6 ms·

I hate being the guy that suggests a book as part of a debate, but have you read The Grapes of Wrath? Among other things, it shows in wrenching emotional detail

I hate being the guy that suggests a book as part of a debate, but have you read The Grapes of Wrath? Among other things, it shows in wrenching emotional details what can happen without minimum wages when people are desperate. Also, do you think humans (in an economy or not) always act rationally?

mindcrime 8y ago
Also, do you think humans (in an economy or not) always act rationally? Depends on how strictly you define "rationally". If you mean "spend a month collecting data, download, install, and learn R, and run sophisticated statistical analysis on the data before making any decision", then no, clearly not. IOW, humans are not the fictional "rational agents" mentioned in economics textbooks and papers. We're not Homo Optimizicus. But if you mean "give some thought to the options based on known information, weigh the different options, outcomes and consequences, and then make the best decision", then I would say that people are generally rational. It would probably be most accurate to say that humans "are semi-rational agents that employs lots of heuristics, including satisficing[1], to make decisions that are not necessarily the best possible, but usually aren't the worst possible either". Or to put it another way, we employ "bounded rationality"[2]. [1]: https://en.wikipedia.org/wiki/Satisficing https://en.wikipedia.org/wiki/Satisficing [2]: https://en.wikipedia.org/wiki/Bounded_rationality https://en.wikipedia.org/wiki/Bounded_rationality
mindcrime 8y ago
Among other things, it shows in wrenching emotional details what can happen without minimum wages when people are desperate. I'm jobless, hungry and desperate. Minimum wage is $15.00 /hour. Given my skills and abilities, no one can justify hiring me at $15.00 / hour. I have two options: 1. Work for $8.00 / hour, which sucks balls, but at least lets me eat. 2. Not work at all for $0.00 / hour, and starve to death. I don't think it's hard to guess which option many people would pick. A high minimum wage just hurts the people at the lowest rung of the economic ladder, by knocking them completely off the ladder.
- darpa_escapee 8y ago
  I'm a business owner. There are hordes of hungry people clamoring for their 3rd, 4th and 5th jobs because Walmart will only pay out $3/hr and McDonald's won't hire above $2/hr. 1. I can hire these guys at ~$8/hr federal minimum wage. 2. I can hire these guys at $2/hr and make shareholders very happy. I don't think it's hard to guess which option many people would pick. No minimum wage just hurts the people at the lowest rung of the economic ladder, by accelerating the race to the bottom.
  - mindcrime 8y ago
    Your premises are fictional. In reality, a business can't always afford to hire someone at the minimum wage. And you can't hire an infinite number of people who are a net economic drain on your company, or you're out of business. Talk about a "race to the bottom". Your "argument" is just a caricatured strawman that has no basis in reality. If your position were an accurate reflection of reality, no company would ever pay above minimum wage. And yet that happens all the time. So maybe, just maybe, the reality is that companies pay based (in part) on the economic output the workers they are hiring...
    - soundwave106 8y ago
      However, governments these days provide a safety net to guard against poverty (because, based on Gilded Age history, the alternative is worse). Employees who are paid substandard wages often simultaneously qualify for the government safety net as well. Probably in part for this reason and others, it was Franklin Roosevelts's opinion that businesses that cannot survive unless they paid substandard wages, should not be allowed to exist. (https://takingnote.blogs.nytimes.com/2014/03/07/f-d-r-makes-the-case-for-the-minimum-wage/ https://takingnote.blogs.nytimes.com/2014/03/07/f-d-r-makes-...).
      - mindcrime 8y ago
        Probably in part for this reason and others, it was Franklin Roosevelts's opinion that businesses that cannot survive unless they paid substandard wages But the question isn't necessarily "survival of the business". It's whether or not the business can afford to bring more people into the fold, based on an arbitrary fixed-point in terms of how much they can pay. Maybe I'm running a company that's humming along, profitable but only marginally so, paying 100 workers some rates ranging from exactly minimum wage, up to $WHATEVER. Now I'd like to hire 5 more workers to do some fairly low value manual labor, but if I hire them at minimum wage, it pushes the company into the red. Where does that leave us? I can: 1. Hire the workers at less than "minimum wage". This creates the most jobs, but has the downside of paying people less than what some people feel that they "should* earn. 2. Hire fewer workers, but at minimum wage. That's fine for the 2.5 workers I do hire, but how does it benefit the 2.5 that I don't hire? 3. Do nothing. This benefits none of the 5 workers I might have hired. 4. Buy a machine that does the kind of work those workers would have done, don't hire anybody new, and then lay off 10 workers once the machine is up and running. 5. Reduce costs somewhere else in the business, to allow for hiring the 5 workers at minimum wage. This might or might not be viable, depending on lots of other details. 6. Hire the 5 workers at minimum wage, and raise prices, passing the increased cost on to my customers. This might work, but again, there are a lot of variables in play here. And this negatively impacts my customers. Obviously there's a lot of nuance to all this, but my point is that it's a bit Pollyanna'ish to think that jacking up the minimum wage results in a better outcome for everybody.

