What harm do minimum wages do? • Hacker News Board

Re: What harm do minimum wages do?

#361

Post by brendoelfrendo » Wed, Aug 19, 2020, 9:14 PM UTC

OCASM wrote: post #193

nakedlunch wrote: post #152

Earlier quoted context omitted.

Is the freedom to accept a contract for poverty wages to avoid starvation a desirable feature in our society?

Is starvation preferable to getting a low wage job? You start somewhere. Minimum wage laws just reduce the amount of opportunities low skill workers can choose from.

This could just go in circles. What benefit does a job that doesn't provide enough of a wage to survive actually provide to the employee, except a way to waste their time while they accrue debt and wait for an emergency expenditure to bankrupt them?

Re: What harm do minimum wages do?

#362

Post by whatshisface » Wed, Aug 19, 2020, 9:15 PM UTC

dnautics wrote: post #312

LudwigNagasena wrote: post #302

Earlier quoted context omitted.

> 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.

If I'm allergic to peanuts and the price of peanuts is $100/pound, the value of a pound of peanuts to me is still $100... because I can sell them and buy something I'm not allergic to.

Re: What harm do minimum wages do?

#363

Post by dragonwriter » Wed, Aug 19, 2020, 9:15 PM UTC

chrischen wrote: post #338

dragonwriter wrote: post #266

Earlier quoted context omitted.

> 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.

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

There are, if I counted right, 19 states and all other federal districts except DC and the Virgin Island at (well, below for American Samoa) the federal $7.25 level (American Samoa's level is also a federal level, but it's federally set lower than the rest of the US), and a few more states at the same level as Guam; so it's pretty close to the middle, not really much on the low side.

Re: What harm do minimum wages do?

#364

Post by macspoofing » Wed, Aug 19, 2020, 9:15 PM UTC

danenania wrote: post #10

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…

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.…

The only arguments for minimum wage that I've ever seen, are those that claim that under certain conditions minimum wage may not be noticeably detrimental. What you never see is the minimum wage actually make a lick of difference to any metric that matters (like unemployment rate, or poverty rates, or income rates, or whatever else). Never. And I'm serious about this. Have you ever seen a region that adopted minimum wage, then come back a year later and show, for example, that poverty rates have fallen as result? Curious.

So you have a policy that cannot demonstrate it actually makes anything better, sometimes can be demonstrated to not measurably negatively affect anything, and frequently actually hurts.

Policies like minimum wage, or rent control, are not really about facts. They are driven purely by emotion and ideology.

Re: What harm do minimum wages do?

#365

Post by ccffpphh » Wed, Aug 19, 2020, 9:15 PM UTC

jmcgough wrote: post #93

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.

> A company exists because one or more people risked wealth in order to create a net positive system What about companies that exist solely as rent seekers? TurboTax is a net negative on society - congress has tried repeatedly to simply mail people a bill or refund, instead of the silly song and dance we go through now, but Intuit has lobbied aggressively to prevent this.

Under the current government system, they clearly provide value - otherwise they wouldn't exist. Whether the government is complicit in their existence is another matter entirely - but they're not just making money appear out of thin air. They clearly provide value in streamlining the spaghetti nest of the tax code for average consumers.

The issue is with government enabling the monopoly.

Re: What harm do minimum wages do?

#366

Post by dredmorbius » Wed, Aug 19, 2020, 9:16 PM UTC

dnautics wrote: post #312

LudwigNagasena wrote: post #302

Earlier quoted context omitted.

> 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.

I'd argue that the economic sense distinguishes market price and individual value (market value === marginal consumer value), but that much political-economic rhetoric, particularly from free-market fundamentalists, does not.

Re: What harm do minimum wages do?

#367

Post by throwaway894345 » Wed, Aug 19, 2020, 9:16 PM UTC

AmpsterMan wrote: post #238

throwaway894345 wrote: post #212

Earlier quoted context omitted.

This is a straw man argument. The issue at hand isn't "whether a free market is eminently desirable", but whether or not the relative ability for employers (or any buyer) to wait for a better price on a good or service renders a market unfree. My position is that a market in which one party (the employer in this specific case) can wait for another party (the worker) to come down to market price is entirely congruent…

Not really sure where there's a straw man here. I've addressed your concern on whether power dynamics are orthogonal or not. I've described the academic definition of what a perfectly competitive market is and referred to Coase's Theorem which essentially concludes such markets rarely exist in reality. You say they are orthogonal, and I provided evidence that they are not.

It's a straw man in that no one in this thread is arguing that a free market is eminently desirable or otherwise making ideological arguments (contrary to the implication in your post). There's the chance that you weren't talking about "arguments made in this thread" and were simply digressing to "arguments made by other people elsewhere in the world" which is differently bad (off topic).

To be clear, I wasn't remarking about any comments you made about my orthogonality claim.

Re: What harm do minimum wages do?

#368

Post by brazzy » Wed, Aug 19, 2020, 9:16 PM UTC

dnautics wrote: post #312

LudwigNagasena wrote: post #302

Earlier quoted context omitted.

> 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.

> 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.

Um... quite exactly the opposite? Very nearly the most basic assumption of all economic theory is that wealth is created through trade (which includes trading labor for a salary) because each party values the thing they are receiving more than the thing they are giving away.

Re: What harm do minimum wages do?

#369

Post by ccffpphh » Wed, Aug 19, 2020, 9:16 PM UTC

tfehring wrote: post #171

throwaway894345 wrote: post #103

Earlier quoted context omitted.

The parent said "no one is entitled to anything". I take that to mean "neither capital nor labor is entitled to a return". It's probably also useful to scope this conversation to a certain context: "in a free market, no one is entitled to anything". This is a sort of hypothetical scenario since there are no perfectly free markets, and a completely unregulated market is very likely not a desirable thing (evolutionary…

They didn't explicitly say that capital is entitled to a return, but the comment pretty clearly indicated an asymmetry between capital and labor. You could invert the wording to the following > You aren't de facto entitled to receiving a return on any capital you may provide, regardless of whether that capital is put to productive use or not. A company exists because one or more people provided their labor in order t…

That's exactly what I was suggesting. The throwaway was correct.

Re: What harm do minimum wages do?

#370

Post by ccffpphh » Wed, Aug 19, 2020, 9:17 PM UTC

mdoms wrote: post #142

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.

> 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. This is a value judgment you have made, and one that seems popular in USA. It's not a priori true and it's not necessarily so popular in other parts of the world.

Are you claiming that if someone else exists, it is now your burden to ensure their living at your own expense until they die?