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Do said economic experts take into account the societal costs of that position? The economically "correct" position isn't always the absolute best thing for so

Do said economic experts take into account the societal costs of that position? The economically "correct" position isn't always the absolute best thing for society when the people have access to both the voting booth and weapons to effect changes. I think that sometimes some people forget that actual people with families are impacted by their decisions.

Reedx 7y ago
But there's another thing people are forgetting about: entry level positions. Consider a case like grocery store baggers. A position which has been devastated because it's become too expensive to justify, even though it's something everyone would still like to have. Stuff like that are great first jobs for teenagers and functions as a low-risk way for them to get introduced to the work force. Learn about money, working with customers, getting to work on time, etc. Useful skills down the line and gives them some spending money in the meantime.
zaroth 7y ago
I think you misunderstand the position of experts who believe a minimum wage is not “optimal”. It’s never been easier to discover and apply for new jobs. That is to say, the transaction costs of changing jobs has never been lower. In a competitive market with low transaction costs of changing jobs, an employee will achieve their highest wage on the open market based on their skill set. Based on this theory a minimum wage sets a minimum skill level or value proposition a worker must present in order to be entitled to employment. Anyone who performs below that level is denied a job by the Federal minimum value proposition law. The higher the minimum value proposition of a worker, the higher functioning / more productive individual workers must be, and the fewer people need to be employed. So the theory is that a minimum value regulation directly hurts the people who are capable of providing the least value. Is it the best thing for society for the least productive workers to be legally unemployable? Of course this glosses over all the inefficiencies and particularly the power imbalances that exist most dramatically at the jobs with the least skilled workers. Companies are profitable because they can pay their employees dramatically less than the value that they produce for the company. Usually that value is a result of the infrastructure and intellectual property of the company multiplying the productivity of the worker to create the added value. But sometimes it’s simply on the backs of the workers being underpaid for the value they are personally creating. Personally I think the minimum wage is low enough at this point where the overhead for just having the employee dominates the total cost of payroll. If there’s a cost saving to be had, it’s in lowering that overhead, not lowering payroll. This typically is achieved through reducing employment regulations in general, of which minimum wage/value is just one of hundreds or perhaps thousands.
- justizin 7y ago
  > That is to say, the transaction costs of changing jobs has never been lower. i'm just going to venture a guess, but i suspect you have never worked as a dishwasher. this sort of overly academic language is tone deaf to the reality of working for minimum wage.
  - dsfyu404ed 7y ago
    Not the person you're replying but I've worked as a dishwasher and what he/she says about ease of switching jobs is spot on. I did a lot of other menial jobs too before I got a degree. Construction laborer was my favorite but janitor wasn't bad. Unless you have a really interesting criminal record it's super easy to bounce between menial jobs. Go on Craigslist, fire off a "resume" (in quotes because it's more of a work history than anything else) to anything that looks tolerable and roll with whatever replies you get back. There was one time I told a boss to shove it on one day and showed up to a different job the next but that was the exception not the rule. I suspect if anything it's easier now. The economy was not as strong back when I was working those jobs. Edit: I can write an email with proper grammar, show up on time and can pass a drug test which I know now are two of the major pain points for minimum wage employers so I guess I was privileged in that regard.
    - derekp7 7y ago
      I recall seeing an interview (many years ago) of some random store manager, on one of those TV news magazine shows. His biggest complaint was that anyone he hired just randomly would not show up, or come in a couple hours late. Being reliable is something that gives you a huge legg up on the competition.
- JaimeThompson 7y ago
  >In a competitive market with low transaction costs of changing jobs Ignoring reality makes it easy to solve all sorts of problem. It simply isn't the case that, for most people, changing jobs is a low cost transaction once you take into account the costs (all of them not just monetary) of changing jobs. If minimum wage had simply kept pace with inflation it would be > 20 dollars per hour today. Edit - the 20 dollar amount may not be correct. I need to verify where I got it from so please research it yourself.

Reedx 7y ago

But there's another thing people are forgetting about: entry level positions. Consider a case like grocery store baggers. A position which has been devastated because it's become too expensive to justify, even though it's something everyone would still like to have. Stuff like that are great first jobs for teenagers and functions as a low-risk way for them to get introduced to the work force. Learn about money, working with customers, getting to work on time, etc. Useful skills down the line and gives them some spending money in the meantime.

zaroth 7y ago

I think you misunderstand the position of experts who believe a minimum wage is not “optimal”. It’s never been easier to discover and apply for new jobs. That is to say, the transaction costs of changing jobs has never been lower. In a competitive market with low transaction costs of changing jobs, an employee will achieve their highest wage on the open market based on their skill set. Based on this theory a minimum wage sets a minimum skill level or value proposition a worker must present in order to be entitled to employment. Anyone who performs below that level is denied a job by the Federal minimum value proposition law. The higher the minimum value proposition of a worker, the higher functioning / more productive individual workers must be, and the fewer people need to be employed. So the theory is that a minimum value regulation directly hurts the people who are capable of providing the least value. Is it the best thing for society for the least productive workers to be legally unemployable? Of course this glosses over all the inefficiencies and particularly the power imbalances that exist most dramatically at the jobs with the least skilled workers. Companies are profitable because they can pay their employees dramatically less than the value that they produce for the company. Usually that value is a result of the infrastructure and intellectual property of the company multiplying the productivity of the worker to create the added value. But sometimes it’s simply on the backs of the workers being underpaid for the value they are personally creating. Personally I think the minimum wage is low enough at this point where the overhead for just having the employee dominates the total cost of payroll. If there’s a cost saving to be had, it’s in lowering that overhead, not lowering payroll. This typically is achieved through reducing employment regulations in general, of which minimum wage/value is just one of hundreds or perhaps thousands.

justizin 7y ago
> That is to say, the transaction costs of changing jobs has never been lower. i'm just going to venture a guess, but i suspect you have never worked as a dishwasher. this sort of overly academic language is tone deaf to the reality of working for minimum wage.
- dsfyu404ed 7y ago
  Not the person you're replying but I've worked as a dishwasher and what he/she says about ease of switching jobs is spot on. I did a lot of other menial jobs too before I got a degree. Construction laborer was my favorite but janitor wasn't bad. Unless you have a really interesting criminal record it's super easy to bounce between menial jobs. Go on Craigslist, fire off a "resume" (in quotes because it's more of a work history than anything else) to anything that looks tolerable and roll with whatever replies you get back. There was one time I told a boss to shove it on one day and showed up to a different job the next but that was the exception not the rule. I suspect if anything it's easier now. The economy was not as strong back when I was working those jobs. Edit: I can write an email with proper grammar, show up on time and can pass a drug test which I know now are two of the major pain points for minimum wage employers so I guess I was privileged in that regard.
  - derekp7 7y ago
    I recall seeing an interview (many years ago) of some random store manager, on one of those TV news magazine shows. His biggest complaint was that anyone he hired just randomly would not show up, or come in a couple hours late. Being reliable is something that gives you a huge legg up on the competition.
JaimeThompson 7y ago
>In a competitive market with low transaction costs of changing jobs Ignoring reality makes it easy to solve all sorts of problem. It simply isn't the case that, for most people, changing jobs is a low cost transaction once you take into account the costs (all of them not just monetary) of changing jobs. If minimum wage had simply kept pace with inflation it would be > 20 dollars per hour today. Edit - the 20 dollar amount may not be correct. I need to verify where I got it from so please research it yourself.