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> I can’t say the former is what we have, but with unions or tight labor market regulation, the later tends to be closer to what you get. This is a big claim w

> I can’t say the former is what we have, but with unions or tight labor market regulation, the later tends to be closer to what you get. This is a big claim without any evidence. Given the minimum wages in other western countries are proportionally much higher with no negative consequences AFAIK, do you have any evidence that the richest average income country could not have a higher minimum wage?

acover 6y ago
> With data from 25 OECD countries over 15 years from 2000 to 2014, we find that a higher minimum wage decreases labor demand but does not affect labor supply. Our empirical results also suggest that relatively modest increases in minimum wages have limited impacts on employment. On average, 10 percent increase in the minimum wage decreases employment by 0.7 percent, thereby increasing unemployment rate by 0.64 percent. https://ns1.6thsigmahosting.com/pms/index.php/jrge/article/view/5227 https://ns1.6thsigmahosting.com/pms/index.php/jrge/article/v... This is just one paper, I don't know if it's a fact.
- aplummer 6y ago
  I can't look at that website due to certificate trust settings, however thanks for replying with data. It's pretty interesting numbers (lets assume its true). So a raise of 25% would equate to 1.28% unemployment. A fully socialized welfare system (Centrelink in Australia) costs 14% of GDP with 6.8% unemployment. So a reversal of 25% would reduce that to 5.52%, and 11.36% of GDP (assuming overheads etc are linear, optimistic). TLDR; if this article is correct, raising minimum wage 25% requires governments invest 2.6PP of GDP. At least that's a decent point to have a rational discussion about where governments spend money and what your priorities are - thanks for sharing.
betwixthewires 6y ago
>no negative consequences Meanwhile politicians tell us that double digit unemployment is the new normal. There are people that are not skilled enough to warrant certain minimum wage. There are jobs that are not feasible at certain wage levels. When you put a floor on what people can agree between themselves that their work is worth, you price people and jobs out of the market. It is self evident when you look at it. Now, the problems we try to solve with minimum wages are real. Cartel formation of labor demand, coercive bargaining, these are real problems. Minimum wages solve them to a degree, hut not without a new set of problems. Did you know Norway, Denmark, Sweden, Iceland and Switzerland have no minimum wage at all?
- billylindeman 6y ago
  Agreed that it is self evident when examined in the right light. Minimum wage doesn't increase the wages of the lowest tier of productivity.. It outlaws it.
  - aplummer 6y ago
    Which is why McDonalds has no employees in Australia or Switzerland? It's not self evident at all looking at higher minimum wages in the 25ish countries with higher HDI than the USA and higher minimum wage.
- aplummer 6y ago
  > Did you know Norway, Denmark, Sweden, Iceland and Switzerland have no minimum wage at all? That's not true at all for example Switzerlands minimum wage is not dictated at the federal level but its equivalent to 25 bucks an hour in Geneva. [1]. > There are jobs that are not feasible at certain wage levels. > It is self evident when you look at it. That's not self evident at all. People still work at unskilled jobs countries like Switzerland or Australia. How do you think the cleaning and fast food industries work? [1] https://www.businessinsider.com/switzerland-geneva-introduce-minimum-wage-highest-in-world-2020-10 https://www.businessinsider.com/switzerland-geneva-introduce...
  - betwixthewires 6y ago
    Where I used to live, they pay this mentally disabled girl at a grocery store to get shopping carts. She would be wholly incapable of doing anything remotely mentally challenging. But with this, she can take some of the burden off her family to care for her, she can have something of her own going on in her life, and she is a human being and I'm sure feels from time to time like she is a burden and gets down about it, so she probably gets some dignity from it. She would probably be out of a job if minimum wage got raised to 15 an hour. She would be priced out of the job market and that job would not be worth paying anyone to perform. You'll notice that when wages are artificially increased, unemployment rises. Which jobs do you think were destroyed? Which workers do you think were let go? It is self evident. When wages are raised by decree, some jobs and some people are priced out of a labor market. Just because there are still low skill jobs and low skilled workers does not mean there was not a reduction in those jobs.

acover 6y ago

> With data from 25 OECD countries over 15 years from 2000 to 2014, we find that a higher minimum wage decreases labor demand but does not affect labor supply. Our empirical results also suggest that relatively modest increases in minimum wages have limited impacts on employment. On average, 10 percent increase in the minimum wage decreases employment by 0.7 percent, thereby increasing unemployment rate by 0.64 percent. https://ns1.6thsigmahosting.com/pms/index.php/jrge/article/view/5227 https://ns1.6thsigmahosting.com/pms/index.php/jrge/article/v... This is just one paper, I don't know if it's a fact.

aplummer 6y ago
I can't look at that website due to certificate trust settings, however thanks for replying with data. It's pretty interesting numbers (lets assume its true). So a raise of 25% would equate to 1.28% unemployment. A fully socialized welfare system (Centrelink in Australia) costs 14% of GDP with 6.8% unemployment. So a reversal of 25% would reduce that to 5.52%, and 11.36% of GDP (assuming overheads etc are linear, optimistic). TLDR; if this article is correct, raising minimum wage 25% requires governments invest 2.6PP of GDP. At least that's a decent point to have a rational discussion about where governments spend money and what your priorities are - thanks for sharing.

betwixthewires 6y ago

>no negative consequences Meanwhile politicians tell us that double digit unemployment is the new normal. There are people that are not skilled enough to warrant certain minimum wage. There are jobs that are not feasible at certain wage levels. When you put a floor on what people can agree between themselves that their work is worth, you price people and jobs out of the market. It is self evident when you look at it. Now, the problems we try to solve with minimum wages are real. Cartel formation of labor demand, coercive bargaining, these are real problems. Minimum wages solve them to a degree, hut not without a new set of problems. Did you know Norway, Denmark, Sweden, Iceland and Switzerland have no minimum wage at all?

billylindeman 6y ago
Agreed that it is self evident when examined in the right light. Minimum wage doesn't increase the wages of the lowest tier of productivity.. It outlaws it.
- aplummer 6y ago
  Which is why McDonalds has no employees in Australia or Switzerland? It's not self evident at all looking at higher minimum wages in the 25ish countries with higher HDI than the USA and higher minimum wage.
aplummer 6y ago
> Did you know Norway, Denmark, Sweden, Iceland and Switzerland have no minimum wage at all? That's not true at all for example Switzerlands minimum wage is not dictated at the federal level but its equivalent to 25 bucks an hour in Geneva. [1]. > There are jobs that are not feasible at certain wage levels. > It is self evident when you look at it. That's not self evident at all. People still work at unskilled jobs countries like Switzerland or Australia. How do you think the cleaning and fast food industries work? [1] https://www.businessinsider.com/switzerland-geneva-introduce-minimum-wage-highest-in-world-2020-10 https://www.businessinsider.com/switzerland-geneva-introduce...
- betwixthewires 6y ago
  Where I used to live, they pay this mentally disabled girl at a grocery store to get shopping carts. She would be wholly incapable of doing anything remotely mentally challenging. But with this, she can take some of the burden off her family to care for her, she can have something of her own going on in her life, and she is a human being and I'm sure feels from time to time like she is a burden and gets down about it, so she probably gets some dignity from it. She would probably be out of a job if minimum wage got raised to 15 an hour. She would be priced out of the job market and that job would not be worth paying anyone to perform. You'll notice that when wages are artificially increased, unemployment rises. Which jobs do you think were destroyed? Which workers do you think were let go? It is self evident. When wages are raised by decree, some jobs and some people are priced out of a labor market. Just because there are still low skill jobs and low skilled workers does not mean there was not a reduction in those jobs.