What harm do minimum wages do? • Hacker News Board

Re: What harm do minimum wages do?

#661

Post by nerdponx » Thu, Aug 20, 2020, 6:11 AM UTC

dx87 wrote: post #516

mdoms wrote: post #358

Earlier quoted context omitted.

So the fields would be left fallow if governments enforced their laws properly?

In some cases, yes. California farms are having problems finding people to work in fields since border control got tighter, and American's don't want to do the work, even for $15+ an hour. The farm owners said they're switching crops over to ones that are easier to harvest with machines. Similar things have happened in the South-East USA, where crops have been left to rot on the field because the government started c…

This seems like a short term phenomenon as the market adjusts. Over time, consumer prices of labor-intensive produce will rise relative to non-labor-intensive produce.

If you had to find a humanitarian angle here, you should ask what the people who were previously working in the fields should do for work instead. Is unemployment the only alternative? Or can the large numbers of people who are currently migrant workers be incorporated into the economy in a different but productive way? I don't have good answers to those questions.

Re: What harm do minimum wages do?

#662

Post by tprice7 » Thu, Aug 20, 2020, 6:11 AM UTC

shirakawasuna wrote: post #505

gjulianm wrote: post #4

> Textbooks state that, in the absence of a minimum wage, a worker is paid his “marginal product of labour”, which means the value of what he produces. > Just as a monopolist can set prices higher than would be the case in a competitive market, a monopsonist can set prices artificially lower. A lot of economic arguments forget these ideas. The labor market is not a free market: companies have more power in negotiatio…

If workers were paid the value of what they produce, there would be no profit, no payoff for investors / owners. Classic Economist, laundering in free market sociopathy through bad economics. If you're ever interested in taking a more removed perspective view of that particular magazine, take a look at their old articles. 1850s-60s (e.g., slavery). Late 1800s and early 1900s (labor rights). Nazi-related stuff.

"the value of what they produce, there would be no profit, no payoff for investors / owners"

It depends if "the value of what they produce" means marginal output or average output. Due to the law of diminishing returns, typically average output is greater than marginal output. The theory predicts that wages = marginal output: if wages are less, you can increase profits by hiring more workers, if they are more, you can increase profits by laying people off. So it comes to an equilibrium where the marginal output matches market wages. Since this is less than average output, it is still possible to make a profit.

I agree though that the article is being misleading here since "the value of what they produce" is an ambiguous term that should probably refer to average output rather than marginal output.

Re: What harm do minimum wages do?

#663

Post by nerdponx » Thu, Aug 20, 2020, 6:12 AM UTC

CraigJPerry wrote: post #471

The more research i do in economics the less impressed i am with the discipline. Economics is defined as a social science. That point never really struck home with me until recently. I think the fancy models, the cutting edge statistics and clever use of logic blinded me to the fact that the entire discipline is built on top of stories. There’s no gravity, there’s no absolute zero, there’s no kilogram. There’s no fun…

Then stop reading The Economist and start reading NBER working papers instead.

Re: What harm do minimum wages do?

#664

Post by DangitBobby » Thu, Aug 20, 2020, 6:14 AM UTC

qeternity wrote: post #341

lokar wrote: post #287

The anti-min-wage / free market argument ignores a key fact: as a society we have decided we won't let people starve to death. So, if someone can't make ends meet, we will (via taxes) support them, at least to some extent. This support factors into the wage negotiation, allowing the employer to force a lower wage (absent a state imposed min). Absent state sate welfare style support many low wage (min and sub-min) job…

This gets to the heart of the problem of minimum wage. Walmart is often cast as a villain because many of their workers receive government benefits. Nobody stops to ask the very real question of: what if the average Walmart worker doesn’t add $X in value per hour. What if the value of the “Walmart Greeter” is less than that of minimum wage? Is it better for Walmart to fire this person because they’re not worth minimu…

They also get a bit of a bad wrap for pricing out local businesses. Would you rather work minimum wage for a giant, faceless megacorp in a soul sucking minimum wage job with few growth prospects? Or would you rather potentially work for a local business with people you might care about and that might care about you? At least now we can have all the cheap plastic shit we ever wanted.

Re: What harm do minimum wages do?

#665

Post by drran » Thu, Aug 20, 2020, 6:22 AM UTC

chii wrote: post #580

mr_toad wrote: post #547

Earlier quoted context omitted.

> you get no profit. Marginal value of production is almost always lower than average value, because of diminishing returns. Profits are made on the average value. A Marxist take in this is that labour should be paid on the average value of production, and labour should get all the profits.

> labour should get all the profits. and the question becomes "who supplies the capital to enable the labour, if labour gets all the profits".

