What harm do minimum wages do? • Hacker News Board

Re: What harm do minimum wages do?

#331

Post by smileysteve » Wed, Aug 19, 2020, 9:03 PM UTC

fragsworth wrote: post #260

mdoms wrote: post #214

Earlier quoted context omitted.

Did this happen in response to minimum wage?

Yes, because if there were no minimum wage, they would simply pay employees less and forget about the touchscreens.

This is incorrect; There were multiple steps of acceptance of the touchscreens including order accuracy, expediency, and customer interaction.

If McDonalds could pay less, not train employees, have them touch buttons accurately, and customers enjoyed interacting with those people; then, and only then is what you have said close to truthful.

What you have proposed is that the internet wouldn't send electronic bits if we just paid mail carriers more.

Re: What harm do minimum wages do?

#332

Post by ativzzz » Wed, Aug 19, 2020, 9:04 PM UTC

trentnix wrote: post #264

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 cou…

> lack of penalties for those that hire illegals provides an unfair advantage to those employers who, brazenly, break the law

I've thought for a long time that the easiest way to curb illegal immigration would be to re-allocate resources targeting illegal immigrants to much more aggresively fine/jail/punish employers who employ illegal immigrants instead. As long as there is a supply of (illegal) jobs willing to pay more than in the country they are emigrating from, the immigrants will come. If there is nobody willing to hire them, they will not come.

This will not happen though because it is in nobody's best interests. Not for business in the US, because they will make less money (or possibly even be unprofitable and have to shut down), and not for consumers, because their prices will increase.

Re: What harm do minimum wages do?

#333

Post by nickff » Wed, Aug 19, 2020, 9:04 PM UTC

klmadfejno wrote: post #291

nickff wrote: post #176

Earlier quoted context omitted.

Many of the people employed at very low wages have attributes which mean that they are not worth hiring at higher costs. Factors such as lack of job history, attendance issues/unreliability, language issues, etc. mean that the employer will opt for a more 'attractive' candidate if there is a price floor. As an example, if you are looking for a bottle of wine to accompany your Tuesday night dinner, you might opt for a…

> any of the people employed at very low wages have attributes which mean that they are not worth hiring at higher costs. Unless the job needs to be done, which is generally the case among minimum wage workers. That was my point. You need cleaning staff, and retail workers, and what not. You still hire them even if they cost more. People don't have intrinsic prices. It's not like an old person costs exactly $4.32 an…

The fact that the job needs to be done does not mean that the job needs to be done by the type of person currently doing it. One common response to price floors is to change the qualifications/requirements (as in my wine example). The employer will hire 'over-qualified' candidates to perform a job which does not require their skills or abilities.

Wine is still being 'hired' with a price floor, but it is a different wine, and the price floor doesn't do the low-quality wine producer any good. This example is actually derived from a time when England imposed a flat tax on French wines.

Re: What harm do minimum wages do?

#334

Post by jldugger » Wed, Aug 19, 2020, 9:04 PM UTC

kennywinker wrote: post #221

cynicalkane wrote: post #184

Earlier quoted context omitted.

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

The problem though is that personal savings grows over time -- a nation full of young people with high incomes will eventually become a nation full of weathly old people, but if you were to compare the two nations, the yard stick matters.

edit: if you want to cook up some evidence, look at a scatter plot of some indicator of age (national average age?) vs national average wealth. I suspect, given the countries at the top of the list, you'll end up with a pretty good r.

Re: What harm do minimum wages do?

#335

Post by lawnchair_larry » Wed, Aug 19, 2020, 9:04 PM UTC

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…

But that is theory. It might be true, it might not, but it’s irrelevant. Many “protections” and well-intentioned policies fail to accomplish the expected outcome, and we routinely forget to judge them based on their results rather than their intentions.

Re: What harm do minimum wages do?

#336

Post by moth-fuzz » Wed, Aug 19, 2020, 9:04 PM UTC

I’m going to flip this one around and ask: why are businesses entitled to low-cost labor? In other markets, markets of objects, if you don’t have the funds to purchase something you don’t get to have the thing, and if you attempt to coerce the thing into your ownership, we call that robbery, and prosecute it accordingly. So why doesn’t that apply to human labor? Labor is a product, it exists in a market, and there is a baseline amount of money a person needs to survive - the ‘price’ of a human doing work (compare this to covering the cost of materials, production, etc for some nonhuman item). If companies cannot meet that price, why are either laborers or governments expected to shoulder it so that businesses can get their hands on the human product regardless? Why is human labor constantly sold at a loss?

Re: What harm do minimum wages do?

#337

Post by Nasrudith » Wed, Aug 19, 2020, 9:05 PM UTC

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.

Reloction isn't free either and there are "implcit secondary standards" for the work beyond just the nominal task such as infastructure, literacy, and scale. Even if anyone can put widgets in boxes they may only need very unskilled labor for the task other aspects like "able to read the numbers to know how many to box up" are included. The labor may be technically cheaper across five towns of 200 but a larger factory in a big city could be more efficent because you can muster larger workforces quicker.

A national standard would have merits but more in the sense of scale - it means less friction from adapting to 1 different standard instead of N different standards. It is simpler but has the downside of being low for expensive locales and high for cheap locales and the trade offs that apply to both.

Re: What harm do minimum wages do?

#338

Post by chrischen » Wed, Aug 19, 2020, 9:05 PM UTC

dragonwriter wrote: post #266

Aunche wrote: post #258

Earlier quoted context omitted.

>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...

Guam’s minimum wage is on the low side, about $1 higher than the federal minimum.

Re: What harm do minimum wages do?

#339

Post by Sohcahtoa82 » Wed, Aug 19, 2020, 9:05 PM UTC

calkuta wrote: post #79

What I find important to remember about minimum wage is that it constitutes a restriction on the freedom of workers to negotiate for their labor. The existence of a meaningful minimum wage implies that there are people in the society who desire to negotiate for lower compensation (because they are more motivated to get the job for whatever reason), but they are disallowed from doing so. It might be our opinion that i…

Without a minimum wage, the "market rates" for what is currently minimum wage labor will create a race to the bottom, not just in wages, but in standards of living.

There will always be someone more desperate for any amount of money, and eliminating the minimum wage won't create significantly more jobs, as businesses only hire enough people to satisfy demand for their products. Wal-mart won't suddenly hire more cashiers just because they can now pay $2/hour to someone living in a cardboard box.

When it comes to negotiating wages, people in current minimum wage jobs have zero leverage. Minimum wage is a necessity to keep people out of cardboard boxes or packed into tiny apartments like sardines. It is necessary to keep a decent baseline standard of living.

Re: What harm do minimum wages do?

#340

Post by chc » Wed, Aug 19, 2020, 9:05 PM UTC

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.

The parent was comparing the value a worker brings to the company against the worker's compensation. To illustrate how the worth of a transaction can be different from the cost: If I offer to give you a $50 bill in exchange for a $5 bill, is that bill not worth $50 just because I lost on the deal?