Economists who defend disaster profiteers are wrong • Hacker News Board

Re: Economists who defend disaster profiteers are wrong

#141

Post by p1necone » Tue, Apr 14, 2020, 5:33 AM UTC

4773ueudjj wrote: post #137

p1necone wrote: post #129

Earlier quoted context omitted.

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.

Again: parent said that minimum wage is a bad idea period, compared it with eugenics and added nothing else to clarify. They didn't say it's a bad idea if chased with tunnel vision, or that it's a bad idea if used in isolation (I don't think that statement even makes sense - having a minimum wage is always going to be one decision amongst the context of a lot of other decisions being made).

I am questioning the particular way they worded their comment, I thought I made that obvious.

Re: Economists who defend disaster profiteers are wrong

#142

Post by AnthonyMouse » Tue, Apr 14, 2020, 5:38 AM UTC

adjkant wrote: post #131

AnthonyMouse wrote: post #127

Earlier quoted context omitted.

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, a…

How would you expect to you hear of some when they're prohibited by law?

Try it like this. Federal minimum wage comes out to around $15,000/year. This is in the same ballpark as college tuition -- which is generally regarded as costing a lot of money. If you go to an institution where you're a novice and it takes half your hours to learn the trade and the other half is productive but effectively unskilled work for the employer, you would expect these two to net to approximately zero, right? So why is it at all unexpected that it would frequently net to a number which is slightly positive but less than minimum wage?

> Even if these jobs exist, what percentage of $4 job will be those?

Probably the large majority of them, because otherwise why would anybody take those jobs? They wouldn't be paying enough to attract employees unless they were offering something else of value that existing jobs with higher compensation don't have.

Corporations can't just offer to pay $0.25/hour and get a line of workers lining up at the door. They have to outbid other companies for labor. That's why most companies already pay more than minimum wage for most jobs. And it's why most of the jobs that would pay less than minimum wage are ones that offer the workers something else in its place -- education, more flexible hours, a shorter commute etc. Taking those options away makes peoples lives worse, not better.

Re: Economists who defend disaster profiteers are wrong

#143

Post by 4773ueudjj » Tue, Apr 14, 2020, 5:39 AM UTC

p1necone wrote: post #141

4773ueudjj wrote: post #137

Earlier quoted context omitted.

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.

Again: parent said that minimum wage is a bad idea period , compared it with eugenics and added nothing else to clarify. They didn't say it's a bad idea if chased with tunnel vision, or that it's a bad idea if used in isolation (I don't think that statement even makes sense - having a minimum wage is always going to be one decision amongst the context of a lot of other decisions being made). I am questioning the part…

They didn't actually compare it with eugenics though, they compared the nature of the discourse around eugenics to discourse around minimum wage with the penultimate point of explaining a mix of why/how they distrust economists, specifically economists, to handle discussions about ethics. They weren't making a direct comparison between the topics themselves and yet most of the replies are reacting as if they had, illustrating why these sorts of talks with laymen are bad ideas.

Re: Economists who defend disaster profiteers are wrong

#144

Post by adjkant » Tue, Apr 14, 2020, 5:39 AM UTC

mikemotherwell wrote: post #140

adjkant wrote: post #125

Earlier quoted context omitted.

> 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://marginal…

> 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.

Do you have any source for that? Because the same author sets are on both studies. The article I linked to is directly criticizing the study you linked to (and also directly links to it).

Admittedly I am not a field expert and I haven't dived into the weeds on these studies. But my points I think aren't reliant on these details. The are simply:

1. There is much debate over if minimum wage laws or even specific implementations do more good or harm, which would seem contrary to the parent appearing to try to claim the harms as facts.

2. All of this seems to make the claim that the harm of eugenics is equal to minimum wage quite egregious.

I'm not trying to start a flame war over the details of viability of minimum wage here - I don't think that will be productive for anyone. I just want to underscore how egregious comparing minimum wage to eugenics is here.

Re: Economists who defend disaster profiteers are wrong

#145

Post by kortilla » Tue, Apr 14, 2020, 5:43 AM UTC

hannasanarion wrote: post #70

hamandcheese wrote: post #42

Earlier quoted context omitted.

If toilet paper was $20/roll, people would think twice before hoarding, and would probably also use less squares overall.

Hoarding isn't the (entire) problem, a bigger issue is the sudden shift in consumption from commercial to consumer. Nobody is pooping in office buildings, schools, or shopping centers anymore, everyone is doing it at home. Producers that uses to sell 50/50 consumer to commercial are now selling 90/10 in favor of consumer and they can't reconfigure their production lines fast enough. https://marker.medium.com/what-eve…

And $20/roll would expedite the changeover pretty quickly.

