7 ms·

> Or they could charge a lot more, I guess. That would reduce demand for their services, meaning they wouldn't need as many employees. That's the solution they

> Or they could charge a lot more, I guess. That would reduce demand for their services, meaning they wouldn't need as many employees. That's the solution they need to follow, though it's probably going to take some badly needed regulation to get there.

icebraining 7y ago
So you're agreeing that they need to let workers go?
- CharlesColeman 7y ago
  If the demand drops and that's the only way they can make it work, sure. Was I not clear?
  - AnthonyMouse 7y ago
    How is that not just the status quo? Nothing requires you to take fares below some threshold amount of compensation. If your threshold is above somebody else's, congratulations, you've self-selected as the one who should quit.
    - CharlesColeman 7y ago
      The the whole point of having a minimum wage is to keep the wage level above that threshold, if market forces would otherwise drive it below the minimum.
      - AnthonyMouse 7y ago
        "Market forces" are just people doing stuff. You don't need a minimum wage law to refuse a job that pays less than that. If there is another job that pays more then the minimum wage does nothing, you can take the other job instead regardless. If there isn't, i.e. you're one of the drivers who would become unemployed, are you really worse off with slightly less money than zero money whatsoever? How does that help you?
        asdfasgasdgasdg 7y ago
        Well, there is research suggesting that a minimum wage has unexpected effects. The economics 101 take is that raising the minimum wage will increase unemployment, but that theoretical view is not well supported empirically.
        AnthonyMouse 7y ago
        This is the "everything is complicated" view where you can find weird effects to support whatever you want if you look at enough different examples. For example, when major employers are large inefficient bureaucracies with high margins, raising the minimum wage doesn't result in those entities laying off many if any workers, because they can just eat the cost and keep going as if nothing changed. But when the employers are lean and operate in markets with high elasticity of demand, as in this case, it does directly result in unemployment. Because there is no way to pay more without charging more, but charging more reduces demand. Notice that this is another way of saying that minimum wage has more negative impact on efficient companies than inefficient ones, which I take as another argument against it.
        CharlesColeman 7y ago
        Sweatshops and unsafe workplaces were also just people doing stuff, yet long ago they were considered such a problem that laws were passed to reign them in (against much resistance). I'm not really interested in returning to the status quo ante.
        bhupy 7y ago
        The problem with sweatshops and unsafe workplaces is that the employees in question don't have the leverage to walk away from those jobs, since...they would just starve and die. Again, this sounds like a welfare problem, because if we instead redistribute money to these folks (expand EITC and even remove the employment requirement), then they have the leverage necessary to negotiate better pay and better conditions. Such workers can walk away from unsafe working conditions without worrying about being able to feed themselves. Higher paid workers do this all the time, and this feeds into the market price for certain labor.
  - icebraining 7y ago
    Sorry, I'm just not used to people stating it so clearly.
bhupy 7y ago
Why is passing on the cost of transportation to the consumer considered the optimum solution? Why not instead advocate for expanding the EITC so that the government fills in the gaps caused by lower wages? At the end of the day, we as a society (rightly) demand a minimum standard of living for everyone, and we collectively pay for that one way or the other. Either we pay taxes to fund a welfare state, or we pay inflated prices for goods and services to maintain wage floors. I'd argue that paying taxes for welfare is more progressive, as the burden falls on richer people. Paying inflated prices for goods and services is regressive as it's a burden that falls equally on the rich and the poor. What we're clearly seeing is a well functioning market driving down the cost of driver labor to the minimum possible price (ignoring for a moment the need to make sure externalities are included in the price via congestion taxes). This is good for consumers, since the good/service is now accessible to people lower on the socioeconomic ladder. If the problem is that some of these drivers aren't making enough to survive, then wouldn't a more optimum solution be to simply give them a little bit of money?
- CharlesColeman 7y ago
  > Why is passing on the cost of transportation [minimum wages] to the consumer considered the optimum solution? I don't, but I think it's more politically achievable and a lot more optimal than the status quo. > What we're clearly seeing is a well functioning market driving down the cost of driver labor to the minimum possible price ....This is good for consumers....If the problem is that some of these drivers aren't making enough to survive, then wouldn't a more optimum solution be to simply give them a little bit of money? One concern I have with ideas like that is the policy could end up just being a subsidy to business owners, since they could turn around and pocket much of their existing labor costs (at least for low-wage workers) by passing that responsibility to the government.
  - AnthonyMouse 7y ago
    > One concern I have with ideas like that is the policy could end up just being a subsidy to business owners, since they could turn around and pocket much of their existing labor costs (at least for low-wage workers) by passing that responsibility to the government. They only get to pocket the money if they lack effective competition. Uber can't charge higher fares while paying lower wages and not expect Lyft or someone else to eat their lunch.

icebraining 7y ago

So you're agreeing that they need to let workers go?

