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What harm do minimum wages do?

economist.com

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Re: What harm do minimum wages do?

#571

Post by mjevans »

Another side to this question is: What is the value of a dollar? that is, what does a minimum wage job actually empower a worker to obtain?

The argument for harm should be re-framed in terms of minimum wages devaluing the buying power of a dollar, of raises to those wages as a tax upon the middle-class (who's wages presumably do not increase accordingly), but crucially not the rent taking (wealthy) class.

Rather than focusing just on dollars and an hourly wage, efforts must be made to correct the market for life essentials so that everyone is able to invest in themselves and the future. Taxes should be structured to prevent the wealthy from abusing the poor. There are other market distortions as well, such as artificially limited housing and many other forms of ladders being kicked out from behind of those who already have their place in life, and don't care for those whom are still seeking a place of their own to belong.

Re: What harm do minimum wages do?

#572

Post by mkoubaa »

dmalvarado wrote: post #550
efxhoy wrote: post #459

Earlier quoted context omitted.

>> 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. > This sentence is just wrong. First of all a rational actor will not intentionally pay a worker the value of their production; you get no profit. In the econ 101 textbook simplified free market that the author is refering to firms do not make any economic profit. If…

As an econ major, I've come to the conclusion that the dismal science is equal parts making models and explaining why they don't work.

the dismal science is too generous

Re: What harm do minimum wages do?

#573

Post by tprice7 »

aidenn0 wrote: post #401
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…

>> 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. This sentence is just wrong. First of all a rational actor will not intentionally pay a worker the value of their production; you get no profit. Textbooks actually say that a worker will be paid no more than the marginal product of labor, and if labor is in short sup…

Each employee is payed the marginal product of labour, but the output per employee is the average product of labour. Due to the law of diminishing returns, the average product of labour is typically greater than the marginal product of labour, and therefore there can still be a profit.

Re: What harm do minimum wages do?

#574

Post by mdoms »

ccffpphh wrote: post #370
mdoms wrote: post #142

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. 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?

If by my burden you mean society's burden then yes. That's why we have things like welfare and national healthcare systems.

Re: What harm do minimum wages do?

#575

Post by leetcrew »

dylz wrote: post #521
leetcrew wrote: post #396

Earlier quoted context omitted.

locally owned businesses are arguably better for a community because the owner is more likely to recirculate their profits back through the local economy. the profits from a walmart location are ultimately captured by the shareholders, who may be disproportionately concentrated in some far-away place. of course, this can be outweighed if the large corporation serves the community much more efficiently than the smalle…

> I would be happy to spend a few hours reading in any of the nearby independent coffee shops. Would this not be worse for independent coffee shops since you're taking up a seat to read, while the people that work employed by Starbucks couldn't possibly care less what you were doing? To me it seems like it would be a bit 50/50 based on industry vertical. I'm happy to support a reasonable independent restaurant over a…

> Would this not be worse for independent coffee shops since you're taking up a seat to read, while the people that work employed by Starbucks couldn't possibly care less what you were doing?

this was just the first example I could think of for a type of business where the independently owned ones are more pleasant, but good question. my guess is that independent coffee places understand that being a pleasant place to hang out is a large part of their value-add and price it in appropriately, but who knows?

I certainly agree there are some types of businesses where I don't really care. if I want to buy a stick of RAM in person, I want it today and I want to pay a competitive price. unless the employees are outright rude, there's not much they can do to improve or harm my experience.

Re: What harm do minimum wages do?

#576

Post by WalterBright »

dredmorbius wrote: post #570
WalterBright wrote: post #561

Earlier quoted context omitted.

Other people say power comes out of the barrel of a gun.

Here's the thing, it's power that is relevant here. Not how it originates, but how it is weilded, by whom, and to what ends. Who buys and sells those guns? Using what currency? And do you really want to kick the hornets' nest of slaver repressions, traders, anti-union violence, including multiple open wars, range wars, the Johnson County War, the Great Potato Famine, Opium War, British occupation of India, China, Egy…

The job of government is to protect rights, and the government gets a monopoly on force.

If other people are using force, that is a failure of the government, not of free markets.

Wars, for example, are not free market operations, even if they are done "in the name of".

Re: What harm do minimum wages do?

#577

Post by anigbrowl »

saas_sam wrote: post #271
anigbrowl wrote: post #246

Earlier quoted context omitted.

No they're not. Employers are prohibited from paying them below a certain amount. No employee can be or ever has been prosecuted/sued for accepting sub-minimum wage. I realize you're trying to say minimum wages limit economic opportunity for ad-hoc and casual labor that the poorest rely on. But you've fatally damaged your argument by presenting it in an untruthful way.

Can you locate for the audience where the poster you are responding to said anything to the effect of "employees can be prosecuted/sued for accepting sub-minimum wage"? I read his/her post a few times and do not see where that was stated. On the contrary, I see where he or she said that certain _jobs_ were illegal. Your point about who gets prosecuted or sued comes across as a total non-sequitur, at least to this rea…

In the second sentence, specifically the word prohibited which was even emphasized for effect.

Re: What harm do minimum wages do?

#578

Post by onionisafruit »

mkoubaa wrote: post #572
dmalvarado wrote: post #550

Earlier quoted context omitted.

As an econ major, I've come to the conclusion that the dismal science is equal parts making models and explaining why they don't work.

the dismal science is too generous

“The dismal science” is an established name for economics. Similar to the sweet science or the gay science.

Re: What harm do minimum wages do?

#579

Post by cosmojg »

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?

Couldn't that be continuously offset by increasing/decreasing taxes at the top? I imagine a self-regulating system might be difficult, but not impossible.

Re: What harm do minimum wages do?

#580

Post by chii »

mr_toad wrote: post #547
aidenn0 wrote: post #401

Earlier quoted context omitted.

>> 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. This sentence is just wrong. First of all a rational actor will not intentionally pay a worker the value of their production; you get no profit. Textbooks actually say that a worker will be paid no more than the marginal product of labor, and if labor is in short sup…

> you get no profit. Marginal value of production is almost always lower than average value, because of diminishing returns. Profits are made on the average value. A Marxist take in this is that labour should be paid on the average value of production, and labour should get all the profits.

> labour should get all the profits.

and the question becomes "who supplies the capital to enable the labour, if labour gets all the profits".

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