[HN Gopher] What harm do minimum wages do?
___________________________________________________________________
What harm do minimum wages do?
Author : prostoalex
Score : 132 points
Date : 2020-08-19 17:39 UTC (5 hours ago)
(HTM) web link (www.economist.com)
(TXT) w3m dump (www.economist.com)
| seiferteric wrote:
| I know that in economics it is difficult to do proper studies
| hence the "dismal science", but my understanding is that most
| economists agree that minimum wages don't work right? So why is
| it still pushed? Shouldn't we "listen to the experts"? Besides
| there are other tools like the EITC.
| fulafel wrote:
| There doesn't appear to be consensus like that - but not
| because lack of trying: https://www.anderson.ucla.edu/faculty-
| and-research/anderson-...
| seiferteric wrote:
| Sorry but that seems to be an opinion article by a non
| economist? Or am I mistaken?
| fulafel wrote:
| I thought it was a pretty even handed piece covering the
| debate in the field.
|
| Here are personally penned unedited opinions from econ
| nobelists etc if you prefer :)
|
| https://www.nytimes.com/2015/07/17/opinion/paul-krugman-
| libe...
|
| https://www.epi.org/publication/raise-minimum-wage/
| seiferteric wrote:
| Thanks, those are a bit better, though still single
| opinions. I guess I am looking more for a survey of
| economists opinions. What was interesting about Krugman's
| piece was that he said minimum wage used to not work, but
| now it might due to changes in the economy, which is
| surprising if true. To me, neither one was a resounding
| affirmation of minimum wage, both said that $15 did not
| seem to hurt, and might help slightly.
| mdoms wrote:
| There's "economics" and then there's real world effects. Take
| some time to study what actually happens in countries with a
| living wage.
| seiferteric wrote:
| My point is about questioning minimum wage specifically, as
| opposed to other tools like EITC or negative income tax.
| alex_young wrote:
| Why don't we index the minimum wage to inflation?
|
| The 1968 minimum, in todays dollars, is over a third higher than
| our federal minimum wage today. [0]
|
| [0]
| https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_Sta...
| jldugger wrote:
| You probably know this but the opponents of raising the minimum
| wage fear that it will lead to inflation. The old adage "labor
| is 2/3rds the cost of everything."
| alex_young wrote:
| Sure, and there is some logic there, but isn't the somewhat
| random real wage a problem? Whatever we select, it seems
| healthy to index it right?
| fulafel wrote:
| Many countries effectively do this and it doesn't make
| inflation get out of habd.
| jldugger wrote:
| States can and sometimes do set higher rates than the
| national minimum. And frankly, a national minimum wage
| doesn't make sense -- why should wages in low CoL areas
| like rural Alabama be the same as high CoL areas like
| NYC/SF?
|
| Even state lines may be too coarse grained for minimum wage
| policies, Since there are many metro areas that cross state
| lines. On the other hand, economists have been able to
| treat these places as natural experiments with mixed
| success: when one state raises the minimum wage but the
| other does not, you can measure a variety of things,
| including regional inflation. But it's still difficult to
| disentangle causation and substitution effects, since the
| minimum wage directly affects only a small portion of
| society. The evidence on that front has been... shedding
| more heat than light. I'm not sure anyone's proved
| conclusively that inflation does or does not happen, or
| that unemployment does or does not happen.
|
| Probably the most interesting study I've heard of is one
| looking at restaurants as a sort of model species for
| minimum wage jobs, the same way that biologists study fruit
| flys because they have short lifecycles. The supposed
| evidence there is that the type of restaurants change in
| response to wage increases: more self-bussing, less staff
| hired per dollar turnover. The people left get paid more,
| but fewer people employed overall. That said this was from
| a podcast discussion and I haven't reviewed the peer
| reviewed article personally.
| sys_64738 wrote:
| They don't do any harm anywhere other than in an ECON 101 class.
| The invisible hand and equilibrium ECON 101 doesn't account for
| unlivable wages. That's why there's a minimum wage.
| snake_plissken wrote:
| I've thought about a similar question: what happens if there is
| no minimum wage? If people are already struggling when being paid
| the minimum wage, what happens if business are able to lower it
| even more? Yeah I get the dynamics of supply demand are supposed
| to work here, but it just feels like at some point it's not worth
| people's time to work for such a low wage and they just give up
| and go on the dole.
|
| I also wonder if in some perverse way, a minimum wage does some
| harm to workers. Basically the thinking goes like this: companies
| that are looking to hire labor at these pay levels don't really
| need to compete for the labor because they know all of their
| competitors are going to be also paying the minimum wage. The
| resulting effect is stagnant wages that never go above the
| minimum wage because everyone knows they only ever need to pay
| that.
|
| Anyway, I support concepts like the minimum wage which are well
| intentioned, it's probably just time we reevaluate how to help
| low income workers achieve more financial security.
|
| PS: didn't read the article, just wanted to get my thoughts out
| there real quick while on lunch break.
| GoodJokes wrote:
| The labor theory of value would be a more useful read than more
| economist garbage.
| baron816 wrote:
| If society decides that people should have a minimum
| income/minimum quality of life, then the burden of providing that
| minimum should fall on society as a whole. I don't think it's
| right (or efficient) to place that burden on a certain set of
| firms or industries that are providing jobs for low skilled
| workers. We would be much better off with a negative income tax
| plus universal health care.
| DINKDINK wrote:
| "The first thing that happens, for example, when a law is passed
| that no one shall be paid less than $106 for a forty-hour week is
| that no one who is not worth $106 a week to an employer will be
| employed at all. You cannot make a man worth a given amount by
| making it illegal for anyone to offer him anything less. You
| merely deprive him of the right to earn the amount that his
| abilities and situation would permit him to earn, while you
| deprive the community even of the moderate services that he is
| capable of rendering. In brief, for a low wage you substitute
| unemployment. You do harm all around, with no comparable
| compensation.
|
| The only exception to this occurs when a group of workers is
| receiving a wage actually below its market worth. This is likely
| to happen only in rare and special circumstances or localities
| where competitive forces do not operate freely or adequately; but
| nearly all these special cases could be remedied just as
| effectively, more flexibly and with far less potential harm, by
| unionization.
|
| It may be thought that if the law forces the payment of a higher
| wage in a given industry, that industry can then charge higher
| prices for its product, so that the burden of paying the higher
| wage is merely shifted to consumers. Such shifts, however, are
| not easily made, nor are the consequences of artificial wage-
| raising so easily escaped. A higher price for the product may not
| be possible: it may merely drive consumers to the equivalent
| imported products or to some substitute. Or, if consumers
| continue to buy the product of the industry in which wages have
| been raised, the higher price will cause them to buy less of it.
| While some workers in the industry may be benefited from the
| higher wage, therefore, others will be thrown out of employment
| altogether. On the other hand, if the price of the product is not
| raised, marginal producers in the industry will be driven out of
| business; so that reduced production and consequent unemployment
| will merely be brought about in another way.
|
| When such consequences are pointed out, there are those who
| reply: "Very well; if it is true that the X industry cannot exist
| except by paying starvation wages, then it will be just as well
| if the minimum wage puts it out of existence altogether." But
| this brave pronouncement overlooks the realities. It overlooks,
| first of all, that consumers will suffer the loss of that
| product. It forgets, in the second place, that it is merely
| condemning the people who worked in that industry to
| unemployment. And it ignores, finally, that bad as were the wages
| paid in the X industry, they were the best among all the
| alternatives that seemed open to the workers in that industry;
| otherwise the workers would have gone into another. If,
| therefore, the X industry is driven out of existence by a minimum
| wage law, then the workers previously employed in that industry
| will be forced to turn to alternative courses that seemed less
| attractive to them in the first place. Their competition for jobs
| will drive down the pay offered even in these alternative
| occupations. There is no escape from the conclusion that the
| minimum wage will increase unemployment."
|
| [...]
|
| "As to the prices, wages and profits that should determine the
| distribution of that product, the best prices are not the highest
| prices, but the prices that encourage the largest volume of
| production and the largest volume of sales. The best wage rates
| for labor are not the highest wage rates, but the wage rates that
| permit full production, full employment and the largest sustained
| payrolls. The best profits, from the standpoint not only of
| industry but of labor, are not the lowest profits, but the
| profits that encourage most people to become employers or to
| provide more employment than before."
|
| Henry Hazlitt "Economics in One Lesson."
|
| To those who are downvoting: There are no illegal people, there
| is no illegal two-party consensual trade.
| Trias11 wrote:
| In a poor areas government-enforced minimal wage will cause mass
| layoffs, black market economy and more misery.
| dayjobpork wrote:
| The richest person in Australia seriously floated an idea to
| import foreign workers and pay them $2 a day to work in her mines
|
| I've always looked at minimum wage as an employer saying "I'd pay
| you less if I legally could". In workplace negotiations all of
| the power is held by the employer, unless you have some form of
| collective bargaining, and having a Government mandated minimum
| prevents companies from totally exploiting low paid workers.
| qeternity wrote:
| These policies are always double edged swords. The other way to
| frame minimum wage is that it makes it illegal to work unless
| you can produce $X value per hour.
| csours wrote:
| 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.
| qeternity wrote:
| 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 it makes it illegal for me to
| work for them.
| csours wrote:
| That still doesn't make it illegal. It only makes it non-
| viable from a unit-economics point of view.
|
| Now if you want to talk about how larger companies have
| better unit-economics, and small companies can suffer
| with high minimum wage, then we can certainly have that
| conversation.
| lokar wrote:
| 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) jobs would simply not work, people could not feed
| themselves, and they would not accept the jobs.
| dragonwriter wrote:
| > Absent state welfare style support many low wage (min and
| sub-min) jobs would simply not work, people could not feed
| themselves, and they would not accept the jobs.
|
| Given the choice between nothing and less than adequate pay,
| they would accept the jobs to buy a little more time to find
| something better before starving.
|
| They wouldn't be sustainable, but without public welfare people
| are going to grasp at what straws they have, not turn away
| something when they have nothing.
| bhupy wrote:
| This argument ignores that the anti-min-wage argument isn't
| monolithic.
|
| The other argument is that a minimum wage can usually (though
| not always) result in higher prices because employers just pass
| on the cost of higher wages to the buyer (especially in
| competitive markets), and that this is a regressive way to
| guarantee a minimum standard of living.
|
| The strongest anti-min-wage argument is that a UBI/EITC is the
| better way to guarantee a minimum money floor because it's paid
| for by progressive taxation, while allowing the market to find
| the lowest possible cost for goods/services/labor. It also
| gives workers negotiating leverage by enabling them to choose
| not to work somewhere without fear of starving to death.
| dragonwriter wrote:
| > The strongest anti-min-wage argument is that a UBI/EITC is
| the better way to guarantee a minimum money floor
|
| EITC doesn't guarantee a minimum anything since, as the name
| suggests, you need earned income to get it and you get more
| of it with more earned income, to a certain point.
|
| It's true that NIT, which is equivalent to UBI, was the
| inspiration for EITC, but EITC is a NIT through a carnival
| funhouse mirror.
| bhupy wrote:
| Sure, I meant a "reformed" EITC, but my point was to
| compare it to a UBI/NIT. It would absolutely be more
| desirable to remove the employment requirement and perhaps
| even increase it by at least 3x.
| qeternity wrote:
| 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 minimum wage
| (presumably it's the highest paying job they could find,
| suggesting they're not worth "minimum wage") or is it better to
| have lower minimum wage with state benefit offsets? At least in
| the latter scenario Walmart helps shoulder the burden.
|
| Tl;dr - Often corporations are accused of abusing state
| benefits by not paying workers more as opposed to shouldering
| some of the burden that states would otherwise be left with due
| to unemployed masses of unskilled labor.
| nickff wrote:
| So they would starve, jobless, because the work wouldn't pay a
| subsistence wage? This seems unlikely, as many people work at
| jobs where they don't earn enough to support their lifestyle.
|
| I think the below-subsistence wage earner would be more likely
| to (though not certainly) move somewhere that their skills were
| more needed.
| smileysteve wrote:
| > I think the below-subsistence wage earner would be more
| likely to (though not certainly) move somewhere that their
| skills were more needed.
|
| This introduces us to indentured servitude's abuses.
| zelphirkalt wrote:
| In which country? I don't think it is true everywhere, that we
| wont let others starve.
| greggyb wrote:
| Is the goal for people to receive a certain amount of money?
| There are many approaches to this.
|
| Is the goal for companies to pay some people (specifically, those
| employed) a certain amount of money? There are fewer approaches
| to this.
|
| Is the goal to shift the distribution of revenue in a company?
| There are fewer approaches to this. A minimum wage is a poor one.
| StreamBright wrote:
| There are valuable insights and measured numbers on minimal wage
| laws.
|
| https://www.aei.org/economics/thomas-sowell-on-the-cruelty-o...
| sparker72678 wrote:
| I know research is hard, and these issues are fraught with
| complexities and challenges in acquiring data, but it still
| boggles my mind just how many macro economic theories don't have
| strong empirical data to support them.
| fragsworth wrote:
| It is basically impossible to produce real empirical evidence
| in economics. You can look at data/correlations, and try to
| reason about cause and effect. But real empirical evidence
| requires you use the scientific method to test hypotheses
| (ideally done in a double-blind way), which is impossible for
| economists to do even if we had a national desire to do it,
| because the test itself would impact reality for its
| participants too much. It's similar to the "observer effect" in
| physics, but on a massive scale.
|
| At best, I think you can create mathematical simulations built
| on certain assumptions about reality. Those simulations depend
| on how well the assumptions model reality, and very easy to
| miss an important detail.
| ipnon wrote:
| AI researchers are important for this reason. Super
| intelligence, even if limited to simulations, can find
| results outside of the mainstream that are more optimal than
| the economic convention.[1]
|
| [1] https://blog.einstein.ai/the-ai-economist/
| rtkwe wrote:
| It's because it's trying to create simple formulas for a
| complex system with people involved at all levels.
| coldtea wrote:
| What if the strong empirical data were against the interests of
| the rich and powerful?
|
| They couldn't afford to base policy on those then!
| [deleted]
| gridlockd wrote:
| How much empirical data do you need to convince yourself that
| jumping out of a window with an umbrella is unsafe?
|
| Everybody can understand that employing people at a loss is
| unsustainable and that the goal of employers is to make a
| profit. I think there's plenty of empirical data for that, the
| rest just follows logically.
|
| Of course there's bound to be a narrow range where you can move
| some profits into wages and you have neither rising prices nor
| unemployment, but that number is going to be different for
| every location, every sector and every business. I wouldn't
| trust politicians to come up with a magic number here.
| CoolGuySteve wrote:
| > How much empirical data do you need to convince yourself
| that jumping out of a window with an umbrella is unsafe?
|
| A non-zero amount, at least:
|
| https://www.youtube.com/watch?v=FBN3xfGrx_U
| gridlockd wrote:
| Maybe he was just holding it wrong.
| CraigJPerry wrote:
| 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 fundamental tangible truths underlying the
| concepts of free markets.
|
| It's stories we tell each other as a way to explain a system we
| don't and possibly can't understand.
|
| I've never been so disappointed to realise all the arguments of
| economic theory are built on a foundation of sand. Shifting sand
| at that.
| Naac wrote:
| >> This school of thought argues that some labour markets are
| characterised by a market structure known as monopsony. Under a
| monopolistic regime one dominant supplier sells to many buyers,
| whereas under a monopsonic regime, one dominant buyer purchases
| from many sellers. Just as a monopolist can set prices higher
| than would be the case in a competitive market, a monopsonist can
| set prices artificially lower.
|
| I had a really hard time understanding this paragraph. Did anyone
| else?
| MisterBastahrd wrote:
| The people who argue hardest against minimum wages are those who
| would never expect to be paid a minimum wage for their services.
| Our "essential workers" are usually some of our lowest paid
| workers. If a UBI is ever implemented, I would suggest that these
| people get those funds first
| csours wrote:
| OT: Is there an economic theory that explains or talks about job
| creation?
| neonate wrote:
| https://archive.is/R8WCe
| pwfisher wrote:
| Non-paywalled: http://archive.is/zF4ei
|
| Great read. The real labor market is more complex than a simple
| model of supply and demand. It's like the old physics joke, "I
| have a solution, but it only works for a spherical chicken in a
| vacuum."
| moth-fuzz wrote:
| I'm going to flip this one around and ask: why are businesses
| entitled to low-cost labor? In other markets, markets of objects,
| if you don't have the funds to purchase something you don't get
| to have the thing, and if you attempt to coerce the thing into
| your ownership, we call that robbery, and prosecute it
| accordingly. So why doesn't that apply to human labor? Labor is a
| product, it exists in a market, and there is a baseline amount of
| money a person needs to survive - the 'price' of a human doing
| work (compare this to covering the cost of materials, production,
| etc for some nonhuman item). If companies cannot meet that price,
| why are either laborers or governments expected to shoulder it so
| that businesses can get their hands on the human product
| regardless? Why is human labor constantly sold at a loss?
| drak0n1c wrote:
| There is no distinction - all markets are ruled by consent.
| Both parties have to agree to a voluntary transaction, and that
| applies to employees and products.
| AnotherGoodName wrote:
| Look i get that USA has a lot of billionaires and the GDP per
| capita looks great for the USA but I want US citizens to please
| take a look at median wealth per adult and see how far you have
| to scroll down to find the USA:
| https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...
|
| This is a great way to rule out outliers. My home country
| Australia has 3X the median wealth per adult of the USA. This is
| similar to the median wealth difference between the USA and China
| for reference. It shows to be honest having lived in both
| countries. Specifically it shows in the conditions that minimum
| wage earners in the USA face, eg. having to live off food stamps
| as is common for wallmart workers for example is just horrendous.
| eg. https://www.kiro7.com/news/local/report-amazon-walmart-
| worke...
|
| Australians usually call out companies that make things in
| sweatshops where pay is below the poverty line. Specifically
| clothing in Asia. But i believe we should start doing this for US
| companies as well. Sure the US minimum wage is higher than say
| Bangladesh but since the cost of living in the US is higher too
| so it doesn't change the fact that things manufactured at minimum
| wage in the US are coming from companies that pay wages below the
| poverty line.
| MuffinFlavored wrote:
| > But i believe we should start doing this for US companies as
| well.
|
| We can "call out" whatever you want. People vote with their
| dollar. Target, Walmart, cheap resellers on AliExpress/Amazon
| are "winning" every day because the most important thing most
| consumers care about is rock bottom price. I don't think
| "calling out" will do much other than virtue signal.
| kennywinker wrote:
| Here's the trick. If choice has been eliminated, i.e. walmart
| has replaced your local shop, you can no longer vote with
| your dollar - pressuring the companies (via "calling-out") to
| give you options becomes the only choice available.
|
| That said, there are a ton of areas where we still have
| choice. In those cases, people do need to become more aware
| of the impact of their purchasing decisions - but in those
| cases I agree with you: making different decisions is the
| actual required action.
| qeternity wrote:
| > Here's the trick. If choice has been eliminated, i.e.
| walmart has replaced your local shop, you can no longer
| vote with your dollar - pressuring the companies (via
| "calling-out") to give you options becomes the only choice
| available.
|
| Aside from actual monopolies (utilities, etc) what is one
| example of having no choice? Whenever I hear this argument,
| it's not that there's no choice, it's that there's no
| cheap, convenient alternative...hence Walmart's domination.
| It's like people never stop to ask why Walmart is so
| successful: people would rather have abundant selection at
| low prices rather than support their local mom and pop
| shop.
| Qub3d wrote:
| Take a look into how Dollar General is actively
| displacing and destroying local grocery opportunities in
| small towns:
| https://www.bloomberg.com/news/articles/2018-12-20/when-
| the-...
| ardy42 wrote:
| > We can "call out" whatever you want. People vote with their
| dollar. Target, Walmart, cheap resellers on AliExpress/Amazon
| are "winning" every day because the most important thing most
| consumers care about is rock bottom price. I don't think
| "calling out" will do much other than virtue signal.
|
| _People also vote with their votes._ If voting with dollars
| was the only thing that counted, we 'd still have rivers so
| polluted they'd regularly catch on fire (see
| http://ohiohistorycentral.org/w/Cuyahoga_River_Fire).
|
| All all "voting with dollars" does is sum up an unfathomable
| number of myopic, usually short-term decisions. Sometimes the
| overall result is counter-intuitively brilliant, but other
| times the terrible result of myopia magnified.
| bhupy wrote:
| On an article about wages (not wealth), did you consider
| looking at median income per adult?
|
| https://en.wikipedia.org/wiki/Disposable_household_and_per_c...
| grandmczeb wrote:
| Wealth is very hard to accurately measure and is impacted a lot
| by demographics (e.g. age distribution). Consumption is a
| better measure of how people actually live.
|
| https://en.wikipedia.org/wiki/List_of_countries_by_household...
| mdoms wrote:
| Yikes. Measuring wellbeing by consumption is a VERY American
| perspective.
| cynicalkane wrote:
| Consumption is the income and wealth that you end up using.
| Measuring wellbeing by consumption is the standard economic
| perspective, since it describes how much of society's goods
| and services one ends up using.
|
| More simply, if you save then spend, wealth-based measures
| will rate you as better off than a person with higher
| income who just spends. That doesn't make sense.
| mdoms wrote:
| A wealth measure will give a higher rating to someone who
| spends on assets than someone who spends on Fortnite
| skins. What it doesn't do is arbitrarily favor someone
| who lives in a HCOL area or in a country (sorry, the
| country) that forces individuals to spend their own money
| on things like health care.
| kennywinker wrote:
| This is confusing. If you save, you have more wealth. If
| you have more wealth, you are more resilient to hardships
| (economic, health, etc.) - a population of people with
| large savings accounts and low debt seems obviously
| better than a population that makes a ton of money but
| lives close to the wire or carries large debts
| jldugger wrote:
| The problem though is that personal savings grows over
| time -- a nation full of young people with high incomes
| will eventually become a nation full of weathly old
| people, but if you were to compare the two nations, the
| yard stick matters.
|
| edit: if you want to cook up some evidence, look at a
| scatter plot of some indicator of age (national average
| age?) vs national average wealth. I suspect, given the
| countries at the top of the list, you'll end up with a
| pretty good r.
| scatters wrote:
| Resilience is unnecessary in countries with a safety net.
| Are individuals in those countries who make the rational
| decision to save less somehow worse off than those who
| have to carry a large savings buffer to guard against
| misfortune?
| qeternity wrote:
| And how would you measure it?
| AnotherGoodName wrote:
| I disagree simply because expenditures are completely
| different for more socialist countries. Eg. Total healthcare
| expenditure per capita is well below the USA in Australia.
| Less than half in fact. https://onthewards.org/the-inside-
| scoop-part-one-a-compariso...
|
| So that's $4500 a year more the average US citizen has in
| total expenditure that isn't some type of luxury good or
| indicator of a better life. It's just survival.
|
| I mean Australia beats the USA by any quality of life index
| out there. https://en.wikipedia.org/wiki/Where-to-be-
| born_Index
| grandmczeb wrote:
| If you add American's median household healthcare
| expenditure (~$8,200) to Australia's consumption, America's
| consumption is still 20% higher.
|
| > I mean Australia beats the USA by any quality of life
| index out there.
|
| I don't think it's worth it to get into an argument about
| which country is "better", except to say a lot of indexes
| are designed to advocate for the creator's goals rather
| than as a useful comparison. E.g. your linked ranking uses
| "the share of women holding seats in national Houses of
| Assembly". Is that really a useful comparison point for
| quality of life?
| AnotherGoodName wrote:
| >If you add American's median household healthcare
| expenditure (~$8,200) to Australia's consumption,
| America's consumption is still 20% higher.
|
| Yes but the point is that's one example. I'm not going to
| got through the full list but i can't think of one USA
| government provided service that's better quality or
| requires less private intervention compared to social
| democracies like Australia and it shows up in so many
| intangible ways. eg. little things like the Australian
| government provided online tax filing. In the USA people
| need to pay to file taxes online (sure paper is free but
| ugh what a hassle). More private toll roads in the USA.
| Public housing is more common per capita in Australia.
