4 ms·

I think it's helpful sometimes to think of the minimum wage not as a prescribed payment, but as a ban on employment below some level. We've decided that it's be

by iguy 8y ago

I think it's helpful sometimes to think of the minimum wage not as a prescribed payment, but as a ban on employment below some level. We've decided that it's better to be unemployed than to be paid less than X. That's OK, we ban lots of other things people might otherwise voluntarily agree to -- like overly dangerous jobs, where we as a community take a longer-term view than the guy desperate to make the rent. Partly because we'll be on the hook when he lands himself in hospital. But banning more and more jobs doesn't obviously improve matters. It seems that we've already banned many starter-jobs, the sort teenagers used to work.

scarface74 8y ago
So it’s better to not have any money than some money? That seems very paternalistic.
AnthonyMouse 8y ago
> I think it's helpful sometimes to think of the minimum wage not as a prescribed payment, but as a ban on employment below some level. We've decided that it's better to be unemployed than to be paid less than X. Which is kind of the point. You help people by giving them options, not by taking them away. Comparisons to workplace safety rules are inapt because the worthwhile ones are anti-stupidity rules. It doesn't help anybody to have unsafe working conditions, which means every instance of it is a mistake. When someone gets hurt they're harmed and the company is liable, which is worse for all parties than preventing the harm to begin with. When designed properly, the law is only prohibiting something that nobody has any legitimate reason to ever do. Whereas there are legitimate reasons to pay someone $10/hour -- you derive $11/hour worth of value from it and their second best alternative was to make $9/hour (or, when that's prohibited too, to be unemployed).
- iguy 8y ago
  Whether you think it should be higher or lower, my main point is that I think you should flip things around (banning instead of prescribing) and see whether you agree with yourself. I'm not sure workplace safety is so different -- I think of most of these regulations as implicitly putting a price on a a life (or a price on a "nanomort" which seems less crude). The price has risen over time because we got richer (which is great!). If we applied today's standards to (say) a steel mill in 1900 Pittsburgh, the cost of complying would be more than the total wage bill, so it should clearly not exist... but these were great jobs, people moved thousands of miles (and took the 1/10 chance of an early death) because it was better than trying to grow barley in Quebec. That said, there are lots of other regulations besides safety, which (like the minimum wage) ban activities between consenting adults. Like cutting their hair for money, need a state license in how many states? Or offering legal advice, needs a license in every state. These all reduce opportunities, and some are insane, and some aren't.
  - AnthonyMouse 8y ago
    > Whether you think it should be higher or lower, my main point is that I think you should flip things around (banning instead of prescribing) and see whether you agree with yourself. Fair enough. > I'm not sure workplace safety is so different -- I think of most of these regulations as implicitly putting a price on a a life (or a price on a "nanomort" which seems less crude). The price has risen over time because we got richer (which is great!). Sure, but that's the first order rule. If you kill someone, you're liable, and then we set a value on human life, e.g. a million dollars. That's not prohibiting something, it's pricing an externality. If you can spend $1 to prevent a 25% chance of death and you don't, you're an idiot, because that has an expected value relative to the alternative of about negative a quarter of a million dollars. On the other hand, if you have to spend a billion dollars to prevent a 0.1% chance of one death, you're not really expected to do that. The second order rule is, OK, if you don't spend the dollar in the first case then we fine you even if nobody has died yet. The second rule is basically harmless because due to the first rule, nobody who was paying attention would be violating it even if it didn't exist. It only prohibits stupidity. (Assuming it isn't imposing a burdensome compliance cost in the process, in which case it could get back to being a bad rule as the costs rise to exceed the benefit.) > If we applied today's standards to (say) a steel mill in 1900 Pittsburgh, the cost of complying would be more than the total wage bill, so it should clearly not exist... but these were great jobs, people moved thousands of miles (and took the 1/10 chance of an early death) because it was better than trying to grow barley in Quebec. But this is just a consequence of placing a higher value on a life to begin with. If a life is worth a million dollars today but only $5000 in 1900, then spending $8000 to reduce the probability of death from 10% to 0.1% is well worth it today but not in 1900. On the other hand, spending $1 to reduce the probability from 25% to 10% is still worth it in 1900, so requiring at least that much would still have only been an anti-stupidity rule even in 1900. The cost of a law against doing something inherently irrational is only the bureaucratic overhead cost, assuming it really is only prohibiting something inherently irrational. The cost of a law against doing something that people may have a legitimate reason to do is necessarily more than that. > That said, there are lots of other regulations besides safety, which (like the minimum wage) ban activities between consenting adults. Like cutting their hair for money, need a state license in how many states? Or offering legal advice, needs a license in every state. These all reduce opportunities, and some are insane, and some aren't. I'm inclined to think that nearly all of them are insane and most of the justifications are bunkum or could be resolved in more efficient ways. For example, you say lawyers. There are good reasons to expect high standards from people like prosecutors and public defenders and the attorney general. But all of those people work for the state. A requirement that they be members of the bar then isn't a prohibition on private transactions, it's a job requirement by the state-as-employer. On the other hand, if you have a lawyer who is writing contracts or filing trademark applications, the case for licensing is dramatically weaker. The argument is essentially that they might be incompetent or malicious. But when isn't that the case? Should we start licensing florists and retail clerks? They could poison someone, after all, or steal from the register, or make change inaccurately and come up thousands of dollars short, or create liability or loss of goodwill by shortchanging customers. And you could still have a bar association without a legal requirement of membership to practice. Then customers that find enough of a benefit to pay the premium for an accredited attorney will do so. But if the benefit turns out to be so small that nobody even cares to demand it then how is it so large that we need the law to require it?

by iguy 8y ago

scarface74 8y ago

So it’s better to not have any money than some money? That seems very paternalistic.

