31–40 of 89 posts
But the real reason minimum-wage advocates want to increase the minimum wage is to increase the pay of union members, who's pay is indexed to the minimum wage.
That's the voting block that matters to politicians, not the near poor, who barely vote and certainly don't have the time (or skills) for political activity (unlike the unions).
As an Australian who spent a couple of years in Asia (where minimum wages are much lower than Australia's $16/hour), one of the most stinking things I noticed was how much easier it was to find work there. I have 'unskilled' Australian friends who have spent months looking for work, without luck, whereas in Singapore for instance it seemed rare for somebody to take more than a week or two to find work.
While the quality of the work may be lower than that of minimum-wage work in Australia, it at least provides unskilled individuals with an opportunity to develop the experience, skills and confidence necessary to move onto better jobs, while their Australian counterparts are still sitting around at home feeling dejected at being unable to find work.
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Actually, they do. The classical economist's understanding is that money is created exogeneously, meaning a central bank prints it and it trinkles down into the mainstream by virtue of banks having excess reserves. What happens in practice is that banks extend loans first and worry about their reserves later. By virtue of that, the enterpreneur gets a buck to invest in whatever he's doing, and part of that buck lands…
Say would tell us something else-that supply is paid for with supply. Ultimately math cannot make you richer-you need to produce more to consume more.
Classical economist's explanation: bank has 100, lends you 90 so as to keep 10 in reserves. 90 gets spent and part of it lands in the bank. Rinse, repeat.
What actually happens: bank has 10, lends you 100. It gets spent and part of it lands back in the bank. If it's not enough to post proper reserves, bank begs central bank for a buck or two to make things work. Rinse, repeat.
It's not an opinion by the way: it's by the own admittance of the SEC. See Steve Keen's research for more details.
Earlier quoted context omitted.
Say would tell us something else-that supply is paid for with supply. Ultimately math cannot make you richer-you need to produce more to consume more.
You're misunderstanding money creation: Classical economist's explanation: bank has 100, lends you 90 so as to keep 10 in reserves. 90 gets spent and part of it lands in the bank. Rinse, repeat. What actually happens: bank has 10, lends you 100. It gets spent and part of it lands back in the bank. If it's not enough to post proper reserves, bank begs central bank for a buck or two to make things work. Rinse, repeat.…
If I recall, economists tend to point out that the causation between minimum wage and poverty is actually reversed from its "intuitive" position. What actually tends to happen, is that first , a city/county/state/country's economy improves to the point that everyone is making a certain wage, just because of competition for workers. And then , policy-makers notice this, realize that there's an upside (better civic ima…
Not quite. What actually happens is that by raising the minimum wage, you lift minimum wage earners from a state where they barely survive to make ends meet to one where they consume the stuff that society at large is producing. There's a virtuous circle in there. It's that thing Ford showed in its early days: paying workers extra so they can buy the cars they produce yields more economic activity for the benefit of…
It's pretty easy to find research coming to a different conclusion than the Card/Kreuger paper that most pro-minimum-wage-increase people cite: http://gregmankiw.blogspot.com/2006/06/sperling-on-minimum-w... http://cafehayek.com/2009/09/new-study-casts-doubt-on-card-k... http://rjwaldmann.blogspot.com/2009/12/in-which-i-disagree-w... But the best reasoning I've seen on the subject is Bryan Caplan's: "Suppose you have…
So even proving beyond a doubt that minimum wage causes an increase in unemployment isn't enough to abolish the institution if there isn't a better solution to the problems at hand. Plus, unemployment percentage is not a robust enough metric to base the entire conversation on.
I liked Bryan Caplan's piece but to me it was predicated on the idea that minimum wage is based on errors in logic and not based on distortions in markets (especially in his conclusion.) I'm yet to see a better idea for addressing the downward effect of unemployment and oligopolization on low end wages. Caplan's solution seems to be deregulation but to me that's a bit like letting the wolves and the sheep work it out for themselves.
It's pretty easy to find research coming to a different conclusion than the Card/Kreuger paper that most pro-minimum-wage-increase people cite: http://gregmankiw.blogspot.com/2006/06/sperling-on-minimum-w... http://cafehayek.com/2009/09/new-study-casts-doubt-on-card-k... http://rjwaldmann.blogspot.com/2009/12/in-which-i-disagree-w... But the best reasoning I've seen on the subject is Bryan Caplan's: "Suppose you have…
Even if minimum wage does cause some unemployment that's not the beginning or the end of the story. It's a market distortion created to counteract two other market distortions - namely already existing unemployment and market concentration on the employers' side, both of which depress wages. So even proving beyond a doubt that minimum wage causes an increase in unemployment isn't enough to abolish the institution if…
No one can live off of $7.25 an hour and $10.10 is definitely a fair/decent wage.
Sure the cost for things will go up when it's increased, but with taxes decreased I'm more then happy to pay the higher costs. A higher cost that keeps people working and earning a living rather then not working and sitting around living off the peoples' tax dollars.
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> It is basic economics that when the government mandates a price floor then anyone who cannot sell their goods for anything below that floor will not be able to sell their goods. Thus it will hurt those it's trying to help. Applying this to the low end of the labor market is pushed in a lot of Econ 101 classes but it requires so many assumptions to be true that the model only has a passing resemblance to reality. To…
Yes they can. This is because we can discuss what higher prices do-invariably they cause market actors to seek substitutes. If you push a $15 minimum wage it stands to reason that there would be demand for any machinery that would allow for cost savings. It would be good for the sectors of the economy that would supply these cost savings technologies. Ultimately marginal workers would get hurt even further once these…
Here's a question. Both market concentration (as in oligopoly) and unemployment have significant downward effects on wages especially in the low end of the labor market. I don't like minimum wage and I wish we didn't have it but it's the best solution I've seen to these problems. Do you have a solution to these problems?