| Australias national broadband network (i still can't get
| fibre here in the USA but i had it in regional
| Australia), etc. Again i'm not going to keep going except
| to say that i've lived in both nations and it's really
| obvious.
|
| In more socialist countries per capita spending can be
| seen as lower but the services are better despite no
| spending from consumers going to them. The spending comes
| from the government. You can't compare spending between
| the USA and Australia for this reason.
| qeternity wrote:
| Very odd to hear from someone who lived in both. I've
| lived in both as well.
|
| > More private toll roads in the USA.
|
| And more public. More roads period. The interstate
| highway system is one of the modern wonders of the world.
|
| > Public housing is more common per capita in Australia.
|
| I'm not sure if this is true, but I'd argue it's not a
| good thing.
|
| > Australias national broadband network (i still can't
| get fibre here in the USA but i had it in regional
| Australia), etc. Again i'm not going to keep going except
| to say that i've lived in both nations and it's really
| obvious.
|
| This is an extremely strange one. Internet in Australia
| is so bad it's painful. The national network is a joke.
| modeless wrote:
| Online tax filing is free for everyone under the median
| income. Private toll roads may or may not be "more"
| common but they are certainly rare. Average internet
| speeds are twice Australia's.
| https://www.fastmetrics.com/internet-connection-speed-by-
| cou...
| umvi wrote:
| Does that take into account cost of living?
|
| In America you can buy a gallon of milk for $1.50 at Walmart.
| In Australia (after some brief googling[0]) it's more like
| $4.50. Same with gas, video games, you name it, a lot of things
| seem to cost 2-4x more in Australia.
|
| [0] https://www.numbeo.com/cost-of-
| living/country_result.jsp?cou...
| thomasahle wrote:
| Yes, you probably want to look at the Purchasing Power Parity
| Median: https://en.m.wikipedia.org/wiki/Disposable_household_
| and_per...
|
| Or the household version:
| https://en.m.wikipedia.org/wiki/Median_income
| AnotherGoodName wrote:
| Not quite that extreme. ~AUD$4 for the fnacy brand which is
| under USD$3. Less for the loss leader store brands.
|
| Looks like 10% difference in cost of living by official
| figures but regardless the median wealth being so much higher
| isn't due to a few percent difference in cost of living or a
| small difference in average age as some suggested. Australia
| is objectively doing better on the wealth gap leading to a
| higher median (but not a higher mean). You can look at USA
| wealth historically too and see the USAs decline in median
| wealth over the years (but again mean wealth is doing fine).
| It all comes down to the thing we all know and have heard a
| lot. The wealth gap in the USA is increasing a lot. The
| lowest paid workers are now well into the poverty zone. The
| arguments against minimum wage are similar to the arguments
| for Asian clothing sweatshops.
| [deleted]
| scatters wrote:
| Median wealth says absolutely nothing except how many
| homeowners you have and to what extent the housing market is
| out of control.
|
| The metric that actually reflects people's lives is consumption
| adjusted for purchasing power. Disposable income (again,
| adjusted for purchasing power) is useful as well.
| aussir wrote:
| If you raise the price of cigarettes through taxes, less people
| buy cigs. Same for gambling, driving, flying, etc.
|
| If you raise the price of labor through minimum wage, you fix
| poverty. Opposed to literally everything else plus evidence.
| simsla wrote:
| This fallacy is addressed in the article, I suggest you read
| it.
|
| The key point is that wages are being kept artificially low by
| monopsonies. And the evidence supports this. (Current
| hyperlocal minimum wage laws make for good A/B-ish tests.)
| trentnix wrote:
| _Minimum wage_ , despite all manner of contortion by those that
| seek to justify its existence, is a political concept. The
| minimum wage is, always, zero.
|
| Minimum wage is also what drives the market for illegal immigrant
| labor. As Milton Friedman pointed out decades ago, immigration is
| most beneficial to employers precisely when it's illegal. Those
| workers don't enjoy the protections, wagers, and respect their
| legal counterparts enjoy. If illegal immigrants are made legal,
| then the benefit of employing an illegal plummets.
|
| These wages also avoid other form of government oversight, such
| as taxation. Lack of immigration enforcement and lack of
| penalties for those that hire illegals provides an unfair
| advantage to those employers who, brazenly, break the law. They
| get cheaper labor, avoid taxes, and gain an unfair market
| advantage over those employers who follow the law. There's
| nothing "free" about a market whose government selectively
| enforces its laws.
|
| Consenting adults should be able to work for whatever wage they
| like.
| jandrese wrote:
| I'm not sure how your first three paragraphs support the
| fourth. Illegal immigration drives down wages so we shouldn't
| have a minimum wage?
| trentnix wrote:
| Illegal immigration is a side effect of minimum wage. And
| minimum wage puts unskilled Americans (or Americans whose
| skills aren't valuable because of a changing market) at an
| unfair disadvantage in their attempts to obtain employment
| and acquire new skills.
|
| Sorry if that wasn't clear in my post.
| jandrese wrote:
| So why not provide a legal path to immigration instead of
| abolishing the minimum wage then?
| trentnix wrote:
| Illegal immigration and immigration in general is its own
| rabbit hole. You shouldn't assume from my post whether
| I'm _for_ or _against_ illegal immigration (or any type
| of immigration) because it doesn 't really matter one way
| or the other to the points I'm trying to make.
|
| Economically speaking, granting legal status to unskilled
| illegals results in a combination of undesirable side
| effects:
|
| - it increases the price of the goods they produced
| reducing the buying power of the _minimum wage_ ,
|
| - it prices many of those illegals out of the market
| because they are unable to produce value for the wage
| they are paid (but now they are eligible for government
| benefits),
|
| - and it encourages new types of "black market"
| employment.
|
| Try all you like, but you won't outsmart the market.
| jandrese wrote:
| This is where you lose me. The jobs still need to be
| done. Some companies might just fold up and die, but most
| would be just as happy passing on the higher costs to
| customers, and said good or service still needs to be
| produced so the companies that survive will take over for
| the ones that folded.
|
| Economists have this weird idea that all fast food would
| close because the people working there clearly aren't
| worth $15/hour because they're doing jobs that currently
| pay only $10/hour.
|
| The crazy part is that higher minimum wages tend to
| increase the market, not decrease it. Turns out that poor
| people are bottlenecked on money. If you reduce the
| bottleneck they can spend more, which increases demand
| for labor (to fill the supply) which increases the labor
| rate. You can see this effect all throughout history, the
| more wealth gap an economy has the slower its economic
| growth rate is. The super rich can't spend the money fast
| enough or broadly enough to increase the economic base,
| the economies grow stagnant.
| ativzzz wrote:
| > lack of penalties for those that hire illegals provides an
| unfair advantage to those employers who, brazenly, break the
| law
|
| I've thought for a long time that the easiest way to curb
| illegal immigration would be to re-allocate resources targeting
| illegal immigrants to much more aggresively fine/jail/punish
| employers who employ illegal immigrants instead. As long as
| there is a supply of (illegal) jobs willing to pay more than in
| the country they are emigrating from, the immigrants will come.
| If there is nobody willing to hire them, they will not come.
|
| This will not happen though because it is in nobody's best
| interests. Not for business in the US, because they will make
| less money (or possibly even be unprofitable and have to shut
| down), and not for consumers, because their prices will
| increase.
| calkuta wrote:
| What I find important to remember about minimum wage is that it
| constitutes a restriction on the freedom of workers to negotiate
| for their labor. The existence of a meaningful minimum wage
| implies that there are people in the society who desire to
| negotiate for lower compensation (because they are more motivated
| to get the job for whatever reason), but they are disallowed from
| doing so. It might be our opinion that it is undignified or
| exploitative to work for a certain wage, but we should not have
| the right to bar others from doing so if they wish.
|
| As individuals, we should demand the freedom to negotiate the
| terms of our employment without government influence, including
| wages, benefits, and even working conditions. Using the
| government to coerce employers into giving greater compensation
| is appealing in the short term, but ultimately it disenfranchises
| others by blocking them out of jobs and results in long term
| economic stagnation.
|
| Mandatory minimum wage significantly above the "natural" level
| dictated by prevailing economic conditions unquestionably causes
| harm, mostly to workers who, if they choose to continue to work
| for less money, are now doing so illegally. Mostly they just
| don't get work. This is why politicians tend to let minimum wages
| lapse behind the market rate - economies work better without this
| restriction. And when a _significant_ minimum wage hike is
| imposed, like $15 /hour in some places today, the economic harm
| to workers quickly becomes apparent.
| Sohcahtoa82 wrote:
| Without a minimum wage, the "market rates" for what is
| currently minimum wage labor will create a race to the bottom,
| not just in wages, but in standards of living.
|
| There will _always_ be someone more desperate for _any_ amount
| of money, and eliminating the minimum wage won 't create
| significantly more jobs, as businesses only hire enough people
| to satisfy demand for their products. Wal-mart won't suddenly
| hire more cashiers just because they can now pay $2/hour to
| someone living in a cardboard box.
|
| When it comes to negotiating wages, people in current minimum
| wage jobs have _zero_ leverage. Minimum wage is a _necessity_
| to keep people out of cardboard boxes or packed into tiny
| apartments like sardines. It is necessary to keep a decent
| baseline standard of living.
| eesmith wrote:
| Indeed we should - demand the repeal of Taft-Hartley Act and
| other laws which have nerfed collective bargaining power far
| from any "natural" point.
|
| Jurisdictional strikes, wildcat strikes, solidarity or
| political strikes, secondary boycotts, secondary and mass
| picketing, closed shops, and monetary donations by unions to
| federal political campaigns are all part of the freedom to
| negotiate the terms of our employment, which we are currently
| disallowed from doing.
| flyingfences wrote:
| I can't tell if you're saying that sarcastically, but I do
| agree unironically.
| eesmith wrote:
| You can see my relevant comment history - https://hn.algoli
| a.com/?dateRange=all&page=0&prefix=true&que...
| rconti wrote:
| I tend to find the libertarian argument appealing, as well, but
| you're making a whole lot of assumptions.
|
| I think your worst unchecked/unstated assumption is that
| "unemployed people are all looking for a job below the minimum
| wage but are unable to find one". That's simply untrue.
| "Unemployment" in the US is defined as people who are _actively
| searching for a job_ (not merely those who do not HAVE a job),
| but there is no requirement that they accept any job at any
| (legal) wage.
|
| Presumably, the vast majority of unemployed people, even in
| good times, would not accept work $1 below the minimum wage,
| even though they are actively searching.
|
| IOW: You are assuming that the entire reason these folks are
| unemployed is because they are not allowed to contract their
| labor for a lower wage.
| gjulianm wrote:
| > 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 negotiation,
| they have more information and, most important of all, they can
| deal with a job opening not being covered most of the time.
| Workers can't usually live too much without finding a job.
|
| That's why minimum wage laws and workers rights are important.
| Companies will always push for lower wages wherever they can,
| without a care for the actual wealth created by the worker. The
| only way to counter that push is by giving more power to the
| worker, and in low-skilled fields with lots of available workers,
| you need to do that through regulations and subsidies.
| throwawaysea wrote:
| You're redefining what a 'free market' means. If one side has a
| greater need or desire, that is still within the bounds of what
| a free market is. The market creates incentives and
| disincentives to fulfill different market demands, by creating
| an incentive to supply what's in demand (by paying more) and a
| disincentive to supply what we don't need more of (by paying
| less).
| gjulianm wrote:
| Not a greater need or desire, but a fundamental need. It's an
| important distinction. In a perfect market, if the only
| offers to buy a product are too low, you will stop production
| and close the company because you can't make a profit. In the
| labor market, if the salaries are too low, people will still
| take the jobs because low income is better than zero income.
| collyw wrote:
| Thomas Sowell makes quite a convincing argument that minimum
| wages stop people getting onto the bottom rung if the
| employment ladder. He convinced me to an extent, in that it can
| be useful for young people starting out and small companies
| that couldn't otherwise afford staff. But I do think it need to
| be balanced with some checks to stop it being exploited by
| companies who can afford it.
| hankchinaski wrote:
| high regulation and subsidies effectively make 'doing business'
| a nightmare. the real question is: who are the value creators?
| how can you reward everyone appropriately based on how much
| value they create and how much risk they incur whilst keeping
| an healthy base level (minimum wage) for those who don't? i
| think the answer is in the middle. too much regulation is
| harmful for businesses which are ultimately the risk takers and
| the value creators in our economies
| missedthecue wrote:
| A free market does not mean that both sides want something with
| equal desire. I need food to survive much more than Krogers
| needs my business to survive. This does not mean that grocery
| sales are not a free market.
|
| A free market means that the supply and demand of goods rely on
| price signals rather than a centralized planner. Labour is
| absolutely a free market. As wages in one particular area
| increase, people respond to that price signal by learning the
| relevant skills and working in that field and getting greater
| salaries. It's also why Amazon (and essentially no business)
| pay $7.25 an hour, even though they legally could.
| yarrel wrote:
| And what happens when those signals are distorted?
|
| Remove the state and there are still many things that can go
| wrong with a market. Price signals become a way of laundering
| this fact past a certain point.
| gjulianm wrote:
| > I need food to survive much more than Krogers needs my
| business to survive
|
| Yes, but you can buy from anywhere other than Krogers and the
| cost of switching is almost negligible. A job is very, very
| different in that regard.
|
| Responding to your edit:
|
| > As wages in one particular area increase, people respond to
| that price signal by learning the relevant skills and working
| in that field and getting greater salaries.
|
| Learning the relevant skills costs time and money. If your
| wage is too low, you won't be able to learn new skills. And
| moving and changing jobs is not that easy for most people.
| missedthecue wrote:
| _Yes, but you can buy from anywhere other than Krogers and
| the cost of switching is almost negligible. A job is very,
| very different in that regard._
|
| It doesn't matter who I buy from, I need food much more
| than any retailer needs my business. I can sell my labour
| to many different companies with a relatively low switching
| cost. The average time people between jobs is lower than it
| has ever been.
|
| _Learning the relevant skills costs time and money. If
| your wage is too low, you won 't be able to learn new
| skills. And moving and changing jobs is not that easy for
| most people._
|
| If the price of steel increased, building new mines to
| extract iron ore would cost great sums of money as well. It
| is not easy for all mining companies to do this. It doesn't
| mean that the market is not relying on price signals to
| coordinate the production of goods.
| gjulianm wrote:
| > I can sell my labour to many different companies with a
| relatively low switching cost.
|
| Well, I disagree on this. Maybe you specifically can do
| it, but housing prices, healthcare costs, transport cost,
| family charges, etc, can make the cost and risk of
| switching prohibitive. Not to mention that "just
| switching" doesn't mean prices will be better. Just have
| a look at the latest stats on working poor people to
| imagine whether those can easily switch jobs and get
| better education.
|
| > If the price of steel increased, building new mines to
| extract iron ore would cost great sums of money as well.
| It is not easy for all mining companies to do this. It
| doesn't mean that the market is not relying on price
| signals to coordinate the production of goods.
|
| So there's a high cost of entry? That's very much a non-
| perfect market. A free market doesn't just "respond to
| price signals", that's a very low threshold as you'll
| hardly find a market that doesn't respond in any way to
| price changes. A free market has to respond to them in an
| elastic way.
| missedthecue wrote:
| Free market is not the same thing as a perfectly
| competitive market
| hirundo wrote:
| > Labour is absolutely a free market.
|
| In what sense is a market with price controls absolutely a
| free market?
| missedthecue wrote:
| You're right that price controls obfuscate the mechanism on
| which pricing signals work, but it's not central planning.
| pydry wrote:
| >A free market means that the supply and demand of goods rely
| on price signals rather than a centralized planner.
|
| That's one definition but it's not one of the more common
| ones.
|
| It also begs the question what counts as a centralized
| planner. Does Boeing count if it sets the price of jet planes
| that only it and Airbus sell? What about when Singapore fixes
| the price of medical care even though anybody who wants can
| cross the border to have it done? Or Venezuela that fixes the
| price of its own money - at a rate literally nobody pays?
| deegles wrote:
| > people respond to that price signal by learning the
| relevant skills and working in that field and getting greater
| salaries
|
| Many people stay in jobs they don't like or that don't pay
| enough because they need the healthcare or don't have the
| resources (including time) to learn new skills and move to a
| higher paying job. So the fact that people can't freely
| respond to price signals means that it is not a free market.
| edoceo wrote:
| Y'all might be using different meanings for the word
| "free".
|
| As for being stuck in a job for health or skill reasons,
| those are choices, crappy choices but still free choices.
|
| Universal Healthcare would, IMO, do more for the worker
| than a nominal pay-rise. The link between employment and
| healthcare is an abomination.
| missedthecue wrote:
| Again, a free market doesn't mean that everyone can easily
| buy or sell any good or service. Plenty of things prohibit
| this, including geographical challenges, language barriers,
| import tariffs, and other natural and contrived barriers to
| trade.
|
| A free market means that the distribution and production of
| goods and services do not rely on centralized planning, but
| on price signals.
| avianlyric wrote:
| Free markets are also free of monopolies, and generally
| expect the actors how have good "information" about the
| market.
|
| This simply isn't true for the labour market, ignoring the
| monopoly aspect for the moment, workers don't have good
| market information.
|
| Worker pay is usually heavily obfuscated by employers so it's
| almost impossible for an individual worker to accurately
| gauge how much they can demand.
|
| Addition workers have very limited time and resources to
| spend on gather information on the labour market. How are
| they supposed to discover better paying jobs, or better
| industries without constantly job hunting?
|
| Compare this to companies who in comparison have a huge
| amount data. At a minimum they know the wages of all their
| employees, they also have the resources to be constantly
| surveying the labour market and adjusting to it.
|
| All of this compounds to produce a heavily skewed labour
| market, that skews in the favour of employers.
| dragonwriter wrote:
| > Free markets are also free of monopolies
|
| Usually, that's covered by the adjective "perfectly
| competitive" rather than "free" modifying "markets", but it
| is an aspect of textbook idealized markets.
| javert wrote:
| The free market is _very_ good at solving information
| asymmetries of the kind you are talking about. If it isn 't
| being solved, it's probably because of regulation
| (regulatory capture). Or maybe it isn't a real problem.
|
| I'm going to guess in this case it's more the latter than
| the former.
| Sohcahtoa82 wrote:
| I've always considered this a very naive idea of how a
| free market works. It ignores how irrational and short-
| sighted humans can be, not to mention that many consumers
| are price sensitive.
|
| A free market will not solve climate change as long as
| coal and fossil fuels are inexpensive.
|
| A free market prioritizes one thing: Profit. That is all.
| A free market only solves problems when it is profitable
| to do so. Yeah, charities exist, but they typically
| aren't big enough to solve the big problems on a big
| scale.
| machinelabo wrote:
| This is an unbalanced opinion of free markets (but I
| generally agree with downsides of unregulated
| capitalism).
|
| > Profit. That is all.
|
| Free markets also have intense competition so "Profits"
| that you talk about don't just go out of control - Prices
| are set at the intersection of supply and demand curves.
| Companies would need to shave off profit margins to stay
| competitive.
|
| I think it is fair to say that there are no ideal free
| markets. There are always asymmetries, downsides, side
| cashing and a whole bunch of complexities in any market -
| nothing is ideal.
|
| So, we should have regulations that control those
| asymmetries.
| javert wrote:
| I think you're reading more into what I said, than what I
| actually said. But I also think part of what I said was
| dumb, so I partially agree with you.
| dragonwriter wrote:
| > The free market is very good at solving information
| asymmetries of the kind you are talking about.
|
| No, it's not.
| megablast wrote:
| Sure, but you don't need food from Kroger's. You can get it
| from 100s of places.
| AnthonyMouse wrote:
| > companies have more power in negotiation, they have more
| information
|
| You're just asserting this without any argument or evidence.
|
| > and, most important of all, they can deal with a job opening
| not being covered most of the time. Workers can't usually live
| too much without finding a job.
|
| Workers don't specifically need a job at _that_ company. Even
| if they need a job, they can go work somewhere else. And if
| that isn 't the case, you have bigger problems than minimum
| wage.
|
| > The only way to counter that push is by giving more power to
| the worker, and in low-skilled fields with lots of available
| workers, you need to do that through regulations and subsidies.
|
| Even if you want to do this, it still makes minimum wage a
| ridiculous policy, because it harms the same workers it's
| purporting to help. The ones who work for companies that can
| absorb the cost get more, but the others lose their jobs. When
| there are policies that do only one and not the other (e.g.
| UBI), there can be no justification for the one that does the
| bad thing in exchange for no relative advantage.
| AlexandrB wrote:
| > You're just asserting this without any argument or
| evidence.
|
| This is ridiculous. If I assert that the sky is blue, I don't
| think I need to provide a list of sources. Under what
| possible circumstances does the _average_ individual have
| more negotiating power or more information than a
| multinational organization with teams of lawyers, an HR
| department, and access to labour market research?
|
| Edit: To add, when we talk about minimum wage jobs we're
| usually talking about low-skilled labor. Please explain how a
| ditch-digger can have negotiating leverage over the average
| road construction company?
| AnthonyMouse wrote:
| > Under what possible circumstances does the _average_
| individual have more negotiating power or more information
| than a multinational organization with teams of lawyers, an
| HR department, and access to labour market research?
|
| You're assuming a level of competence for corporate HR
| departments that isn't in evidence. What do you think they
| have that you can't get from Glassdoor or similar? Not
| much, if anything.
|
| > Please explain how a ditch-digger can have negotiating
| leverage over the average road construction company?
|
| By taking a job at some other ditch-digging company, or
| Walmart, or Uber, or anywhere else, until one company
| offers a better wage than the other.
|
| For commodity positions it's not even really a negotiation
| for either party -- everybody on both sides knows what
| ditch diggers get paid, the employers offer that much and
| the employees accept that much because anybody who offered
| less or demanded more wouldn't find any takers.
|
| Which is also why there can't be any meaningful information
| asymmetry -- when everybody knows the prevailing wage for
| that category of work, there is nothing else you really
| need to know in terms of wage negotiations.
| TuringNYC wrote:
| >> Workers don't specifically need a job at that company.
| Even if they need a job, they can go work somewhere else. And
| if that isn't the case, you have bigger problems than minimum
| wage.
|
| This works in a theoretical perfect competition in an
| economics textbook. In real life people have financial
| handcuffs (vesting periods, mandatory option
| execution/abandonment on job exit), school districts for
| children, underwater mortgages, 10% gross transaction fees on
| home sales/purchases.
| AnthonyMouse wrote:
| > vesting periods, mandatory option execution/abandonment
| on job exit
|
| We're talking about minimum wage jobs. None of that
| applies.
|
| > school districts for children, underwater mortgages, 10%
| gross transaction fees on home sales/purchases.
|
| Nobody says you have to move. Take a job from another
| employer in the same city.
|
| Also, again, minimum wage employees? Typically not
| homeowners.
| pwinnski wrote:
| Yes, there are some circumstances in which labor ends up more
| concentrated after a minimum wage hike, but other
| circumstances in which that is not the case.
|
| The article at hand does a decent job summarizing the
| different observations people have made.
| AnthonyMouse wrote:
| > Yes, there are some circumstances in which labor ends up
| more concentrated after a minimum wage hike, but other
| circumstances in which that is not the case.
|
| But that's what I'm saying. Minimum wage is ridiculous
| because there are alternative policies that don't do the
| bad thing at all, not even sometimes.
| pwinnski wrote:
| Alternative policies that don't involve people being
| woefully underpaid? Such as what?
| bhupy wrote:
| > Such as what?
|
| UBI/NIT. Or more realistically, just expanding the EITC.
| gjulianm wrote:
| > You're just asserting this without any argument or
| evidence.
|
| I don't think it's a controversial statement at all. Even
| then, my argument was just in the next sentence.
|
| > Workers don't specifically need a job at that company.
|
| Nor companies specifically need a job filled by a given
| worker. It's a statement about general needs. If a company
| finds no satisfying candidates, they can deal with leaving
| that post open. If a worker doesn't find a satisfying job,
| they will still take something because they need to eat.
|
| > Even if they need a job, they can go work somewhere else.
