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> The main drawback to a minimum wage is that it artificially increases the cost of labor, And? Why is that artificial increase a problem. Every law on the boo

• uxp100 11y ago
  If you read precisely past the point where you stopped quoting, you see their reasoning why this bad, the answer to your "And?" Whether or not you agree with that answer, shouldn't that answer be the part you respond to, instead of deliberately misrepresenting what the poster you were responding to was saying?
  • a3n 11y ago
    My objection was to the word "artificial," (which is why I didn't quote further) as if mandating a minimum wage is somehow different from everything else we do with the economy. The "natural" economy doesn't exist, except insofar as the adjusted economy we have is the natural economy. Making changes from what is to what someone wants is entirely normal.
    • kough 11y ago
      Well congratulations, you found a nit to pick.
• ryanmonroe 11y ago
  Read the rest of the sentence >it's no longer worth it to an employer to hire a low-output employee
• alttab 11y ago
  The mortgage interest deduction "hurts" only government tax revenues. Raising the tide on minimum wage impacts every business that has employees, regardless of what their cost structure is. What if your business worked in such a way that a single employee wouldn't even produce $15 of revenue in an hour? You can't lose money on every sale and make up for it in volume. The artificial increase is a problem because it goes against supply and demand, which is a natural law of economics.
  • spankalee 11y ago
    The mortgage interest deduction disadvantages renters compared to owners. Subsidizing home ownership effectively taxes renting.
    • alttab 11y ago
      Disagree. I've owned 3 homes and my mortgage interest deduction made no difference on whether or not I purchased. The difference between renting and owning is income, savings rate, and lifestyle. If you can't afford to buy, you either don't make enough or don't save enough. It's the down payment that separates a lot of renters and buyers. If you are arguing homes are expensive, I'd argue that $15 minimum wage isn't helping. Mortgage interest deductions may be bad policy, but it doesn't "tax renting." That's asinine.
      • msellout 11y ago
        It changed the amount you paid.
        • alttab 11y ago
          Either you're wrong, or I'm about to learn something. Explain?
          • sokoloff 11y ago
            You probably paid a higher purchase price, because even if you couldn't take the mortgage interest deduction (for whatever reason, maybe you paid all cash), you are still competing against other buyers, most of whom could take the deduction. That deduction saves them money, meaning they're willing to pay a higher price than they would if they couldn't take a mortgage interest deduction. That those other buyers are willing to pay a higher price affects the comparable sales, the appraisal, the "Zestimate [haha]", the willingness of the seller to select your offer, etc. Then, assuming you did have a mortgage and qualified for the deduction (most people with one home do), you paid less (net) for the loan than you would have otherwise.
• deleted 11y ago
  [deleted]
• anoonmoose 11y ago
  He gave the "and" in his comment- artificially increasing the cost of labor can potentially prevent people whose contribution is worth less than that cost from ever entering the market.
• harryh 11y ago
  The majority of economists (as well as many other people) think that the mortgage interest deduction is bad policy.
• p4wnc6 11y ago
  It is a problem if all of the would-be employers look at you and say, "Well, for what you bring to the table, I would be willing to pay $3/hour, but no more. If I have to pay more than that, I will simply make do with life having fewer employees." You would prefer $7/hr instead of $3/hr, but you would prefer $3/hr instead of $0/hr.
  • alttab 11y ago
    $0 an hour is life's true minimum wage.
  • dvtv75 11y ago
    My employer, who hired me for my degree, told me that he was willing to pay me for 40 hours. I later found out that it was a requirement that I work 60-80 hours a week - not written into my contract, but this particular employer has an aversion to providing contracts. This displaces up to an entire employee. Said employer also gets taxpayer funding for the employee I've displaced. I would prefer that my employer met the minimum (non-US) legal requirements for salaried employees, but the literal threats of violence and permanent unemployment should I complain to the government, have kept me on up to $5/hour less than minimum wage - without meal breaks, public holidays, and weekends - all in breach of the law. Unethical law-breaking employers abound in my country, and many of the wealthiest have political contacts that mean they can get away with a lot. Having a minimum wage gives them something to dance around but if that disappeared things would get a lot worse: I would most likely find myself working for something nearer to $5 an hour. This (small) city alone has a median wage that sits about 25% under minimum wage on paper, but if you started really looking into it you'd find that the paid hours don't match the hours worked. No matter what your theories about minimum wage and the market say, you'll find that pragmatic side of having a minimum wage has a major positive impact on employees by providing some restriction to what employers can get away with.
    • p4wnc6 11y ago
      To put things in perspective a little, my younger brother works as an inventory clerk for a company that makes custom industrial fasteners in the Midwest, US, and the working conditions you describe are actually better than his working conditions -- though I wholeheartedly agree that both of you have unfortunate working conditions and more should be done to improve the situation. If your situation is so extreme as to involve threats of violence, then it is non-negotiable that you need to remove yourself from it, even if it means facing grave and dire financial hardship. The psychological damage of an employer threatening you is worse than the damage of financial ruin or uncertainty. Also, on one hand you are claiming that minimum wage laws are beneficial, but then you're also saying that the political favoritism of your country allows those laws to be basically ignored (as in your case) with no consequence. To me, your comment is much more about ensuring legitimacy of government and enforcement of laws overall, and is very much unrelated to minimum wage at this point. Only after the enforcement of those laws is legitimized can you then begin to ask questions about what is the actual human effect of the law. Finally, I'd like to point out that I already said this type of reasoning (the argument that minimum wage denies opportunity to those who would agree to work for less) is overstated. I understand the economic rationale in the ideal case, and I was explaining that case just to clarify for the OP that I commented on ... not positing it as a robust defense or anything. Here's my other comment if interested: < https://news.ycombinator.com/item?id=11424743 https://news.ycombinator.com/item?id=11424743 >.
