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What harm do minimum wages do?

economist.com

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Re: What harm do minimum wages do?

#461

Post by ajmadesc »

ccffpphh wrote: post #346
ckocagil wrote: post #136

Earlier quoted context omitted.

If no one is entitled to anything why did humankind abolish slavery? Child workers? Indentured servitude? Think about it. Indentured servitude is nothing but a contract between two people. By your ideology it should be of no one else's concern. Yet, it is considered slavery and is illegal. Why? Because it turns out life isn't as simple as "you're not entitled to anything". This same sentence has been uttered by peopl…

Yes, the one thing we can all agree on is the right to self. Nobody other than themselves can control their body - by that I mean that no matter what you do, nobody can tell you what to think. You can be brainwashed by force, or conditioned to react a certain way to escape force, but you can never really know what another person thinks. Regardless, one has a right to their body. It is their property. More explicitly,…

Why are we entitled to property?

Re: What harm do minimum wages do?

#462

Post by asdff »

sushshshsh wrote: post #160
david38 wrote: post #116

Earlier quoted context omitted.

Minimum wage, applied universally, absolutely validates worth of a worker. If the minimum wage is set too high to plant grapes for example, grapes will not be grown. $15/h too high to flip burgers? Ok, I guess we don’t need fast food. Oh wait. Except it somehow doesn’t put the corps out of business.

We are already seeing Flippy the burger flipping robot taking over jobs originally meant for humans. The technology for Flippy is only getting cheaper and better, the quality of human labor is already at its most optimal point and is only getting more expensive due to laws passed. Now, you could make Flippy the robot illegal, and maybe x number of businesses would eat the cost of the more expensive workers. But somet…

Some jobs are too dynamic for automation. Every shift means a unique set of tasks with unique sets of variables, even if they are routine tasks, and it gets very expensive to design and support an automated solution that will continually adapt to changing conditions and replace human creativity and plasticity.

I think back to my minimum wage job working as a grounds keeper at a golf course. To the uninformed, it seems like a perfect space to deploy a roomba with knives and never hire a groundskeeper again. I can tell you that this high tech course would sooner burst into flames than maintain playable conditions for a golf season. For a groundskeeper, the generalized routine is the same, cut the same greens and teeboxes every morning with a shotgun start and the fairways and rough every other day or so, but how you cut those sections changes by the day, even by the minute over the course of a dynamic weather event. What angle you cut, how high or low the cutting surface should be, whether or not the grass is slightly slippery that day and would require more focus with the mower to maintain a straight line, how the grass was cut yesterday and the day before are all variables that an experienced greensmower accounts for subconsciously and instantly. Then you might have a drought which changes how the grass should be cut, or a rain storm which might require a lot of emergency drainage work to keep irrigation equipment functional or to preserve the playing surface before you could even begin regular cutting, which would be with extreme care given the rain soaked earth (you might even opt to roll rather than cut).

A comprehensive automated solution for many jobs is exceedingly complex and highly custom, which could really add up in pricier engineer-man-hours and service contracts, versus having your own maintenance shop hidden on the course and hiring a low skilled crew to operate that equipment. It's so much easier to tell a human to cut grass than to spend 100x the man hours maintaining an automated solution that continually captures all the variability of that dynamic job.

Re: What harm do minimum wages do?

#463

Post by ChrisLomont »

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…

>companies have more....

and

>Workers can't usually live too much without finding a job.

Conversely, most workers can go to a different job, and hiring is expensive, so companies cannot simply keep spending on hiring and get no workers, so companies must offer enough value to attract workers.

Workers also have information companies do not - they know where else they might or are looking, they sometimes have competing offers in hand, and they can always not take a job based on these things.

>Companies will always push for lower wages wherever they can, without a care for the actual wealth created by the worker.

Conversely, workers will always push for more wages wherever they can, without a care for the actual value they produce for their employer.

And it's much easier for a worker to go elsewhere than it is for a company to replace all workers. Both sides have interest in getting a good balance on wages.

Re: What harm do minimum wages do?

#464

Post by macspoofing »

heylook wrote: post #392
macspoofing wrote: post #364

Earlier quoted context omitted.

