Economists who defend disaster profiteers are wrong • Hacker News Board

Re: Economists who defend disaster profiteers are wrong

#131

Post by adjkant » Tue, Apr 14, 2020, 4:56 AM UTC

AnthonyMouse wrote: post #127

adjkant wrote: post #112

Earlier quoted context omitted.

The irony of this comment is that it is exactly missing the morality in an economic situation, the claim being that if you are capable of work and are trying your best, you deserve to have enough pay to live off of. Minimum wage does not price people out of jobs, it puts a cap on the profit that a corporation can squeeze out of its workers. Employers who would be paying under it are simply not viable moral businesses…

Here's a thought experiment for you. Think of college as a job. You go there, you do work, you get paid. The amount you get paid is negative because your productivity to the school is near zero and their cost of "employing" you requires them to have a lot of buildings and faculty etc. Yet people take on a lot of debt to be able to work as a student at a college, so they obviously perceive some value in it. Should we…

The argument you're making requires that you are making a significant personal investment in yourself at that $4 an hour job, which I have yet to find such an example of. I'd be happy to hear about some.

Internships for lucrative fields where knowledge experience/investment pay off have no issues existing in economies with minimum wages as very clearly demonstrated by the fields of software engineering, businesses, and many other fields. Not to mention that most minimum wage laws make exceptions or reductions for internships, and people do unpaid internships often for things like PolySci students for political campaigns.

So, yes, we should continue to support internships that invest in people and we already regularly make such considerations in minimum wage laws. $4 an hour jobs in a place where $8 an hour is the minimum wage is not an example of an internship where you are going to learn something valuable, though I am open to hearing about these jobs. The cost of an intern is often far less the pay and much more the hours of those senior to them who would be teaching. Minimum wage is not standing in the way there.

Even if these jobs exist, what percentage of $4 jobs will those be? In reality this will be exploited by large corporations every time, pricing as low as the market will let them, irregardless of livability.

Re: Economists who defend disaster profiteers are wrong

#132

Post by logicchains » Tue, Apr 14, 2020, 4:57 AM UTC

danans wrote: post #123

AndrewUnmuted wrote: post #96

Earlier quoted context omitted.

Eugenics and wage “protections” like minimum wage are both tied to the same racist underpinnings. The minimum wage was established to price out black workers.

Lots of rights enjoyed by all today in th US - the most important being voting - were originally established specifically at the exclusion of people of color and women. The problem wasn't the rights themselves, it's that they were purposely offered to white men only. Therefore it's deceptive to attack the minimum wage as being any more racist in origin than the right to vote is. Much of the law has deeply racist orig…

That's a completely different thing. The minimum wage wasn't originally only offered to white people: it was mandated for everyone, for the purpose of rendering those with lower-paying jobs (people of color, immigrants) unemployed, or preventing them from competing with whites. The briefing paper at https://www.cato.org/sites/cato.org/files/pubs/pdf/bp017.pdf discusses this.

"The law provided that all federal construction contractors with contracts inexcess of $5,000 or more must pay their workers the "prevailing wage," which in practice meant the wages ofunionized labor. The measure passed because Congressmen saw the bill as protection for local, unionized[12] white workers' salaries in the fierce labor market of the Depression.[13] In particular, white union workers were angry that black workers who were barred from unions were migrating to the North in search of jobs in the building trades and undercutting "white" wages.[14] The comments of various congressmen reveal the racial animus that motivated the sponsors and supporters of the bill. In 1930, Representative John J. Cochran of Missouri stated that he had "received numerous complaints in recent months about southern contractors employing low-paid colored mechanics getting work and bringing the employees from the South."[15] Representative Clayton Allgood, supporting Davis-Bacon on the floor of the House, complained of "cheap colored labor" that "is in competition with white labor throughout the country."[16]"

Re: Economists who defend disaster profiteers are wrong

#133

Post by AnthonyMouse » Tue, Apr 14, 2020, 4:58 AM UTC

jimmaswell wrote: post #122

AnthonyMouse wrote: post #118

Earlier quoted context omitted.

I think this is the biggest flaw in your argument. If toilet paper was $20/roll, that wouldn't deter someone who has none in the slightest bit. They'd buy one roll and pay $20 in a second. But that guy who was trying to buy a thousand? He's thinking twice.

Yes it is going to deter someone who has none. Is it impossible for you to imagine someone who couldn't afford that premium so they resort to using the shower or something? And do you really think a millionaire is going to be deterred from buying too much in that instance?

Someone who couldn't afford $20 for something that lasts more than a month? If this person exists it's because they place a below-average value on toilet paper, not because they don't have $20.

