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A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

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Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#181

Post by dragonwriter »

hirundo wrote: post #53

Opponents of a minimum wage need only believe that increasing the price of a thing tends to proportionally decrease the demand for that thing. This is simply a statement of the law of supply and demand, which is (though weaker) the economic equivalent of physics' F=MA. Proponents of a minimum wage need to believe that in this particular case, raising a price does not proportionally decrease demand. While this may be…

> Opponents of a minimum wage need only believe that increasing the price of a thing tends to proportionally decrease the demand for that thing. This is simply a statement of the law of supply and demand

No, it's a contradiction of it; in conventional economics, a price floor has no effect on supply or demand, but reduces quantity traded iff the market clearing price without the floor is below the price floor. (One of the most annoying recurring things, to me, on HN is people making economic arguments and confusing either “supply” or “demand” with “quantity traded”, especially when discussing the effect of price controls which result in quantity traded not being the intersection of the supply and demand curves.)

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#182

Post by dragonwriter »

Veelox wrote: post #180
coldpie wrote: post #83

Earlier quoted context omitted.

> On the other hand, the minimum wage definitely benefits middle class teenagers on their first jobs (if they can get a job), and has questionable benefit for millennial humanities college grads who have yet to start a career. This is the problem. Everyone working 40 hours per week deserves a living wage, whether they're fresh out of high school or 8 years into a humanities degree. There's this weird sense out there…

What would you need to be able to afford for it to count as a living wage? I would say enough to cover food, clothing, housing, and healthcare for you and a dependent. One of my issues with setting a national minimum wage is those last two are very different if you are living in Seattle vs rural Arkansas. How would you set minimum wage in such that it gives the same standard of living to people in both of those place…

> As an aside, I think our social safety net should be changed so that any income will increase your standard of living. There are too many situation were going from 0$ to something will decrease your standard of living

That's a major argument for UBI.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#183

Post by tptacek »

atemerev wrote: post #177
tptacek wrote: post #123

Earlier quoted context omitted.

Hazlitt wasn't a scholar of any sort. He was a writer. He's got about as much authority on this subject as John Stossel. The irony of this citation is that we're commenting on a paper that opens by observing that the theory of minimum wages, derived in effect from economic first principles, hugely oversimplifies the empirical reality. And as support for that study.. Hazlitt.

Is von Mises authoritative enough for you?

What does the existence of von Mises have to do with my point?

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#184

Post by RivieraKid »

clavalle wrote: post #170
greggyb wrote: post #165

Earlier quoted context omitted.

I didn't say that the person should take the exploitative job. The term you're looking for is opportunity cost. And yes, the opportunity cost of A is !B. Similarly the opportunity cost for B is !A. We could come up with all sorts of stuff that happens in the time that would otherwise be devoted to the exploitative job, but that wouldn't clarify the point being made here. We are in adversarial agreement.

Exploitative employment can be defined as one being paid much less than one's time is worth. So the 'slightly less bad' assessment of the exploitative employment is incorrect because having all of the time at full value is better than selling some for lesser value.

Even assuming that working a low-paying job is worse than not working at all, it doesn't mean that low-paying jobs should be illegal. Adding more options doesn't generally make things worse. Maybe for some people having a low-paying job is better than not having a job at all.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#185

Post by dragonwriter »

coldpie wrote: post #167
rhino369 wrote: post #129

Earlier quoted context omitted.

Whether they deserve or it or not doesn't change whether the market will support it. Some people making 10 dollars an hour might get a raise to 13, but some might just get fired. So law decides that someone whose labor is only worth 10 dollars to the market is better off banned from working.

I'm willing to entertain other ideas. If the living wage is X and the minimum wage is Y < X, then someone has to make up the difference. Two methods to make up the gap that make sense to me are taxation and redistribution, or raising the minimum wage. How do you suggest to make up the gap?

> How do you suggest to make up the gap?

How about first reducing the gap by reducing taxation of labor income, including employer-side payroll taxes (which both reduces the nominal wage necessary for livable income and makes it less expensive for employees to hire workers at any given nominal wage.)

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#186

Post by RivieraKid »

coldpie wrote: post #83
lend000 wrote: post #42

The problem I have with the minimum wage is that it transfers wealth from the very poorest to the mid-working class/lower middle class. Who am I to tell a homeless person that she is legally forbidden to engage in a voluntary, hourly employment contract for less than $15/hr? I would effectively be guaranteeing that she stays unemployed/homeless. Regardless of practical effects (which are ambiguous at best), it's wron…

> On the other hand, the minimum wage definitely benefits middle class teenagers on their first jobs (if they can get a job), and has questionable benefit for millennial humanities college grads who have yet to start a career. This is the problem. Everyone working 40 hours per week deserves a living wage, whether they're fresh out of high school or 8 years into a humanities degree. There's this weird sense out there…

"Deserve" is pretty subjective and vague, borderline meaningless. One could argue that they only deserve the value they create.

The problem is that automation increases inequality (I think). Between individual workers (software engineers vs factory workers) - and between capital and labour.

The solution is income redistribution. To me, the negative income tax with no minimum wage makes most sense. Minimum wage is a weird, hard-to-analyze hack.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#187

Post by Veelox »

dragonwriter wrote: post #182
Veelox wrote: post #180

Earlier quoted context omitted.

What would you need to be able to afford for it to count as a living wage? I would say enough to cover food, clothing, housing, and healthcare for you and a dependent. One of my issues with setting a national minimum wage is those last two are very different if you are living in Seattle vs rural Arkansas. How would you set minimum wage in such that it gives the same standard of living to people in both of those place…

> As an aside, I think our social safety net should be changed so that any income will increase your standard of living. There are too many situation were going from 0$ to something will decrease your standard of living That's a major argument for UBI.

There are ways to solve the problem without UBI. Such as making sure the sum of help reduces slower than income increase.

With the current system the aid is earmarked for certain items. This prevents one of the issues with UBI where someone gets a check, eats steak for a week, then cannot make rent the next week.

I know the earmarks don't work perfectly currently or prevent all bad choices but I think that UBI would allow for more bad choices.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#188

Post by lend000 »

taeric wrote: post #135
lend000 wrote: post #74

Earlier quoted context omitted.

Perhaps minimum wage proponents need to frame it like that to justify it, but in reality, it goes both ways . You ARE legally forbidding a homeless person from working at a price of their choosing, just as much as you are forbidding a business from purchasing labor below a certain price.

This line of thinking leads to allowing people to sell themselves into slavery. Do we need to solve homelessness? Absolutely. We do not do this by propping up businesses and properties that rely on below livable wages. I can buy some level of slippery slope at play here. But, by and large, this frames it in a way that allows sub-livable wages. So, you can think my "side" is framing this in a way to justify it. This d…

> This line of thinking leads to allowing people to sell themselves into slavery.

I think there is a fundamental difference between selling labor and selling legal rights. You might say that someone so financially desperate has de-facto given some rights to their employer, but coercion is always illegal (whether or not this kind of person is likely to seek legal help is another story).

> So, you can think my "side" is framing this in a way to justify it. This does little more than convince me your "side" is just trying to justify keeping ill earned wealth.

Sounds like you dislike exploitative businesses more than you care about the homeless. That isn't necessarily right or wrong, but I think it explains your inclination on the issue.

Re: A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news

#190

Post by tptacek »

atemerev wrote: post #189
tptacek wrote: post #183

Earlier quoted context omitted.

What does the existence of von Mises have to do with my point?

Explicit endorsement?

All you're saying is "there are libertarian economists who like libertarian-leaning pop science". Sure, that's true.
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