CharlesColeman 7y ago
If the demand drops and that's the only way they can make it work, sure. Was I not clear?
- AnthonyMouse 7y ago
  How is that not just the status quo? Nothing requires you to take fares below some threshold amount of compensation. If your threshold is above somebody else's, congratulations, you've self-selected as the one who should quit.
  - CharlesColeman 7y ago
    The the whole point of having a minimum wage is to keep the wage level above that threshold, if market forces would otherwise drive it below the minimum.
    - AnthonyMouse 7y ago
      "Market forces" are just people doing stuff. You don't need a minimum wage law to refuse a job that pays less than that. If there is another job that pays more then the minimum wage does nothing, you can take the other job instead regardless. If there isn't, i.e. you're one of the drivers who would become unemployed, are you really worse off with slightly less money than zero money whatsoever? How does that help you?
      - asdfasgasdgasdg 7y ago
        Well, there is research suggesting that a minimum wage has unexpected effects. The economics 101 take is that raising the minimum wage will increase unemployment, but that theoretical view is not well supported empirically.
        AnthonyMouse 7y ago
        This is the "everything is complicated" view where you can find weird effects to support whatever you want if you look at enough different examples. For example, when major employers are large inefficient bureaucracies with high margins, raising the minimum wage doesn't result in those entities laying off many if any workers, because they can just eat the cost and keep going as if nothing changed. But when the employers are lean and operate in markets with high elasticity of demand, as in this case, it does directly result in unemployment. Because there is no way to pay more without charging more, but charging more reduces demand. Notice that this is another way of saying that minimum wage has more negative impact on efficient companies than inefficient ones, which I take as another argument against it.
      - CharlesColeman 7y ago
        Sweatshops and unsafe workplaces were also just people doing stuff, yet long ago they were considered such a problem that laws were passed to reign them in (against much resistance). I'm not really interested in returning to the status quo ante.
        bhupy 7y ago
        The problem with sweatshops and unsafe workplaces is that the employees in question don't have the leverage to walk away from those jobs, since...they would just starve and die. Again, this sounds like a welfare problem, because if we instead redistribute money to these folks (expand EITC and even remove the employment requirement), then they have the leverage necessary to negotiate better pay and better conditions. Such workers can walk away from unsafe working conditions without worrying about being able to feed themselves. Higher paid workers do this all the time, and this feeds into the market price for certain labor.
- icebraining 7y ago
  Sorry, I'm just not used to people stating it so clearly.

bhupy 7y ago

Why is passing on the cost of transportation to the consumer considered the optimum solution? Why not instead advocate for expanding the EITC so that the government fills in the gaps caused by lower wages? At the end of the day, we as a society (rightly) demand a minimum standard of living for everyone, and we collectively pay for that one way or the other. Either we pay taxes to fund a welfare state, or we pay inflated prices for goods and services to maintain wage floors. I'd argue that paying taxes for welfare is more progressive, as the burden falls on richer people. Paying inflated prices for goods and services is regressive as it's a burden that falls equally on the rich and the poor. What we're clearly seeing is a well functioning market driving down the cost of driver labor to the minimum possible price (ignoring for a moment the need to make sure externalities are included in the price via congestion taxes). This is good for consumers, since the good/service is now accessible to people lower on the socioeconomic ladder. If the problem is that some of these drivers aren't making enough to survive, then wouldn't a more optimum solution be to simply give them a little bit of money?

CharlesColeman 7y ago
> Why is passing on the cost of transportation [minimum wages] to the consumer considered the optimum solution? I don't, but I think it's more politically achievable and a lot more optimal than the status quo. > What we're clearly seeing is a well functioning market driving down the cost of driver labor to the minimum possible price ....This is good for consumers....If the problem is that some of these drivers aren't making enough to survive, then wouldn't a more optimum solution be to simply give them a little bit of money? One concern I have with ideas like that is the policy could end up just being a subsidy to business owners, since they could turn around and pocket much of their existing labor costs (at least for low-wage workers) by passing that responsibility to the government.
- AnthonyMouse 7y ago
  > One concern I have with ideas like that is the policy could end up just being a subsidy to business owners, since they could turn around and pocket much of their existing labor costs (at least for low-wage workers) by passing that responsibility to the government. They only get to pocket the money if they lack effective competition. Uber can't charge higher fares while paying lower wages and not expect Lyft or someone else to eat their lunch.