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What harm do minimum wages do?

economist.com

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Re: What harm do minimum wages do?

#311

Post by ccffpphh »

p49k wrote: post #68
ccffpphh wrote: post #47

Earlier quoted context omitted.

The issue is that nobody is entitled to anything. You aren't de facto entitled to receiving money for any services you may or may not provide, regardless of whether you're skilled or not, just because you exist. A company exists because one or more people risked wealth in order to create a net positive system - their existence is not as riskless as one would believe.

Companies aren't inherently "entitled to" anything either, including "personhood," avoidance of personal liability of shareholders for company actions, patents and trademark protection for inventions, rights to use public infrastructure, etc. You can't pretend like society hasn't granted corporations their own reasonable entitlements while arguing that workers shouldn't have their own.

That's true. Companies are just collections of people. They are not entitled to anything either. I don't think they should have any entitlements. No entitlement is "reasonable" if none are owed to anyone or anything to begin with.

Re: What harm do minimum wages do?

#312

Post by dnautics »

LudwigNagasena wrote: post #302
dnautics wrote: post #223

Earlier quoted context omitted.

> 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?

there is this pervasive assumption in economic theory that if two things have the same price they have the same value in some global sense. To make an obvious example: If you are allergic to peanuts, then the value of a peanut to you is quite extremely different to the value of that same peanut to someone else. This is unaffected by the price of the peanut.

Re: What harm do minimum wages do?

#313

Post by Broken_Hippo »

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…

Unlike, say, buying a game, most folks can't just decide not to work. If you need to eat, pay rent, child support, need health insurance, or a slew of other things - you can't say no. You must work. Period. The safety net isn't good enough not to take that minimum wage job, especially if you are a childless adult. The only real thing keeping you from being paid less is minimum wage, and that's there because companies aren't fair about hiring practices.

The only reason you were able to work an unpaid internship is because your family not only didn't need you to work, but they also didn't need you to watch younger siblings in your free time. To top it all off, that was offered to you - this isn't a thing most folks can do. Not to mention that unpaid internships are often slavery under a different name. If someone wants to give someone experience or train someone, they should pay.

I wish people would quit acting like the market is fair by any means or like people have a real choice in working. Neither of these things are true with the labor market.

Re: What harm do minimum wages do?

#314

Post by chc »

seiferteric wrote: post #83
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.…

If a company can hire someone worth $50/hr for only $5/hr and therefore make huge profits/margins, couldn't another company easily come along and undercut them? I don't think a scenario like that could exist very long.

Undercut them in what sense? Pay the employee even less for $50 worth of labor?

Re: What harm do minimum wages do?

#315

Post by tastyfreeze »

gjulianm wrote: post #230
tastyfreeze wrote: post #190

Earlier quoted context omitted.

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 t…

In this discussion a country's population is irrelevant. For a small country with a GDP per capita higher than the United States only 55 years after independence I would say they are doing pretty damn good.

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)...

There is no requirement that everybody succeed at the same level. The measure of a country's success is improvement of society over time. Has the general quality of life improved for the people of Singapore over the last 55 years? I think that is a resounding yes.

Re: What harm do minimum wages do?

#316

Post by machinelabo »

Sohcahtoa82 wrote: post #220
javert wrote: post #94

Earlier quoted context omitted.

The free market is very good at solving information asymmetries of the kind you are talking about. If it isn't being solved, it's probably because of regulation (regulatory capture). Or maybe it isn't a real problem. I'm going to guess in this case it's more the latter than the former.

I've always considered this a very naive idea of how a free market works. It ignores how irrational and short-sighted humans can be, not to mention that many consumers are price sensitive. A free market will not solve climate change as long as coal and fossil fuels are inexpensive. A free market prioritizes one thing: Profit. That is all. A free market only solves problems when it is profitable to do so. Yeah, charit…

This is an unbalanced opinion of free markets (but I generally agree with downsides of unregulated capitalism).

> Profit. That is all.

Free markets also have intense competition so "Profits" that you talk about don't just go out of control - Prices are set at the intersection of supply and demand curves. Companies would need to shave off profit margins to stay competitive.

I think it is fair to say that there are no ideal free markets. There are always asymmetries, downsides, side cashing and a whole bunch of complexities in any market - nothing is ideal.

So, we should have regulations that control those asymmetries.

Re: What harm do minimum wages do?

#317

Post by jsmith99 »

nucleardog wrote: post #305
wdn wrote: post #294

Earlier quoted context omitted.

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 a…

They are arguing about semantics. The labour market is a free market but not a totally efficient market as some participants use their power over demand or supply (huge corporations, unions) to drive different outcomes to a perfectly competitive market where all participants are price-takers.

Re: What harm do minimum wages do?

#318

Post by qeternity »

dayjobpork wrote: post #285

The richest person in Australia seriously floated an idea to import foreign workers and pay them $2 a day to work in her mines I've always looked at minimum wage as an employer saying "I'd pay you less if I legally could". In workplace negotiations all of the power is held by the employer, unless you have some form of collective bargaining, and having a Government mandated minimum prevents companies from totally expl…

These policies are always double edged swords. The other way to frame minimum wage is that it makes it illegal to work unless you can produce $X value per hour.

Re: What harm do minimum wages do?

#319

Post by gamblor956 »

lukevdp wrote: post #293
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 is not worth $50/hr if someone else is willing to do the same job with equal capability for $5/hr.

There is a difference between someone being worth $50/hour and another person willing to do whatever for just $5/hour.

For example, rich kids can take unpaid internships because they don't have to worry about food or rent for the duration of internships.

Poor kids can't usually afford to take jobs that don't pay.

Re: What harm do minimum wages do?

#320

Post by ccffpphh »

abdullahkhalids wrote: post #60
ccffpphh wrote: post #47

Earlier quoted context omitted.

The issue is that nobody is entitled to anything. You aren't de facto entitled to receiving money for any services you may or may not provide, regardless of whether you're skilled or not, just because you exist. A company exists because one or more people risked wealth in order to create a net positive system - their existence is not as riskless as one would believe.

Universal Declaration of Human Rights Article 3 Everyone has the right to life, liberty and the security of person. Article 22 Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dign…

Anyone can make any arbitrary decision and call it a human right, it does not make it so. Watch:

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Article 6753 Everyone has the right to play video games 24 hours a day.

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Nobody is entitled to life, nor dignity. Simply because someone else exists on the planet doesn't mean their livelihood is now my burden. Me existing doesn't mean you ought to be enslaved to provide for me.

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