5 ms·

You seem to have missed the point of the article. The $15 minimum wage will most likely help the precariat. This is a good thing. But it will do little if an

by labster 10y ago

You seem to have missed the point of the article. The $15 minimum wage will most likely help the precariat. This is a good thing. But it will do little if anything to help the unnecessariat. > ... no matter how tenuous, the precariat had jobs. The new dying Americans, the ones killing themselves on purpose or with drugs, don’t. Don’t, won’t, and know it. Overtime and wage increases are not going to help people who don't have jobs, and can't be trained for high paying jobs. UBI might help them, but might have some other unbeneficial social effects. And maybe if we invent Soma we could give people a safe way to escape a crushing reality. But the gist here is that for a certain underclass, things are not improving, and no solutions are being offered. No one even cares that these people are dying, no community is organized around helping them. Nothing. It's bad enough to make one want to take heroin. So vote Trump! If you can't save the world, better to watch it burn. Fire walk with me.

seizethecheese 10y ago
> But it will do little if anything to help the unnecessariat. A higher minimum wage will most likely hurt the unnecessariat. One way to think of a $15 minimum wage is a prohibition on anyone who's labor is worth less than $15/hr from working. Not only will it make the current unecessariat's situation worse, it will likely expand it's ranks.
- mwcampbell 10y ago
  Makes me wonder if we should eliminate the minimum wage altogether.
  - labster 10y ago
    We should. And replace it with universal basic income. Also: GP makes an excellent point, which I should have thought of myself.
    - dredmorbius 10y ago
      Replacing minimum wage with UBI shifts employment subsidies to the same firms which are now pressing their workers to apply for welfare benefits whilst pocketing massive profits, including the wealthiest family in the US, the Waltons, of WalMart. Another model is UBI and government as employer of last resort (or a equivalent strong labour movement). If there is an employer who can absorb all applicants at a minimum wage, then the market floor is pushed up. Remember, a living wage is the minimum all-in cost of labour. If you're operating a business which cannot afford to pay a worker what they need to survive, you're not operating a business, you're operating a charity supported by your workforce (or social welfare systems). If you can and fail to, you're simply pocketing profits from the public purse. This is straight-up Adam Smith: "A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more, otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation." https://ello.co/dredmorbius/post/29ecw4nrl7ap2fu4chnjsw https://ello.co/dredmorbius/post/29ecw4nrl7ap2fu4chnjsw
      - sokoloff 10y ago
        > If you're operating a business which cannot afford to pay a worker what they need to survive, you're not operating a business, you're operating a charity supported by your workforce (or social welfare systems). Likewise, if you are a working-age individual who is only capable of creating value at a rate less the minimum wage, you aren't looking for a job, you're looking for charity dressed up like a job. (That's fine as a social policy, but when that charity is expected to come private sources, it's a very unstable employer/employee relationship. The minute affordable automation comes along or the business revenues take a dip, such charity cases will be the first to be let go or have their hours cut, because they're fundamentally unprofitable in the normal condition.)
        dredmorbius 10y ago
        I'd strongly suggest reading Smith on that. I'd also inquire as to: 1. Who or what the economy is supposed to be for, anyway. 2. What the situation is when it's not trivially possible to create increased value through exploitation of labour. That speaks to some problems with the production function. 3. The possibility of positive externalities and/or public goods (also of negative externalities and rent-seeking). 4. The relationships between wealth and political or negotiating power. I'll give you a hint on that last. "Wealth, as Mr Hobbes says, is power." Smith again.