mindcrime 8y ago

Also, do you think humans (in an economy or not) always act rationally? Depends on how strictly you define "rationally". If you mean "spend a month collecting data, download, install, and learn R, and run sophisticated statistical analysis on the data before making any decision", then no, clearly not. IOW, humans are not the fictional "rational agents" mentioned in economics textbooks and papers. We're not Homo Optimizicus. But if you mean "give some thought to the options based on known information, weigh the different options, outcomes and consequences, and then make the best decision", then I would say that people are generally rational. It would probably be most accurate to say that humans "are semi-rational agents that employs lots of heuristics, including satisficing[1], to make decisions that are not necessarily the best possible, but usually aren't the worst possible either". Or to put it another way, we employ "bounded rationality"[2]. [1]: https://en.wikipedia.org/wiki/Satisficing https://en.wikipedia.org/wiki/Satisficing [2]: https://en.wikipedia.org/wiki/Bounded_rationality https://en.wikipedia.org/wiki/Bounded_rationality

mindcrime 8y ago

Among other things, it shows in wrenching emotional details what can happen without minimum wages when people are desperate. I'm jobless, hungry and desperate. Minimum wage is $15.00 /hour. Given my skills and abilities, no one can justify hiring me at $15.00 / hour. I have two options: 1. Work for $8.00 / hour, which sucks balls, but at least lets me eat. 2. Not work at all for $0.00 / hour, and starve to death. I don't think it's hard to guess which option many people would pick. A high minimum wage just hurts the people at the lowest rung of the economic ladder, by knocking them completely off the ladder.

darpa_escapee 8y ago
I'm a business owner. There are hordes of hungry people clamoring for their 3rd, 4th and 5th jobs because Walmart will only pay out $3/hr and McDonald's won't hire above $2/hr. 1. I can hire these guys at ~$8/hr federal minimum wage. 2. I can hire these guys at $2/hr and make shareholders very happy. I don't think it's hard to guess which option many people would pick. No minimum wage just hurts the people at the lowest rung of the economic ladder, by accelerating the race to the bottom.
- mindcrime 8y ago
  Your premises are fictional. In reality, a business can't always afford to hire someone at the minimum wage. And you can't hire an infinite number of people who are a net economic drain on your company, or you're out of business. Talk about a "race to the bottom". Your "argument" is just a caricatured strawman that has no basis in reality. If your position were an accurate reflection of reality, no company would ever pay above minimum wage. And yet that happens all the time. So maybe, just maybe, the reality is that companies pay based (in part) on the economic output the workers they are hiring...
  - soundwave106 8y ago
    However, governments these days provide a safety net to guard against poverty (because, based on Gilded Age history, the alternative is worse). Employees who are paid substandard wages often simultaneously qualify for the government safety net as well. Probably in part for this reason and others, it was Franklin Roosevelts's opinion that businesses that cannot survive unless they paid substandard wages, should not be allowed to exist. (https://takingnote.blogs.nytimes.com/2014/03/07/f-d-r-makes-the-case-for-the-minimum-wage/ https://takingnote.blogs.nytimes.com/2014/03/07/f-d-r-makes-...).
    - mindcrime 8y ago
      Probably in part for this reason and others, it was Franklin Roosevelts's opinion that businesses that cannot survive unless they paid substandard wages But the question isn't necessarily "survival of the business". It's whether or not the business can afford to bring more people into the fold, based on an arbitrary fixed-point in terms of how much they can pay. Maybe I'm running a company that's humming along, profitable but only marginally so, paying 100 workers some rates ranging from exactly minimum wage, up to $WHATEVER. Now I'd like to hire 5 more workers to do some fairly low value manual labor, but if I hire them at minimum wage, it pushes the company into the red. Where does that leave us? I can: 1. Hire the workers at less than "minimum wage". This creates the most jobs, but has the downside of paying people less than what some people feel that they "should* earn. 2. Hire fewer workers, but at minimum wage. That's fine for the 2.5 workers I do hire, but how does it benefit the 2.5 that I don't hire? 3. Do nothing. This benefits none of the 5 workers I might have hired. 4. Buy a machine that does the kind of work those workers would have done, don't hire anybody new, and then lay off 10 workers once the machine is up and running. 5. Reduce costs somewhere else in the business, to allow for hiring the 5 workers at minimum wage. This might or might not be viable, depending on lots of other details. 6. Hire the 5 workers at minimum wage, and raise prices, passing the increased cost on to my customers. This might work, but again, there are a lot of variables in play here. And this negatively impacts my customers. Obviously there's a lot of nuance to all this, but my point is that it's a bit Pollyanna'ish to think that jacking up the minimum wage results in a better outcome for everybody.