|
| Doesn't make a difference if "somewhere else" offers the same
| low wages. Which is what happens, because most companies have
| the same incentives and the same lack of limits to push wages
| below livable levels.
|
| > Even if you want to do this, it still makes minimum wage a
| ridiculous policy, because it harms the same workers it's
| purporting to help
|
| The OP linked article shows that there's no clear evidence on
| whether minimum wages destroy employment or not.
|
| > When there are policies that do only one and not the other
| (e.g. UBI)
|
| Of course UBI or UGI policies would be far better, and would
| remove the need for a minimum wage. However, they work in the
| same direction: give more power to workers to offset the
| power of negotiation that business have. And, being
| pragmatic, a minimum wage increase is far more likely to be
| accepted, at least in the short term, than UBI.
| tastyfreeze wrote:
| It is not the role of government to set prices of labor or
| products. If a company wants to pay less than market rate for
| labor they will find themselves without employees. By letting
| the market dictate the price of labor, wages certainly fall
| from the artifically high price now. But, that is the result of
| people willingly entering a contract for the lower pay. People
| choosing to work for some money instead of no money. People
| choosing to work to improve their lives instead of being
| supported by welfare.
|
| Minimum wage removes the choice. Minimum wage infringes on your
| freedom of contract.
| dasil003 wrote:
| The role of government is to set the rules of the game to
| provide for the livelihood of all citizens. Free markets
| bring certain efficiencies but they are not a priori good and
| virtuous. If they bring the best outcome for society as a
| whole then we should lean into them, if not then we should
| consider regulation of some form.
|
| Increasing income inequality should be very alarming to
| everyone. The bottom 90% because they're getting screwed, and
| the top 10% because the perfection of conservative talking
| points and scapegoating of minorities and immigrants will not
| address the truth on the ground: nostalgia for post-war
| prosperity will not bring the jobs back. Policy in today's
| interconnected world is complex and almost entirely driven by
| expert lobbyists representing special interests who donate to
| both political parties to guarantee their influence. It's
| going to get worse and worse until either the 1% see their
| own danger or the pitchforks come out.
| nakedlunch wrote:
| Is the freedom to accept a contract for poverty wages to
| avoid starvation a desirable feature in our society?
| jlawson wrote:
| Since we have a social safety net, nobody needs to do such
| to 'avoid starvation' so the question makes no sense.
| flyingfences wrote:
| Is the alternative - a total absence of contracts offered
| to those people - a desirable feature in our society?
| tastyfreeze wrote:
| If labor costs less products as a result cost less. How do
| you reconcile your view with the success of Singapore? A
| country with no minimum wage and a comparatively free
| market. There is income disparity in every time and every
| place. The question to ask is do the rules of the game
| allow anybody to succeed. Minimum wage is a rule that says
| some people just don't get to play.
| gjulianm wrote:
| > How do you reconcile your view with the success of
| Singapore?
|
| A country general success does not equal the success of
| its poor people. There are not many income inequality
| stats of Singapore, but the ones I've seen [1] actually
| put Singapore with a similar income inequality to the US.
|
| Furthermore, it is a small country (5M people) with a
| pretty high GDP per capita (8th in the world). I don't
| think you can extract too many conclusions that would be
| applicable to other, bigger countries.
|
| > The question to ask is do the rules of the game allow
| anybody to succeed. Minimum wage is a rule that says some
| people just don't get to play.
|
| And without a livable minimum wage, you'll get people
| that are working full time for peanuts. They won't be
| able to save, get healthcare, provide their kids with
| good education, etc. Are those people succeeding?
|
| 1: https://en.wikipedia.org/wiki/List_of_countries_by_inc
| ome_eq...
| tastyfreeze wrote:
| In this discussion a country's population is irrelevant.
| For a small country with a GDP per capita higher than the
| United States only 55 years after independence I would
| say they are doing pretty damn good.
|
| https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(P
| PP)...
|
| There is no requirement that everybody succeed at the
| same level. The measure of a country's success is
| improvement of society over time. Has the general quality
| of life improved for the people of Singapore over the
| last 55 years? I think that is a resounding yes.
| gjulianm wrote:
| > In this discussion a country's population is
| irrelevant.
|
| It's not. You'll see that a lot of the top companies in
| Singapore are operating at global level while
| headquartered in Singapore. It's a little bit like
| looking only at the economy of the main US cities.
|
| > There is no requirement that everybody succeed at the
| same level. The measure of a country's success is
| improvement of society over time.
|
| Inequality is a pretty important measure. What society is
| better, one where everybody earns two times a livable
| wage or another where 25% earn eight times a livable wage
| and the 75% remaining are in poverty?
| tastyfreeze wrote:
| There is always inequality in all aspects of life. We all
| do not perform on the same level. Looking at a specific
| point in time and comparing inequality is a poor measure
| of society. The only measure that matters is improvement
| over time.
|
| Upon independence, "Singapore faced a small domestic
| market, and high levels of unemployment and poverty. 70
| percent of Singapore's households lived in badly
| overcrowded conditions, and a third of its people
| squatted in slums on the city fringes. Unemployment
| averaged 14 percent, GDP per capita was US$516, and half
| of the population was illiterate." [https://en.wikipedia.
| org/wiki/Economy_of_Singapore#Independe...]
|
| Compared to today, Singapore has about 1000 homeless,
| 3.16 persons per household, a literacy rate of 97.3%, GDP
| per capita of $602 billion, an unemployment rate of 4.11%
| and a median household income of $9,293. The income
| distribution isn't bad either. From what I could find the
| cost of living (minus rent) for an individual is $575 a
| month.
|
| https://blog.seedly.sg/average-singaporean-household-
| income-...
|
| The better society is the one where everyone has an
| opportunity to improve their lot in life by satisfying a
| need of others.
| karpierz wrote:
| Do you think Singapore is a free market? What do you
| think of their housing policy?
| tastyfreeze wrote:
| Thank you for pointing that out. That housing market is
| certainly not free. Not an aspect of Singapore I had read
| about before.
|
| Other than my opinion that the needs of the people would
| have been better met with a free housing market. I don't
| have much to say on it.
| OCASM wrote:
| Is starvation preferable to getting a low wage job?
|
| You start somewhere. Minimum wage laws just reduce the
| amount of opportunities low skill workers can choose from.
| brendoelfrendo wrote:
| This could just go in circles. What benefit does a job
| that doesn't provide enough of a wage to survive actually
| provide to the employee, except a way to waste their time
| while they accrue debt and wait for an emergency
| expenditure to bankrupt them?
| [deleted]
| gjulianm wrote:
| > If a company wants to pay less than market rate for labor
| they will find themselves without employees.
|
| What if multiple companies in an area do that? What incentive
| does a entering company have to increase wages if employees
| will take jobs at lower wages nevertheless because they need
| to eat?
|
| > But, that is the result of people willingly entering a
| contract for the lower pay.
|
| This viewpoint ignores that people need to work in order to
| eat. It's not exactly willing if your alternatives are
| "accept this contract or starve".
| tastyfreeze wrote:
| You mean price fixing and collusion that are already
| illegal?
|
| Without price fixing and collusion the employers have to
| compete for labor. Competition that would as a result
| improve the compensation for employees.
| gjulianm wrote:
| It's not price fixing nor collusion. It's just the
| incentives companies have to lower wages.
|
| Look at this example: a number of companies in an area
| are paying a livable wage at time T for low-skilled
| workers. Now, time goes on and inflation kicks in. Those
| wages, which did not grow, are not livable now. Workers,
| however, can't complain too much because they will be
| fired, and bad income is better than no income (not to
| mention healthcare tied to the jobs). There are also more
| workers than job positions, and new young workers are
| constantly entering the market, so companies will always
| find someone that needs to work even at that low wage.
|
| What incentives do those companies have to increase
| wages? Absolutely none. In fact, this is what is
| happening right now.
|
| > Without price fixing and collusion the employers have
| to compete for labor.
|
| If employees actually had to compete for labor in all
| cases, we wouldn't be having this debate and people
| wouldn't be complaining that their wages are not enough
| to live.
| tastyfreeze wrote:
| That sounds like blaming a broken money supply for lower
| wages. They are making the same wages. The inflation of
| money supply makes their dollar worth less. Two separate
| issues. I would prefer to examine one issue on its own.
|
| The company has no say in the money supply. Their money
| is worth less as well. Do you expect a company to pay
| more when they are earning the same amount and employee
| production stays the same?
|
| The Fed is the only entity that controls money supply and
| the purchasing power of a dollar. Upset that what you are
| earning doesn't buy the same amount of stuff? Blame for
| that is entirely on us for asking the government for more
| while demanding lower taxes. Their only alternative to
| raising taxes is printing more money.
| gjulianm wrote:
| The example is not about inflation, it's just a method to
| show how without any specific action, companies don't
| have incentives to raise wages. But in fact, it's a real
| example because it's what has been happening in the US
| for a while, inflation increasing, company profits
| increasing but profits stagnating.
|
| Anyways, the point is that companies will tend to push
| for lower wages, always. It's just how capitalism works,
| it pushes for maximizing profits. If there are more
| workers than jobs (which is the case almost everywhere)
| you can't say that competition will push companies to
| increase wages, because there will be no competition, and
| workers can't just stay home if there are no satisfying
| jobs.
| unfortun8 wrote:
| Irony is Adam Smith only brings up markets in terms of a free
| labor market.
|
| Labor must be free to move among opportunities. Fearing that
| extreme division of labor would make a person a limited
| thinking tune easily swayed by corrupt political intentions.
|
| Amazing how 200+ years ago, and even more if you lump Plato &
| Aristotle's awareness of human behavior, how true much of their
| concerns still apply. It's almost as if humans haven't evolved
| much socially, we haven't escaped the same theme. We've merely
| improved the world around us.
| ccffpphh wrote:
| The issue is that nobody is entitled to anything. You aren't de
| facto entitled to receiving money for any services you may or
| may not provide, regardless of whether you're skilled or not,
| just because you exist. A company exists because one or more
| people risked wealth in order to create a net positive system -
| their existence is not as riskless as one would believe.
| mdoms wrote:
| > The issue is that nobody is entitled to anything. You
| aren't de facto entitled to receiving money for any services
| you may or may not provide, regardless of whether you're
| skilled or not, just because you exist.
|
| This is a value judgment you have made, and one that seems
| popular in USA. It's not a priori true and it's not
| necessarily so popular in other parts of the world.
| ccffpphh wrote:
| Are you claiming that if someone else exists, it is now
| your burden to ensure their living at your own expense
| until they die?
| [deleted]
| throwaway2048 wrote:
| I think we as a society can do better than whinging about how
| "entitled" people are for wanting to work for livable wages.
| mattmanser wrote:
| Risk is a strong word, often there's little risk involved,
| it's often more about who you know, which entitlements your
| birth gave you and what parachute mummy and daddy can give
| you (especially if you're white, male and privately
| educated).
|
| There's no inherent entitlement or human right to give your
| children your money, or to not be simply turfed off what ever
| land you are using when society decided there's a better use
| for it, for a competitor simply stealing your inventory,
| expecting protection from thugs taking your business etc.,
| etc.
|
| Because wealth begats wealth, there needs to be certain
| checks and balances, minimum wages are one of them,
| inheritance taxes and capital gains taxes are others.
|
| For that, you get the protection of strong laws, an
| infrastructure you paid almost nothing towards, legal
| protections for your property, protection from foreign
| governments, access to skilled trained workers you didn't pay
| to educate, etc.
|
| Your argument is circular, Fred is wealthy and can afford to
| speculate, therefore Fred deserves more wealth.
|
| But Fred is only wealthy when everyone else buys into the
| system, otherwise Fred would soon be Dead Fred.
| ccffpphh wrote:
| There is risk in any action taken due to the fundamental
| lack of information regarding events occurring in the
| future. I agree with you that much of it is luck, this at
| the same time does not mean because one is born lucky that
| they now need to suffer to bring someone else to their
| level. I disagree that it is meaningless, I believe that
| since no one person is entitled to anything from anyone
| else (to think otherwise would be to support slavery), the
| only morally correct form of interaction is through
| consensual voluntary action.
|
| I do not think we need checks and balances. Minimum wage
| actually harms those who are most disadvantaged - if I am
| hiring two people and I must pay them the same amount,
| there's no reason I would take the socially less valuable
| person. At the very least, eliminating the floor would
| allow the disadvantaged to compete and make racists pay for
| their prejudice, i.e. "Do I really want to pay $10.00 for a
| white straight privileged [whatever insert here] or $5.00
| for a black trans [etc]".
|
| Inheritance tax is violence against those who pass on their
| wealth. If you have indeed earned so much that you would
| like to ensure your lineage, what right does anyone else
| have to stop you? Why is it wrong for you pass on wealth to
| your children? Whose business is it? What if instead, you
| simply lived a thousand years and kept your wealth?
|
| If you want to donate money because you are very rich and
| have a lot of money to spare and truly believe this, then
| by all means, you can even pay more in taxes nowadays and
| never file a return. Nobody will stop you.
| mattmanser wrote:
| I stopped reading when you started directly contradicting
| the fact based article with an armchair philosopher
| supposition.
|
| Your view is merely dogmatic and ignorant, the opposite
| of what I come to HN for.
| bakuninsbart wrote:
| > 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.
| Press2forEN wrote:
| > 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.
| dependenttypes wrote:
| > a pretty lonely
|
| Nowadays with the internet one does not need to be lonely
| even if they are away from society.
|
| In addition others might decide to follow them.
|
| > primitive existance in Siberia or Alaska.
|
| This does not make much sense. Why would living somewhere
| else automatically give them any duties?
|
| Anyway, I do not see the point of this argument. It is like
| saying to a gay person "if you don't want to be
| discriminated by anyone, you will have to live a pretty
| lonely, primitive existance in Siberia or Alaska."
| frenchyatwork wrote:
| > Nowadays with the internet one does not need to be
| lonely even if they are away from society.
|
| How are you going to pay for the internet? If you want to
| operate with state currency, you need to abide by the
| rules of the state. Render unto Caesar ...
|
| Edit: I suppose you could try doing it with bitcoin. Best
| of luck if you try!
| Klinky wrote:
| This is incredibly simplistic and reductionist thinking with
| regards to the development of society. It comes from a
| brutal, cold and careless place. The goal of societies should
| be to evolve beyond the brutality of nature, not regress
| backwards to a place where we're eating our young.
| abdullahkhalids wrote:
| Universal Declaration of Human Rights
|
| Article 3
|
| Everyone has the right to life, liberty and the security of
| person.
|
| Article 22
|
| Everyone, as a member of society, has the right to social
| security and is entitled to realization, through national
| effort and international co-operation and in accordance with
| the organization and resources of each State, of the
| economic, social and cultural rights indispensable for his
| dignity and the free development of his personality.
|
| Article 23
|
| 1. Everyone has the right to work, to free choice of
| employment, to just and favourable conditions of work and to
| protection against unemployment. 2. Everyone, without any
| discrimination, has the right to equal pay for equal work. 3.
| Everyone who works has the right to just and favourable
| remuneration ensuring for himself and his family an existence
| worthy of human dignity, and supplemented, if necessary, by
| other means of social protection. 4. Everyone has the right
| to form and to join trade unions for the protection of his
| interests.
|
| ------------
|
| You can either give people unemployment (wage without
| work)[as per 22 or 23(3)] by taxing the companies you
| mention, or you can make the companies to give money directly
| to the people in return for work. There is no third way. You
| can't deprive people of a dignified life by ignoring them.
| ccffpphh wrote:
| Anyone can make any arbitrary decision and call it a human
| right, it does not make it so. Watch:
|
| ----
|
| Article 6753 Everyone has the right to play video games 24
| hours a day.
|
| ----
|
| Nobody is entitled to life, nor dignity. Simply because
| someone else exists on the planet doesn't mean their
| livelihood is now my burden. Me existing doesn't mean you
| ought to be enslaved to provide for me.
| DINKDINK wrote:
| Positive and Negative Rights or Coercion and Non-Coercion
| Rights
|
| "Negative and positive rights are rights that oblige either
| inaction (negative rights) or action (positive rights).
| These obligations may be of either a legal or moral
| character. The notion of positive and negative rights may
| also be applied to liberty rights."
| https://en.wikipedia.org/wiki/Negative_and_positive_rights
|
| Rights are either (1) liberties that are stipulated to not
| be infringed by the government (Saying "Dear Leader is a
| bad leader" is protected speech and taxes/government cannot
| be used to prosecute someone for saying it) or (2) The
| ability to demand services to be rendered by the government
| so one's desires are fulfilled (I demand the ability to
| take from you via taxes to pay police so that I can have
| protective forces / police to defend me saying "Dear Leader
| is a bad leader")
|
| Organizing political unions around negative rights (1) is
| socially scalable and recursible: "who among us agrees we
| will never kill our fellow man? of those in the subset, who
| will agree to never assault someone unless if and only if
| the person who is to be assaulted, has already assaulted
| someone" (2) is not socially scalable "Who agrees we should
| coerce person/group x if some of you feel person/group y
| wants what person/group x has"
|
| If you think it's possible to write laws the subsidize the
| well-being of the destitute, Please let me know who I
| should sue for landing on a desert island and starving to
| death. Reality isn't fortunate nor charitable --
| consensual, opt-in unions can be.
| javert wrote:
| > Universal Declaration of Human Rights
|
| Well, I declare differently. Words are wind (unless backed
| up by an argument).
|
| > You can't deprive people of a dignified life by ignoring
| them.
|
| Ignoring someone is not depriving them of anything.
|
| Sacrificing some people for the sake of other people--what
| you are advocating--deprives both groups of a dignified
| life.
|
| Human sacrifice is utterly barbaric and would be outlawed
| in a truly civilized society.
| dependenttypes wrote:
| The UDHR is a joke. It considers it your human right for
| someone to kidnap you and (re)educate you. In addition it
| considers marriage a human right.
|
| > There is no third way
|
| You can give them a piece of fertile land.
| tfehring wrote:
| So capital is entitled to a return but labor isn't? Why the
| distinction?
| throwaway894345 wrote:
| The parent said "no one is entitled to anything". I take
| that to mean "neither capital nor labor is entitled to a
| return". It's probably also useful to scope this
| conversation to a certain context: "in a free market, no
| one is entitled to anything". This is a sort of
| hypothetical scenario since there are no perfectly free
| markets, and a completely unregulated market is very likely
| not a desirable thing (evolutionary forces aren't stable
| and stability is a prerequisite for sustained prosperity,
| security, etc); however, it's still a useful concept to
| guide discussion.
| tfehring wrote:
| They didn't explicitly say that capital is entitled to a
| return, but the comment pretty clearly indicated an
| asymmetry between capital and labor. You could invert the
| wording to the following
|
| > _You aren 't de facto entitled to receiving a return on
| any capital you may provide, regardless of whether that
| capital is put to productive use or not. A company exists
| because one or more people provided their labor in order
| to create a net positive system._
|
| and the tone clearly changes from the original. I agree
| that neither capital nor labor is entitled to a return,
| but I don't think that's what the parent comment was
| suggesting.
| throwaway894345 wrote:
| Via "no one is entitled to anything", the parent
| _explicitly said that capital is not entitled to a
| return_. No need to read between the lines here. We can
| all agree that no one is entitled to anything in a free
| market and move on to the next question, which is
| probably something like "to what extent does a perfectly
| free market deliver on our collective objectives"? I.e.,
| "Can we balance market freedom with some amount of
| regulation to deliver a system that is both prosperous
| and stable/sustainable/equitable/etc?".
| ccffpphh wrote:
| That's exactly what I was suggesting. The throwaway was
| correct.
| coliveira wrote:
| The argument goes both sides. No company is entitled to
| receive profits on the products it creates or the money it
| invests, just because it exists. There is no reason to
| believe or accept that companies and investors should have
| more protections from losses than workers.
| ccffpphh wrote:
| I agree!
| JoeAltmaier wrote:
| ...and because workers show up to make it run, and because
| everybody pays taxes for the roads and electricity, and on
| and on.
|
| We could have a dog-eat-dog society like Mad Max or
| something. Or we could set simple rules and live a decent
| life. Its kind of what Democracy is about.
| ccffpphh wrote:
| You don't need taxes for roads or electricity. In the same
| way we don't need taxes for grocery shopping, or education.
|
| Workers indeed show up and make things run, but only
| because they voluntarily chose to agree to a contract where
| that is their duty. If they don't like the terms of their
| contract, they can not take it, renegotiate their current
| one, find a new one, or take on risk and start your own
| income. You can't "accidentally" fall into a job.
| jmcgough wrote:
| > A company exists because one or more people risked wealth
| in order to create a net positive system
|
| What about companies that exist solely as rent seekers?
| TurboTax is a net negative on society - congress has tried
| repeatedly to simply mail people a bill or refund, instead of
| the silly song and dance we go through now, but Intuit has
| lobbied aggressively to prevent this.
| jlawson wrote:
| Only possible thanks to government policy wielded through
| regulatory capture. Not a free market outcome.
| dmitriid wrote:
| Ok then. What would taxes look like in a "free market"
| where "no one is entitled to anything"?
| OCASM wrote:
| There would be no taxes, only voluntary cooperation.
| dmitriid wrote:
| What is this ideal world, I want to live in it.
|
| Reality and all of history tells us that doesn't work at
| scale.
| ccffpphh wrote:
| Under the current government system, they clearly provide
| value - otherwise they wouldn't exist. Whether the
| government is complicit in their existence is another
| matter entirely - but they're not just making money appear
| out of thin air. They clearly provide value in streamlining
| the spaghetti nest of the tax code for average consumers.
|
| The issue is with government enabling the monopoly.
| ckocagil wrote:
| If no one is entitled to anything why did humankind abolish
| slavery? Child workers? Indentured servitude?
|
| Think about it. Indentured servitude is nothing but a
| contract between two people. By your ideology it should be of
| no one else's concern. Yet, it is considered slavery and is
| illegal. Why?
|
| Because it turns out life isn't as simple as "you're not
| entitled to anything". This same sentence has been uttered by
| people throughout the ages who profited by the status quo
| until the commoners got their heads, literally or
| figuratively.
|
| Every law we have, including the ones that allow you to have
| private property, private land and virtual property such as
| copyrights and patents are man-made and arbitrary.
| ccffpphh wrote:
| Yes, the one thing we can all agree on is the right to
| self. Nobody other than themselves can control their body -
| by that I mean that no matter what you do, nobody can tell
| you what to think. You can be brainwashed by force, or
| conditioned to react a certain way to escape force, but you
| can never really know what another person thinks.
|
| Regardless, one has a right to their body. It is their
| property. More explicitly, any individual intelligent agent
| that exists takes up some physical space and that space
| they occupy at any point in time to continue their
| existence is theirs only. Property can be given up
| voluntarily or if nobody else has a claim to it - in this
| case it extends that clearly rape is wrong, but
| prostitution is okay, as it's voluntary on both sides.
| Seizing someone's house is wrong, but exploring space and
| building new structures in the middle of nowhere is not.
|
| Whether laws exist regarding private property (or the lack
| thereof), we can define a set of natural rights that any
| person has regardless of any local, regional, or global
| laws, constructs, or ideologies. We can all agree murder is
| wrong, rape is wrong, stealing is wrong, slavery is wrong,
| and the clearest and most concise way of setting this
| forward is by understanding that nobody is entitled to
| anything other than their body and any property they have
| gained which was either unclaimed or voluntarily from
| another agent.
|
| Certain schools of thought disagree on unclaimed property,
| e.g. if one settles a piece of land and the landowner
| doesn't notice, but after a decade or so has passed and the
| resident has worked the land and only then the landowner
| notices, who really owns it? I am not in a position to
| answer this but I don't think it's "arbitrary" or "man-
| made" to expect natural rights over your body and property.
| Everything else, indeed, is abstract.
| ajmadesc wrote:
| Why are we entitled to property?
| ckocagil wrote:
| >Regardless, one has a right to their body. It is their
| property.