- jjoonathan 10y ago
  Elasticity in the US labor market is much closer to 0 than -1. Not only has this been studied, it's been studied enough that we can do pretty solid meta-studies to find bias is the studies: http://cepr.net/blogs/cepr-blog/studying-the-studies-on-the-minimum-wage http://cepr.net/blogs/cepr-blog/studying-the-studies-on-the-... I wouldn't advocate a jump straight to a $15 minimum wage because for sufficiently large MW jumps the elasticity has to start heading for -1 (and beyond -- that's just the break even point) and we only have good information for small changes. But for small changes the evidence is unambiguous. The traditional narrative taught in Econ 101 is an oversimplification. It's not hard to figure out why: markets set the actual price of labor between the producer price (minimum people will work for) and consumer price (value to the employer) based on bargaining power. If employers are winning at the bargaining power game, wages will be close to the minimum. If employees are winning, wages will be close to the maximum. Only those earning wages already close to the maximum will be affected by a minimum wage increase. Since the unskilled labor market is flooded, approximately everyone is on the "minimum" side of the spectrum. Both theory and evidence say that small MW increases are boons to laborers under these conditions. As machines advance and begin push humans out of the market, the maximum side of the spectrum will begin to drift downwards and impinge on all the people crunched up against the minimum side, squeezing them out of the market and into "unnecessariat" status. Minimum wage will become an ineffective tool at that point, just as you say. But we aren't there yet.
  - todd8 10y ago
    > Not only has this been studied, it's been studied enough that we can do pretty solid meta-studies to find bias is the studies. The cited blog is by the CEPR, a leftist/progressive think-tank, this doesn't make their conclusion wrong, however, my reading of the graph present on the blog looks more like there is a negative elasticity, with respect to the demand for labor at higher wages, indicated by the meta-study. The graph looks like it might be as large as -0.1, suggesting that doubling of the minimum wage could have a noticeable negative impact on employment. Not all studies show that happening, but a greater number do.
- conjectures 10y ago
  Ludicrous. This is the same kind of simplistic ideological fantasy as to think we're always on the RHS of the Laffer curve.
deleted 10y ago
[deleted]
robotresearcher 10y ago
> Overtime and wage increases are not going to help people who don't have jobs Did you miss this bit, or do you not believe it? >> Goldman Sachs says this will add 100,000 jobs, as employers try to avoid paying time and a half for overtime.[2]
- labster 10y ago
  It will create jobs but not increase wealth at lower levels. Obviously not, because the whole reason companies do it is to avoid paying more to workers. It will just create more situations where people need to work two jobs, without the benefit of being paid overtime. Still no benefit to a man in his mid 50s looking for a low-skill job, because the job he was trained in doesn't exist now. TL;DR yes, I don't believe it.
  - lmm 10y ago
    > It will create jobs but not increase wealth at lower levels. Obviously not, because the whole reason companies do it is to avoid paying more to workers. It will increase wealth because the companies will still be paying more than they are today - if two 40-hour workers were cheaper than one 80-hour worker today, they'd be hiring the two 40-hour workers already. Additionally going from one unemployed person and one person with an 80-hour job to two people with 40-hour jobs is probably a win, even if there were no extra money.
    - falcolas 10y ago
      Probably cheaper to get 3 26.? hour employees and avoid full-time benefits like insurance and retirement. They can get those through welfare, after all. /s