And there aren't enough millionaires for their toilet paper buying habits to have a meaningful effect on the market unless they each start buying millions of rolls, which is a ridiculous hypothetical with no chance of really happening.

Re: Economists who defend disaster profiteers are wrong

#134

Post by yawaramin » Tue, Apr 14, 2020, 5:02 AM UTC

nonidentified wrote: post #76

Speaking as an economist, I tend to get nervous when other economists talk about circumstances where "morality trumps economics." As a profession, we have a miserable track record on morality. Economists widely endorsed eugenics in the first half of the 20th century, for example. And many modern economists endorse a minimum wage, as eugenicists did then, but with even less regard for the harm it causes. Personally, I…

> Speaking as an economist, I tend to get nervous when other economists talk about circumstances where "morality trumps economics."

Some examples where morality trumps economics that might help to calm you:

- Child labour is illegal in the civilized world

- Slavery is illegal in all or most countries (despite slave labour being more, um, economical than paid labour)

- Emergency services like fire, police, paramedics don't demand payment up-front.

> Companies can't just push one lever to maximum and expect nothing else to change.

They should expect profits to fall. That can happen during a pandemic. Act of God and all that.

> But most importantly, we don't need it. Yes, we've seen some small-time punks buy up too much hand sanitizer, but the big manufacturers are being decent.

And we should gamble our lives on the continued decency of profit-maximizing corporations.

Re: Economists who defend disaster profiteers are wrong

#135

Post by yawaramin » Tue, Apr 14, 2020, 5:06 AM UTC

AnthonyMouse wrote: post #103

wpietri wrote: post #45

Earlier quoted context omitted.

> An important point the article didn’t address is that high prices direct resources to more important uses. Neither do high prices. Those direct them to people with more money to spend. Confusing "richer" with "more important" is always a bad idea, but especially so with goods like medical supplies. A billionaire who wants to stockpile a million masks just in case definitely not "more important" than a million poor…

> A billionaire who wants to stockpile a million masks just in case definitely not "more important" than a million poor people getting 1 mask each. Real people don't behave like this. A billionaire can't make personal use of a million masks and there is no point in stockpiling them during a crisis just in case there is some future crisis. They're not going to be worth more a year from now than they are today because…

The assumption here is that 'doctor's offices' have that kind of cash to throw around? I'm wracking my brain trying to understand who these mythical doctors are who need masks more than hospitals which are the actual front lines of treating COVID-19 and are alarmingly low on PPE.

Re: Economists who defend disaster profiteers are wrong

#136

Post by logicchains » Tue, Apr 14, 2020, 5:17 AM UTC

pfranz wrote: post #130

logicchains wrote: post #119

Earlier quoted context omitted.

Australia has relatively high youth unemployement, a predicted effect of a high minimum wage: https://www.statista.com/statistics/811644/youth-unemploymen... . Having difficulty finding work after graduating high school or university is a common complaint among Australian youth, in my experience. The hardest part is getting the first job, getting the foot in the door, and this is because a minimum wage prevents many…

> Having difficulty finding work after graduating high school or university is a common complaint among Australian youth, in my experience. Those numbers don't look all that different from the US. Are people pursuing minimum wage jobs after graduating high school or university? Even high school graduates with no intention of pursuing higher schooling seem to pursue a vocation at something higher than minimum wage.

Before corona, it was around 12-13% in Australia compared to 8-9% in the US, 3-4% is a non-trivial difference. In rural areas it's worse (https://www.abc.net.au/triplej/programs/hack/youth-unemploym...), which is expected as even if minimum wage is set "properly" for the cities, where most people live, it may be relatively too high for rural areas where cost of living and wages are lower.

>Are people pursuing minimum wage jobs after graduating high school or university? Even high school graduates with no intention of pursuing higher schooling seem to pursue a vocation at something higher than minimum wage.

Not everybody is able to find a higher-paying job, that's why we still see people at age thirty working in checkouts or McDonalds. Try not to think of the average person; instead imagine the worst behaved, most disruptive, academically failing students at your high school, and consider what kind of jobs are available to them. It's the least hireable people that are affected by minimum wage laws, not anybody who's capable of getting a better job.

Re: Economists who defend disaster profiteers are wrong

#137

Post by 4773ueudjj » Tue, Apr 14, 2020, 5:20 AM UTC

p1necone wrote: post #129

4773ueudjj wrote: post #120

Earlier quoted context omitted.

