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What harm do minimum wages do?

economist.com

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Re: What harm do minimum wages do?

#551

Post by Dylan16807 »

madeofpalk wrote: post #512
bravo22 wrote: post #502

Earlier quoted context omitted.

Which is why instead of mispricing labour through minimum wage you can have a negative income tax which makes up the difference. The nice thing is that it will apply to everyone -- working or not, sick or not, on mat leave or not, can't work because of covid or not. You top-up people's income and that's paid for through taxes. You take the benefit of efficiency and productivity from the entire economy and return it t…

I’m not all that educated on negative tax rate - what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up the bill and pay out the difference?

The fact that everyone will get the negative tax even if they stay home (or volunteer, or work on a passion project). If you're only going to pay an extra dollar per hour, nobody will take the job.

Re: What harm do minimum wages do?

#552

Post by arp242 »

ccffpphh wrote: post #385
mattmanser wrote: post #374

Earlier quoted context omitted.

Risk is a strong word, often there's little risk involved, it's often more about who you know, which entitlements your birth gave you and what parachute mummy and daddy can give you (especially if you're white, male and privately educated). There's no inherent entitlement or human right to give your children your money, or to not be simply turfed off what ever land you are using when society decided there's a better…

There is risk in any action taken due to the fundamental lack of information regarding events occurring in the future. I agree with you that much of it is luck, this at the same time does not mean because one is born lucky that they now need to suffer to bring someone else to their level. I disagree that it is meaningless, I believe that since no one person is entitled to anything from anyone else (to think otherwise…

The problem with no inheritance tax is that it destroys individual merit. In an ideal free and liberal society everyone would start from the same point and achieve the things they achieve in life based on their individual merit. Such a scenario driven to its extremes would be a dystopian Brave New World-like horror, but we can certain level the playing field somewhat by ensuring that some don't start with millions in their pocket whereas others start with 0.

There is an absolute mountain of evidence that the economic status of your parents is a strong influencer of your own economic status. This is the cause of a great many problems, including things like the problems with the black community in the US for example.

Your entire argument on this is a contradiction; no one is entitled to anything yet you are entitled to the money from your parents? What right do your children have on the money someone else earned with their merit? Let them prove their own worth.

Re: What harm do minimum wages do?

#553

Post by dragonwriter »

madeofpalk wrote: post #512
bravo22 wrote: post #502

Earlier quoted context omitted.

Which is why instead of mispricing labour through minimum wage you can have a negative income tax which makes up the difference. The nice thing is that it will apply to everyone -- working or not, sick or not, on mat leave or not, can't work because of covid or not. You top-up people's income and that's paid for through taxes. You take the benefit of efficiency and productivity from the entire economy and return it t…

I’m not all that educated on negative tax rate - what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up the bill and pay out the difference?

> I’m not all that educated on negative tax rate

Negative income tax is not a negative tax rate (it's a credit plus a progressive, always positive, rate.)

(EITC has a negative rate in the lower portion of it's range, but EITC is a weird thing.)

> what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up the bill and pay out the difference?

People's lack of willingness to work for low wages, which increases when there is reduced economic coercion to take whatever minimal scraps are thrown at you because of the income floor provided by UBI or negative income tax (different names for the same thing.)

Re: What harm do minimum wages do?

#554

Post by edgyquant »

WalterBright wrote: post #469
throwaway894345 wrote: post #354

Earlier quoted context omitted.

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.

You are greatly oversimplifying in response to paragraphs. Please expand on your point.

Re: What harm do minimum wages do?

#555

Post by dragonwriter »

svachalek wrote: post #522
madeofpalk wrote: post #512

Earlier quoted context omitted.

I’m not all that educated on negative tax rate - what’s to prevent companies from just setting wages to obscenely low, knowing the government will just pick up the bill and pay out the difference?

This is more or less what happens with tipping so I would assume it also happens here.

