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What harm do minimum wages do?

economist.com

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Re: What harm do minimum wages do?

#301

Post by dmitriid »

OCASM wrote: post #263
dmitriid wrote: post #187

Earlier quoted context omitted.

> 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?

Demanding other people live in perpetual poverty with no safety nets, how is that not slavery.

BTW: Are you American, and do you by any chance identify as Christian? Because I've only seen two groups of people so hellbent on never helping their fellow man. American Christians and American libertarians.

Re: What harm do minimum wages do?

#302

Post by LudwigNagasena »

dnautics wrote: post #223
fsckboy wrote: post #95

Earlier quoted context omitted.

> 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…

> prices represent an equivalence class of values

What do you mean by that?

Re: What harm do minimum wages do?

#303

Post by xphos »

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.

I think this is a question about timescales. Employers especially larger ones can afford to wait much longer than any singular employee. People break union lines because future better pay is not worth starving to death today. The average minimum wage American cannot afford to miss 1 paycheck without serious economic trouble.

Re: What harm do minimum wages do?

#304

Post by throwaway894345 »

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.

Sounds like you define "free market" such that all parties have equal wealth, or at least equal runway to wait for a better price. Per my original comment, I'm not familiar with this definition.

Re: What harm do minimum wages do?

#305

Post by nucleardog »

wdn wrote: post #294
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…

The labor market is a free market. If you don't agree the employer offer is fair, you don't have to accept. When you find a better offer, you go to the better offer. As for minimum wage, it is hurting the unskilled workers, like high school students, college students who are looking for experience. If you are stuck in a minimum wage job, then this is what the market is paying for your skill set. If you think you wort…

>> 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.

> The labor market is a free market. If you don't agree the employer offer is fair, you don't have to accept.

You disagreed with him while not actually addressing his point at all. Care to elaborate how you think he's wrong here?

Re: What harm do minimum wages do?

#306

Post by dmitriid »

OCASM wrote: post #251
dmitriid wrote: post #191

Earlier quoted context omitted.

Ok then. What would taxes look like in a "free market" where "no one is entitled to anything"?

There would be no taxes, only voluntary cooperation.

What is this ideal world, I want to live in it.

Reality and all of history tells us that doesn't work at scale.

Re: What harm do minimum wages do?

#307

Post by nickff »

lokar wrote: post #287

The anti-min-wage / free market argument ignores a key fact: as a society we have decided we won't let people starve to death. So, if someone can't make ends meet, we will (via taxes) support them, at least to some extent. This support factors into the wage negotiation, allowing the employer to force a lower wage (absent a state imposed min). Absent state sate welfare style support many low wage (min and sub-min) job…

So they would starve, jobless, because the work wouldn't pay a subsistence wage? This seems unlikely, as many people work at jobs where they don't earn enough to support their lifestyle.

I think the below-subsistence wage earner would be more likely to (though not certainly) move somewhere that their skills were more needed.

Re: What harm do minimum wages do?

#308

Post by CountSessine »

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.

Why? If prices and wages keep going up in step, why did you need unlimited cash and capital? You just keep raising people’s wages with the increasingly worthless cash you earn in revenues?

Re: What harm do minimum wages do?

#309

Post by trentnix »

jandrese wrote: post #296
trentnix wrote: post #289

Earlier quoted context omitted.

Illegal immigration is a side effect of minimum wage. And minimum wage puts unskilled Americans (or Americans whose skills aren't valuable because of a changing market) at an unfair disadvantage in their attempts to obtain employment and acquire new skills. Sorry if that wasn't clear in my post.

So why not provide a legal path to immigration instead of abolishing the minimum wage then?

Illegal immigration and immigration in general is its own rabbit hole. You shouldn't assume from my post whether I'm for or against illegal immigration (or any type of immigration) because it doesn't really matter one way or the other to the points I'm trying to make.

Economically speaking, granting legal status to unskilled illegals results in a combination of undesirable side effects:

- it increases the price of the goods they produced reducing the buying power of the minimum wage,

- it prices many of those illegals out of the market because they are unable to produce value for the wage they are paid (but now they are eligible for government benefits),

- and it encourages new types of "black market" employment.

Try all you like, but you won't outsmart the market.

Re: What harm do minimum wages do?

#310

Post by ardy42 »

MuffinFlavored wrote: post #71
AnotherGoodName wrote: post #29

Look i get that USA has a lot of billionaires and the GDP per capita looks great for the USA but I want US citizens to please take a look at median wealth per adult and see how far you have to scroll down to find the USA: https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe... This is a great way to rule out outliers. My home country Australia has 3X the median wealth per adult of the USA. This is similar to…

> But i believe we should start doing this for US companies as well. We can "call out" whatever you want. People vote with their dollar. Target, Walmart, cheap resellers on AliExpress/Amazon are "winning" every day because the most important thing most consumers care about is rock bottom price. I don't think "calling out" will do much other than virtue signal.

> We can "call out" whatever you want. People vote with their dollar. Target, Walmart, cheap resellers on AliExpress/Amazon are "winning" every day because the most important thing most consumers care about is rock bottom price. I don't think "calling out" will do much other than virtue signal.

People also vote with their votes. If voting with dollars was the only thing that counted, we'd still have rivers so polluted they'd regularly catch on fire (see http://ohiohistorycentral.org/w/Cuyahoga_River_Fire).

All all "voting with dollars" does is sum up an unfathomable number of myopic, usually short-term decisions. Sometimes the overall result is counter-intuitively brilliant, but other times the terrible result of myopia magnified.

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