|
| To what extent? Does this principle apply to indentured
| servitude? How about work related accidents, should a
| company be legally required to prevent them? Should a
| mining company pay compensation for the lung damage
| sustained by their miners, even though that was not in
| their contract? How about the environment, does this
| principle imply I have a right to breathe fresh air? How
| about drinking water?
|
| >Whether laws exist regarding private property (or the
| lack thereof), we can define a set of natural rights that
| any person has regardless of any local, regional, or
| global laws, constructs, or ideologies.
|
| _You_ can, but it doesn 't mean I or anyone else will
| agree to them.
|
| >We can all agree murder is wrong, rape is wrong,
| stealing is wrong, slavery is wrong
|
| No, we can't. People used to think slavery was ethical.
| What changed? Raping and plundering used to be ethical
| for a victorious army. What changed? Today the majority
| of the world eats meat, and it is very possible that in a
| century we will be seen as primitive carnivores.
|
| You are also not defining what constitutes these crimes.
| Is capital punishment murder? Is it murder to kill an
| enemy soldier? How about an enemy civilian? How about
| collateral damage? Is it slavery if a company destroys
| all your other options, forcing you to work for them on
| their terms?
|
| Is it unethical for companies to collude and fix prices
| or wages? Is it unethical when workers do the same? Is it
| unethical when a company pays the local police to break a
| strike?
|
| The thought that "you only own your body, and you have to
| earn everything else" falls down pretty quickly once you
| look outside that idealistic bubble and see historical or
| ongoing issues.
| p49k wrote:
| Companies aren't inherently "entitled to" anything either,
| including "personhood," avoidance of personal liability of
| shareholders for company actions, patents and trademark
| protection for inventions, rights to use public
| infrastructure, etc. You can't pretend like society hasn't
| granted corporations their own reasonable entitlements while
| arguing that workers shouldn't have their own.
| ccffpphh wrote:
| That's true. Companies are just collections of people. They
| are not entitled to anything either. I don't think they
| should have any entitlements. No entitlement is
| "reasonable" if none are owed to anyone or anything to
| begin with.
| RockIslandLine wrote:
| "Companies are just collections of people."
|
| False. Corporations are golems, not people at all.
| kube-system wrote:
| Naturally? Maybe not, but many societies have decided to form
| governments in which their citizens are ascribed those
| entitlements.
| ccffpphh wrote:
| How many of those governments are just, however? Can you
| reasonably claim that all citizens consent to the policies
| of their government? If everyone agreed to murder you,
| would that make it ok? What about if everyone agreed to rob
| you of all of your property, your livelihood? What about
| only half of that? Quarter? A tenth? What's the right
| number? Non-consent to any degree is not morally right. In
| the same way, it would morally wrong for me to coerce you
| to pay me some arbitrary amount I come up with.
| kube-system wrote:
| In the interest of expediency, most groups of people have
| decided that democracies can make decisions as a proxy
| for consent, and people continually work to improve that
| process. Larger groups of people have all found it
| necessary to delegate daily governance tasks to a subset
| of people, because the time and effort needed to govern
| scales with the size of the group.
|
| > Can you reasonably claim that all citizens consent to
| the policies of their government?
|
| People will disagree with each other whether they have a
| government or not. Those who live ungoverned tend to
| experience _more_ coercion, violence, and violations of
| their rights than those who are governed.
| ChrisLomont wrote:
| >companies have more....
|
| and
|
| >Workers can't usually live too much without finding a job.
|
| Conversely, most workers can go to a different job, and hiring
| is expensive, so companies cannot simply keep spending on
| hiring and get no workers, so companies must offer enough value
| to attract workers.
|
| Workers also have information companies do not - they know
| where else they might or are looking, they sometimes have
| competing offers in hand, and they can always not take a job
| based on these things.
|
| >Companies will always push for lower wages wherever they can,
| without a care for the actual wealth created by the worker.
|
| Conversely, workers will always push for more wages wherever
| they can, without a care for the actual value they produce for
| their employer.
|
| And it's much easier for a worker to go elsewhere than it is
| for a company to replace all workers. Both sides have interest
| in getting a good balance on wages.
| WalterBright wrote:
| > The labor market is not a free market
|
| If it is as you say the employer has all the power, then nobody
| would have a job at more than minimum wage.
| cactus2093 wrote:
| > The only way to counter that push is by giving more power to
| the worker, and in low-skilled fields with lots of available
| workers, you need to do that through regulations and subsidies.
|
| Even assuming everything else you've said is true, that's quite
| the leap to make. And also quite the oversimplification. There
| are lots of regulations and subsidies that have been tried
| where the unintended consequences end up negating most of the
| benefits, and just turn out to make the entrenched powers even
| more entrenched and wealthy. Plus there are ideas like UBI that
| don't fit neatly into the traditional buckets of "regulations
| and subsidies" and could be another (better?) way to give
| workers more leverage.
| gjulianm wrote:
| Of course actual policy is difficult, and complex. UBI or
| guaranteed income would seem to be the better way to give
| workers more leverage, but for that one needs to accept that
| we indeed need to give workers more leverage. You'll see in
| this thread a lot of people arguing that less regulation will
| somehow lead to better wages, when in reality that will only
| increase the power imbalance between workers and businesses
| and push wages lower.
| macspoofing wrote:
| Where are you getting all this stuff from? It's like you're
| only reading communist blogs where they engage in creating
| fictitious straw-men of every aspect of a market-based economy.
| This is not how the world works.
|
| >The labor market is not a free market: companies have more
| power in negotiation
|
| That's not what a free market means. And I don't know how you
| can say companies have more power in negotiation. They post
| their rates, and people apply or they don't. There are millions
| of alternative jobs. If I sell my car, I post the price and if
| I don't like the offer, I don't take it. Are you claiming that
| this is not an aspect of the free market?
|
| A friend of mine is a shift supervisor at a food supplier. He
| uses a staffing agency to augment their full-time workforce
| during busy seasons. The company he works for pays above
| minimum wage (and so does the staffing agency even after
| commission). If he calls in 10 people, maybe 6 will come in and
| 2 will leave mid-shift (and those 10 are those that accepted
| the job). If he calls people in on Saturday, those ratios are
| even worse. He offers full-time positions to agency workers he
| likes and gets denied often because those workers may actually
| prefer the flexibility of agency work (e.g. they can choose to
| work this week, but not next week).
|
| There are wages that people will just not work for. Even if
| minimum wage laws were lifted, people aren't going to go work
| at MacDonald's for $1/hr. Talk to any small business owner and
| hear what they have to say about that. And you also see this
| will undocumented labour (i.e. where minimum wage regulations
| are ignored). Those laborers may be getting less than minimum
| wage (but even that isn't a sure thing, when factoring in the
| type of job - skilled or unskilled - and lack of taxes), but
| they certainly aren't getting paid pennies either.
|
| >Workers can't usually live too much without finding a job.
|
| Sure they can. What are you talking about? Tens of millions of
| people, for all kinds of reasons, either choose not to work, or
| choose to work part-time.
| B4CKlash wrote:
| Ironic that you complain about the parent maintaining a
| particular set of ideology while maintaining a similar set of
| irrational beliefs...
|
| Just looking at your first point. Companies wield an extreme
| asymmetric information advantage about 'your' specific hiring
| cohort. They know who has applied to the job, the size,
| relative experience, and in many cases they know the expected
| salary range of those individuals. They know the explicit and
| implicit cost of their benefits on an actuarial scale - costs
| potential-employee will never know. They have a firm
| understanding of their actual needs and a higher degree of
| flexibility. Like other comments have concluded - it's easier
| for an organization to fold tasks into other jobs. Employees,
| especially when you consider health insurance (and that of a
| family) is tied into these decisions.
|
| In today's model potential employees are required to
| negotiate with themselves (as a result of being unaware of
| the qualifications, expected incoming, etc. of the pool). We
| wonder why salaries remain stagnant...
|
| If you look at CEO pay as a counterexample it becomes
| obvious. It's not about adding or demonstrating value, it's
| about extracting value and an understanding of your ability
| to extract value. CEO compensation is a published number in
| public companies. "High CEO pay reflects economic rents--
| concessions CEOs can draw from the economy not by virtue of
| their contribution to economic output but by virtue of their
| position." https://www.epi.org/publication/ceo-
| compensation-2018/
| macspoofing wrote:
| >In today's model potential employees are required to
| negotiate with themselves (as a result of being unaware of
| the qualifications, expected incoming, etc. of the pool).
| We wonder why salaries remain stagnant...
|
| To be clear, you have no actual basis to believe that
| asymmetric bargaining power (as you defined it) is the
| reason for stagnant wages. This is just something you
| reasoned through and it _feels_ right to you.. correct?
|
| And you just say things ... what do you mean employees are
| unaware of the market - from other job seekers, to
| competitive? That is completely untrue. When you're looking
| for a job, you are very aware of the range of salaries you
| are expected to be offered for positions you seek. I
| literally just had someone decline a position because our
| offer was lower than what they were offered by other local
| company. Where was this asymmetric advantage you speak of?
|
| I have no idea what CEO pay has to do with anything except
| that this is a kitchen sink approach to argumentation where
| you just throw anything against the wall and hope something
| sticks.
| gjulianm wrote:
| > That's not what a free market means.
|
| It looks like in this thread people have different
| definitions of free market. For me, the fundamental property
| is that supply and demand respond elastically to price
| changes, and a quick test (necessary, not sufficient) is the
| following: if the price asked by buyers is too low, does
| supply stop? For example (and simplifying), if people wanted
| to pay just $1 for consoles, the supply of consoles would
| drop because it's not profitable, so it could be a free
| market. Now, for jobs, if companies wanted to pay just $1 an
| hour, would people stop working? Given that their alternative
| is starving, they probably wouldn't. So the job market can't
| be a free market.
|
| > And I don't know how you can say companies have more power
| in negotiation. They post their rates, and people apply or
| they don't. There are millions of alternative jobs. If I sell
| my car, I post the price and if I don't like the offer, I
| don't take it. Are you claiming that this is not an aspect of
| the free market?
|
| A car and a job are very, very different things. You can live
| without a car, you can't live without a job. If the available
| offer of cars is too bad, you won't get a car (well, maybe
| you need to because you need a means of transport). If the
| available offer of jobs is too bad, you will still get a job
| because you need income to live.
|
| > A friend of mine is a shift supervisor at a food
| supplier...
|
| I don't know how this is related to the debate at hand. Do
| you know the situations and motivations of those people?
|
| > There are wages that people will just not work for. Even if
| minimum wage laws were lifted, people aren't going to go work
| at MacDonald's for $1/hr.
|
| IIRC, current minimum wage puts people below the poverty
| line. Why do people go to work on that? Maybe because they
| have no alternative?
|
| > And you also see this will undocumented labour (i.e. where
| minimum wage regulations are ignored)
|
| Which is a separate problem. Any regulation of any kind will
| push incentives towards undocumented labor. That's not an
| argument against regulation, it's an argument for better
| oversight.
|
| > Sure they can. What are you talking about? Tens of millions
| of people, for all kinds of reasons, either choose not to
| work, or choose to work part-time.
|
| Working part-time is working. And if you've found the formula
| to live without income, please share it.
| macspoofing wrote:
| >It looks like in this thread people have different
| definitions of free market.
|
| No. Words have meaning. You made up a definition for 'free
| market'.
|
| >For me ...
|
| Well how about we use the general understanding free
| market? It just makes it easier when you don't redefine
| common terms. But OK ...
|
| >Now, for jobs, if companies wanted to pay just $1 an hour,
| would people stop working?
|
| Yes. They would indeed not bother working.
|
| But try it. I can guarantee you that even poor migrant
| workers would laugh at you if you offered them that kind of
| wage.
|
| >Given that their alternative is starving, they probably
| wouldn't
|
| That is not an alternative. I'm not even sure if there was
| a single case of starvation in the last few decades that
| was a result of lack of income or lack of a job. On the
| other hand, plenty of starvation in Soviet Russia ... with
| full employment!
|
| >You can live without a car, you can't live without a job.
|
| This is just pure gaslighiting. Unemployed people do not
| die. What are you talking about?
|
| >Which is a separate problem.
|
| No. It's not. It is an unregulated market where minimum
| wage laws are ignored, and yet, you don't see a race to the
| bottom. The wage settles at some equilibrium. And yes,
| skilled labour even in that type of environment will be
| much much higher than minimum wage. It kills your argument
| because clearly minimum wage laws are not the thing that
| prevent a race to the bottom, but rather, you know ...
| market forces.
|
| Do you also realize there are countries with modern
| economies that do not have minimum wage laws.
|
| >And if you've found the formula to live without income,
| please share it.
|
| That's not what you said. You wrote: "Workers can't usually
| live too much without finding a job."
|
| But even with this, let me throw it back at you. There are
| tens of millions of people without income or a job - how do
| they survive?
| roenxi wrote:
| Hasn't the experience, considering Asia, been that the greatest
| benefit of free markets is for low-paid workers?
|
| I buy a lot of notionally 'American' products (iPhone, computer
| gear, electronics) that are all manufactured in Asia for cost
| reasons. A bunch of places have become extremely wealthy in the
| last century, basically creating a middle class out of poverty,
| through a strategy of cheap-wages-lots-of-manufacturing.
| Coincidentally, the greatest reductions in poverty are all in
| Asia. And one shudders to think what the Chinese could be
| achieving if their government was a bit more competent and left
| people alone to prosper.
|
| Is there evidence that the poor in America are prospering under
| high minimum wages? The stats I've seen suggested it is
| basically status-quo for the last 50 years. Minimum wage is a
| small part of the puzzle, granted, but it isn't necessary to
| generate absurd improvements in the general welfare.
| deegles wrote:
| I think it makes sense to get rid of a minimum wage requirement
| _after_ universal healthcare and a basic income is implemented.
| Capitalists whine that the free market should be allowed to
| play itself out, but conveniently forget that labor is not a
| free market as is mentioned above.
| abstractbarista wrote:
| It's just not as simple as "companies have more power in
| negotiation". At times, it can be. But usually, it is a more
| complex interaction.
| changoplatanero wrote:
| the firms in the market are competing against each other and
| that's what drives up the wages. it's not so much about the
| relative power between the employee and the employer
| prostoalex wrote:
| > That's why minimum wage laws and workers rights are
| important.
|
| How do you translate that into numbers? If $15/hr is better
| than $14/hr, wouldn't $150/hr be 10x better, and if so, what's
| wrong with a comfortable $1,500/hr?
|
| I think that's where economists start to differ.
| TheCoelacanth wrote:
| If eating a hamburger is better than starving, wouldn't
| eating 10 hamburgers be 10x better?
| yarrel wrote:
| How much should workers pay their employers for being able to
| work, since working is a benefit? We can differ reasonably
| about how much, surely.
|
| A minimum wage is not set in a vacuum, and high numbers that
| ignore this fact do not illustrate anything useful.
| bitdotdash wrote:
| Slippery slope / Straw-man fallacy. One is to do with tying
| the minimum wage to a livable wage. The other is just large
| numbers for the sake of trying to win an argument. No one is
| arguing for $150/hr. The argument is simply that you aught
| not to be able to run a business and extract a profit if the
| cost to do so is employing people at such a low wage that
| they require governmental handouts just to pay rent and eat
| food. Given that, imaginary large numbers like $150/hr or
| $1500/hr do not come into play and thus do not need to be
| considered.
| OCASM wrote:
| They don't need the handouts. They could for example live
| in communal spaces and share resources.
|
| What exactly is "livable" anyways? Millions of people live
| every day with only a couple of dollars a day.
| RockIslandLine wrote:
| "Millions of people live every day with only a couple of
| dollars a day."
|
| Not in the USA they don't. There is no possible way that
| an individual could pay for food, clothing, and shelter
| on that income.
| mrkstu wrote:
| That is still better for society than not having the
| economic activity.
|
| What exactly is the benefit of wholly depriving the
| putative worker of a job vs. making up the difference with
| something like food stamps and Medicaid?
| adrr wrote:
| Rate that allows the employee to live without government
| assistance like food stamps and Medicaid. Otherwise the
| government is just subsidizing the company.
| dragonwriter wrote:
| > Rate that allows the employee to live without government
| assistance like food stamps and Medicaid. Otherwise the
| government is just subsidizing the company.
|
| No, the government is subsidizing the _worker_ , and in a
| system of means-tested aid doing so _less_ than it would be
| without the job.
|
| If you can't employ people at wages that don't get them
| fully off public aid, then people can't get the jobs that
| let them build the skills to be employable at decent wages.
| Your plan is a recipe for (1) killing businesses and tax
| revenue that support public assistance, and (2) killing
| people's ability to move up and off of public assistance,
| so that for any given minimum standard of living we'll need
| more public funds to reach it but have less available.
|
| It's much better to tax capital returns and use the
| proceeds to support the un- and under-employed (whether
| permanent or transitional) then it is to block the onramps
| to people becoming employable at wages that are livable.
|
| And that's even ignoring that Medicaid and other public
| assistance usually aren't based solely on individual income
| but household circumstance, so that the required minimum
| wage by that standard would be dependent on household
| circumstances, which is problematic.
| prostoalex wrote:
| Thanks, that seems to be the most rational approach and can
| be tied to a specific formula.
|
| I wonder why states/municipalities don't just leave it at
| that - a specific consumption basket whose cost is
| recalculated annually, vs having recurrent loud debates
| about it with some arbitrary round numbers.
| dragonwriter wrote:
| > I wonder why states/municipalities don't just leave it
| at that - a specific consumption basket whose cost is
| recalculated annually, vs having recurrent loud debates
| about it with some arbitrary round numbers.
|
| Because the level at which it is safe to set local
| minimum wage without net adverse effects from job loss
| depends on a variety of conditions besides price levels,
| including prevailing low-end wages in localities that
| compete to attract employment. Building a formula that
| fully addresses this is nontrivial, and even with one
| that worked locally there would be a reason for broader
| regional/national campaigns to kick the floor up.
| kube-system wrote:
| I agree in spirit, but not in execution. What you suggest
| implies the necessity of discrimination between different
| workers in the same job, which I don't agree with.
|
| I think the better solution is to set a reasonable rate,
| fix it to inflation, and use corporate taxes to fund social
| safety nets.
| endtime wrote:
| To "live" at what standard of living? A smartphone? A
| recent one? What standard of medical care? What about
| entertainment? What if someone wants only to eat organic,
| fair trade food?
|
| When you pay for yourself, you're price sensitive and try
| to choose what makes sense for you. When you're not price
| sensitive, you run into a major incentive problem. If your
| life is funded by taxpayers, you have no reason not to
| argue that basic subsistence requires a lifestyle as
| expensive as you can get away with.
| dmitriid wrote:
| > To "live" at what standard of living?
|
| Decent.
|
| Roosevelt:
|
| """ In my Inaugural I laid down the simple proposition
| that nobody is going to starve in this country. It seems
| to me to be equally plain that no business which depends
| for existence on paying less than living wages to its
| workers has any right to continue in this country.
|
| By business I mean the whole of commerce as well as the
| whole of industry; by workers I mean all workers, the
| white collar class as well as the men in overalls; and by
| living wages I mean more than a bare subsistence level-I
| mean the wages of decent living.
|
| """
|
| > A smartphone?
|
| Yes
|
| > A recent one?
|
| Define "recent". One that has internet connectivity,
| allows you to install apps that are increasingly required
| today (banks, school, mail, auth etc.)
|
| > What standard of medical care?
|
| All of it except cosmetic. A.k.a. universal healthcare.
|
| > What about entertainment?
|
| What about it? Define entertainment. Let's do this way
| more broadly: how about vacations, sick leaves and
| parental leave?
|
| > What if someone wants only to eat organic, fair trade
| food?
|
| Yes. The poor cannot escape bad eating habits because
| (especially in the US) more often than not they have no
| access to healthy food, and healthy food is much more
| expensive than current government assistance can cover.
| OCASM wrote:
| Demanding other people take care of you even against
| their will and using the power of the state to achieve
| so. How is that not slavery?
| dmitriid wrote:
| 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.
| tick_tock_tick wrote:
| You must have lived a horribly isolated life if those are
| the only groups you've ever seen this behavior from. Take
| a look at the EU and austerity measures if you want to
| see this kind of behavior on a large scale.
| adrr wrote:
| There's obviously income thresholds for Medicaid, food
| stamps and other services. ACA clearly defines standard
| of medical care. Not sure what your asking because the
| government has already figured this out base on data.
| mdoms wrote:
| Everyone I know who has lived on government assistance is
| most certainly price sensitive.
| pineaux wrote:
| I dunno, it has never been tried right? What do you think
| would happen?
| lawnchair_larry wrote:
| But that is theory. It might be true, it might not, but it's
| irrelevant. Many "protections" and well-intentioned policies
| fail to accomplish the expected outcome, and we routinely
| forget to judge them based on their results rather than their
| intentions.
| wdn wrote:
| The labor market is a free market. If you don't agree the
| employer offer is fair, you don't have to accept. When you find
| a better offer, you go to the better offer.
|
| As for minimum wage, it is hurting the unskilled workers, like
| high school students, college students who are looking for
| experience. If you are stuck in a minimum wage job, then this
| is what the market is paying for your skill set. If you think
| you worth more, then proof it, don't blame the system.
|
| When I was in high school, I was working in an unpaid
| internship to get some experiences. I don't know if there is
| any unpaid internship now or if it is even legal now.
| Broken_Hippo wrote:
| Unlike, say, buying a game, most folks can't just decide not
| to work. If you need to eat, pay rent, child support, need
| health insurance, or a slew of other things - you can't say
| no. You must work. Period. The safety net isn't good enough
| not to take that minimum wage job, especially if you are a
| childless adult. The only real thing keeping you from being
| paid less is minimum wage, and that's there because companies
| aren't fair about hiring practices.
|
| The only reason you were able to work an unpaid internship is
| because your family not only didn't need you to work, but
| they also didn't need you to watch younger siblings in your
| free time. To top it all off, that was offered to you - this
| isn't a thing most folks can do. Not to mention that unpaid
| internships are often slavery under a different name. If
| someone wants to give someone experience or train someone,
| they should pay.
|
| I wish people would quit acting like the market is fair by
| any means or like people have a real choice in working.
| Neither of these things are true with the labor market.
| wdn wrote:
| No one is saying you shouldn't work at a job where you
| think it is unfair compensate to your skill sets.
|
| What I am saying is this, if I think I worth $50/hr and the
| only offer I got after 2 months of searching is $10/hour.
| If I desperately need some income, I will take the job and
| continue my job search. $10/hr is still better than $0.
| Next job offer may be $30/hr. Then the next one may be $50
| or $60.
|
| No one is forcing you to stop looking or improving yourself
| while you are at a job don't value your skill sets.
| dlp211 wrote:
| I challenge you to poke your finger through the massive
| hole in your argument. I'll give you a hint, it has to do
| with the resource utilization that you can never buy more
| of.
| Broken_Hippo wrote:
| It never matters if you think you are worth $50/hour if
| the skills you have never pay that much in your area. A
| preschool teacher makes minimum wage or slightly above,
| despite needing an associates degree. You can be really
| good, too, but there is only so high that pays. A normal
| teacher starts out pretty low and if you are in the wrong
| area, you'll never get paid $50/hr and you'll get lucky
| to get half that with experience. Lots of jobs never pay
| a fair wage compared to skill sets. It just doesn't
| freaking matter most of the time.
|
| The game is rigged. You can be stuck somewhere simply
| because they have good insurance and your kid is sick. It
| doesn't matter how good you are. Not everyone can improve
| themselves in ways that will get them paid more. Even if
| everyone did this, there are only so many jobs out there
| and you should hope not to have the disadvantage of
| wanting free time, time with children, or a health issue
| that puts any limits on your work.
| klodolph wrote:
| The labor market ain't free. There's minimum wage, all these
| regulations around payroll and healthcare. Consider that 40
| hours a week is standard... why is that standard? Is it
| because a majority independently arrived at that same
| conclusion? Or is it because of overtime laws? Consider the
| W2 vs 1099 employee, or the fact that you can't purchase
| healthcare at a competitive rate outside of employment, and
| employment isn't required to provide that below 30
| hours/week.
|
| Doesn't seem very free to me, sounds downright byzantine.