Re: Economists who defend disaster profiteers are wrong

#146

Post by kortilla » Tue, Apr 14, 2020, 5:46 AM UTC

yawaramin wrote: post #134

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…

Slavery isn’t a good example because that requires government enforcing the ability for people to own people as property.

Re: Economists who defend disaster profiteers are wrong

#147

Post by dragonwriter » Tue, Apr 14, 2020, 5:49 AM UTC

adjkant wrote: post #112

dantheman wrote: post #105

Earlier quoted context omitted.

Minimum wage puts a floor on the amount of value necessary for someone to be employable. Many people, especially those just starting out can't produce that much value.

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…

> Minimum wage does not price people out of jobs,

Yes, it quite obviously does.

> it puts a cap on the profit that a corporation can squeeze out of its workers.

No, it doesn't. Competition does that. Minimum wage puts a floor on the economic value of labor that can get hired at all.

It might limit value extraction where there is a monopsony purchaser of labor who is not also a monopoly supplier of the good produced with that labor, but that's not actually all that common a situation.

> Employers who would be paying under it are simply not viable moral businesses

If there is work to be done that genuinely has value less than the minimum wage, is it truly better for society that the worker instead has no job prospects and the one who would have the work done instead has no work done? Who benefits from that.

> Now we can have economic arguments about what is true here, but the purpose of minimum wage today is a moral one and that must be factored in.

Any legitimate moral purpose of minimum wage is served better by taxing business income and high-end personal (including capital) income and providing a UBI as high as economic productivity can bear without out-of-control inflation.

Which is not to say that in practice minimum wage isn't better than nothing, it's just far from the best means of achieving it's legitimate purposes, in large part due to the adverse consequences it has in limiting employability.

Re: Economists who defend disaster profiteers are wrong

#148

Post by h0l0cube » Tue, Apr 14, 2020, 5:54 AM UTC

4773ueudjj wrote: post #120

h0l0cube wrote: post #91

Earlier quoted context omitted.

> And many modern economists endorse a minimum wage, as eugenicists did then, but with even less regard for the harm it causes. What are the harms of a minimum wage? Do you have any empirical sources to back that up?

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…

> Hacker News supposedly has a rule against shallow comments and yet for some reason knee jerk requests for sources with no additional substance to drive the dialogue forward are considered 'reasonable'.

Their statement begged the question, and it was asked.

I wasn't asking out of hostility, but out of curiosity. If the point can be made, and as you say, there is overwhelming evidence, I'd like the self-described expert of their field to provide an authoritative source. That's to the benefit of all readers.

Instead, we have a bunch of hand-wavey replies on both sides with dubious back-up, balanced with maybe a more illuminating discussion about the intersection of morality and economics, specifically regarding slavery and minorities - which I feel somewhat swayed by.

> Minimum wage is a widely studied issue with well documented pros and cons.

Throw us a bone then :) There are many countries around the world that do have a minimum wage, surely there's some data out there we can grok. Perhaps a minimum wage to quality-of-life measure? Inform this naive individual.

Re: Economists who defend disaster profiteers are wrong

#149

Post by vl » Tue, Apr 14, 2020, 6:01 AM UTC

4773ueudjj wrote: post #120

h0l0cube wrote: post #91

Earlier quoted context omitted.

> And many modern economists endorse a minimum wage, as eugenicists did then, but with even less regard for the harm it causes. What are the harms of a minimum wage? Do you have any empirical sources to back that up?

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…

Wait, we haven’t talked about UBI yet.

Re: Economists who defend disaster profiteers are wrong

#150

Post by Der_Einzige » Tue, Apr 14, 2020, 6:03 AM UTC

closeparen wrote: post #68

patmcc wrote: post #15

It's very interesting to me that (nearly) everyone agrees that reselling disaster supplies like masks, hand sanitizer, etc. for a large profit is terrible, but somehow selling literal essentials like food, housing, and healthcare for profit is just fine.

Suppose a farmer or a developer relinquishes his handsome profits by switching to less efficient techniques. Or the price of one of his inputs sharply rises, and he doesn't have the market power to pass it on. Now he only makes a narrow living. Has the world become a better place?

Yes, because the marginal utility gained by the people who don't have to pay extra for products during a crisis is significantly more than the marginal utility lost by a (comparatively wealthy) farmer or developer. Remember that most farming done today is factory farming by big shots. Same with property or business development.