• savanaly 11y ago
  I usually really, really hate when people trot out the "go back to econ 101" argument, but in this case it applies. The reasons why a minimum wage might be inefficient (to what degree is very much debatable and dependent on the cirumstances) are explained thoroughly in any introductory microeconomics educational resource.
  • maxerickson 11y ago
    Sometimes econ 101 is macro. I feel like a lot of the people who think economics is all terrible nonsense start off with macroeconomics (and maybe never get to microeconomics because of it).
  • thescriptkiddie 11y ago
    The ECON 101 argument regarding minimum wage and deadweight loss gets a lot less convincing when get to ECON 110 and start learning that the real world is a lot more complicated than two roughly-perpendicular curves. In real life, labor markets have very inelastic supply, which means that the deadweight loss is small and comes almost entirely from consumer (in this case, employer) side. In most cases this is a net gain for workers. Of course, all of this goes out the window if the minimum wage is non-binding (as it is in most of the US), in which case there is actually zero deadweight loss. Basic income is far superior to minimum wage for meany reasons, but "minimum wage doesn't work" isn't one of them.
• merpnderp 11y ago
  And? It keeps people who want to work from working. People who would be willing to work at less than the minimum wage. Subsiding on government relief can lead to depression, loss of social status, load term mental illness. Not having a job is a very unhealthy thing for most people.
  • jack9 11y ago
    > It keeps people who want to work from working. That doesn't mean the work (the individual is capable of) is valuable enough to justify the position, in the locality.
    • occamrazor 11y ago
      But what are the alternatives, for the people whose productivity is lower than minimum wage?
  • justizin 11y ago
    There are people willing to do valuable work for less than the minimum wage - they're called volunteers. A lot of work done by volunteers is more important than work done by minimum wage workers, but involves no commerce. A basic income provides the opportunity for people to find healthy, fulfilling things that do not pay money. I'm absolutely OK with some types of paid work going away entirely. Our society leans too heavily on the ability to pay someone else to do something at a rate that is usually more than we would like to pay and less than we would like to make. It is essentially a way of saying that we are more important than other people and that's lame. Food delivery, for instance, is convenient, I take advantage of it, but I tip far more heavily than most people, and I could live without it. Some people who deliver for a pay service today may end up, with basic income, volunteering for meals on wheels. That's a better allocation of society's potential energy than to bring me a burrito when I don't feel like leaving the house.
  • a3n 11y ago
    And the mortgage deduction makes a house a better investment, and so increases the price of buying and renting houses. These are all tradeoffs that we decide to make.
• jackcn 11y ago
  Actually, mortgage interest deduction was considered to be limited to only 1 home. It causes higher demand than without, which helps to drive house prices up, and at this point, out of reach of many in some cities. Same with the availability of cheap loans and grants for colleges - it only really serves to increase the price of an education.
• EGreg 11y ago
  It makes people who got a bad education unemployable and perpetuates their culture of dependency on welfare. Conditional welfare perpetuates it also because people are afraid to take a job and then lose it.
• maxerickson 11y ago
  I bitch about the mortgage interest deduction on a regular basis. A national policy that drives up housing prices is plain stupid (and it obviously isn't helping the ~1/2 of the country that doesn't have any wealth build wealth). I'm ambivalent about a minimum wage. I think the arguments about the imbalance in negotiating power have some merits, but the GP answered your question about why it is a problem with their next sentence, it likely makes some productive tasks uneconomic. I think it's important to try to characterize the actual economic impact of a minimum wage though, just pointing to the expected negative marginal effect isn't a very useful argument.
• lujim 11y ago
  And borders are just imaginary lines. They are however a based around the underlying reality of geographical, cultural, and political factors. We could make a law that all airplanes must slow down to 50 miles per hour over crowed areas but that doesn't matter if most planes can't fly any slower than 120mph without falling out of the sky. Laws do have to take into account things like physics and economics. The latter is the study of scarce resources that have alternative uses and specifically addresses things like the cost of labor and the affect of artificially manipulating it.
  • dv_dt 11y ago
    Economics has no particular respect for human self-sufficiency. If businesses can operate with employees just above starvation wages then all sorts of technologically feasible efficiencies are skipped while human suffering is prolonged. From a practical standpoint, it feels like for a time that capitalism seeking local-optima was perfectly ok in that the efficiencies gained were lifting society all around - and it still seems that way in the world at large. However, in more mature economies it seems like a different discussion needs to be made because the business actions seem to be divergent from the interests of society - optimizing on the same financial metrics seems merely a shell game of keeping a larger share of the production -- to the point that there is little to no growth in value to most of society.
  • denim_chicken 11y ago
    > Laws do have to take into account things like physics and economics Economics is not even remotely similar to physics in any respect.
    • lujim 11y ago
      Where did I say they were? I called them both "things" I guess.
• tikhonj 11y ago
  Really? I read complaints about the mortgage interest deduction all the time. I mean, subsidizing home ownership isn't exactly an obviously worthy goal in and of itself and it creates weird incentives. The difference in popular discourse is threefold: the mortgage interest deduction is less of a blue/red team tribal marker; it isn't as morally charged an issue (the arguments against it are more economic in nature than moralistic); a disproportionate number of the people who would be complaining about it are homeowners themselves and therefore heavily incentivized to keep it around, regardless of its economic effect.
  • a3n 11y ago
    My statement was exaggerated. Of course people object to it. I do. But relatively speaking, if you got rid of it there'd be all but revolution. I actually prefer zero deductions for anything, for all people and entities. Here's the rate: pay it. If you're below the line we draw, you don't have to pay.
• BurningFrog 11y ago
  Because it keeps desperately poor people unemployed and outside of productive society.