying. Minimum wage is ridiculous because there are alternative policies that don't do the bad thing at all, not even sometimes.
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> If a company wants to pay less than market rate for labor they will find themselves without employees. What if multiple companies in an area do that? What incentive does a entering company have to increase wages if employees will take jobs at lower wages nevertheless because they need to eat? > But, that is the result of people willingly entering a contract for the lower pay. This viewpoint ignores that people need…
You mean price fixing and collusion that are already illegal? Without price fixing and collusion the employers have to compete for labor. Competition that would as a result improve the compensation for employees.
Look at this example: a number of companies in an area are paying a livable wage at time T for low-skilled workers. Now, time goes on and inflation kicks in. Those wages, which did not grow, are not livable now. Workers, however, can't complain too much because they will be fired, and bad income is better than no income (not to mention healthcare tied to the jobs). There are also more workers than job positions, and new young workers are constantly entering the market, so companies will always find someone that needs to work even at that low wage.
What incentives do those companies have to increase wages? Absolutely none. In fact, this is what is happening right now.
> Without price fixing and collusion the employers have to compete for labor.
If employees actually had to compete for labor in all cases, we wouldn't be having this debate and people wouldn't be complaining that their wages are not enough to live.
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> 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.
Slippery slope / Straw-man fallacy. One is to do with tying the minimum wage to a livable wage. The other is just large numbers for the sake of trying to win an argument. No one is arguing for $150/hr. The argument is simply that you aught not to be able to run a business and extract a profit if the cost to do so is employing people at such a low wage that they require governmental handouts just to pay rent and eat f…
What exactly is "livable" anyways? Millions of people live every day with only a couple of dollars a day.
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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…
> even though crucially that value was created by the worker Crucially the value wasn't created by the worker, but rather the worker played a part in the creation of that value. In a capitalist society, that worker's wage is determined based on the value of their contribution and the supply of workers with the requisite skill. In a Marxist society, it is set by the state, and it seems to be very hard for states to de…
I think we need to define "value of their contribution".
If a friend of mine has an idea for an app, but he has zero programming knowledge and so he pays me $1,000 to develop it, and he ends up making $1,000,000 from selling it, what is the value of my contribution?
Is it only $1,000 because that was the agreed price for my labor? Or is it $1,000,000 because that's how much money he made from it? Or something in between?
Obviously, in this hypothetical, I should be negotiating a share of the revenue instead of just a flat fee, but generally most workers don't get to do this.
So...what was the value of my contribution?
> 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…
Even assuming everything else you've said is true, that's quite the leap to make. And also quite the oversimplification. There are lots of regulations and subsidies that have been tried where the unintended consequences end up negating most of the benefits, and just turn out to make the entrenched powers even more entrenched and wealthy. Plus there are ideas like UBI that don't fit neatly into the traditional buckets of "regulations and subsidies" and could be another (better?) way to give workers more leverage.
> 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…
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.…
It's not a given when you're talking about a small region like Seattle. However, increasing the minimum wage to the entire US would dramatically increase unemployment in the poorest areas. The minimum wage is why territories like American Samoa and Puerto Rico have the highest unemployment.
Edit: changed Guam to American Samoa
> 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…