| anoraca wrote:
| Unpaid internships are definitely still a thing, and they are
| yet another way that privileged people have an advantage in
| society. Not many people can afford to work for free unless
| they have family wealth to support them, or are willing to go
| into large amounts of debt. Unpaid internships should
| probably be illegal to make things more fair.
| nucleardog wrote:
| >> The labor market is not a free market: companies have more
| power in negotiation, they have more information and, most
| important of all, they can deal with a job opening not being
| covered most of the time. Workers can't usually live too much
| without finding a job.
|
| > The labor market is a free market. If you don't agree the
| employer offer is fair, you don't have to accept.
|
| You disagreed with him while not actually addressing his
| point at all. Care to elaborate how you think he's wrong
| here?
| jsmith99 wrote:
| They are arguing about semantics. The labour market is a
| _free_ market but not a totally _efficient_ market as some
| participants use their power over demand or supply (huge
| corporations, unions) to drive different outcomes to a
| perfectly competitive market where all participants are
| price-takers.
| thethethethe wrote:
| > The labor market is a free market. If you don't agree the
| employer offer is fair, you don't have to accept. When you
| find a better offer, you go to the better offer.
|
| Not everyone has competitive skill sets. People who work at
| McDonald's don't have much of a choice of where they work.
| Burger King isn't going to pay them much better.
|
| > If you are stuck in a minimum wage job, then this is what
| the market is paying for your skill set. If you think you
| worth more, then proof it, don't blame the system.
|
| I think what OP was saying is that employers of low-skill
| workers have a asymmetric power. Because low-skill workers
| have no where to turn, they are forced to accept low wages
| and poverty over living in the street, even when their
| employers can very well afford to pay them more. And because
| the live in poverty, they cannot afford the time or materials
| to build skills which lift them out of poverty.
|
| We are going to need service workers for the foreseeable
| future, not everyone can be a fancy software engineer with
| marketable skills. Covid has certainly demonstrated this. Are
| we just going to say "tough shit you should have worked for
| free when you were a teenager" and let a large portion of the
| population live in poverty when they don't have to?
|
| > I don't know if there is any unpaid internship now or if it
| is even legal now.
|
| They definitely are
| gjulianm wrote:
| > you don't have to accept. When you find a better offer, you
| go to the better offer.
|
| What if there aren't better offers?
|
| > As for minimum wage, it is hurting the unskilled workers,
| like high school students, college students who are looking
| for experience.
|
| The article shows that there isn't conclusive evidence
| pointing to employment destruction with minimum wage
| increases.
|
| > If you think you worth more, then proof it, don't blame the
| system.
|
| If the market can get away with paying less than your worth,
| it will. That's precisely the point of my argument: companies
| have more power than workers to negotiate wages.
|
| > When I was in high school, I was working in an unpaid
| internship to get some experiences. I don't know if there is
| any unpaid internship now or if it is even legal now.
|
| Don't you see how unpaid internships can be harmful? If you
| need experience to have a nice job and unpaid internships are
| a requirement, it means a "forced" period where you are
| working without income. People without savings won't be able
| to take those internships and have those better jobs, further
| locking them in poverty.
| david38 wrote:
| Minimum wage, applied universally, absolutely validates worth
| of a worker.
|
| If the minimum wage is set too high to plant grapes for
| example, grapes will not be grown.
|
| $15/h too high to flip burgers? Ok, I guess we don't need fast
| food. Oh wait. Except it somehow doesn't put the corps out of
| business.
| OCASM wrote:
| Destroys small businesses and consolidates big corps as
| monopolies.
| Broken_Hippo wrote:
| If you cannot pay your workers a decent amount, perhaps you
| should not have your small business. Working for a small
| business shouldn't mean sacrificing your ability to buy
| food. Offer something better than the large places.
| ChrisLomont wrote:
| >Minimum wage, applied universally, absolutely validates
| worth of a worker.
|
| And minimum wage prices those unable to produce that much in
| value out of any job whatsoever.
| sushshshsh wrote:
| We are already seeing Flippy the burger flipping robot taking
| over jobs originally meant for humans. The technology for
| Flippy is only getting cheaper and better, the quality of
| human labor is already at its most optimal point and is only
| getting more expensive due to laws passed.
|
| Now, you could make Flippy the robot illegal, and maybe x
| number of businesses would eat the cost of the more expensive
| workers. But something else will suffer as a result, and I
| would argue it would involve price, efficiency, quality, and
| compliance...
| entropicdrifter wrote:
| Or you could make an automation tax and use it to fund UBI
| Stupulous wrote:
| You could only use it to help fund UBI, unless UBI is
| significantly less than minimum wage. If the price of
| buying the robot and running it plus automation tax
| exceeds what you would spend on employing people at
| minimum wage, businesses would just keep employing
| people.
| chc wrote:
| That sounds like a win-win scenario. In cases where
| robots can do things so efficiently that no human could
| compete when the minimum wage is a living wage, robots
| will can do the jobs and anyone who could only have done
| that job will be OK. In cases where it's cheaper to pay
| people a living wage than to have robots do it, people
| can work for a living wage.
| aidenn0 wrote:
| That ignores productivity gains. When automation makes
| things cheaper, it lowers the living wage.
| asdff wrote:
| Some jobs are too dynamic for automation. Every shift means
| a unique set of tasks with unique sets of variables, even
| if they are routine tasks, and it gets very expensive to
| design and support an automated solution that will
| continually adapt to changing conditions and replace human
| creativity and plasticity.
|
| I think back to my minimum wage job working as a grounds
| keeper at a golf course. To the uninformed, it seems like a
| perfect space to deploy a roomba with knives and never hire
| a groundskeeper again. I can tell you that this high tech
| course would sooner burst into flames than maintain
| playable conditions for a golf season. For a groundskeeper,
| the generalized routine is the same, cut the same greens
| and teeboxes every morning with a shotgun start and the
| fairways and rough every other day or so, but how you cut
| those sections changes by the day, even by the minute over
| the course of a dynamic weather event. What angle you cut,
| how high or low the cutting surface should be, whether or
| not the grass is slightly slippery that day and would
| require more focus with the mower to maintain a straight
| line, how the grass was cut yesterday and the day before
| are all variables that an experienced greensmower accounts
| for subconsciously and instantly. Then you might have a
| drought which changes how the grass should be cut, or a
| rain storm which might require a lot of emergency drainage
| work to keep irrigation equipment functional or to preserve
| the playing surface before you could even begin regular
| cutting, which would be with extreme care given the rain
| soaked earth (you might even opt to roll rather than cut).
|
| A comprehensive automated solution for many jobs is
| exceedingly complex and highly custom, which could really
| add up in pricier engineer-man-hours and service contracts,
| versus having your own maintenance shop hidden on the
| course and hiring a low skilled crew to operate that
| equipment. It's so much easier to tell a human to cut grass
| than to spend 100x the man hours maintaining an automated
| solution that continually captures all the variability of
| that dynamic job.
| Ekaros wrote:
| That's not very good argument. As we are where we are now
| because our productivity has increased insanely since
| invention of agriculture...
|
| If burger flipping robot is more productive than human, we
| should replace all humans with such robots.
| cogman10 wrote:
| There's a lot of blind faith in "New jobs will appear as
| old ones are obsoleted".
|
| That's certainly has been true, but I don't think it's
| absolutely always going to be true.
|
| Further, what we've seen is that primarily low skill high
| wage jobs have been replaced with high skill jobs. This
| is evidenced by the fact that you simply can't make a
| good living off a high school degree.
|
| Based off this
|
| https://www.careerprofiles.info/careers-largest-
| employment.h...
|
| How many of those jobs are in danger of being automated?
| Cashiers, food preparation, freight,
| Customer service representatives (I know, you're thinking
| no way, but a lot of effort is going into AI chatbots to
| cut down on CS requirements).
|
| accounting (In fact, this is what I'm working on), order
| fillers, Truck drivers
|
| What happens to the millions when those jobs are slowly
| eroded away? It's easy to cheat and say "Something else
| will probably come up" but I simply don't think that will
| continue to happen in the next 10->20 years.
|
| There's only so much productivity we can utilize. What
| happens when we've saturated? Unemployment.
|
| I don't think any nation is really well equipped at this
| point to handle large portions of their workforce being
| automated away.
|
| Sure, the standard of living will go up for everyone with
| jobs. However, that will be less and less of the
| population as time goes on.
|
| This is why programs like UBI and universal healthcare
| are important. Without them, things are going to be
| pretty bleak for a lot of people (even with them, and a
| constant population growth, things won't look good).
| giantrobot wrote:
| Fast food has _always_ been about efficiency, consistency,
| and streamlining. If Flippy has existed in 1961 when Roy
| Kroc bought out McDonald 's it would have been a fixture in
| every location.
|
| Making fast food isn't a job "meant for humans", it's a job
| humans perform for the legal minimum of pay. The moment
| fast food chains can replace humans with Flippy without a
| PR backlash they will do so without hesitation.
| nickff wrote:
| Most arguments against minimum wages are not concerned with
| the impact on businesses, they are concerned with the impact
| on low-skill workers, inexperienced workers, and unusual
| workers (i.e. individuals with restricted schedules, or
| issues communicating).
| abvdasker wrote:
| The Marxist perspective is that the employer is incentivized to
| pay as little as possible to extract the maximum amount of
| value from the person's labor, realizing the difference as
| profit (even though crucially that value was created by the
| worker). An example of this would be software engineers at
| companies like Apple and Google, whose labor has been shown to
| produce several times the value of their compensation. Unions
| and worker cooperatives are meant to counterbalance these
| forces by giving workers more negotiating power in the case of
| the former, or aligning the profit motive with employee
| compensation for the latter.
| throwaway894345 wrote:
| > even though crucially that value was created by the worker
|
| Crucially the value wasn't created by the worker, but rather
| the worker played a part in the creation of that value. In a
| capitalist society, that worker's wage is determined based on
| the value of their contribution and the supply of workers
| with the requisite skill. In a Marxist society, it is set by
| the state, and it seems to be very hard for states to
| determine a price that is sustainable.
|
| In my humble opinion, Marxism seems like a denial of basic
| economic realities--namely that the state can set the price
| of anything to whichever value they prefer and it won't have
| disastrous economic ramifications ("price is just an
| arbitrary number"). Maybe I'm creating a straw man, but I do
| notice a lot of Marxists who make arguments about what is
| _fair_ and not what is _economically sustainable_ as though
| economic sustainability is an invented problem that we can
| disregard. Perhaps this view isn 't uniformly shared among
| Marxists, in which case my criticism is "too many Marxists
| are making these kinds of unconvincing arguments, and more
| convincing arguments would be centered around economic
| feasibility--we all agree that we want poor people to have
| more money, the question is 'how?'".
| cmrdporcupine wrote:
| Marx never said anything about the state setting prices.
| Wasn't part of his analysis. He was only concerned with
| analyzing how prices came to be what they are under
| capitalism, and what the consequences of that are
|
| He did feel that some other model of ownership & management
| could lead to some other form of remuneration, but he
| definitely left it unclear.
|
| Read the other discussions on this thread, there's far more
| nuance here than I think you're understanding.
| throwaway894345 wrote:
| You're making a motte/bailey argument, but either way it
| doesn't look good for the 'Marxist'.
|
| If a Marxist is one who says "Capitalism is imperfect;
| I've got a gut feeling that there is a better system out
| there, but no idea what it looks like concretely", then
| that may be correct but it's close to worthless.
|
| If a Marxist is someone who says "Capitalism is
| imperfect; the state needs to fix the price of $X (labor,
| etc)" with no mention of the economic feasibility of said
| price-fixing, then that's better but still far from
| persuasive.
|
| My criticism was directed at the latter. There are
| perhaps many good Marxists who make convincing economic
| arguments; I'm asking for more of this.
| Sohcahtoa82 wrote:
| > In a capitalist society, that worker's wage is determined
| based on the value of their contribution and the supply of
| workers with the requisite skill.
|
| I think we need to define "value of their contribution".
|
| If a friend of mine has an idea for an app, but he has zero
| programming knowledge and so he pays me $1,000 to develop
| it, and he ends up making $1,000,000 from selling it, what
| is the value of my contribution?
|
| Is it only $1,000 because that was the agreed price for my
| labor? Or is it $1,000,000 because that's how much money he
| made from it? Or something in between?
|
| Obviously, in this hypothetical, I should be negotiating a
| share of the revenue instead of just a flat fee, but
| generally most workers don't get to do this.
|
| So...what was the value of my contribution?
| cmrdporcupine wrote:
| I think it's more correct to say that the Marxist (well,
| labour theory of value) perspective is not that the employer
| is incentivized as such, but they _have_ to. That the
| capitalist market _requires_ it or it doesn't work, business
| won't survive. It's intrinsic to the profit / wage-labour
| model, even if you switch to something like cooperatives or
| state ownership.
|
| The theory is that surplus value (which can become profit, or
| be reinvested, etc) exists only through paying the worker
| less (on aggregate) than the aggregate amount that the worker
| provides through their labour.
|
| The mainstream economics answer to this is to say that the
| labour theory of value is bunk and that prices are defined
| purely by market forces. But this kind of misses the bigger
| picture of what Marx was getting at rather by getting lost in
| the weeds about price definitions and really is a critique of
| Ricardo more than Marx.
|
| Despite using the term "exploitation" which has moral
| overtones in English, Marx really isn't casting a moral
| judgement here. It's a technical description. But he does
| believe that this phenomenon leads to structural inequality
| and injustice and that the only resolution is some other kind
| of property ownership or method of production. Though he was
| famously vague on what that alternative would be, and people
| far less intelligent than him were left to fill in the blanks
| with some rather awful alternatives.
| abvdasker wrote:
| Thank you for the more precise definition. Broadly I think
| Hacker News could use a little more discussion of Marx,
| which is why I brought it up.
| cmrdporcupine wrote:
| Hah, here we go, a few minutes of meaningful conversation
| and then when I check back in the conversation...
| downvoted to -1 by a bunch of guys who read Ayn Rand when
| they were 16 and now know better than everyone. :-) I
| think that discussion you want will probably have to take
| place somewhere else.
| claudiawerner wrote:
| >But this kind of misses the bigger picture of what Marx
| was getting at rather by getting lost in the weeds about
| price definitions and really is a critique of Ricardo more
| than Marx.
|
| This is very true, and cannot be overstated. Often, the
| criticisms of one theory are actually much better direceted
| at a predecessor theory. Students in a history of economics
| course, or a regular economics course, may learn of the
| "labour theory of value", but they may learn either
| Smith's, Ricardo's, or Marx's, and assume that the theories
| are the same, or that the same criticisms apply to all of
| them.
|
| There are good and serious criticisms of the "labour theory
| of value" from those unsympathetic (and even those
| sympathetic) to its apparent normative conclusions. It's a
| shame that many people seem to confuse one thinker for
| another, especially when each boasted of their improvements
| (Marx, for example, writes "I was the first to point out
| and examine this [...]" when writing on the "LTV" and
| discussed the law of the tendency for the rate of profit to
| fall again in his original understanding, despite being
| extremely well read on - and critical of - his
| predecessors).
| oneplane wrote:
| Minimum wage is not just important for the employer-employee
| relation, but also in society as a baseline of survivability.
| If you work a 100% of your time (so no sleep, no rest) and
| still cannot afford basic requirements for life then I'd argue
| that a minimum wage is the only way to guarantee that someone
| working about 8 hours a day can live.
|
| If a normal workday cannot pay for a baseline life, the system
| is simply wrong.
| least wrote:
| Minimum wage laws aren't important. Forcing companies to
| classify freelancers as employees or gig workers as employees
| is harmful and leads to less work available.
|
| If you want to meaningfully create leverage for laborers, you
| need to ensure their livelihood is not dependent on being
| employed. A negative income tax or some other form of UBI would
| serve better to accomplish this goal.
|
| On the flipside, providing all the basic needs of living to
| someone can potentially lead to a large drop in labor supply
| and create its own problems.
| aidenn0 wrote:
| >> 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.
|
| This sentence is just wrong. First of all a rational actor will
| not intentionally pay a worker the value of their production;
| you get no profit.
|
| Textbooks actually say that a worker will be paid _no more
| than_ the marginal product of labor, and _if_ labor is in short
| supply, they will be paid very close to their marginal product
| of labor. If there are a huge number of workers willing to work
| for $5 /hr then workers won't tend to make even a penny more
| than this.
|
| Information asymmetry and differences in negotiating power will
| further distort this, but the initial premise is already a
| strawman of basic microeconomics.
| efxhoy wrote:
| >> 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.
|
| > This sentence is just wrong. First of all a rational actor
| will not intentionally pay a worker the value of their
| production; you get no profit.
|
| In the econ 101 textbook simplified free market that the
| author is refering to firms do not make any economic profit.
| If a firm in a free market is turning an economic profit more
| firms will enter that market, raising supply, lowering price
| and driving profits to zero.
| rbanffy wrote:
| > First of all a rational actor will not intentionally pay a
| worker the value of their production; you get no profit.
|
| That's true for a single employee, but you don't need to make
| a profit out of every single employee.
|
| If you do, your CEO will be extremely underpaid in relation
| to the rest of the market.
| aidenn0 wrote:
| I am willing to work as the CEO of Walmart for say $750k
| per year. The fact that I don't work there means that
| either:
|
| 1. Voting Walmart shareholders think that the having Doug
| McMillon for $24M/year is a better deal than having me for
| $750k/year
|
| 2. Voting Walmart shareholders are unaware that reasonably
| intelligent people with no executive experience are willing
| to work for a lot less than McMillon.
|
| 3. There are other forces at play; e.g. CEOs as Veblen
| goods or good-old-fashioned corruption. Maybe the board
| members are also C level employees (at different companies)
| and they are colluding to keep the C level compensation
| high.
|
| #2 seems rather unlikely so pick one of #1 and #3.
|
| #1 Certainly does not contradict my use of _intentionally_
| , since they believe that McMillon
| rbanffy wrote:
| You also have to consider it's difficult to measure the
| exact economic value of an employee.
| throwaway894345 wrote:
| > A lot of economic arguments forget these ideas. The labor
| market is not a free market: companies have more power in
| negotiation, they have more information and, most important of
| all, they can deal with a job opening not being covered most of
| the time. Workers can't usually live too much without finding a
| job.
|
| I'm generally in favor of stronger job protections and so on,
| but I'm not aware of any definition of "free market" which
| supposes that all players have equal leverage. As I understand
| it, an economy with powerful corporations and relatively weak
| workers could still satisfy the definition for 'free market';
| in other words, power dynamics are orthogonal to market
| freedom.
| oarabbus_ wrote:
| >As I understand it, an economy with powerful corporations
| and relatively weak workers could still satisfy the
| definition for 'free market';
|
| Sure, this can be true.
|
| > in other words, power dynamics are orthogonal to market
| freedom.
|
| No, they are certainly not orthogonal. One needs to only
| perform a simple thought experiment and increase the
| corporations' power to the point which constitutes a
| monopoly, to see immediately that they are not orthogonal. Do
| the same thing with increasing the power of unions and
| workers and you will again quickly leave free market
| territory.
|
| It's a bit astounding to make the (false) claim power
| dynamics are orthogonal to market freedom.
| unfortun8 wrote:
| Really, none at all? Because a labor market free of
| manipulation is the only way in which Adam Smith ever
| contextualizes the idea.
|
| He even describes how the government should protect equality
| of condition for workers to avoid manipulative behaviors the
| of bourgeois class.
|
| If seems the information filtering system worked.
| wtallis wrote:
| If you're having a rational conversation with reasonable
| people, sure. But there are plenty of people who will insist
| that anything making a market less free is harmful, a bad
| idea and bad public policy. If you try to reconcile that, you
| may infer that they seem to be working with an unusually
| constrained definition of "free market", but that's usually
| not the most straightforward explanation.
| trentnix wrote:
| I've not found _my position is rational, other positions
| are not_ to be all that convincing.
| brokensegue wrote:
| ec101 often assumes perfect competition. google defines that
| as.
|
| >the situation prevailing in a market in which buyers and
| sellers are so numerous and well informed that all elements
| of monopoly are absent and the market price of a commodity is
| beyond the control of individual buyers and sellers.
|
| so everyone has equal leverage (zero).
| baddox wrote:
| Perfect competition is definitely taught as a concept,
| mostly as a benchmark to measure real-world markets
| against, but I don't think it's literally an assumption of
| everything you learn in Econ 101.
| mcguire wrote:
| Most of the theoretical results of basic economics (i.e.
| Econ 101) are built on really sketchy assumptions,
| including perfect competition. I recommend Steve Keen,
| _Debunking Economics_ , for one amusing reference.
| mywittyname wrote:
| Assuming a perfectly spherical cow...
| AmpsterMan wrote:
| That's kinda the point. We define what a spherical cow is
| to be able to compare the real world against it. The
| problem for economists is that lay persons take that
| spherical cow to be truth and base whole ideological
| systems on those spherical cow.
| throwaway894345 wrote:
| This is a straw man argument. The issue at hand isn't
| "whether a free market is eminently desirable", but
| whether or not the relative ability for employers (or any
| buyer) to wait for a better price on a good or service
| renders a market unfree. My position is that a market in
| which one party (the employer in this specific case) can
| wait for another party (the worker) to come down to
| market price is entirely congruent with the definition of
| a free market.
| AmpsterMan wrote:
| Not really sure where there's a straw man here. I've
| addressed your concern on whether power dynamics are
| orthogonal or not. I've described the academic definition
| of what a perfectly competitive market is and referred to
| Coase's Theorem which essentially concludes such markets
| rarely exist in reality.
|
| You say they are orthogonal, and I provided evidence that
| they are not.
| throwaway894345 wrote:
| It's a straw man in that no one in this thread is arguing
| that a free market is eminently desirable or otherwise
| making ideological arguments (contrary to the implication
| in your post). There's the chance that you weren't
| talking about "arguments made in this thread" and were
| simply digressing to "arguments made by other people
| elsewhere in the world" which is differently bad (off
| topic).
|
| To be clear, I wasn't remarking about any comments you
| made about my orthogonality claim.
| AmpsterMan wrote:
| Yeah, I was talking to the immediate commenter, not the
| parent. I can understand where you're coming from with my
| off-topic comment; it was not intended to imply anything
| about anyone on the thread as such, nor was it a response
| to the op. It was just a lament of a frustrated person
| when it comes to their field of study.
| throwaway894345 wrote:
| Fair enough, and thanks for the clarification. I
| empathize with your frustration about bad arguments. :)
| mcguire wrote:
| _Economists_ take the spherical cow as, if not the
| current state of cow-dom, the perfected nature of cows
| and what cows would be if they got to make the rules.
| dragonwriter wrote:
| > Economists take the spherical cow as, if not the
| current state of cow-dom, the perfected nature of cows
| and what cows would be if they got to make the rules.
|
| Well, sure in a way, but that includes the parts that lay
| people ignore like the perfect information element and
| perfect value optimizing decisionmaking of the rational
| actor model, and the absence of externalities. But most
| economists recognize that people aren't omniscient, don't
| always optimally apply the information they so have, and
| that you can't avoid econonicndecisions having impacts on
| people other than those voluntarily participating in
| them.
|
| Far fewer economists (basically, just the
| Chicago/Austrian schools, the latter of which does so as
| pretty overtly an article of faith) think that if you
| can't magically handwave those elements of the model into
| reality, the rest of 101-level simplified regulation-free
| markets still remains desirable as an ideal.
| AmpsterMan wrote:
| I'm not really sure I understand what you are trying to
| say here.
|
| The almost purely "logical" and "ideological" statements
| of 19th and early-to-mid 20th century economics have been
| supplanted with with more empirical methods.
| WalterBright wrote:
| A lot of people seem to think that free markets require
| perfect information and perfect competition.
|
| These requirements are not remotely necessary for free
| markets to work and work well.
| karpierz wrote:
| What are the requirements for a free market to work well?
| And how do you define working well?
| WalterBright wrote:
| > requirements for a free market to work well
|
| Most generally, transactions can be freely negotiated by
| either party. I.e. no force or fraud. Contracts need to
| be enforceable. Individual liberties must be guaranteed.
