25 ms·

A lower bound for worker pay/treatment is like a law prohibiting supermarkets from selling gruel mix, on account of the sentiment that poor people should not be

A lower bound for worker pay/treatment is like a law prohibiting supermarkets from selling gruel mix, on account of the sentiment that poor people should not be eating gruel. It doesn't lead to the poor suddenly being able to afford fish fillet and steak. It leads to the poor going hungry. There is absolutely no public welfare benefit in creating statutory minimums on wages, benefits and working conditions. The arguments that rationalize the granting of extra-contractual rights to labor unions, and labor regulations in general, are basically just economic fallacies that rent-seeking unions popularized.

cratermoon 6y ago
Or, as Anatole France wrote, "The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal loaves of bread"
- CryptoPunk 6y ago
  The law doesn't do the first or second, only the third. Prohibition of some behavior associated with some state of being doesn't eliminate that state of being. It only makes it manifest in some other functionally equivalent way.
- epivosism 6y ago
  "Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force." -Thomas Sowell
  - tablespoon 6y ago
    https://www.theatlantic.com/business/archive/2017/01/economism-and-the-minimum-wage/513155/ https://www.theatlantic.com/business/archive/2017/01/economi... > The argument against increasing the minimum wage often relies on what I call “economism”—the misleading application of basic lessons from Economics 101 to real-world problems, creating the illusion of consensus and reducing a complex topic to a simple, open-and-shut case.... > [discussion of economic research that shows no consensus if increasing minimum wage empirically leads to greater unemployment] > Even if a higher minimum wage does cause some people to lose their jobs, that cost has to be balanced against the benefit of greater earnings for other low-income workers. A study by the Congressional Budget Office (CBO) estimated that a $10.10 minimum would reduce employment by 500,000 jobs but would increase incomes for most poor families, moving 900,000 people above the poverty line. Similarly, a recent paper by the economist Arindrajit Dube finds that a 10 percent raise in the minimum wage should reduce the number of families living in poverty by around 2 percent to 3 percent. The economists polled in the 2013 Chicago Booth study thought that increasing the minimum wage would be a good idea because its potential impact on employment would be outweighed by the benefits to people who were still able to find jobs. Raising the minimum wage would also reduce inequality by narrowing the pay gap between low-income and higher-income workers. > In short, whether the minimum wage should be increased (or eliminated) is a complicated question. The economic research is difficult to parse, and arguments often turn on sophisticated econometric details. Any change in the minimum wage would have different effects on different groups of people, and should also be compared with other policies that could help the working poor—such as the negative income tax (a cash grant to low-income households, similar to today’s Earned Income Tax Credit) favored by Milton Friedman, or the guaranteed minimum income that Friedrich Hayek assumed would exist.
    - CryptoPunk 6y ago
      There are limits to what a study can show. It's hard to measure its effects on the unemployment rate due to the mobility of labour. We don't have an experimental control where we can see what unemployment rates are like without a minimum wage anywhere in the world, and that would be the only way to actually provide something approaching proof that minimum wage increases the unemployment rate. But what has been demonstrated suggests that minimum wage decreases job growth: https://web.archive.org/web/20160410035745/http://economics.cornell.edu/sites/default/files/files/events/Meer_West_Minimum_Wage.pdf https://web.archive.org/web/20160410035745/http://economics.... And this is exactly what economic theory would suggest. Basic supply and demand theory tells us that the minimum wage, to the extent that it has an effect, harms wage growth. In the absence of the ability to conduct controlled experiments to prove definitively its effect one way or another, we should opt to trust basic economy theory. >>Dube finds that a 10 percent raise in the minimum wage should reduce the number of families living in poverty by around 2 percent to 3 percent. He hasn't shown anything. These studies are at best suggestive, and based on some amount of conjecture by the study authors. They also have difficulty measuring long-term effects, which in any case of any anti-market intervention that redirects profit for investors, to give workers above market wages, while redirecting private sector income to the larger roll of welfare recipients, will be negative for wage growth. I am not going to believe that a centrally imposed price floor, that is universally considered harmful, and a source of deadweight losses, in economics, just happens to be beneficial in its one application that has been most heavily politicized.
      - tablespoon 6y ago
        > Basic supply and demand theory tells us that the minimum wage, to the extent that it has an effect, harms wage growth. In the absence of the ability to conduct controlled experiments to prove definitively its effect one way or another, we should opt to trust basic economy theory. So trust the 101-level dogma, even though it's not been validated empirically, and it's also quite clear that actual economic and sociological systems are far more complicated than its models? The problem with econ 101 is that it's oversimplified yet so seductively simple that you can give a group of people a 400 page persuasive econ book, a good chunk of them will be confusing the map for the territory by the end of it.