AnthonyMouse 8y ago

> I think it's helpful sometimes to think of the minimum wage not as a prescribed payment, but as a ban on employment below some level. We've decided that it's better to be unemployed than to be paid less than X. Which is kind of the point. You help people by giving them options, not by taking them away. Comparisons to workplace safety rules are inapt because the worthwhile ones are anti-stupidity rules. It doesn't help anybody to have unsafe working conditions, which means every instance of it is a mistake. When someone gets hurt they're harmed and the company is liable, which is worse for all parties than preventing the harm to begin with. When designed properly, the law is only prohibiting something that nobody has any legitimate reason to ever do. Whereas there are legitimate reasons to pay someone $10/hour -- you derive $11/hour worth of value from it and their second best alternative was to make $9/hour (or, when that's prohibited too, to be unemployed).

iguy 8y ago
Whether you think it should be higher or lower, my main point is that I think you should flip things around (banning instead of prescribing) and see whether you agree with yourself. I'm not sure workplace safety is so different -- I think of most of these regulations as implicitly putting a price on a a life (or a price on a "nanomort" which seems less crude). The price has risen over time because we got richer (which is great!). If we applied today's standards to (say) a steel mill in 1900 Pittsburgh, the cost of complying would be more than the total wage bill, so it should clearly not exist... but these were great jobs, people moved thousands of miles (and took the 1/10 chance of an early death) because it was better than trying to grow barley in Quebec. That said, there are lots of other regulations besides safety, which (like the minimum wage) ban activities between consenting adults. Like cutting their hair for money, need a state license in how many states? Or offering legal advice, needs a license in every state. These all reduce opportunities, and some are insane, and some aren't.
- AnthonyMouse 8y ago
  > Whether you think it should be higher or lower, my main point is that I think you should flip things around (banning instead of prescribing) and see whether you agree with yourself. Fair enough. > I'm not sure workplace safety is so different -- I think of most of these regulations as implicitly putting a price on a a life (or a price on a "nanomort" which seems less crude). The price has risen over time because we got richer (which is great!). Sure, but that's the first order rule. If you kill someone, you're liable, and then we set a value on human life, e.g. a million dollars. That's not prohibiting something, it's pricing an externality. If you can spend $1 to prevent a 25% chance of death and you don't, you're an idiot, because that has an expected value relative to the alternative of about negative a quarter of a million dollars. On the other hand, if you have to spend a billion dollars to prevent a 0.1% chance of one death, you're not really expected to do that. The second order rule is, OK, if you don't spend the dollar in the first case then we fine you even if nobody has died yet. The second rule is basically harmless because due to the first rule, nobody who was paying attention would be violating it even if it didn't exist. It only prohibits stupidity. (Assuming it isn't imposing a burdensome compliance cost in the process, in which case it could get back to being a bad rule as the costs rise to exceed the benefit.) > If we applied today's standards to (say) a steel mill in 1900 Pittsburgh, the cost of complying would be more than the total wage bill, so it should clearly not exist... but these were great jobs, people moved thousands of miles (and took the 1/10 chance of an early death) because it was better than trying to grow barley in Quebec. But this is just a consequence of placing a higher value on a life to begin with. If a life is worth a million dollars today but only $5000 in 1900, then spending $8000 to reduce the probability of death from 10% to 0.1% is well worth it today but not in 1900. On the other hand, spending $1 to reduce the probability from 25% to 10% is still worth it in 1900, so requiring at least that much would still have only been an anti-stupidity rule even in 1900. The cost of a law against doing something inherently irrational is only the bureaucratic overhead cost, assuming it really is only prohibiting something inherently irrational. The cost of a law against doing something that people may have a legitimate reason to do is necessarily more than that. > That said, there are lots of other regulations besides safety, which (like the minimum wage) ban activities between consenting adults. Like cutting their hair for money, need a state license in how many states? Or offering legal advice, needs a license in every state. These all reduce opportunities, and some are insane, and some aren't. I'm inclined to think that nearly all of them are insane and most of the justifications are bunkum or could be resolved in more efficient ways. For example, you say lawyers. There are good reasons to expect high standards from people like prosecutors and public defenders and the attorney general. But all of those people work for the state. A requirement that they be members of the bar then isn't a prohibition on private transactions, it's a job requirement by the state-as-employer. On the other hand, if you have a lawyer who is writing contracts or filing trademark applications, the case for licensing is dramatically weaker. The argument is essentially that they might be incompetent or malicious. But when isn't that the case? Should we start licensing florists and retail clerks? They could poison someone, after all, or steal from the register, or make change inaccurately and come up thousands of dollars short, or create liability or loss of goodwill by shortchanging customers. And you could still have a bar association without a legal requirement of membership to practice. Then customers that find enough of a benefit to pay the premium for an accredited attorney will do so. But if the benefit turns out to be so small that nobody even cares to demand it then how is it so large that we need the law to require it?