|
| > working well
|
| Delivering on prosperity.
|
| To clarify, imperfect information is not fraud.
|
| Force in this context is something proactively applied,
| such as your signature will be on the contract or your
| brains. Force is not withholding something you have that
| the other party needs.
|
| Charity, voluntarily helping others in need, etc., is
| perfectly in line with free market principles. Unions are
| perfectly in line, too, although laws bestowing monopoly
| powers on unions are not.
|
| A free market does not have to be a perfect free market
| in order to deliver prosperity. Even small amounts of
| free markets can have outsized positive benefits, as the
| Soviet Union discovered when it allowed farmers to farm
| small plots, sell the produce, and pocket the proceeds.
| throwaway894345 wrote:
| I think this is a difference without a distinction. I was
| using "leverage" in a non-standard way (I didn't realize it
| already had a formal economic definition). The parent cited
| the relative ability for some employers to wait for lower
| labor prices to be evidence of an unfree market--such a
| definition of 'free market' seems like it would preclude
| differences in wealth (and thus runway to await better
| market prices) between any two players in a market.
| AmpsterMan wrote:
| Free Market used colloquially is very broad and usually means
| free from government intervention.
|
| Free market in the microeconomic context is a market in which
| no one entity can significantly move the prices of a product
| but deciding how much to supply, therefore they don't have
| price setting power.
|
| A second condition is relative ease of entering and exiting a
| market for competitors.
|
| Coase's theorem is a good place to look for when thinking
| about power dynamics in a free market. Essentially, perfect
| information is a requirement when it comes to optimal
| decisions. Absent that, some party will be able to absorb
| some surplus, one essence "getting a better deal"
| throwaway894345 wrote:
| Yes, the example we're discussing is very contrived and
| over simplified. Notably, I'm implicitly assuming "perfect
| information" for both parties for simplicity (spherical
| cows and all that). There's lots I'm glossing over because
| this is an HN post, and I was responding to the specific
| claim that an employer's ability to avoid bankruptcy
| without filling a position gives them the ability to fix
| labor prices such that the labor market is not free.
| littlestymaar wrote:
| > but I'm not aware of any definition of "free market" which
| supposes that all players have equal leverage.
|
| You'll find it in the same chapter of the textbooks that
| 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.". This is also called "perfect
| competition", and you won't find a textbook to say that the
| marginal cost equals the marginal value without summoning
| this hypothesis.
| fsckboy wrote:
| > I'm not aware of any definition of "free market" which
| supposes that all players have equal leverage.
|
| bog standard microeconomics 101 uses as an assumption that no
| player can thru individual choices affect prices in the
| market, i.e. all players do have equal leverage, zero.
|
| "free market" has more than one usage, but economics's
| conclusions are valid only if the assumptions are met.
| socialdemocrat wrote:
| A lot of the analysis and conclusions economists make are
| based on these kinds of assumptions. That is how they
| concluded in the past that minimum wage was a bad thing or
| many of them was against labour unions.
|
| Although Adam Smith grasped this better than many modern
| economists and was hence a strong supporter of Labour
| Unions.
|
| Of course Smith had not gotten his brain poisoned by
| excessive reliance on overly mathematical models of the
| economy.
| throwaway894345 wrote:
| Fair enough; we're using 'leverage' differently. I didn't
| realize it had a formal economic definition. Never the
| less, my point stands: that employers can afford to wait
| for a given worker's labor prices to come down to the
| market price for their labor is affirmative evidence that
| the labor market is free whereas the OP considers this
| evidence that the labor market is unfree.
| WalterBright wrote:
| > employers can afford to wait for a given worker's labor
| prices to come down to the market price for their labor
|
| That seriously underestimates the cost of a business
| being idle. Ample evidence for that is the devastation
| wreaked on businesses from the recent lockdowns.
| dredmorbius wrote:
| The lockdowns are (incidentally, effectively) a case of
| collective action. It's not a case of _one_ worker
| withdrawing from the market, but _all_ workers.
|
| Individually, with any positive level of unemployment,
| any one worker's nonparticipation is mooted by a ready
| waiting pool of available workers. Eventually the hold-
| out gets hungry. Or starves.
|
| Blacklists operate similarly: businesses can afford the
| exclusion, the (unorganised) excluded cannot.
|
| _[I]n every part of Europe, twenty workmen serve under a
| master for one that is independent... What are the common
| wages of labour, depends everywhere upon the contract
| usually made between those two parties, whose interests
| are by no means the same. The workmen desire to get as
| much, the masters to give as little as possible. The
| former are disposed to combine in order to raise, the
| latter in order to lower the wages of labour._
|
| _It is not, however, difficult to foresee which of the
| two parties must, upon all ordinary occasions, have the
| advantage in the dispute, and force the other into a
| compliance with their terms. The masters, being fewer in
| number, can combine much more easily; and the law,
| besides, authorizes, or at least does not prohibit their
| combinations, while it prohibits those of the
| workmen...._
|
| -- Adam Smith, _Wealth of Nations_ , 1776
|
| https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book
| _I/...
| WalterBright wrote:
| If that were true, every job I've had would be at minimum
| wage. But I tended to be well-paid, despite being at the
| bottom of the organizational pyramids.
|
| As for blacklists, there are solutions. Blacklisted
| people can join together and start their own enterprises.
| One of the nice things about a free market is you can't
| stop people from doing that.
| throwaway894345 wrote:
| To the OP's credit, I think there's a difference between
| "a company can continue without filling a specific role
| for a very long time, while a worker must find a job
| quickly" and "a company can continue without any
| employees for a very long time" which seems to be more
| consistent with your lockdown example.
|
| The OP's position is IMO wrong in that (rational)
| employers aren't incentivized to wait for the absolute
| lowest-price worker because of opportunity cost. Consider
| the example of a successful restaurant looking to fill
| the role of 'marketer'. The company is already profitable
| and could continue indefinitely without filling the role.
| However, the company is looking to fill this role
| precisely because it believes that it stands to profit a
| lot, and every day that the role goes unfilled they're
| losing out on that profit. So here the worker has some
| leverage. Further, the restaurant isn't the only game in
| town, the worker can have offers from multiple employers
| and parlay them against each other for still better
| offers. The wage ultimately depends on the size of the
| opportunity (the company won't pay the marketer 100% of
| the opportunity or it won't be worth hiring them) and the
| supply of marketers. Ultimately, the restaurant wants to
| hire the least-expensive marketer (ignoring variance in
| worker quality for sake of argument) without waiting too
| long (losing out on the opportunity). This is what a free
| market looks like--the OP is arguing that because an
| employer can theoretically avoid bankruptcy indefinitely
| without filling the position that the market is not free,
| but I think they misunderstand what "free market" means.
| WalterBright wrote:
| Every job that pays more than minimum wage is evidence
| that workers do have negotiating power.
| avmich wrote:
| Unpacking this:
|
| > employers can afford to wait for a given worker's labor
| prices to come down
|
| So employers can wait.
|
| > is affirmative evidence that the labor market is free
|
| For employers.
|
| > whereas the OP considers this evidence that the labor
| market is unfree
|
| For employees - they can't wait (that much), see above.
| xphos wrote:
| I think this is a question about timescales. Employers
| especially larger ones can afford to wait much longer
| than any singular employee. People break union lines
| because future better pay is not worth starving to death
| today. The average minimum wage American cannot afford to
| miss 1 paycheck without serious economic trouble.
| throwaway894345 wrote:
| Sounds like you define "free market" such that all
| parties have equal wealth, or at least equal runway to
| wait for a better price. Per my original comment, I'm not
| familiar with this definition.
| dnautics wrote:
| if you could wave a magic wand and create a system for
| deciding labour allocation: Let's keep it simple: You
| must harry potter sorting hat people into, some salaries
| in the real world in parentheses: instagram influencer,
| video game tester, poet laureate, astrophysicist,
| molecular biologist (~35k USD), code monkey (~80-200k
| USD), oil rig worker (~80k USD+), road paver, garbage
| collector (~70-100k USD+), lyft driver (~40k USD --
| though I made 50k doing that), and farmer (< ~20k USD)...
| How would you do it, and how "free" would it be, and what
| is your operational definition of "free"?
| dnautics wrote:
| > no player can thru individual choices affect prices in
| the market
|
| That might be Econ 101 with fully continuous utility
| curves, and realized price equilbria, but anyone who has
| traded on a market knows that as soon as most bids are
| fulfilled it causes a dislocation of the price, so in
| reality the opposite is true: all individual choices affect
| prices in the market.
|
| There is an old concept that rolls through bernanke,
| krugman, keynes, marx, smith, and aristotle (you're in very
| smart company if you make this mistake), that somehow
| prices represent an equivalence class of values. That's a
| very mistaken view of the world and also, in a perverse
| way, considering the progressive bona fides of some of
| those smart people, reflects an illiberal fetishization of
| the power of money and numericism.
| LudwigNagasena wrote:
| > prices represent an equivalence class of values
|
| What do you mean by that?
| dnautics wrote:
| there is this pervasive assumption in economic theory
| that if two things have the same price they have the same
| value in some global sense. To make an obvious example:
| If you are allergic to peanuts, then the value of a
| peanut to you is quite extremely different to the value
| of that same peanut to someone else. This is unaffected
| by the price of the peanut.
| whatshisface wrote:
| If I'm allergic to peanuts and the price of peanuts is
| $100/pound, the value of a pound of peanuts to me is
| still $100... because I can sell them and buy something
| I'm not allergic to.
| munk-a wrote:
| There are a lot of assumptions required to have that
| statement be sensical including a lack of transaction
| fees (including, just, effort - you're assuming the time
| it takes for you to arrange the purchase and resale is
| without value) and extreme price stability. 100$ worth of
| peanuts isn't worthless to someone with a peanut allergy
| but it is certainly worth less than it is to someone
| without since to the person with an allergy the only
| value of peanuts is as a bartering currency.
| dann0 wrote:
| True. Value to an economist is an aggregate of all the
| individual's values. Your individual value is likely to
| have not influence on the market value (unless you're
| buying a lot at a different price).
| dnautics wrote:
| not really. If you are planning an arbitrage operation,
| then their resell price (and thus value to you) must be
| at least MORE than $100, otherwise you wouldn't buying
| them and going through the hassle and opportunity loss of
| the arbitrage.
|
| If you don't bother buying them, then the total value to
| you is probably less than the value of $100 for you.
|
| It's possible that the value just happens to be equal to
| the value of $100. That's a vanishingly unlikely
| coincidence.
| dredmorbius wrote:
| I'd argue that the economic sense distinguishes _market
| price_ and _individual value_ (market value === marginal
| consumer value), but that much political-economic
| rhetoric, particularly from free-market fundamentalists,
| does not.
| brazzy wrote:
| > there is this pervasive assumption in economic theory
| that if two things have the same price they have the same
| value in some global sense.
|
| Um... quite exactly the opposite? Very nearly the most
| basic assumption of all economic theory is that wealth is
| created through trade (which includes trading labor for a
| salary) because each party values the thing they are
| receiving more than the thing they are giving away.
| xvedejas wrote:
| The quantity in question here is "price", not "value".
| Prices only exist when buyer and seller agree. You're
| right that values will be different, but I think you've
| missed the subject of the previous post.
| dnautics wrote:
| > because each party values the thing they are receiving
| more than the thing they are giving away.
|
| We're not disagreeing. I think I could have been
| imprecise. It seems a lot of arguments made by economists
| who _should know better_ quietly use models which which
| effectively ignore the "most basic assumption" or
| average it out, which is a nonsensical operation.
| dann0 wrote:
| This is a faulty argument.
|
| Value to an individual is very different to value to a
| market.
|
| Value in this sense is the aggregate of the individual
| values to all of the buyers and all of the sellers.
|
| Price and value only match when supply and demand are at
| equilibrium.
| dann0 wrote:
| It's knowledge of settlement that causes the
| "dislocation" of price. Actual settlement has minimal
| affect.
|
| Price, at equilibrium, is a true representation of value.
| But other market forces ensure that equilibrium is seldom
| met. Tax, tariffs, subsidies on the product and its
| components skew price away from value.
|
| Also, this kind of analysis only works at market level.
| Individual actors all have different values. It has to be
| viewed in aggregate. Think anecdote vs data.
| dredmorbius wrote:
| Keep in mind that "free market" and "perfect competition",
| whilst commonly used interchangably, are in fact distinct
| terms. Few standard economic texts even _mention_ "free
| market" whilst "perfect competition" is a standard
| microeconomic term (along with monopoly/monopsony and
| oligopoly/oligopsony), referring almost entirely to
| marginal value analysis, price/quantity behaviours,
| allocations of producer/consumer surplus, and deadweight
| losses.
|
| "Free market" is a political term regarding the level of
| government regulation.
|
| Neither "free market" nor "competitive market" adequately
| describe all (or even significant) levels of power
| differentials between economic (and social) actors.
| littlestymaar wrote:
| > Keep in mind that "free market" and "perfect
| competition", whilst commonly used interchangably, are in
| fact distinct terms.
|
| But the author used a "textbook" result that is only true
| in case of perfect competition, so he must be talking
| about perfect competition right?
| nxmL wrote:
| Power dynamics are not at all orthogonal to market freedom.
|
| Academics hold all the power in the "free" market and have
| their snouts in the trough. In a truly free market Milton
| Friedman would be on minimum wage at best (or find a rich
| sponsor).
| LoSboccacc wrote:
| > Workers can't usually live too much without finding a job.
|
| > Companies will always push for lower wages wherever they can
|
| but it's not just megacorp tho.
|
| minimum wage will lower employment from small business
| significantly; i.e. small shop owner will get by with one less
| garcon to pay the other one more.
|
| and if you think that can be resolved just by ample
| unemployment benefits, look no further than the Dublin heroin
| epidemic.
|
| maybe two tier of minimum hourly wage + progressive hour cap
| could work: x$/month minimum wage for part time capped at 20
| hour/week, x+50%/month for full time workers.
|
| but it's a thorny issue where in the fight between drones and
| megacorp it's easy to incur in collateral damage around the
| middle.
| mdoms wrote:
| > minimum wage will lower employment from small business
| significantly
|
| Can you show some data that demonstrates this? Because,
| despite all of the wailing and gnashing of teeth (and flawed
| economic theory), in my country this has never been shown to
| be an actual effect after minimum wages go up.
| LoSboccacc wrote:
| https://epionline.org/wp-content/studies/sabia_05-2006.pdf
| gjulianm wrote:
| > minimum wage will lower employment from small business
| significantly; i.e. small shop owner will get by with one
| less garcon to pay the other one more.
|
| As a counterpoint, where do we put the threshold then? I
| could argue that if I could pay employees in breadcrumbs, I
| could create a new company that would be profitable and I
| would increase employment!
|
| In this issue, either you're driven by empirical data of the
| exact effect of minimum wage on social welfare (which is
| impossible to achieve without actually doing those changes)
| or you're driven by ideology. Mine is that someone with a
| full time job should at least be able to live a decent life,
| specially in our current society where we clearly have the
| capacity to do so.
| monocasa wrote:
| Who are these mom and pops that are hiring extraneous
| workers? If they can get rid of a position, they probably
| already have.
| kube-system wrote:
| They're out there. Mom-and-pops are not known for their
| efficiency. I've known some that hire people as a favor to
| friends/family/community. ("hey, my kid needs a summer job,
| do you have a job for them?") Heck, there are entire mom-
| and-pop shops that exist not as a serious income stream,
| but as a hobby.
|
| If you're running a business with <5 people, hiring an
| 'unnecessary' person could just be a luxury so that the
| business owner can take a vacation or get an extra hour of
| sleep... and when times are tough, they forego that luxury.
|
| These are probably not a significant part of the
| overarching discussion here, though.
| monocasa wrote:
| I've seen "my kid needs a summer job" way more at medium
| size $100m/yr revenue companies where that can be hidden
| in the budget easier, and you can get a kickback for
| internships if you play your cards right as one of those
| companies.
|
| And it is relevant, because there's a lot of data that
| there is no negative effect on employment elasticity, but
| there is significant publication bias in the field. And
| what always gets brought out is the argument that
| "businesses will start letting extra people go". They
| already do that even without minimum wage increases.
| Certhas wrote:
| Universal Basic Income would also help with this problem.
| Romanulus wrote:
| Have you considered the converse of very larger companies that
| have a stranglehold on their market (like Walmart, perhaps)
| pushing for a higher minimum wage to stifle smaller businesses
| in the same domain?
|
| It seems like a viable tactic, though I will admit I have not
| looked into it much myself.
| aeternum wrote:
| I believe you could make the labor market much more competitive
| with one simple and easy to implement change:
|
| _Make it a requirement that companies publish salaries._
|
| We did this with CEO pay and it resulted in huge increases in
| CEO pay because it removed the information asymmetry. We make
| companies disclose important safety and nutrition information
| to the public so consumers can make good decisions about
| purchases, why not enable people to make good decisions about
| employers as well?
| opportune wrote:
| That entire excerpt is bollocks. I seem to recall a pretty
| influential treatise explaining how wages tend towards the
| exchange-value of the _labor_ to produce a good, not the use
| value or even marginal exchange value of the good itself.
| ouid wrote:
| most of these problems can be solved by just giving everyone
| the right to say no to labor with a guaranteed poverty income.
| It's not enough money to live on comfortably, but it gives the
| labor negotiator a chance to walk away from a monopsonist.
| bcrosby95 wrote:
| Also, do textbooks actually say that? Because it seems
| trivially false: if a worker is actually paid that, then
| there's no money left for investors.
| [deleted]
| ianai wrote:
| Yes. In one of my grad Econ classes an entire lecture was
| devoted to deriving individual pay based on marginal input
| and aggregate utility functions. The prof ended the
| derivation with a laugh then discussed all the obvious places
| wage does not equal marginal societal benefit. Ie school
| teachers vs entertainers.
|
| The takeaway is that Econ theory only explains what it's
| capable of explaining. The real market clearly has a lot more
| going on than purely rational actors exchanging goods and
| services.
| oivey wrote:
| It's also obviously untrue given the fact that wages in the
| US have stagnated while productivity has continued to grow.
| That's despite a floor on wages.
| nemo44x wrote:
| Over the last 50 years, the combined middle and upper-
| middle class of the USA has been the part that has grown
| the most. The lower middle and poverty classes have shrunk.
| The upper class has grown a small amount. 62% of the
| country today is middle or upper-middle class today as
| opposed to 50 years ago when 51% were. [1]
|
| However, the middle class has shrunk quite a bit as the
| upper middle class has seen tremendous growth while lower
| middle and poverty classes have seen a good deal of
| shrinkage.
|
| 37% today are lower-middle or poverty class compared with
| 50 years ago where 48% were. In particular, the poor have
| shrunk from 24% to 20% today.
|
| So the middle and upper-middle have grown over the last 50
| years with the upper-middle in particular growing and
| lower-middle and poverty has shrunk. However, middle class
| people may feel left behind as they see more people
| becoming upper-middle.
|
| [1] https://www.urban.org/sites/default/files/publication/8
| 1581/...
| colinmhayes wrote:
| No it's not obviously untrue. Productivity growth has been
| driven by capital, not labor.
| Fargren wrote:
| If I dig one hole a day with my hands and ten holes a day
| with a shovel, I still dug the nine extra holes even if I
| don't own the shovel.
| AnimalMuppet wrote:
| I believe that colinmhayes' point is that you dug the
| extra nine holes because there was a shovel, not because
| you got better at digging holes with your hands. The
| productivity gain was because a shovel was being used. It
| didn't matter who owned the shovel, it mattered that you
| were digging with one.
|
| But that's not completely true, because a person who only
| knows how to dig with their hands still only digs one
| hole a day, even if there's a shovel just lying there.
| Knowing how to use the tools does in fact make you a more
| productive worker.
|
| It seems to me, then, that part of the gain from the
| productivity from better tools should go to the worker
| who knows how to use the tools. And part should go to the
| person who bought the tools.
| colinmhayes wrote:
| Not really sure what you're saying as this is an example
| of my point. The growth was caused mostly by the shovel,
| and partly by the worker learning to use the shovel.
| Wages have grown to show that.
| claudiawerner wrote:
| But if you follow that logic further, which you should,
| it's also true that part of that capital is "human
| capital", or what some economists called variable
| capital. I can't think of any increase in productivity
| which has not been the result of human labour (whether
| technical, scientific, in discovery of new natural
| materials, or otherwise). Non-labour ("constant") capital
| is inert (literally, as physical goods, it just sits in a
| warehouse) without labourers to work on or with it.
| e12e wrote:
| > Productivity growth has been driven by capital, not
| labor.
|
| What does capital produce?
| sudosysgen wrote:
| What produces capital?
| geogra4 wrote:
| Maybe some textbooks? But like - when a software engineer is
| billed out by a contracting company at 250/hr and only is
| paid 50/hr it's pretty obvious that the wealth created is not
| what the worker is paid. It's been a long time since I took
| microeconomics in college but even the most charitable
| analysis of that is basically that the worker gives up the
| other 200/hr for stability and benefits.
| mywittyname wrote:
| And support. That $200 goes to paying accountants, sales
| staff, executive, marketing, custodians, etc. All of which
| help keep that $250/hr paycheck rolling in and getting
| distributed.
|
| When I was working solo, I could not bill out remotely
| close to what I can as part of a firm. Not to mention that
| I had to find a cheap accountant, pay for office space
| myself, etc.
| danenania wrote:
| Right, many minimum wage opponents focus on the scenario where
| someone is worth e.g. $14/hr to a business, and rightly point
| out that this person won't be hired with a $15/hr min wage.
|
| BUT without a minimum wage, someone worth $50/hr can be paid
| $5/hr _if_ anyone can do the job. It strikes me that this
| situation is far more common than the first scenario, and
| minimum wage opponents tend to ignore it in their arguments.
|
| Minimum wage sets a floor for the market. That could
| theoretically increase unemployment in _some_ industries with
| razor thin margins, but it 's far from a given.
| macspoofing wrote:
| The only arguments for minimum wage that I've ever seen, are
| those that claim that under certain conditions minimum wage
| may not be _noticeably_ detrimental. What you never see is
| the minimum wage actually make a lick of difference to any
| metric that matters (like unemployment rate, or poverty
| rates, or income rates, or whatever else). Never. And I 'm
| serious about this. Have you ever seen a region that adopted
| minimum wage, then come back a year later and show, for
| example, that poverty rates have fallen as result? Curious.
|
| So you have a policy that cannot demonstrate it actually
| makes anything better, sometimes can be demonstrated to not
| measurably negatively affect anything, and frequently
| actually hurts.
|
| Policies like minimum wage, or rent control, are not really
| about facts. They are driven purely by emotion and ideology.
| heylook wrote:
| > Never. And I'm serious about this.
|
| You know that we have search engines, right?
|
| https://www.healthaffairs.org/do/10.1377/hpb20180622.107025
| /...
|
| https://papers.ssrn.com/sol3/papers.cfm?abstract_id=267875
|
| https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3381978
|
| https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3520915
| macspoofing wrote:
| Let me summarize what you did here:
|
| 1) You had a conclusion in your mind that minimum wage is
| beneficial. 2) You googled with terms that match your
| conclusion. 3) You cherry-picked the studies that match
| your conclusion. 4) The studies all point to either mixed
| outcomes or minor effects - with no attempt to even
| establish a causal effects (some of those are downright
| silly. Like tying minimum wage policy to rising wages in
| a country that is going through 7-9% GDP growth)
|
| Do you honestly think that this is a way to argue? That
| you just shut-gun random links you cherry-picked?
|
| How about this, survey after survey of economists (and
| you can google those since apparently googling is all you
| need) show either a majority or plurality of economists
| oppose rising minimum wages and deep skepticism of its
| benefits. What are they missing? Or do you want to
| cherry-pick economists that support your conclusion like
| a climate change denier pointing to that small number of
| climate scientist that show some skepticism of climate
| change?
| lsiebert wrote:
| Wait, your contention is that paying poor people more
| doesn't effect poverty rates, and you are asking other
| people for citations, not citing something of your own?