  - cratermoon 6y ago
    Oh yea, Thomas Sowell. The neoliberal/libertarians favorite snake-oil salesman.
    - epivosism 6y ago
      How would you engage with his claim, that minimum wages don't actually guarantee wages - they just give employers this choice: Pay minimum living wage Don't hire someone True minimum wage implementations like EITC [0] would get what we both want here! Free hiring at the market price for employers, so they can hire very unskilled people at low wages, for them to gain experience (i.e. hiring homeless guys to pick up cans, which is currently so unprofitable that nobody does it) The government makes up the living wage gap with effectively a "negative income tax" for low wage workers. This satisfies us both, and fulfills the true vision of a "living wage" in ways that don't lock unskilled people out of the labor force. [https://www.wikiwand.com/en/Earned_income_tax_credit https://www.wikiwand.com/en/Earned_income_tax_credit]
      - AstralStorm 6y ago
        How do you convert the current job "market" into an actual market? Legislation to mandate hiring transparency? Some sort of collective bargaining to even out the power discrepancy in wage setting? At the same time avoiding making everyone a gig worker, as would be so seductive and disastrous due to lack of personal stability?
      - cratermoon 6y ago
        > How would you engage with his claim Show me the money (i.e. not a blog post. Something peer-reviewed) Also, how does lowering someone's tax burden help if they aren't being paid a living wage? Plus they have to file for it at the end of the tax year, instead of just having the money to pay bills.
epivosism 6y ago
Downvoters have a duty to explain how they calculated their proposed minimum wage: i.e. what calculations you ran to show this proposal is welfare-maximizing at exactly 15$ or whatever, not 16$ or 50$. Otherwise arguments for a minimum wage don't have to take into account the costs, which are things like "person with no experience can't be hired to get more experience" for N$/hour, N<minimum wage. And since the arguments naturally sound more "caring" than "no minimum wage", the natural bias will be to favor them, and proposing minimum wages will be a popular action (which is what we observe). There must be some upper limit below 50$/hour, right? What are the limiting factors that come into play there, and why don't they come into play at 15$/hour?
- nieve 6y ago
  "Upvoters have a duty to explain how they calculated their proposed minimum possible livable wage wage: i.e. what calculations you ran to show this proposal is profit-maximizing at exactly 15$ or whatever, not 16$ or 50$."
  - CryptoPunk 6y ago
    Profit maximizing would be slavery with $0 wages. But social utility maximizing is the price that emerges spontaneously when people are free to broadcast job offers and to contract, that is set by supply and demand: https://en.wikipedia.org/wiki/Supply_and_demand https://en.wikipedia.org/wiki/Supply_and_demand
    - AstralStorm 6y ago
      Unfortunately for us, there is no such thing as free market. Deregulated markets devolve into might makes right (by size), regulated ones are facing the problem of justification for everything. In terms of wages, the markets in the US are extremely deregulated, in addition to lobbying messing with the politics. Somehow actual solutions are presented as less free market when they don't actually impact how trades are made. Big corporations can always undercut small companies on costs by investing into capital expensive technologies. Does it mean the smaller companies should be allowed to run wage slavery? No, because then we run into arbitrary wage differentiation. The proper way to evaluate the minimum wage is to compute local Purchasing Power Parity, check how many PPP-dollars are required for life, then set the minimum wage at slightly higher level to compensate for how rarely it is adjusted. These numbers will be a bit different per state in plain US dollars. Anything else is not a living wage, and a living wage is the only reasonable way of approaching it. From capitalist point of view, a business that cannot supply a minimum wage is insufficiently competitive and should fail. It is trying to run feudal by creating wage slaves. Alternative approach would be interventions to lower PPP-adjusted cost of living, such as building cheap or free housing, not means tested food stamps, free healthcare, free education etc. But these are much less predictable, and put the onus on government, while at the same time allowing bigger corporations to undercut their salaries, so it is at best a part of a combined approach.
ClumsyPilot 6y ago
"There is absolutely no public welfare benefit in creating statutory minimums on wages, benefits and working conditions" This is so flat wrong, have you ever bothered to read how theae laws came about? Maybe you should not assume that people who put them in place arw idiota.
- CryptoPunk 6y ago
  There are many popularly supported laws based that are based on economic fallacies, like this Venezuelan law enacted in 2011: http://www.bloomberg.com/news/articles/2011-11-25/chavez-price-caps-spark-panic-buying-of-coffee-toilet-paper http://www.bloomberg.com/news/articles/2011-11-25/chavez-pri... >>“The law of supply and demand is a lie,” Karlin Granadillo, the head of a price control agency set up to enforce the new regulations, said yesterday on state television. “These are not arbitrary measures. They are necessary.” Or the many rent control laws in place all across the US. Rent control is unequivocally a harmful law: https://www.econlib.org/library/Enc/RentControl.html https://www.econlib.org/library/Enc/RentControl.html

cratermoon 6y ago

Or, as Anatole France wrote, "The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal loaves of bread"