> This is more or less what happens with tipping

The amount of tips isnt guaranteed,and you don't get access to them independently of whether you also choose the low-paying job, so I don't see how it's at all similar to UBI/NIT.

If people got the average rate of tips for a tipped job without doing the job, you think they'd take the job on top for the tipped minimum wage ($2.13/hr federally)? I don't think so.

Re: What harm do minimum wages do?

#556

Post by arp242 »

OCASM wrote: post #528
RockIslandLine wrote: post #435

Earlier quoted context omitted.

"Millions of people live every day with only a couple of dollars a day." Not in the USA they don't. There is no possible way that an individual could pay for food, clothing, and shelter on that income.

Sure, different countries have different living standards. That's the point. "Living wage" is an undefined, ever changing concept. Populist to the core.

What a strange argument; you can most certainly quantify living wage for a specific region by looking at the prices in said region.

Re: What harm do minimum wages do?

#557

Post by chillacy »

_ah wrote: post #98

The direct effect of the minimum wage is to make certain low-productivity jobs illegal . Consider that for a moment: a person with limited skills and/or needs is simply prohibited from doing low-productivity work regardless of desire. The counter-argument is that many workers do not have a choice; they will always accept wages vs nothing, but have no power or ability to negotiate. With a minimum wage we've made the d…

I've only read a little about the idea but I heard that time banking has been used in some communities without work to keep an informal economy going. It turns out there are a lot of odd jobs which aren't high-value enough to be part of the formal economy, but are worth doing with basic time-tracking.

https://en.wikipedia.org/wiki/Time-based_currency

And then there's maybe the more traditional form where a local currency comes into existence which maybe not regulated like the national one: https://en.wikipedia.org/wiki/Local_currency

Re: What harm do minimum wages do?

#558

Post by karpierz »

WalterBright wrote: post #460
karpierz wrote: post #393

Earlier quoted context omitted.

What are the requirements for a free market to work well? And how do you define working well?

> requirements for a free market to work well Most generally, transactions can be freely negotiated by either party. I.e. no force or fraud. Contracts need to be enforceable. Individual liberties must be guaranteed. > working well Delivering on prosperity. To clarify, imperfect information is not fraud. Force in this context is something proactively applied, such as your signature will be on the contract or your brai…

What does "delivering on prosperity" mean? Is that GDP per capita? Life expectancy? Number of iOS apps produced?

Re: What harm do minimum wages do?

#559

Post by chillacy »

CraigJPerry wrote: post #471

The more research i do in economics the less impressed i am with the discipline. Economics is defined as a social science. That point never really struck home with me until recently. I think the fancy models, the cutting edge statistics and clever use of logic blinded me to the fact that the entire discipline is built on top of stories. There’s no gravity, there’s no absolute zero, there’s no kilogram. There’s no fun…

The concept of money isn't a hard measurable fact of the universe, but when enough people believe in it, it starts to acquire some pretty consistent attributes across different cultures and times.

It's definitely not a physical science, but it's probably one of the more important social phenomena. (I almost wrote social science, but imo I can't really consider a discipline which isn't based on experimentation to be a science).

So I guess I agree. I would like to see more rigorous methodology.

Re: What harm do minimum wages do?

#560

Post by WalterBright »

karpierz wrote: post #558
WalterBright wrote: post #460

Earlier quoted context omitted.

> requirements for a free market to work well Most generally, transactions can be freely negotiated by either party. I.e. no force or fraud. Contracts need to be enforceable. Individual liberties must be guaranteed. > working well Delivering on prosperity. To clarify, imperfect information is not fraud. Force in this context is something proactively applied, such as your signature will be on the contract or your brai…

What does "delivering on prosperity" mean? Is that GDP per capita? Life expectancy? Number of iOS apps produced?

A rough measure is GDP growth per capita.

Life expectancy was a good proxy in the 1800s because it improved dramatically, but now it has asymptotically approached a biological limit so is less useful. The same for average height.

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