|
| You might find this CBO report useful.
| https://www.cbo.gov/publication/55410
| macspoofing wrote:
| >your contention is that paying poor people more doesn't
| effect poverty rates
|
| No. That is not my contention at all. Do you want try
| again without straw manning the argument?
| jackvalentine wrote:
| This article links to a lot of studies about the health
| benefits of a minimum wage: https://www.nytimes.com/interac
| tive/2019/02/21/magazine/mini...
| prostoalex wrote:
| > someone worth $50/hr can be paid $5/hr if anyone can do the
| job
|
| What business sectors enjoy consistent 90% gross margins?
| danenania wrote:
| That's not the right question to ask, since many other
| costs besides labor figure into gross margins.
| prostoalex wrote:
| What formula then is used in calculating "someone worth
| $50/hr"?
|
| Does it omit or include those costs?
| danenania wrote:
| It's not always easy to quantify. Consider people like
| janitors or security guards. They may be absolutely
| critical to the business running even though they don't
| produce revenue directly. Even if minimum wage was set to
| $100/hr for these jobs, it would still be worth it for
| many companies to hire them, since producing _any_
| revenue could be contingent on having people in those
| positions. At the same time, they are very competitive
| labor markets, so without a floor, the pay could go very
| low despite being essential to the business.
|
| When someone is directly contributing to revenue, like a
| factory worker or salesperson, it's a bit simpler since
| you can look at their output, but you still need more
| information than gross margin to know the maximum a
| company _could_ profitably pay an employee, since a
| company might design their operations very differently
| depending on the price of labor.
| leetcrew wrote:
| $100/hr is considerably more than I make as a software
| engineer. if my employer was required to pay a janitor
| $100/hr, they would fire them and have all the junior
| engineers spend the last hour of their day cleaning.
| having _someone_ clean the building is essential for any
| business with a physical presence, but it 's only worth
| hiring a person specifically to clean if they can be paid
| less than your core employees or if they can do it much
| more efficiently. this is why restaurants typically do
| not employ janitors.
| bumby wrote:
| Another example that has come to mind lately is how do
| you quantify non-production skilled or intellectual
| labor?
|
| The value of maintenance, safety, quality are often only
| only apparent _after_ being cut
| nemothekid wrote:
| I know you were trying to make a broader point, but
| Facebook has been flirting with 90% gross margins for more
| than 5 years.
| AnthonyMouse wrote:
| But then you have to ask, how can they do that? And the
| answer is, of course, the network effect of their social
| network. The value derives predominantly from that and
| not what the employees are doing -- if they did the same
| work for someone else who doesn't control a popular
| social network, it wouldn't create the same returns.
| jandrese wrote:
| In economics this is called a barrier to entry.
| Industries with lower barriers of entry are more
| competitive (see: restaurants) and have lower margins.
| Industries high high barriers to entry tend to gravitate
| towards monopolies. For industries with the highest
| barriers to entry (like tap water) markets don't work and
| we have to use heavy handed regulation to avoid letting
| the industry completely screw over the populace (see:
| water barons).
|
| Of course it is pretty weird to think of a social network
| as a utility.
| olva22 wrote:
| Apple's appstore? :)
| Aunche wrote:
| >That could theoretically increase unemployment in some
| industries with razor thin margins, but it's far from a
| given.
|
| It's not a given when you're talking about a small region
| like Seattle. However, increasing the minimum wage to the
| entire US would dramatically increase unemployment in the
| poorest areas. The minimum wage is why territories like
| American Samoa and Puerto Rico have the highest unemployment.
|
| Edit: changed Guam to American Samoa
| gamblor956 wrote:
| Puerto Rico has structural issues related to endemic
| corruption that discourages business investment, and that
| is why companies generally avoid doing business there
| despite the very generous tax incentives for doing business
| in Puerto Rico.
|
| PR's minimum wage has very little to do with it, except for
| being a convenient scapegoat.
| dragonwriter wrote:
| > The minimum wage is why territories like Guam and Puerto
| Rico have the highest unemployment.
|
| But...they don't, even though Guam, unlike several states,
| has a higher minimum wage than the Federal level.
|
| https://en.m.wikipedia.org/wiki/List_of_U.S._states_and_ter
| r...
| chrischen wrote:
| Guam's minimum wage is on the low side, about $1 higher
| than the federal minimum.
| dragonwriter wrote:
| > Guam's minimum wage is on the low side, about $1 higher
| than the federal minimum.
|
| There are, if I counted right, 19 states and all other
| federal districts except DC and the Virgin Island at
| (well, below for American Samoa) the federal $7.25 level
| (American Samoa's level is also _a_ federal level, but it
| 's federally set lower than the rest of the US), and a
| few more states at the same level as Guam; so it's pretty
| close to the middle, not really much on the low side.
| Aunche wrote:
| I must have been thinking about another territory rather
| than Guam. It looks like unemployment was counted before
| the pandemic for the US territories and after the
| pandemic for states.
| lukevdp wrote:
| Someone is not worth $50/hr if someone else is willing to do
| the same job with equal capability for $5/hr.
| gamblor956 wrote:
| There is a difference between someone being worth $50/hour
| and another person willing to do whatever for just $5/hour.
|
| For example, rich kids can take unpaid internships because
| they don't have to worry about food or rent for the
| duration of internships.
|
| Poor kids can't usually afford to take jobs that don't pay.
| frogpelt wrote:
| I'm guessing poor kids usually don't have jobs at all.
|
| Only about 40% of poor people 18-64 even have jobs.
| chc wrote:
| The parent was comparing the value a worker brings to the
| company against the worker's compensation. To illustrate
| how the worth of a transaction can be different from the
| cost: If I offer to give you a $50 bill in exchange for a
| $5 bill, is that bill not worth $50 just because I lost on
| the deal?
| lukevdp wrote:
| Yes but it is wrong to do so because wages are not set
| only by the worth a worker is to a company. That is only
| one side of the equation (demand). The labour market also
| have a supply side component which is the ability for the
| company to find labour.
| gwright wrote:
| I would certainly value that piece of paper at $50 but
| apparently you value it at something less than $5 because
| you are willing to accept $5 for it. I haven't a clue as
| to why you would value it at less than $5, perhaps you
| get some entertainment value in giving away money?
|
| This doesn't seem like a particularly helpful
| illustration.
| chc wrote:
| You arrived at the conclusion that something can be worth
| more than you paid for it, which is the point I was
| trying to illustrate (because the person I was replying
| to assumed that the lowest price you can pay = worth). So
| it seems like the illustration did its job to me.
| seiferteric wrote:
| If a company can hire someone worth $50/hr for only $5/hr and
| therefore make huge profits/margins, couldn't another company
| easily come along and undercut them? I don't think a scenario
| like that could exist very long.
| chc wrote:
| Undercut them in what sense? Pay the employee even less for
| $50 worth of labor?
| aidenn0 wrote:
| Sell the results of that labor for just $49.
| asdff wrote:
| They sure could and do if labor is limited. If the supply
| of labor exceeds the demand, you wouldn't need to undercut;
| you and your competitor would advertise $5/hr and you would
| both get a worker. In our current world, we don't see
| chipotle trying to out compete mcdonalds on wages, so
| clearly for many classes of worker there is an oversupply
| of labor.
|
| Sometimes even in the real world things do flip, and there
| is a demand for low skilled labor that isn't being met. I
| overheard a few restaurant owners talking about the
| pandemic and their business while I was in line outside the
| grocery store a month or two ago. They bemoaned how no one
| wanted to come back to work at the restaurant since they
| were making more on unemployment. Neither brought up the
| idea of paying more if they failed to find labor at that
| price point in the market. Instead, they quipped back and
| forth about how lazy their staff are behaving after these
| owners themselves laid them off not too long ago and put
| them on unemployment in the first place. This anecdote is
| American capitalism in a nutshell, imo, just pure cognitive
| dissonance between the realities of the working class and
| the perceptions from the capital class.
| [deleted]
| jusssi wrote:
| If the other company can also do the same, why would they
| piss into their own cereal by reducing their profit?
|
| And if the other company is a newcomer looking to gain
| market share by undercutting, they'll likely find
| themselves strongarmed or bought out of the market.
| AnthonyMouse wrote:
| > If the other company can also do the same, why would
| they piss into their own cereal by reducing their profit?
|
| Because that's how newcomers gain market share.
|
| > And if the other company is a newcomer looking to gain
| market share by undercutting, they'll likely find
| themselves strongarmed or bought out of the market.
|
| But then the high margins are still there, so the dynamic
| that attracts new entrants is still there.
|
| The markets that maintain high margins are the ones with
| barriers to entry. Which, of course, we try to avoid as a
| matter of policy, so any policy that relies on their
| existence is quite problematic.
| [deleted]
| CJefferson wrote:
| Between all the patents, it would be basically impossible
| to start a new mobile phone company from scratch which made
| its own chips, for example.
| collyw wrote:
| I went looking for a new phone recently, there were
| brands I hadn't seen before on the shelves. Why you would
| need your own chips is beyond me, when you can buy them
| for a pretty small price.
| wonnage wrote:
| Not wanting to get Huawei-ed?
| jayd16 wrote:
| >couldn't another company easily come along and undercut
| them?
|
| Not necessarily. A lot of factors might give one company an
| exclusive position. Another coal mine can't just open up.
| There might be a large barrier to entry into the market or
| it might just take time for a competitor to surface.
| strbean wrote:
| > companies have more power in negotiation, they have more
| information and, most important of all, they can deal with a
| job opening not being covered most of the time
|
| This will be the case as long as we have monetary policy based
| on the idea that "100% employment is the apocalypse".
|
| It seems like it is accepted as fact that 100% employment would
| lead to hyperinflation, despite the fact that this has never
| occurred. It is a totally untested theory that is suspiciously
| convenient for employers and shitty for workers.
| throwawaysea wrote:
| > This will be the case as long as we have monetary policy
| based on the idea that "100% employment is the apocalypse"
|
| Can you share where you are deriving this from? I don't think
| monetary policy is based on this idea. I think it is based
| more on managing inflation and economic growth, with
| employment impacts being a side-effect.
|
| > It seems like it is accepted as fact that 100% employment
| would lead to hyperinflation
|
| I also don't think it is that 100% employment would lead to
| hyperinflation. It's more that full employment might imply
| inflation has taken place, meaning that a basket of
| goods/services might cost more (in terms of number of
| Dollars). But maybe I don't understand the argument here?
| dannyw wrote:
| Monetary policy is to benefit the owners; not the workers.
| 100% employment will drive wage growth as demand exceeds
| supply. That's not good for the stock market.
| pratik661 wrote:
| Source? That is an extraordinarily broad statement to make.
|
| Central Banks' (the primary institutions behind monetary
| policy) primary goal is to promote a stable environment for
| commerce. This typically means maintaining a stable rate of
| inflation (2-4% for mature economies, 4-7% for frontier
| economies). This often requires performing a balancing act
| between managing unemployment and inflation. We have PLENTY
| of evidence to suggest that inflation is harmful for
| everyone, ESPECIALLY for low income workers. The stock
| market usually has ZERO consideration in the decisions
| central bankers typically make.
| lotsofpulp wrote:
| Whatever their goal is, the execution obviously benefits
| owners of capital disproportionately more than sellers of
| labor.
|
| If economic growth is more than the interest rate, the
| owners pocket the difference. If economic growth is less
| than the interest rate, the owners get bailed out. But in
| all cases, growth for the sellers of labor always lag the
| growth for the owners of capital.
| aNoob7000 wrote:
| The Federal Reserve has been trying to get inflation
| above 2% consistently for over 10 years. What are the
| chances that they get that even now with rates at zero?
|
| Also, I would disagree with you about the Federal Reserve
| not targeting the stock market or other assets. Anytime
| in the past couple of years that the stock market in the
| USA has dropped roughly 10-15%, the Federal Reserve has
| jumped in dropped rates. They might say the don't target
| the market, but in reality that is what they are doing.
|
| I think biggest issue in the future will be how will the
| Federal Reserve ever raise rates. They can't even go
| above 2.5% without the market collapsing.
| novok wrote:
| If you really want to up inflation, go towards a %100
| employment target :p
| jsmith99 wrote:
| 2% is the Fed's inflation target.
| bumby wrote:
| I agree with you in theory, but it seems naive to believe
| political appointees like a chairperson of central banks
| give zero consideration to the stock market when that
| market is fundamentally important to those who appoint
| them.
|
| I hope they have that kind of integrity but I won't be
| surprised if there's a gap between theory and practice
| GedByrne wrote:
| Not necessarily. In this case the business seeks an
| alternative to workers such automation or simply going
| without.
| Supermancho wrote:
| > 100% employment will drive wage growth as demand exceeds
| supply.
|
| I hesitate to call this a fantasy thought experiment (like
| all the atoms in the right place for a brick wall to allow
| a baseball to pass through). Not to mention the illusion of
| employment statistics (how it's measured), in many
| countries.
|
| This stable equilibrium is impractical. The world is not a
| singular country. Employment within a single country is not
| representative of labor supply/demand, in this context.
| mattmcknight wrote:
| This is the one of the two biggest flaws in most
| macroeconomics. They act as if the national economy is a
| closed system. Of course, if wages rise too high, (in
| addition to automation) the products the wages were
| producing can be produced in other economies and
| delivered as finished goods. Immigration is of course
| another violation of the closed system model, where labor
| flows to places with higher wages. (The other biggest
| flaw in macro is treating the economy as an
| undifferentiated GDP factory)
| cik2e wrote:
| There's a lot of very understandable confusion in this thread
| about the directionality of the unemployment-inflation
| tradeoff. It's not that increased employment causes
| inflation, but rather the idea is that inflation will
| increase if central banks try to get there by printing money.
| So the frequently used statement of "increased employment
| will cause inflation" should only be considered in the
| context of monetary policy. But the phrasing is unfortunate
| because it implies the wrong causality.
|
| https://en.wikipedia.org/wiki/Full_employment#The_NAIRU
| Analemma_ wrote:
| I don't enough to say whether 100% employment is good or not,
| but I do know that this:
|
| > It seems like it is accepted as fact that 100% employment
| would lead to hyperinflation
|
| is a strawman. The argument is that 100% employment will
| cause an undesirably high inflation, but serious economists
| almost never talk about hyperinflation. (It tends to be a
| boogeyman used by deficit hawks and the like, since it almost
| never happens except in cases of war or truly disastrous
| policy).
| strbean wrote:
| It isn't a straw man. The theory states that inflation will
| _continuously increase at an accelerating rate_ as long as
| employment is above the "natural level". For any
| definition of hyper-inflation, proponents of NAIRU believe
| that we will meet that definition at some point if
| employment stays too high.
|
| > Only with continuously accelerating inflation could rates
| of unemployment below the natural rate be maintained. [0]
|
| [0]: https://en.wikipedia.org/wiki/NAIRU#The_natural_rate_h
| ypothe...
| sumtechguy wrote:
| For it to be basically unlimited inflation would mean
| there is an unlimited amount of cash and capital and
| capital in the system. That seems on the surface
| improbable. It strikes more as one of the formulas has
| gone off the chart and someone is making assumptions.
| strbean wrote:
| Well, my own view is that NAIRU is a complete crock.
| _shrug_
| CountSessine wrote:
| Why? If prices and wages keep going up in step, why did
| you need unlimited cash and capital? You just keep
| raising people's wages with the increasingly worthless
| cash you earn in revenues?
| fulafel wrote:
| It seems this targets difficulty depends on the the threshold
| to get registered outside the labour force and that options
| incentives vs regitering as unemployed. For example,
| motivated stay at home parents would need strong incentives
| to become employed.
| coliveira wrote:
| This is one example that shows how economy is skewed against
| workers. If salaries rise because there is a shortage of
| workers, this should be accepted as normal. Instead, it is
| seem as a cataclysm for the economy that should be avoided
| because, of course, this shrinks the profit margin for
| companies. The monetary policy is designed to maintain the
| power of companies over labor.
| bgorman wrote:
| Your chain of causality is actually completely wrong. At 15
| dollars an hour only a few companies can hire unskilled
| workers. At 1 dollar an hour many people can pay workers that
| amount, so there is more competition out there for wages. The
| idea that there is a monopolistic employer in the US labor
| market is laughable. Even for monopolistic industries like
| telecom there are multiple options.
|
| Minimum wage jobs should not be expected to be a long term
| viable career choice. Minimum wage jobs are a way for people to
| get their first experience, and then move one once they have
| gained valuable skills.
|
| People like to twist reality by imposing arbitrary constraints
| e.g. workers need to be able to get paid 15 dollars an hour
| without needing to relocate or learn new skills. The world
| isn't a charity, and anyone disputing that price floors don't
| result in shortages is frankly uneducated.
| jayd16 wrote:
| A livable minimum wage is the only way someone can move on.
| If you're working in an unskilled job, living paycheck to
| paycheck, how are you going to improve that situation?
| dragonwriter wrote:
| > If you're working in an unskilled job, living paycheck to
| paycheck, how are you going to improve that situation?
|
| One of the most common ways people move on to higher-paying
| jobs in the workforce is by skills (not necessarily in
| "skilled labor" sense, but even just basic work habits)
| earned and/or demonstrated through work in lower-paying
| (even unpaid, though less that since the crackdown on
| unpaid internships) jobs. Minimum wage jobs, even when
| minimum wage does not meet any criteria for "living wage",
| are absolutely part of that.
| asdff wrote:
| It's a lot easier said than done. There are a finite
| amount of management positions.
| dragonwriter wrote:
| Not all positions which aren't poorly paid are
| supervisory/management positions.
|
| Of course, restricting employability at the bottom end
| proportionately reduces the number of
| supervisory/management positions needed.
| Broken_Hippo wrote:
| IT doesn't matter if minimum wage shouldn't be expected to be
| long-term. The reality is that many folks basically work
| minimum wage or slightly above for large chunks of their
| life. And some folks are happy in these jobs.
|
| Some of these minimum wage jobs even require degrees.
| Preschool teachers, for example, often pay minimum wage or
| just above it - but this somehow shouldn't be a career
| choice. Many other jobs pay just a little above this - which,
| realistically, is what you'd get working late at a burger
| place. They get paid more than preschool teachers many times.
|
| There is a limit to the ability to relocate with these jobs
| as it costs money: Same for learning new skills.
|
| Denying folks a living wage when you know that low-paying
| jobs is reality for a large band of people (regardless of
| what you think it should be) is just cruel. The world "isn't
| a charity" because folks look down on folks.
| gjulianm wrote:
| > Your chain of causality is actually completely wrong. At 15
| dollars an hour only a few companies can hire unskilled
| workers. At 1 dollar an hour many people can pay workers that
| amount, so there is more competition out there for wages.
|
| That theory is good if there's a surplus of job offers,
| something that doesn't happen outside of very specific
| sectors.
|
| Moreover, your argument assumes that changing jobs is easy
| and risk-free, when in reality it's not, specially for
| unskilled workers.
|
| > Minimum wage jobs should not be expected to be a long term
| viable career choice.
|
| Why not? Of course it's not the optimal career choice, but
| why wouldn't one be able to live off a full-time job?
|
| > Minimum wage jobs are a way for people to get their first
| experience, and then move one once they have gained valuable
| skills.
|
| Yeah, the "serving fast food" skill that is so demanded in
| the current job market.
|
| > workers need to be able to get paid 15 dollars an hour
| without needing to relocate or learn new skills
|
| If you don't get paid a livable wage, you can't save for
| moving and/or changing jobs, and it will be far harder to pay
| and/or have time for further education.
|
| Non-livable wages just lock people into poverty. When the
| alternative is losing your house, or your healthcare, or
| starving, people will be forced to make non-optimal long-term
| decisions because it's their only option.
| dragonwriter wrote:
| > Non-livable wages just lock people into poverty.
|
| No, non-livable _income_ does that. Relying on _wages_ to
| solve that relegates people to a permanent underclass if
| they ever experience more than brief unemployment.
| chanfest22 wrote:
| http://archive.is/zF4ei
|
| tl;dr -- when labor markets are artificially depressed by
| employers with monopsony power (e.g. workers only have one
| employer to work for), a minimum wage can improve efficiency of
| the marketplace.
|
| Enjoyed the dispassionate take on the age old minimum wage
| question. It is difficult to figure out which people are in
| monopsony labor markets because it depends on so many things
| including geography and even within a zip code could vary based
| on a variety of factors such as internet access, public
| transportation access, etc. Makes sense that in some cases, when
| there is only one employer, they are artificially driving the
| price of labor down because people have no choice.
|
| Have policymakers considered other solutions to this monopsony
| problem? For example guaranteed government jobs that pay a
| certain $ amount adjusted for the geography to incentivize
| private sector to match or beat that price?
| coldtea wrote:
| They harm the bottom line of people using the Economist to
| suggest public policy...
| jsanford9292 wrote:
| What a useless article. No real conclusion and no new
| information.
|
| Raising the minimum wage CAN have negative effects. This is
| obvious. If you raise the minimum wage to $10,000 per hour, what
| happens? Hamburgers cost $1,000 each and nobody buys them.
| Restaurants become insolvent and they close. Bad outcome.
|
| I believe no minimum wage CAN also have negative effects but
| those effects are less clear to me. Maybe workers get taken
| advantage of by companies? But is a minimum wage the best way to
| fix this? Would love to hear other thoughts on what specifically
| a minimum wage fixes compared to having no minimum wage.
| pchristensen wrote:
| (can't read the article, but I've read and thought a lot about
| it)
|
| I'm on the fence about the net cost/benefit of localized minimum
| wages. I think that a federal minimum wage (or at least, a high
| one), and to some extent, state minimum wages, are a bad idea.
| The Fight for $15 movement came from expensive cities, and it
| might be the right policy for those places. But it would severely
| distort and crush lower-cost cities and states. The right policy
| for San Francisco isn't necessarily right for Birmingham. It's
| one thing to have uniform national laws for human rights. But the
| nominal value of $15 means something very different in different
| parts of the country.
|
| It seems to me that the right policy to increased pay for low
| wage jobs would be to set the minimum wage so a full time job at
| that rate puts you at some multiple of the
| metropolitan/micropolitan area poverty line. Wages would
| automatically increase with costs in a predictable way, and local
| economic conditions determine the rate. State or federal minimum
| wages could set a floor but acknowledge that regional differences
| matter in economics.
| eloff wrote:
| I think you're very right that this is policy best done
| locally, because cost of living varies wildly even in the same
| state.
| ghayes wrote:
| My only fear is that wouldn't businesses constantly relocate
| to new areas with lower minimum wages? If the area you're
| located in goes from $5 to $8 (possibly due to your factory),
| why not relocate three counties over to an area that's still
| at $5? A national standard mitigates this issue.
| pchristensen wrote:
| Moving 3 counties means basically every employee has to be
| relocate or be replaced. If a business is willing and able
| to make that choice, they are a) not attached to their
| current location, and b) probably willing to consider
| farther moves for further cost reductions.
| Nasrudith wrote:
| Reloction isn't free either and there are "implcit
| secondary standards" for the work beyond just the nominal
| task such as infastructure, literacy, and scale. Even if
| anyone can put widgets in boxes they may only need very
| unskilled labor for the task other aspects like "able to
| read the numbers to know how many to box up" are included.
| The labor may be technically cheaper across five towns of
| 200 but a larger factory in a big city could be more
| efficent because you can muster larger workforces quicker.
|
| A national standard would have merits but more in the sense
| of scale - it means less friction from adapting to 1
| different standard instead of N different standards. It is
| simpler but has the downside of being low for expensive
| locales and high for cheap locales and the trade offs that
| apply to both.
| Sohcahtoa82 wrote:
| 1. Relocating a factory is extremely expensive.
|
| 2. What about businesses where their location is critical,
| like restaurants?
| wccrawford wrote:
| That is already what happens with factories. They find
| cheap land and cheap labor.
|
| They generally don't move factories unless the wages are
| enough different to justify all the other pain and expenses
| that moving would entail, including hiring almost all of
| their low-pay workers from scratch in the new area.
