It is foolish to think that this won't result in unemployment. We live in a time in which higher labor costs for marginal work can be eliminated through automation and these higher labor costs will only accelerate that transition. You may not like that fact, but that's what will happen. You don't a free ride on planet earth and no foolish government policy can change that.
Raising Floor for Minimum Wage Pushes Economy into the Unknown
81–90 of 105 posts
Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown
#82> Their evidence rests largely on comparisons between neighboring areas with different minimum wages. The seminal study in this vein examined fast-food restaurants on both sides of the Pennsylvania-New Jersey border before and after New Jersey raised its minimum wage in the early 1990s. It found no evidence that employment there fell as a result. This is often cited in publications that generally support a higher min…
> if you make them less than the amount that they have to pay you
You assume we are already paying everyone fairly for the value they create. That's... possible, but it's also possible that a lot of people are paid far less than the value they create; raising minimum wage makes the job less profitable but not unprofitable.
Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown
#83It is foolish to think that this won't result in unemployment. We live in a time in which higher labor costs for marginal work can be eliminated through automation and these higher labor costs will only accelerate that transition. You may not like that fact, but that's what will happen. You don't a free ride on planet earth and no foolish government policy can change that.
Indeed. Minimum wage is a hack on labor that barely worked 60 years ago when full employment was some sort of reasonable goal. It's a ludicrous superstition now - better to just institute a basic income, abolish minimum wage entirely, and let employers pay people whatever they want.
Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown
#84> Their evidence rests largely on comparisons between neighboring areas with different minimum wages. The seminal study in this vein examined fast-food restaurants on both sides of the Pennsylvania-New Jersey border before and after New Jersey raised its minimum wage in the early 1990s. It found no evidence that employment there fell as a result. This is often cited in publications that generally support a higher min…
> if you make them less than the amount that they have to pay you You assume we are already paying everyone fairly for the value they create. That's... possible, but it's also possible that a lot of people are paid far less than the value they create; raising minimum wage makes the job less profitable but not unprofitable.
> You assume we are already paying everyone fairly for the value they create.
No, they are assuming that some employees are generate less than $15 of value per hour. They could be 'worth' $14 and currently paid $9.
Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown
#85This is absurd. The results of raising the minimum wage are perfectly known. Learn from the other countries that have done it in the last 10-15-25 years. Australia, Scandinavian countries, etc. etc. Why can't America look outside it's own borders and learn from what other countries have done and are doing? i.e. watch this John Oliver video on gun control [1] where it's stated Australia is not on this planet and Ameri…
Please don't bring generic ideological tangents into already-controversial topics. Any vector that runs through the points "minimum wage studies", "American self-centeredness", and "gun control" is guaranteed not to lead to substantive discussion. The OP may be wrong, but it's hardly absurd. Let's stick to the substance.
How can you stick to the substance if drawing on other examples is out of bounds?
Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown
#86Earlier quoted context omitted.
Or maybe just a fair flat tax on all new goods and all services at ~8%. Everybody always pays the same percentage: tourists, bajillionaires, hobos, you name it.
Flat taxes are regressive. They're simple, but they don't work. You consider it "fair" because everyone pays the same. Not everyone should pay the same tax. Some people should pay more, some less.
Define "regressive" because when I google it I get "(of a tax) taking a proportionally greater amount from those on lower incomes". Are you talking about the wealthy having greater ability to find tax loopholes or do define "regressive" as everyone paying the same proportion of their income?
Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown
#87I don't believe that raising the minimum wage will trigger businesses to cut jobs significantly. They will probably pass the higher cost onto the consumer. Ultimately, it's a method of wealth redistribution, which is sorely needed in our economy.
Businesses would generally charge the price that would result in the most profit (revenue - expenses). Businesses can't just raise prices and get more revenue. If they could, they would do that already. Minimum wage has to do with marginal cost of producing an extra product. Marginal cost generally increases after a while. So producing that last additional unit usually costs more than the one before. When you increas…
> Marginal cost generally increases after a while
That is possible, but I would generally expect the opposite with economies of scale.
Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown
#88Earlier quoted context omitted.