This line of online questioning is the lazy dismissal of the 21st century. This comment has a positive score and even a child that agrees with it and yet it's akin to asking any theorist "do you have sources for that?" in response to them saying something wildly uncontroversial within their domain. It adds nothing to the discussion and only shows that the respondent is so wildly out of touch with the relevant mainstr…

The parent said unequivocally that minimum wage is a bad idea (and compared it to eugenics of all things), not that it has cons that need to be mitigated. This is not an uncontroversial opinion, even among economists.

It is though. Most economists will advocate a mix of minimum wage and EITC (Earned income tax credit). Few will say that minimum wage by itself is a good thing and those that do will typically qualify it by saying that it's a good thing if you're only concerned with optimizing particular metrics, the persuit of which will likely have unintended consequences if chased with tunnel vision.

Re: Economists who defend disaster profiteers are wrong

#138

Post by danans » Tue, Apr 14, 2020, 5:21 AM UTC

logicchains wrote: post #132

danans wrote: post #123

Earlier quoted context omitted.

Lots of rights enjoyed by all today in th US - the most important being voting - were originally established specifically at the exclusion of people of color and women. The problem wasn't the rights themselves, it's that they were purposely offered to white men only. Therefore it's deceptive to attack the minimum wage as being any more racist in origin than the right to vote is. Much of the law has deeply racist orig…

That's a completely different thing. The minimum wage wasn't originally only offered to white people: it was mandated for everyone, for the purpose of rendering those with lower-paying jobs (people of color, immigrants) unemployed, or preventing them from competing with whites. The briefing paper at https://www.cato.org/sites/cato.org/files/pubs/pdf/bp017.pdf discusses this. "The law provided that all federal constru…

> it was mandated for everyone, for the purpose of rendering those with lower-paying jobs (people of color, immigrants) unemployed

So it was mandated for "everyone", but by your own description, not really, because it adjusted another variable - who had a job - by race, which is practically the same thing as being racially exclusionary.

This is not so different to how black people in theory got the right to vote after the Civil War, but practically were excluded from voting in many areas until just 50 years ago.

Re: Economists who defend disaster profiteers are wrong

#139

Post by AnthonyMouse » Tue, Apr 14, 2020, 5:27 AM UTC

yawaramin wrote: post #135

AnthonyMouse wrote: post #103

Earlier quoted context omitted.

> A billionaire who wants to stockpile a million masks just in case definitely not "more important" than a million poor people getting 1 mask each. Real people don't behave like this. A billionaire can't make personal use of a million masks and there is no point in stockpiling them during a crisis just in case there is some future crisis. They're not going to be worth more a year from now than they are today because…

The assumption here is that 'doctor's offices' have that kind of cash to throw around? I'm wracking my brain trying to understand who these mythical doctors are who need masks more than hospitals which are the actual front lines of treating COVID-19 and are alarmingly low on PPE.

Some doctors treat COVID-19 patients. If they have no PPE, they're more likely to get infected themselves and pass the virus to their other patients. Or they can outbid some hypochondriacs.

Re: Economists who defend disaster profiteers are wrong

#140

Post by mikemotherwell » Tue, Apr 14, 2020, 5:30 AM UTC

adjkant wrote: post #125

barry-cotter wrote: post #114

Earlier quoted context omitted.

People whose labor is worth less than the minimum wage become unemployable. Being unemployed means you can’t acquire skills or experience and is bad for your mental health and social attachment. If you want to look at the literature you can start with Card and Krueger, which shows minimal effects for a small minimum wage discontinuity, I believe on the NJ/NY border. The Seattle minimum wage study showed a reduction i…

> It’s an exciting example of people looking really hard for ways to confirm their priors on both sides. It seems like you're doing that here yourself: > The Seattle minimum wage study showed a reduction in hours and benefits and reduced likelihood of new entrants to the labor market. https://ritholtz.com/2018/10/seattle-studys-shocking-conclus... Minimum wage may have some complexities to be played out and examined,…

Is that article accurate? My understanding was that Seattle commissioned a multi-year study, and then when the results didn't go their way, quickly rushed a study out the door that said what they wanted. I got this from Marginal Revolution, and I can't find the article, but here is the actual study https://evans.uw.edu/policy-impact/minimum-wage-study and here is an MR article summarising the report: https://marginalrevolution.com/marginalrevolution/2017/06/se...

The first two points from MR:

> – The numbers of hours worked by low-wage workers fell by 3.5 million hours per quarter. This was reflected both in thousands of job losses and reductions in hours worked by those who retained their jobs.

> – The losses were so dramatic that this increase “reduced income paid to low-wage employees of single-location Seattle businesses by roughly $120 million on an annual basis.”