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What harm do minimum wages do?

economist.com

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Re: What harm do minimum wages do?

#261

Post by AmpsterMan »

mcguire wrote: post #241
AmpsterMan wrote: post #197

Earlier quoted context omitted.

That's kinda the point. We define what a spherical cow is to be able to compare the real world against it. The problem for economists is that lay persons take that spherical cow to be truth and base whole ideological systems on those spherical cow.

Economists take the spherical cow as, if not the current state of cow-dom, the perfected nature of cows and what cows would be if they got to make the rules.

I'm not really sure I understand what you are trying to say here.

The almost purely "logical" and "ideological" statements of 19th and early-to-mid 20th century economics have been supplanted with with more empirical methods.

Re: What harm do minimum wages do?

#262

Post by LoSboccacc »

mdoms wrote: post #151
LoSboccacc wrote: post #62

Earlier quoted context omitted.

> Workers can't usually live too much without finding a job. > Companies will always push for lower wages wherever they can but it's not just megacorp tho. minimum wage will lower employment from small business significantly; i.e. small shop owner will get by with one less garcon to pay the other one more. and if you think that can be resolved just by ample unemployment benefits, look no further than the Dublin heroi…

> minimum wage will lower employment from small business significantly Can you show some data that demonstrates this? Because, despite all of the wailing and gnashing of teeth (and flawed economic theory), in my country this has never been shown to be an actual effect after minimum wages go up.

https://epionline.org/wp-content/studies/sabia_05-2006.pdf

Re: What harm do minimum wages do?

#263

Post by OCASM »

dmitriid wrote: post #187
endtime wrote: post #80

Earlier quoted context omitted.

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 t…

> To "live" at what standard of living? Decent. Roosevelt: """ In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By business I mean the whole of commerce as well as the whole of industry; by workers I…

Demanding other people take care of you even against their will and using the power of the state to achieve so. How is that not slavery?

Re: What harm do minimum wages do?

#264

Post by trentnix »

Minimum wage, despite all manner of contortion by those that seek to justify its existence, is a political concept. The minimum wage is, always, zero.

Minimum wage is also what drives the market for illegal immigrant labor. As Milton Friedman pointed out decades ago, immigration is most beneficial to employers precisely when it's illegal. Those workers don't enjoy the protections, wagers, and respect their legal counterparts enjoy. If illegal immigrants are made legal, then the benefit of employing an illegal plummets.

These wages also avoid other form of government oversight, such as taxation. Lack of immigration enforcement and lack of penalties for those that hire illegals provides an unfair advantage to those employers who, brazenly, break the law. They get cheaper labor, avoid taxes, and gain an unfair market advantage over those employers who follow the law. There's nothing "free" about a market whose government selectively enforces its laws.

Consenting adults should be able to work for whatever wage they like.

Re: What harm do minimum wages do?

#265

Post by oneplane »

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…

Minimum wage is not just important for the employer-employee relation, but also in society as a baseline of survivability. If you work a 100% of your time (so no sleep, no rest) and still cannot afford basic requirements for life then I'd argue that a minimum wage is the only way to guarantee that someone working about 8 hours a day can live.

If a normal workday cannot pay for a baseline life, the system is simply wrong.

Re: What harm do minimum wages do?

#266

Post by dragonwriter »

Aunche wrote: post #258
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.…

>That could theoretically increase unemployment in some industries with razor thin margins, but it's far from a given. 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: cha…

> The minimum wage is why territories like Guam and Puerto Rico have the highest unemployment.

But...they don't, even though Guam, unlike several states, has a higher minimum wage than the Federal level.

https://en.m.wikipedia.org/wiki/List_of_U.S._states_and_terr...

Re: What harm do minimum wages do?

#267

Post by throwaway894345 »

cmrdporcupine wrote: post #150
throwaway894345 wrote: post #137

Earlier quoted context omitted.

> 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…

Marx never said anything about the state setting prices. Wasn't part of his analysis. He was only concerned with analyzing how prices came to be what they are under capitalism, and what the consequences of that are He did feel that some other model of ownership & management could lead to some other form of remuneration, but he definitely left it unclear. Read the other discussions on this thread, there's far more nua…

You're making a motte/bailey argument, but either way it doesn't look good for the 'Marxist'.

If a Marxist is one who says "Capitalism is imperfect; I've got a gut feeling that there is a better system out there, but no idea what it looks like concretely", then that may be correct but it's close to worthless.

If a Marxist is someone who says "Capitalism is imperfect; the state needs to fix the price of $X (labor, etc)" with no mention of the economic feasibility of said price-fixing, then that's better but still far from persuasive.

My criticism was directed at the latter. There are perhaps many good Marxists who make convincing economic arguments; I'm asking for more of this.

Re: What harm do minimum wages do?

#268

Post by Sohcahtoa82 »

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.

1. Relocating a factory is extremely expensive.

2. What about businesses where their location is critical, like restaurants?

Re: What harm do minimum wages do?

#269

Post by abstractbarista »

klmadfejno wrote: post #130
_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 i…

All jobs are productivity jobs. It is the definition of a job. You are paid to accomplish some process. To be productive. Some non-zero skill is always needed. Cleaning surfaces in a restaurant happens to be fairly low-skill. There is a high supply of humans who can produce the result - a clean restaurant. Thus, the wage commonly paid for this job is (compared to higher-skilled jobs) quite low.

Re: What harm do minimum wages do?

#270

Post by dnautics »

avmich wrote: post #231
throwaway894345 wrote: post #217

Earlier quoted context omitted.

Fair enough; we're using 'leverage' differently. I didn't realize it had a formal economic definition. Never the less, my point stands: that employers can afford to wait for a given worker's labor prices to come down to the market price for their labor is affirmative evidence that the labor market is free whereas the OP considers this evidence that the labor market is unfree.

Unpacking this: > employers can afford to wait for a given worker's labor prices to come down So employers can wait. > is affirmative evidence that the labor market is free For employers. > whereas the OP considers this evidence that the labor market is unfree For employees - they can't wait (that much), see above.

if you could wave a magic wand and create a system for deciding labour allocation: Let's keep it simple: You must harry potter sorting hat people into, some salaries in the real world in parentheses: instagram influencer, video game tester, poet laureate, astrophysicist, molecular biologist (~35k USD), code monkey (~80-200k USD), oil rig worker (~80k USD+), road paver, garbage collector (~70-100k USD+), lyft driver (~40k USD -- though I made 50k doing that), and farmer (< ~20k USD)... How would you do it, and how "free" would it be, and what is your operational definition of "free"?
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