>As much as you want to tax "the wealthy", there really aren't enough wealthy people to pay for everything, The point isn't to make them pay for everything. The point of taxing them is to mute the inflationary effect of letting them keep their money. The primary noticeable effect of taxing the wealthy on the rest of us would be to make property more affordable once again.
This is completely backwards. The wealthy primarily invest their money; it is mainly spent on non-consumer goods (servers, backhoes, research, etc). If we redistribute to people with a higher propensity to spend, then we are shifting wealth from investment to consumption. This will raise demand for consumer goods, hence raising prices, and causing inflation. Note that an increase in the speculative value of real esta…
>This is completely backwards. The wealthy primarily invest their money; it is mainly spent on non-consumer goods
Have you not noticed that these goods have experienced a considerable degree of price inflation over the last decade? Did houses get cheaper?
>Note that an increase in the speculative value of real estate is NOT inflation
Bullshit. If I'm spending more on rent or mortgage (which I will if property prices increase), I've experienced inflation just as much as if I'm spending more on milk, eggs and bread.
>By the way, if you believe that money going into the hands of the wealthy is the best way to cause inflation, it therefore follows that the best economic stimulus is tax cuts for the wealthy.
Depends on whose economy you are stimulating. If you just want to stimulate the price of property and stock prices, sure, tax cuts for the wealthy all round. If you want to stimulate employment for the middle classes, not so much.
If you want to stimulate general economic growth, tax cuts for the rich are awful because there is a very minimal multiplier effect. The money goes into real estate and the stock market and largely stays there.
The best way to do that is to offer a job guarantee like FDR did in the 30s or increasing the minimum wage. The spending multiplier on both of those is about 3-5.
>Do you favor such cuts during times of recession?
Clearly not.
Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown
#89Earlier quoted context omitted.
>What? How is it inflationary to let "the wealthy" keep their money Because they spend it. >We're the ones driving up housing prices on a macro scale across the country, not the few people that have hundreds of millions to spend. Both are. The few people with hundreds of millions of dollars will buy large properties in central locations in multiple cities, shrinking the available housing stock for the rest of us.
"Because they spend it." So does everyone, they just spend it differently. Bill Gates' money isn't sitting in a checking account, it's in stock certificates. High net-worth people don't put money under their mattresses, they spend it, albeit in different ways. I don't know how to compare consumer spending vs. investments, so I can't say if one is "better" than another, but that money isn't just sitting in bank accoun…
>So does everyone, they just spend it differently.
Yes, and the wealthy spend more, so the effect of their spending is more inflationary.
>Bill Gates' money isn't sitting in a checking account, it's in stock certificates. High net-worth people don't put money under their mattresses, they spend it, albeit in different ways.
Quite. This is why the price of property is absurd and P/E for the stock market is so low. Unfortunately the middle and working classes get hit by this just as much as they get hit by rises in the price of milk or eggs.
>Available housing stock on the whole is just fine in the US. Sure, you and I probably can't afford to live on Park Avenue or overlooking Central Park, but that's because those properties attract worldwide money. We're not there yet. San Francisco's housing problems aren't as simple as "some people have money". Taking money away from people isn't going to solve this.
Oh yes it would. Hit the wealthy with huge taxes and they would end up selling those properties to pay off their tax bill. That would lead to a spiraling decrease in San Francisco and New York property prices as well as a stock market decline.
Re: Raising Floor for Minimum Wage Pushes Economy into the Unknown
#90Earlier quoted context omitted.
> By the way, if you believe that money going into the hands of the wealthy is the best way to cause inflation, it therefore follows that the best economic stimulus is tax cuts for the wealthy. Do you favor such cuts during times of recession? In a recession, you want to stoke demand. Inflation isn't a worry, deflation is. You therefore give tax cuts to the people who are going to spend (ie not the wealthy). "Overall…
Yes, that's the point I'm making - I'm disagreeing with this: "The point of taxing them is to mute the inflationary effect of letting them keep their money." But if crdoconnor disagrees and also is logically consistent, he should also disagree with you. Somehow I suspect he won't. Also, your understanding of Keynesian economics is slightly confused; the goal is to cause inflation in order to reduce real wages.
>But if crdoconnor disagrees and also is logically consistent, he should also disagree with you.
Uh, no. It's entirely logically consistent to agree with him.