| crooked-v wrote:
| > It seems to me that the right policy to increased pay for low
| wage jobs would be to set the minimum wage so a full time job
| at that rate puts you at some multiple of the
| metropolitan/micropolitan area poverty line.
|
| I would be in support of that in the abstract, with the caveat
| that various business lobbying would immediately push for
| abstruse redefinitions of 'poverty' as used in the law.
| snarf21 wrote:
| It is a very tough problem. Trying to do it all locally also
| pits town against each other. I think the thing is that this
| kind of minimum wage isn't a living wage so having it as a
| floor is not awful. I also think we have better tools to help
| the poor than minimum wage.
|
| I've also tried to think a little about this from the spend >
| consume > work > spend cycle. Minimum wage isn't a factor in SV
| tech jobs. The places that employ people at the minimum also
| tend to service those same people. Rich people don't shop at
| Wal-Mart (largely) so we are only adding costs to goods that
| poor people want. So wages go up but if prices go up the same
| or more, the poor have lost buying power. I think EITC is a
| much more targeted and effectively way to help the poor but it
| needs expanded.
| adrr wrote:
| I am fine with localized min wage laws if the federal
| government based distribution of spending on a per tax revenue
| by each state. High min wage, means more federal tax revenue.
| State should get most of that money back in federal spending.
| nobody9999 wrote:
| >The Fight for $15 movement came from expensive cities, and it
| might be the right policy for those places. But it would
| severely distort and crush lower-cost cities and states. The
| right policy for San Francisco isn't necessarily right for
| Birmingham.
|
| Your point is a valid one. At the same time, if you look at how
| these numbers actually play out in reality, $15/hour (assuming
| 40 hours/week -- certainly not a given and 50 weeks per year)
| works out to $30,000/annum. Figure in the 12%[0] Federal income
| tax plus the 6.25% FICA (Social Security/Medicare) withholding
| and that $30,000/annum nets (not including state and local
| income taxes, which vary) to ~$25,000/annum.
|
| Assuming (a big assumption) no income tax at the state/local
| levels, that leaves ~25,000/annum at $15/hour, 40 hours/week.
|
| This works out to ~$2100/month for a single earner. Given that
| rent, food cost, transportation requirements, etc. vary widely
| across various localities, it's difficult to determine how well
| folks can get by on that amount of money.
|
| The median rent in the US[1] is ~$1000/month. That represents
| ~50% of net income (again, assuming zero state/local income
| tax. Which doesn't bode well for those making $15/hour, given
| that many don't get 40 hours/week.
|
| Even in the places with the least expensive rent[2], that's
| still ~25% of income. That's often considered an appropriate
| level of housing cost relative to income.
|
| What's more, given that the median income in the US is more
| than twice as high[3] as 40 hours/week at $15/hour, a $15
| minimum wage wouldn't put any upward pressure on median income
| (how relevant such an eventuality might be is arguable, but is
| interesting to note).
|
| So yes, a national $15/hour minimum wage isn't a panacea. Those
| living in the _poorest /cheapest_ places could likely live
| pretty well on $15/hour (again, assuming 40 hours/week, 50
| weeks/year -- which doesn't apply to many).
|
| Contrariwise, those who live in places with costs around the
| median for the US would likely struggle with $15/hour, and
| those living in the most expensive places would likely not be
| able to live on just one full-time job.
|
| So yes, $15/hour nationally is a bad idea. In fact, it should
| be significantly _higher_ in places that are more expensive.
|
| [0]https://en.wikipedia.org/wiki/Income_tax_in_the_United_State
| ...
|
| [1]https://www.deptofnumbers.com/rent/us/
|
| [2]https://dailyhive.com/mapped/10-cheapest-cities-rent-usa
|
| [3]https://www.census.gov/library/stories/2019/09/us-median-
| hou...
|
| [Edit: Fix spacing typos]
| leetcrew wrote:
| I think you're overselling your point a bit. $15/hr would be
| very rough in NYC or SF, but it's actually a pretty decent
| wage for a single person most places in the US.
|
| for comparison, I make quite a bit more than $15/hr, but
| $2100/month is pretty close to what it costs me to live a
| nice life in one of the most desirable neighborhoods in my
| city. I spend closer to $2500 in a typical month, but $200 of
| that is because I chose a nice apartment with a good view,
| and I could probably shave off another $200-300 by not
| shopping at whole foods and downgrading the alcohol I buy. a
| year ago, I was living in a detached home (with a driveway!)
| in the county with three other people and my monthly spending
| was well under $2000.
|
| so imo, $15/hr is more than enough as an absolute floor for
| wages in most locales. probably not enough to support an
| entire household with n children on a single income, but I
| don't think that's a reasonable expectation for a minimum
| wage.
| nobody9999 wrote:
| >for comparison, I make quite a bit more than $15/hr, but
| $2100/month is pretty close to what it costs me to live a
| nice life in one of the most desirable neighborhoods in my
| city.
|
| What's your monthly healthcare premium? What's that, your
| employer provides that for you? Mine is almost $750/month.
| That's just for me.
|
| What's more, as I pointed out, many folks earning minimum
| wage don't get 40 hours/week. As such, their income is
| _less_ than the numbers I stated.
|
| To go even farther, it's not so much about $15/hour or any
| other arbitrary figure. It's about whether or not someone
| can support themselves (and their dependents -- I didn't
| address children or parents or other non-working folks in a
| household, let alone the costs of child care if all adults
| need to work to pay the bills).
|
| If the current minimum wage doesn't allow for that, then
| the government (that means you and me) has to subsidize
| those folks.
|
| in the end, it comes down to how we choose to deal with
| this situation. Do we require employers to provide a
| (theoretical, remember many don't get 40 hours a week)
| living wage, or do we as a society pay to subsidize those
| employers who don't pay enough to allow people to support
| themselves?
|
| But the issue goes beyond just the dollars and cents. The
| hoops that many government programs force those who need
| help to jump through is often demeaning and tends to
| dehumanize people. What's more, those programs have
| overhead too. The costs of administering these programs
| need to be considered part of the subsidy to employers.
| leetcrew wrote:
| > What's your monthly healthcare premium? What's that,
| your employer provides that for you? Mine is almost
| $750/month. That's just for me.
|
| yes, my employer pays the premiums for my HDHP. the
| coverage is comparable to something at the boundary of a
| typical silver/gold ACA plan. these cost $450-480/month
| for an individual, but someone making $30k would likely
| qualify for a federal credit of $100+/month (not to
| mention that their tax burden would be significantly
| lower than your quick estimate).
|
| > What's more, as I pointed out, many folks earning
| minimum wage don't get 40 hours/week. As such, their
| income is less than the numbers I stated.
|
| "many" being about 6% of workers making the minimum wage,
| according to BLS in 2017.[0]
|
| > in the end, it comes down to how we choose to deal with
| this situation. Do we require employers to provide a
| (theoretical, remember many don't get 40 hours a week)
| living wage, or do we as a society pay to subsidize those
| employers who don't pay enough to allow people to support
| themselves?
|
| > But the issue goes beyond just the dollars and cents.
| The hoops that many government programs force those who
| need help to jump through is often demeaning and tends to
| dehumanize people. What's more, those programs have
| overhead too. The costs of administering these programs
| need to be considered part of the subsidy to employers.
|
| as a taxpayer, I'm not happy about paying for it, but I
| tend to think this is society's problem more than any
| particular business's. inevitably, there will be people
| who do not produce enough value to sustain themselves. in
| my ideal world, we would do away with minimum wage
| entirely, give people UBI sufficient to at least subsist
| (perhaps coupled with a public option for affordable
| heathcare), and let businesses employ anyone who wants to
| work for a market wage.
|
| [0]https://www.bls.gov/opub/reports/minimum-
| wage/2017/home.htm
| jefftk wrote:
| _> Figure in the 12%[0] Federal income tax_
|
| You're forgetting the standard deduction: $12k for an
| individual. This brings taxable income to $18k. Per
| https://www.irs.gov/pub/irs-pdf/i1040tt.pdf that puts tax at
| $1,929, so $30k becomes $28k after Federal income tax and not
| $26k.
| nobody9999 wrote:
| >You're forgetting the standard deduction: $12k for an
| individual. This brings taxable income to $18k. Per
| https://www.irs.gov/pub/irs-pdf/i1040tt.pdf that puts tax
| at $1,929, so $30k becomes $28k after Federal income tax
| and not $26k.
|
| A fair point. I'd point out (again) that many folks earning
| minimum wage don't get 40 hours/week. What's more, once you
| add in health care costs, not to mention any children or
| other dependents, that extra ~$175/month won't go too far.
| jefftk wrote:
| Children or other dependents will add more deductions,
| though, and likely qualify you for the earned income tax
| credit.
| wccrawford wrote:
| But it's okay to have a national minimum wage and _also_ a
| state, county or city minimum wage that 's higher than the
| national. That doesn't mean we shouldn't at least start with
| the national one. Individual areas can fight for their own
| raised minimum wage in their area. Everyone can fight for the
| national one, which would still be a big increase over what
| minimum wages are everywhere.
| nobody9999 wrote:
| >But it's okay to have a national minimum wage and also a
| state, county or city minimum wage that's higher than the
| national. That doesn't mean we shouldn't at least start
| with the national one.
|
| You won't get any argument about that from me.
|
| My point was that, except in the poorest places in the US,
| $15/hour is _not_ a living wage. Especially since many, if
| not most folks earning the minimum wage _don 't get health
| care benefits (a big additional cost) and often are not
| afforded 40 hours/week either_.
| clairity wrote:
| i'm generally in favor of state-level control of such things,
| but i'd be remiss not to point out that that's a great way to
| further entrench inequality across america.
|
| i mean, if $15/hour is a little more than subsistence level in
| rural north dakota or the hills of west virginia, so be it.
| maybe it means they can buy a laptop for the kids, but it won't
| be mansions and teslas everywhere.
|
| current labor markets are profoundly unfair, and a little
| imperfect leveling of the field is fine, while we work on
| fixing the decades of extractive policies that got us here in
| the first place.
| kenhwang wrote:
| It's one thing to be unfair when the government is footing
| the bill, like basic income or tax brackets. It's a good
| incentive to balance out rising cost of living.
|
| It's another when it's small businesses footing the bill.
| There's a very painful lag time between being required to pay
| employees more and when employees have more spending power.
| Typically all that happens is local business don't have the
| finances to cover that lag, but national businesses do, and
| the latter survives and dominates.
| Klinky wrote:
| Then we should advocate for government footing the bill,
| either UBI or subsidized minimum wage.
|
| Someone is paying the cost in the end, and probably
| shouldn't end up on the small business owner, and
| definitely shouldn't end up on the laborer being unable to
| make ends meet.
| clairity wrote:
| small businesses don't foot the bill, at least not to any
| painful level if they're anything approaching a reasonably
| run business. their customers might, and having it be a
| blanket policy means that small businesses are not
| disadvantaged or penalized for not having the leverage of
| big businesses to distribute costs onto the rest of society
| (e.g., walmart and welfare).
|
| at most, on the margin, a small business might give
| employees 1-2 fewer hours per week. that actually puts
| selective pressure on small businesses to be more
| efficient, and therefore more competitive with big
| business.
|
| this also counters the other oft-cited rebuttal that people
| will lose jobs due to the minimum wage - no, they may lose
| an hour or two on the margin, but whole swaths of jobs
| aren't at stake, and their take-home will likely stay
| roughly the same even with fewer hours per week.
|
| economic lag isn't particularly relevant either, because
| folks making minimum wage turn around immediately and spend
| that money. there's virtually no lag there.
| dylz wrote:
| I don't have an opinion on this in either direction, but
| i'm curious: how do you define a small business, and do
| inefficient/wasteful small businesses get selectively
| 'bailed out' compared to national ones? Why should small
| businesses not have to foot the bill while large ones do?
| Just because they are small, they don't have to be
| competitive or efficient - do not-profitable hobby
| businesses get propped up for no reason other than they are
| small?
|
| Many chains and non-small businesses have also been known
| to split off (for example, an incorporation per chain
| location, franchise location, or per physical building) -
| then that one national fast food chain or REIT building is
| now a "small business" with only a few employees?
| leetcrew wrote:
| locally owned businesses are arguably better for a
| community because the owner is more likely to recirculate
| their profits back through the local economy. the profits
| from a walmart location are ultimately captured by the
| shareholders, who may be disproportionately concentrated
| in some far-away place. of course, this can be outweighed
| if the large corporation serves the community much more
| efficiently than the smaller competition.
|
| subjectively, I find it a lot more pleasant to deal with
| local businesses. on the rare occasion I go to starbucks,
| I grab my coffee and leave immediately, but I would be
| happy to spend a few hours reading in any of the nearby
| independent coffee shops.
| credit_guy wrote:
| > maybe it means they can buy a laptop for the kids
|
| Or maybe it means they can't buy a laptop if they don't have
| a job at all.
| EduardoBautista wrote:
| I am wondering if this would convince many people to move to
| areas with lower cost of living.
| sthnblllII wrote:
| The only politically feasible alternative is increased welfare
| spending, which means a low minimum wage is just a way to have
| taxpayers cover employers' labor costs.
|
| https://www.realclearpolitics.com/video/2014/02/13/ron_unz_h...
| Spivak wrote:
| I think a more politically feasible alternative is a corporate
| welfare program where companies apply to have the government
| step in and just pay a portion of worker's wages.
|
| I don't like it but I think it would be something that would
| actually manage to pass with some amount of bipartisan support.
| The market still sorta-kinda allocates the labor, incentives
| for employer and employee are aligned, and as part of the
| program they would could implement some form of corporate
| austerity to audit spending so companies couldn't just walk
| away with the cash.
| crooked-v wrote:
| See, for example, how Wal-Mart has the single largest
| collection of workers who get food stamps in the US.
| pchristensen wrote:
| Not defending Wal-Mart's labor practices, but there are
| probably very, very many companies where they have the single
| largest collection of workers who $INSERT_CONDITION_HERE.
| Ekaros wrote:
| I would actually say that it is the opposite... As there is
| few very large employers. Wal-mart being largest one of
| them. Companies employing lot of people also has largest
| collection of workers with $INSERT_CONDITION_HERE.
|
| Not that the whole sector couldn't do better. Wal-Mart just
| having that statistic because they employ the most.
| kennywinker wrote:
| This is a puzzling comment. Yes, you can probably find a
| unique characteristic among various groups... but this
| specific value of $INSERT_CONDITION_HERE is relevant to the
| discussion, and probably a negative force in our society.
| Seems like you're trying to dismiss it for some reason?
| marshmellman wrote:
| Or a high minimum wage is a way to have employers cover the
| government's welfare costs?
|
| Who really should front the bill for low earners to live above
| poverty, and why?
| kennywinker wrote:
| If you are getting a significant chunk of someone's time and
| labor, but not paying them enough to live well, that seems
| like the definition of exploitation. If you can't pay a
| living wage, your company should go out of business - it's
| not helping society, and it's sucking up air that could be
| used by other companies that CAN pay their workers a livable
| wage.
|
| Specifically in the case of walmart, they CAN pay their
| employees a living wage. They drain about 6-7 billion from
| taxpayers (1) by way of workers on assistance. From 2006-2020
| walmart has made over 10 billion/year every year except two
| (9ish billion and 6ish billion) (2)
|
| (1) https://www.forbes.com/sites/clareoconnor/2014/04/15/repo
| rt-...
|
| (2)
| https://www.macrotrends.net/stocks/charts/WMT/walmart/net-
| in...
| afinlayson wrote:
| Without a minimum wage, some jobs would pay effectively zero.
|
| You see that with waiters, who get paid below minimum wage, and
| are expected to make tips, the issue is if there's no customers
| because of a pandemic, they are now making no income.
| _ah wrote:
| The direct effect of the minimum wage is to make certain low-
| productivity jobs _illegal_. Consider that for a moment: a person
| with limited skills and /or needs is simply _prohibited_ from
| doing low-productivity work regardless of desire.
|
| The counter-argument is that many workers do not have a choice;
| they will always accept wages vs nothing, but have no power or
| ability to negotiate.
|
| With a minimum wage we've made the decision as a society that, in
| order to prevent worker exploitation, we will also eliminate
| certain classes of work. Some of this work does vanish entirely,
| while some of it reappears in the shadow economy through
| untracked cash payments or self-employment.
|
| As with all policy decisions there's a messy balance here and
| we're arguing mostly over where the line falls. I do wish there
| was a cleaner way to protect against monopsony (higher minimum
| wages) while also providing good opportunities for low-skill
| workers (those who are very young, very old, have physical or
| mental impairments, etc).
| anigbrowl wrote:
| No they're not. Employers are prohibited from paying them below
| a certain amount. No employee can be or ever has been
| prosecuted/sued for accepting sub-minimum wage.
|
| I realize you're trying to say minimum wages limit economic
| opportunity for ad-hoc and casual labor that the poorest rely
| on. But you've fatally damaged your argument by presenting it
| in an untruthful way.
| saas_sam wrote:
| Can you locate for the audience where the poster you are
| responding to said anything to the effect of "employees can
| be prosecuted/sued for accepting sub-minimum wage"? I read
| his/her post a few times and do not see where that was
| stated. On the contrary, I see where he or she said that
| certain _jobs_ were illegal. Your point about who gets
| prosecuted or sued comes across as a total non-sequitur, at
| least to this reader! A very anti-charitable one at that with
| an aftertaste of moral grandstanding.
| mdoms wrote:
| > The direct effect of the minimum wage is to make certain low-
| productivity jobs illegal. Consider that for a moment: a person
| with limited skills and/or needs is simply prohibited from
| doing low-productivity work regardless of desire.
|
| Has this ever been shown to be the case? Use real data or case
| studies.
| _ah wrote:
| Walmart eliminated all greeters last year.
| mdoms wrote:
| Was there a corresponding increase in minimum wage?
| fragsworth wrote:
| No, but I don't think that makes the point any less
| relevant.
| mdoms wrote:
| Well either the greeters became more expensive or their
| utility dropped, if we're taking a simplistic market-
| based approach. So which is it?
| pwinnski wrote:
| And yet this year I see people standing outside the front
| door with a box of masks, ensuring everyone is masked
| before entering, and greeting people at the same time.
| fragsworth wrote:
| The fact that they were hired back during a pandemic
| isn't a good counter-argument, greeters obviously add
| very small value to the company under normal
| circumstances.
| flyingfences wrote:
| McDonalds locations now have replaced most of their cashiers
| with touchscreens.
| mdoms wrote:
| Did this happen in response to minimum wage?
| fragsworth wrote:
| Yes, because if there were no minimum wage, they would
| simply pay employees less and forget about the
| touchscreens.
| mdoms wrote:
| So these touch screens are not being introduced in
| countries with low or no minimum wage?
| smileysteve wrote:
| This is incorrect; There were multiple steps of
| acceptance of the touchscreens including order accuracy,
| expediency, and customer interaction.
|
| If McDonalds could pay less, not train employees, have
| them touch buttons accurately, and customers enjoyed
| interacting with those people; then, and only then is
| what you have said close to truthful.
|
| What you have proposed is that the internet wouldn't send
| electronic bits if we just paid mail carriers more.
| kennywinker wrote:
| minimum wage in the usa has been largely static or
| declining since 1968, if you control for inflation (1).
| Given that, it seems like the thing driving the mcdonalds
| cashier job losses are not minimum wage laws, but rather
| technology and probably the economic pressure to maximize
| shareholder value caused by the stock market.
|
| (1) https://en.wikipedia.org/wiki/Minimum_wage_in_the_Unite
| d_Sta...)
| abstractbarista wrote:
| Back-breaking farm work is done largely by humans who are
| present in the country illegally.
| mdoms wrote:
| So the fields would be left fallow if governments enforced
| their laws properly?
| klmadfejno wrote:
| I don't think that's a reasonable point of view. Most minimum
| wage jobs are not productivity jobs, but jobs that need to get
| done by someone but require no special skills. That is, you
| can't easily define the value of the sanitation worker who
| keeps a restaurant clean enough to pass health standards. You
| just observe that there's enough people willing to do it that
| you can offer a low wage.
|
| What jobs are being made illegal?
| nickff wrote:
| Many of the people employed at very low wages have attributes
| which mean that they are not worth hiring at higher costs.
| Factors such as lack of job history, attendance
| issues/unreliability, language issues, etc. mean that the
| employer will opt for a more 'attractive' candidate if there
| is a price floor.
|
| As an example, if you are looking for a bottle of wine to
| accompany your Tuesday night dinner, you might opt for a low-
| cost, low-quality option, as it is adequate for your needs;
| but if there is a price floor, you will opt for a different,
| higher quality option.
|
| Price floors mean that deals below the set price are illegal.
| klmadfejno wrote:
| > any of the people employed at very low wages have
| attributes which mean that they are not worth hiring at
| higher costs.
|
| Unless the job needs to be done, which is generally the
| case among minimum wage workers. That was my point. You
| need cleaning staff, and retail workers, and what not. You
| still hire them even if they cost more. People don't have
| intrinsic prices. It's not like an old person costs exactly
| $4.32 an hour and therefore is unable to find work if the
| minimum wage is $7.25.
| nickff wrote:
| The fact that the job needs to be done does not mean that
| _the job needs to be done by the type of person currently
| doing it_. One common response to price floors is to
| change the qualifications /requirements (as in my wine
| example). The employer will hire 'over-qualified'
| candidates to perform a job which does not require their
| skills or abilities.
|
| Wine is still being 'hired' with a price floor, but it is
| a different wine, and the price floor doesn't do the low-
| quality wine producer any good. This example is actually
| derived from a time when England imposed a flat tax on
| French wines.
| _ah wrote:
| Sanitation workers may be low-skill but they are high-value.
| I don't think this is a good example.
|
| In contrast, a friend of mine recently hired the teenager
| next door with cash (for less than the local minimums) to do
| some manual yard labor. This job simply wasn't worth paying
| for at a higher cost; my friend would have left the work un-
| done. But in this case the value proposition at a lower price
| was acceptable and the neighbor was glad for the extra cash.
| klmadfejno wrote:
| Well sanitation workers make up a fairly large fraction of
| the minimum wage workers so that's a representative group
| of people for the matter at hand.
|
| You're not wrong that unnecessary private exchanges like
| that might be lost, but those are unnecessary, not that
| noteworthy in terms of economic scale, and generally aren't
| relevant to minimum wage laws anyway. My point is precisely
| that most of the labor that is priced at minimum wage is
| not like the example you describe.
| abstractbarista wrote:
| All jobs are productivity jobs. It is the definition of a
| job. You are paid to accomplish some process. To be
| productive. Some non-zero skill is always needed. Cleaning
| surfaces in a restaurant happens to be fairly low-skill.
| There is a high supply of humans who can produce the result -
| a clean restaurant. Thus, the wage commonly paid for this job
| is (compared to higher-skilled jobs) quite low.
| aidenn0 wrote:
| You make low-productivity jobs illegal while also raising the
| wages for low-skill high-productivity jobs. Worker productivity
| in the US has gone through the roof while real wages have
| stagnated. Combined with the (at least pre-pandemic) low
| unemployment rates, it seems likely that most minimum wage
| workers are in jobs that would not be eliminated by raising the
| minimum wage.
| hpoe wrote:
| One thing I found was interesting
|
| > The effects of a wage floor can also be felt outside low-pay
| sectors. A preliminary study in 2019 of the impact of Germany's
| minimum wage found it led to more reallocation of workers from
| smaller, lower-paying firms to larger, higher-paying ones.
|
| Is it possible that although the change in overall employment was
| muted smaller shops were closed up and their work simply
| transferred to larger ones better able to expend the capital?
| supernova87a wrote:
| A most frustrating thing about many kinds of protectionist
| economic policies is that frequently the people who would benefit
| from the opposite policy aren't allowed to vote to count the
| value of it.
|
| The people who would get hired if you didn't put this policy in
| place are the ones who don't get to vote against it.
|
| The people who would be able to afford to live in a city that has
| rent control, don't get to vote against it.
|
| It's not until you have some external shock that shows you how
| much this little island of protectionist policy has cost you that
| you realize what it did. And in the meantime you've favored and
| built up a system that is that much less resilient to whatever
| new problems you face.
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