Just confiscate capital from these fat and greedy pigs, then shoot them, so they will not complain. They are just pigs, not humans. Problem solved. /s

Re: What harm do minimum wages do?

#666

Post by drran » Thu, Aug 20, 2020, 6:27 AM UTC

aidenn0 wrote: post #606

lopmotr wrote: post #602

Earlier quoted context omitted.

The other question is what does labor get when there are temporarily low or negative profits? I used to work at a company which gave 10% of its profits to the workers each month as a bonus. But I was only there during some money-losing months so I got zero bonus. Imagine if that had been my entire pay!

If they gave 100% of their profits to the workers as the only pay, then long term workers could presumably self-insure.

It looks like excellent solution for startup: just pay 100% of startup profit to workers by giving them 100% of shares, so they will self-insure themselves and be OK when startup will fail.

Re: What harm do minimum wages do?

#667

Post by dang » Thu, Aug 20, 2020, 6:31 AM UTC

Press2forEN wrote: post #431

bakuninsbart wrote: post #112

Earlier quoted context omitted.

> The issue is that nobody is entitled to anything. That's an ideological statement. You may subscribe to it, but not everyone has to. Society is fundamentally based on the notion of shared rights and duties, what these rights and duties entail can be up for debate, but if you don't want to owe anyone, you will have to live a pretty lonely, primitive existance in Siberia or Alaska.

> Society is fundamentally based on the notion of shared rights and duties This statement is equally ideological. Proximity to others imparts no responsibility outside what individuals choose to take on for themselves. You may subscribe to it, but not everyone has to. Most of our social unrest today can be laid at the feet of those who insist otherwise.

We've banned this account for using HN primarily for political battle. That's against the site guidelines: https://news.ycombinator.com/newsguidelines.html.

Re: What harm do minimum wages do?

#668

Post by neilwilson » Thu, Aug 20, 2020, 6:36 AM UTC

gjulianm wrote: post #4

> Textbooks state that, in the absence of a minimum wage, a worker is paid his “marginal product of labour”, which means the value of what he produces. > Just as a monopolist can set prices higher than would be the case in a competitive market, a monopsonist can set prices artificially lower. A lot of economic arguments forget these ideas. The labor market is not a free market: companies have more power in negotiatio…

"That's why minimum wage laws and workers rights are important. "

But ultimately pointless when there are insufficient jobs - which there always are since "inflation targeting" ensures there always will be.

The actual problem is that there are 20 dogs and 19 bones. What we need is a Federal Job Guarantee. An alternative job that everybody has a right to access paying the living wage. Then simple competition sorts the rest out.

The task of the private sector is to eliminate all jobs and replace them with automated capital. Once there is a job alternative in place, we can let the private sector get on with that task.

Re: What harm do minimum wages do?

#669

Post by ApolloFortyNine » Thu, Aug 20, 2020, 6:40 AM UTC

qeternity wrote: post #378

csours wrote: post #342

Earlier quoted context omitted.

Ehhh? What are you talking about? It's not illegal to do things that don't make money. That's called a cost center. I don't make money for my company, I reduce the risk of losing money, and provide tools for people who do make money.

I didn’t say making money, I said providing value. You’re creating some value for your company that exceeds what they pay you, otherwise you wouldn’t have a job. Let’s say I’m a widget maker. I can make 10 widgets per hour for my company, and they in then earn $1 profit per widget. This company is not going to pay me $15/hr if I’m only able to generate $10/hr in value for the business. But if minimum wage is $15 then…

This is why I always found it odd that Trump would get attacked for setting tariffs.

Minimum wage essentially requires tariffs, as long as the world doesn't have equal income. If people are only willing to pay a $1 for a shirt, but to make it in the US will require to charge $2, but the same shirt in China will only cost $0.50, what will happen? Now instead of having a factory with low wage employees, you have no factory, no employees, no supply chain.

Re: What harm do minimum wages do?

#670

Post by dmitriid » Thu, Aug 20, 2020, 6:44 AM UTC

OCASM wrote: post #527

dmitriid wrote: post #301

Earlier quoted context omitted.

Demanding other people live in perpetual poverty with no safety nets, how is that not slavery. BTW: Are you American, and do you by any chance identify as Christian? Because I've only seen two groups of people so hellbent on never helping their fellow man. American Christians and American libertarians.

Could be that I do want people to improve their lives and just happen to disagree with your methods? No, disagreeing with your must mean I want people to stay in poverty forever... Learn from immigrants: they earn their way to a better life by applying themselves and helping each other.

OCASM: Learn from immigrants, and help each other

Also OCASM: You can't make me help other people, it's slavery