7 ms·

The minimum wage is an effort to increase the welfare of those whose skills are in excess supply. Economics is complicated and far from reliable. The idea that

by acover 9y ago

The minimum wage is an effort to increase the welfare of those whose skills are in excess supply. Economics is complicated and far from reliable. The idea that removing the minimum wage would result in full employment is ridiculous. It would make businesses richer and subject millions of people to worse poverty. There is open debate that the minimum wage even reduces employment [1]. [1] - https://en.wikipedia.org/wiki/Minimum_wage https://en.wikipedia.org/wiki/Minimum_wage

malandrew 9y ago
If you don't address other costs, rising minimum wages can end up putting employers out of business. Now you have a decline in the supply of minimum wage jobs. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2951110 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2951110
- acover 9y ago
  I'm not being precise. I do not have the expertise to debate this. When I talk about the minimum wage, what really matters is what that income can buy you. Rather than discussing nominal wage and associated costs let's just combine them and talk about real wages. Clearly there is a point where a higher minimum wage (real) is infeasible and detrimental. In my opinion there is a wide range of minimum wages (real) that raise the welfare of those whose skill is in excess supply.
ThrustVectoring 9y ago
>The minimum wage is an effort to increase the welfare of those whose skills are in excess supply. It's an inefficient one. We can do a better job at improving their welfare at a lower overall cost.` >The idea that removing the minimum wage would result in full employment is ridiculous. I'm not arguing that at all. >It would make businesses richer and subject millions of people to worse poverty. So combine abolishing the minimum wage with a complimentary policy that makes businesses poorer and alleviate the poverty of millions. A minimum wage is not the only way to make employers pay to alleviate the poverty of the working poor.
- Frondo 9y ago
  "It's an inefficient one. We can do a better job at improving their welfare at a lower overall cost." So show us anywhere in the Western world that does that; improves the welfare of the poor without a minimum wage. But show us with evidence from other countries that are currently employing the system, don't defer to untested and unproven "it could be so if..." claims, please.
  - deleted 9y ago
    [deleted]
  - ptr 9y ago
    Technically, Sweden doesn't have a minimum wage. Some unions negotiate salary centrally for their members though.
    - jpttsn 9y ago
      Centrally is an understatement. There is legislation that binds non-union members at non-union workplaces to union agreements.
      - kwhitefoot 9y ago
        It's essentially the same here in Norway and so far the system is working reasonably well. It does mean that my job as a software developer doesn't pay as well as it might in the US but on the other hand I have a lot more security; I can't be fired without cause, notice periods are six months after working for the company for ten years, etc., redundancy compensation is generally reasonable, and so on.
        jpttsn 9y ago
        Compared to the US, I think there might be a shortage of truly affluent individuals. Are there angel investors in Norway, that can give a new startup a chance?
Mz 9y ago
The minimum wage is an effort to increase the welfare of those whose skills are in excess supply. No, that is entirely unrelated to why it was created. It was created because The Deep South was unwilling to pay a black man "a white man's wages" and blacks were routinely paid about half what whites made for the exact same job. The policy was initially a failure. Businesses in the South fired blacks en masse rather than pay a black man the same as a white. This did not change until WW2 caused very serious labor shortages. Minimum wage was an antiracism policy aimed at forcing the Deep South to get more in line with the rest of the nation and stop having Jim Crow bullshit linger on in the form of literally paying blacks half as much as whites. It was intended to put a stop to that practice. Whatever they do with it now for REASONS, the original federal minimum wage law was passed for the above reason.
- vacri 9y ago
  How Deep South are we talking? The first and second nations in the world to introduce minimum wage laws (New Zealand and Australia, both are pretty South) weren't ever slave states, about 40 years before the US caught on. It was introduced for welfare reasons - to ensure people had a living wage. A few other places had minimum wage before the US as well.
- acover 9y ago
  Ah, TIL. I'm not American though. Minimum wage isn't just an American policy.
- danblick 9y ago
  > Minimum wage was an antiracism policy aimed at forcing the Deep South Could you offer some support for this claim? There is a recent book called "Illiberal Reformers" that seems to suggest exactly the opposite: that minimum wage policies were put in place with the intent of putting minorities out of work (rather than raising their standard of living). See some of the quotations here: http://www.econtalk.org/archives/2016/12/thomas_leonard.html http://www.econtalk.org/archives/2016/12/thomas_leonard.html """ The low-standard or undercutting-of-wages part of the theory, got its start with the violent activism of white Americans against Chinese immigrant workers. The title of a pamphlet published by the American Federation of Labor trenchantly captured the heart of the claim: Meat versus Rice: American Manhood against Asiatic Coolieism, Which Shall Survive? If wages were determined by living standards rather than by productivity, then the meat-eating Anglo-Saxon could not compete with the Chinese worker accustomed to eating rice. Professor Woodrow Wilson, in his popular History of the American People, preferred the same theory of low-standard races undercutting American wages, adding a fillip of racism to cement the notion that race explained the low standards. White laborers, unable to "live upon a handful of rice for a pittance," could not compete with the Chinese, "who with their yellow skin and strange debasing habits of life seemed to them hardly fellow men at all but evil spirits, rather." """