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…

> Never. And I'm serious about this. You know that we have search engines, right? https://www.healthaffairs.org/do/10.1377/hpb20180622.107025/... https://papers.ssrn.com/sol3/papers.cfm?abstract_id=267875 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3381978 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3520915

Let me summarize what you did here:

1) You had a conclusion in your mind that minimum wage is beneficial. 2) You googled with terms that match your conclusion. 3) You cherry-picked the studies that match your conclusion. 4) The studies all point to either mixed outcomes or minor effects - with no attempt to even establish a causal effects (some of those are downright silly. Like tying minimum wage policy to rising wages in a country that is going through 7-9% GDP growth)

Do you honestly think that this is a way to argue? That you just shut-gun random links you cherry-picked?

How about this, survey after survey of economists (and you can google those since apparently googling is all you need) show either a majority or plurality of economists oppose rising minimum wages and deep skepticism of its benefits. What are they missing? Or do you want to cherry-pick economists that support your conclusion like a climate change denier pointing to that small number of climate scientist that show some skepticism of climate change?

Re: What harm do minimum wages do?

#465

Post by WalterBright »

dredmorbius wrote: post #321
WalterBright wrote: post #292

Earlier quoted context omitted.

> employers can afford to wait for a given worker's labor prices to come down to the market price for their labor That seriously underestimates the cost of a business being idle. Ample evidence for that is the devastation wreaked on businesses from the recent lockdowns.

The lockdowns are (incidentally, effectively) a case of collective action. It's not a case of one worker withdrawing from the market, but all workers. Individually, with any positive level of unemployment, any one worker's nonparticipation is mooted by a ready waiting pool of available workers. Eventually the hold-out gets hungry. Or starves. Blacklists operate similarly: businesses can afford the exclusion, the (uno…

If that were true, every job I've had would be at minimum wage. But I tended to be well-paid, despite being at the bottom of the organizational pyramids.

As for blacklists, there are solutions. Blacklisted people can join together and start their own enterprises. One of the nice things about a free market is you can't stop people from doing that.

Re: What harm do minimum wages do?

#466

Post by ChrisLomont »

david38 wrote: post #116
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, applied universally, absolutely validates worth of a worker. If the minimum wage is set too high to plant grapes for example, grapes will not be grown. $15/h too high to flip burgers? Ok, I guess we don’t need fast food. Oh wait. Except it somehow doesn’t put the corps out of business.

>Minimum wage, applied universally, absolutely validates worth of a worker.

And minimum wage prices those unable to produce that much in value out of any job whatsoever.

Re: What harm do minimum wages do?

#467

Post by macspoofing »

lsiebert wrote: post #442
macspoofing wrote: post #364

Earlier quoted context omitted.

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…

Wait, your contention is that paying poor people more doesn't effect poverty rates, and you are asking other people for citations, not citing something of your own? You might find this CBO report useful. https://www.cbo.gov/publication/55410

>your contention is that paying poor people more doesn't effect poverty rates

No. That is not my contention at all. Do you want try again without straw manning the argument?

Re: What harm do minimum wages do?

#468

Post by asdff »

dragonwriter wrote: post #454
jayd16 wrote: post #449

Earlier quoted context omitted.

A livable minimum wage is the only way someone can move on. If you're working in an unskilled job, living paycheck to paycheck, how are you going to improve that situation?

> If you're working in an unskilled job, living paycheck to paycheck, how are you going to improve that situation? One of the most common ways people move on to higher-paying jobs in the workforce is by skills (not necessarily in “skilled labor” sense, but even just basic work habits) earned and/or demonstrated through work in lower-paying (even unpaid, though less that since the crackdown on unpaid internships) jobs…

It's a lot easier said than done. There are a finite amount of management positions.

Re: What harm do minimum wages do?

#469

Post by WalterBright »

throwaway894345 wrote: post #354
WalterBright wrote: post #292

Earlier quoted context omitted.

> employers can afford to wait for a given worker's labor prices to come down to the market price for their labor That seriously underestimates the cost of a business being idle. Ample evidence for that is the devastation wreaked on businesses from the recent lockdowns.

To the OP's credit, I think there's a difference between "a company can continue without filling a specific role for a very long time, while a worker must find a job quickly" and "a company can continue without any employees for a very long time" which seems to be more consistent with your lockdown example. The OP's position is IMO wrong in that (rational) employers aren't incentivized to wait for the absolute lowest…

Every job that pays more than minimum wage is evidence that workers do have negotiating power.

Re: What harm do minimum wages do?

#470

Post by xvedejas »

brazzy wrote: post #368
dnautics wrote: post #312

Earlier quoted context omitted.

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.

The quantity in question here is "price", not "value". Prices only exist when buyer and seller agree. You're right that values will be different, but I think you've missed the subject of the previous post.
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