by labster 10y ago

seizethecheese 10y ago

> But it will do little if anything to help the unnecessariat. A higher minimum wage will most likely hurt the unnecessariat. One way to think of a $15 minimum wage is a prohibition on anyone who's labor is worth less than $15/hr from working. Not only will it make the current unecessariat's situation worse, it will likely expand it's ranks.

mwcampbell 10y ago
Makes me wonder if we should eliminate the minimum wage altogether.
- labster 10y ago
  We should. And replace it with universal basic income. Also: GP makes an excellent point, which I should have thought of myself.
  - dredmorbius 10y ago
    Replacing minimum wage with UBI shifts employment subsidies to the same firms which are now pressing their workers to apply for welfare benefits whilst pocketing massive profits, including the wealthiest family in the US, the Waltons, of WalMart. Another model is UBI and government as employer of last resort (or a equivalent strong labour movement). If there is an employer who can absorb all applicants at a minimum wage, then the market floor is pushed up. Remember, a living wage is the minimum all-in cost of labour. If you're operating a business which cannot afford to pay a worker what they need to survive, you're not operating a business, you're operating a charity supported by your workforce (or social welfare systems). If you can and fail to, you're simply pocketing profits from the public purse. This is straight-up Adam Smith: "A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more, otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation." https://ello.co/dredmorbius/post/29ecw4nrl7ap2fu4chnjsw https://ello.co/dredmorbius/post/29ecw4nrl7ap2fu4chnjsw
    - sokoloff 10y ago
      > If you're operating a business which cannot afford to pay a worker what they need to survive, you're not operating a business, you're operating a charity supported by your workforce (or social welfare systems). Likewise, if you are a working-age individual who is only capable of creating value at a rate less the minimum wage, you aren't looking for a job, you're looking for charity dressed up like a job. (That's fine as a social policy, but when that charity is expected to come private sources, it's a very unstable employer/employee relationship. The minute affordable automation comes along or the business revenues take a dip, such charity cases will be the first to be let go or have their hours cut, because they're fundamentally unprofitable in the normal condition.)
      - dredmorbius 10y ago
        I'd strongly suggest reading Smith on that. I'd also inquire as to: 1. Who or what the economy is supposed to be for, anyway. 2. What the situation is when it's not trivially possible to create increased value through exploitation of labour. That speaks to some problems with the production function. 3. The possibility of positive externalities and/or public goods (also of negative externalities and rent-seeking). 4. The relationships between wealth and political or negotiating power. I'll give you a hint on that last. "Wealth, as Mr Hobbes says, is power." Smith again.
jjoonathan 10y ago
Elasticity in the US labor market is much closer to 0 than -1. Not only has this been studied, it's been studied enough that we can do pretty solid meta-studies to find bias is the studies: http://cepr.net/blogs/cepr-blog/studying-the-studies-on-the-minimum-wage http://cepr.net/blogs/cepr-blog/studying-the-studies-on-the-... I wouldn't advocate a jump straight to a $15 minimum wage because for sufficiently large MW jumps the elasticity has to start heading for -1 (and beyond -- that's just the break even point) and we only have good information for small changes. But for small changes the evidence is unambiguous. The traditional narrative taught in Econ 101 is an oversimplification. It's not hard to figure out why: markets set the actual price of labor between the producer price (minimum people will work for) and consumer price (value to the employer) based on bargaining power. If employers are winning at the bargaining power game, wages will be close to the minimum. If employees are winning, wages will be close to the maximum. Only those earning wages already close to the maximum will be affected by a minimum wage increase. Since the unskilled labor market is flooded, approximately everyone is on the "minimum" side of the spectrum. Both theory and evidence say that small MW increases are boons to laborers under these conditions. As machines advance and begin push humans out of the market, the maximum side of the spectrum will begin to drift downwards and impinge on all the people crunched up against the minimum side, squeezing them out of the market and into "unnecessariat" status. Minimum wage will become an ineffective tool at that point, just as you say. But we aren't there yet.
- todd8 10y ago
  > Not only has this been studied, it's been studied enough that we can do pretty solid meta-studies to find bias is the studies. The cited blog is by the CEPR, a leftist/progressive think-tank, this doesn't make their conclusion wrong, however, my reading of the graph present on the blog looks more like there is a negative elasticity, with respect to the demand for labor at higher wages, indicated by the meta-study. The graph looks like it might be as large as -0.1, suggesting that doubling of the minimum wage could have a noticeable negative impact on employment. Not all studies show that happening, but a greater number do.
conjectures 10y ago
Ludicrous. This is the same kind of simplistic ideological fantasy as to think we're always on the RHS of the Laffer curve.

deleted 10y ago

[deleted]

robotresearcher 10y ago

> Overtime and wage increases are not going to help people who don't have jobs Did you miss this bit, or do you not believe it? >> Goldman Sachs says this will add 100,000 jobs, as employers try to avoid paying time and a half for overtime.[2]

labster 10y ago
It will create jobs but not increase wealth at lower levels. Obviously not, because the whole reason companies do it is to avoid paying more to workers. It will just create more situations where people need to work two jobs, without the benefit of being paid overtime. Still no benefit to a man in his mid 50s looking for a low-skill job, because the job he was trained in doesn't exist now. TL;DR yes, I don't believe it.
- lmm 10y ago
  > It will create jobs but not increase wealth at lower levels. Obviously not, because the whole reason companies do it is to avoid paying more to workers. It will increase wealth because the companies will still be paying more than they are today - if two 40-hour workers were cheaper than one 80-hour worker today, they'd be hiring the two 40-hour workers already. Additionally going from one unemployed person and one person with an 80-hour job to two people with 40-hour jobs is probably a win, even if there were no extra money.
  - falcolas 10y ago
    Probably cheaper to get 3 26.? hour employees and avoid full-time benefits like insurance and retirement. They can get those through welfare, after all. /s