by acover 9y ago

malandrew 9y ago

If you don't address other costs, rising minimum wages can end up putting employers out of business. Now you have a decline in the supply of minimum wage jobs. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2951110 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2951110

acover 9y ago
I'm not being precise. I do not have the expertise to debate this. When I talk about the minimum wage, what really matters is what that income can buy you. Rather than discussing nominal wage and associated costs let's just combine them and talk about real wages. Clearly there is a point where a higher minimum wage (real) is infeasible and detrimental. In my opinion there is a wide range of minimum wages (real) that raise the welfare of those whose skill is in excess supply.

ThrustVectoring 9y ago

>The minimum wage is an effort to increase the welfare of those whose skills are in excess supply. It's an inefficient one. We can do a better job at improving their welfare at a lower overall cost.` >The idea that removing the minimum wage would result in full employment is ridiculous. I'm not arguing that at all. >It would make businesses richer and subject millions of people to worse poverty. So combine abolishing the minimum wage with a complimentary policy that makes businesses poorer and alleviate the poverty of millions. A minimum wage is not the only way to make employers pay to alleviate the poverty of the working poor.

Frondo 9y ago
"It's an inefficient one. We can do a better job at improving their welfare at a lower overall cost." So show us anywhere in the Western world that does that; improves the welfare of the poor without a minimum wage. But show us with evidence from other countries that are currently employing the system, don't defer to untested and unproven "it could be so if..." claims, please.
- deleted 9y ago
  [deleted]
- ptr 9y ago
  Technically, Sweden doesn't have a minimum wage. Some unions negotiate salary centrally for their members though.
  - jpttsn 9y ago
    Centrally is an understatement. There is legislation that binds non-union members at non-union workplaces to union agreements.
    - kwhitefoot 9y ago
      It's essentially the same here in Norway and so far the system is working reasonably well. It does mean that my job as a software developer doesn't pay as well as it might in the US but on the other hand I have a lot more security; I can't be fired without cause, notice periods are six months after working for the company for ten years, etc., redundancy compensation is generally reasonable, and so on.
      - jpttsn 9y ago
        Compared to the US, I think there might be a shortage of truly affluent individuals. Are there angel investors in Norway, that can give a new startup a chance?

Mz 9y ago

The minimum wage is an effort to increase the welfare of those whose skills are in excess supply. No, that is entirely unrelated to why it was created. It was created because The Deep South was unwilling to pay a black man "a white man's wages" and blacks were routinely paid about half what whites made for the exact same job. The policy was initially a failure. Businesses in the South fired blacks en masse rather than pay a black man the same as a white. This did not change until WW2 caused very serious labor shortages. Minimum wage was an antiracism policy aimed at forcing the Deep South to get more in line with the rest of the nation and stop having Jim Crow bullshit linger on in the form of literally paying blacks half as much as whites. It was intended to put a stop to that practice. Whatever they do with it now for REASONS, the original federal minimum wage law was passed for the above reason.

vacri 9y ago
How Deep South are we talking? The first and second nations in the world to introduce minimum wage laws (New Zealand and Australia, both are pretty South) weren't ever slave states, about 40 years before the US caught on. It was introduced for welfare reasons - to ensure people had a living wage. A few other places had minimum wage before the US as well.
acover 9y ago
Ah, TIL. I'm not American though. Minimum wage isn't just an American policy.
danblick 9y ago
> Minimum wage was an antiracism policy aimed at forcing the Deep South Could you offer some support for this claim? There is a recent book called "Illiberal Reformers" that seems to suggest exactly the opposite: that minimum wage policies were put in place with the intent of putting minorities out of work (rather than raising their standard of living). See some of the quotations here: http://www.econtalk.org/archives/2016/12/thomas_leonard.html http://www.econtalk.org/archives/2016/12/thomas_leonard.html """ The low-standard or undercutting-of-wages part of the theory, got its start with the violent activism of white Americans against Chinese immigrant workers. The title of a pamphlet published by the American Federation of Labor trenchantly captured the heart of the claim: Meat versus Rice: American Manhood against Asiatic Coolieism, Which Shall Survive? If wages were determined by living standards rather than by productivity, then the meat-eating Anglo-Saxon could not compete with the Chinese worker accustomed to eating rice. Professor Woodrow Wilson, in his popular History of the American People, preferred the same theory of low-standard races undercutting American wages, adding a fillip of racism to cement the notion that race explained the low standards. White laborers, unable to "live upon a handful of rice for a pittance," could not compete with the Chinese, "who with their yellow skin and strange debasing habits of life seemed to them hardly fellow men at all but evil spirits, rather." """