CryptoPunk 6y ago
The law doesn't do the first or second, only the third. Prohibition of some behavior associated with some state of being doesn't eliminate that state of being. It only makes it manifest in some other functionally equivalent way.
epivosism 6y ago
"Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force." -Thomas Sowell
- tablespoon 6y ago
  https://www.theatlantic.com/business/archive/2017/01/economism-and-the-minimum-wage/513155/ https://www.theatlantic.com/business/archive/2017/01/economi... > The argument against increasing the minimum wage often relies on what I call “economism”—the misleading application of basic lessons from Economics 101 to real-world problems, creating the illusion of consensus and reducing a complex topic to a simple, open-and-shut case.... > [discussion of economic research that shows no consensus if increasing minimum wage empirically leads to greater unemployment] > Even if a higher minimum wage does cause some people to lose their jobs, that cost has to be balanced against the benefit of greater earnings for other low-income workers. A study by the Congressional Budget Office (CBO) estimated that a $10.10 minimum would reduce employment by 500,000 jobs but would increase incomes for most poor families, moving 900,000 people above the poverty line. Similarly, a recent paper by the economist Arindrajit Dube finds that a 10 percent raise in the minimum wage should reduce the number of families living in poverty by around 2 percent to 3 percent. The economists polled in the 2013 Chicago Booth study thought that increasing the minimum wage would be a good idea because its potential impact on employment would be outweighed by the benefits to people who were still able to find jobs. Raising the minimum wage would also reduce inequality by narrowing the pay gap between low-income and higher-income workers. > In short, whether the minimum wage should be increased (or eliminated) is a complicated question. The economic research is difficult to parse, and arguments often turn on sophisticated econometric details. Any change in the minimum wage would have different effects on different groups of people, and should also be compared with other policies that could help the working poor—such as the negative income tax (a cash grant to low-income households, similar to today’s Earned Income Tax Credit) favored by Milton Friedman, or the guaranteed minimum income that Friedrich Hayek assumed would exist.
  - CryptoPunk 6y ago
    There are limits to what a study can show. It's hard to measure its effects on the unemployment rate due to the mobility of labour. We don't have an experimental control where we can see what unemployment rates are like without a minimum wage anywhere in the world, and that would be the only way to actually provide something approaching proof that minimum wage increases the unemployment rate. But what has been demonstrated suggests that minimum wage decreases job growth: https://web.archive.org/web/20160410035745/http://economics.cornell.edu/sites/default/files/files/events/Meer_West_Minimum_Wage.pdf https://web.archive.org/web/20160410035745/http://economics.... And this is exactly what economic theory would suggest. Basic supply and demand theory tells us that the minimum wage, to the extent that it has an effect, harms wage growth. In the absence of the ability to conduct controlled experiments to prove definitively its effect one way or another, we should opt to trust basic economy theory. >>Dube finds that a 10 percent raise in the minimum wage should reduce the number of families living in poverty by around 2 percent to 3 percent. He hasn't shown anything. These studies are at best suggestive, and based on some amount of conjecture by the study authors. They also have difficulty measuring long-term effects, which in any case of any anti-market intervention that redirects profit for investors, to give workers above market wages, while redirecting private sector income to the larger roll of welfare recipients, will be negative for wage growth. I am not going to believe that a centrally imposed price floor, that is universally considered harmful, and a source of deadweight losses, in economics, just happens to be beneficial in its one application that has been most heavily politicized.
    - tablespoon 6y ago
      > Basic supply and demand theory tells us that the minimum wage, to the extent that it has an effect, harms wage growth. In the absence of the ability to conduct controlled experiments to prove definitively its effect one way or another, we should opt to trust basic economy theory. So trust the 101-level dogma, even though it's not been validated empirically, and it's also quite clear that actual economic and sociological systems are far more complicated than its models? The problem with econ 101 is that it's oversimplified yet so seductively simple that you can give a group of people a 400 page persuasive econ book, a good chunk of them will be confusing the map for the territory by the end of it.
- cratermoon 6y ago
  Oh yea, Thomas Sowell. The neoliberal/libertarians favorite snake-oil salesman.
  - epivosism 6y ago
    How would you engage with his claim, that minimum wages don't actually guarantee wages - they just give employers this choice: Pay minimum living wage Don't hire someone True minimum wage implementations like EITC [0] would get what we both want here! Free hiring at the market price for employers, so they can hire very unskilled people at low wages, for them to gain experience (i.e. hiring homeless guys to pick up cans, which is currently so unprofitable that nobody does it) The government makes up the living wage gap with effectively a "negative income tax" for low wage workers. This satisfies us both, and fulfills the true vision of a "living wage" in ways that don't lock unskilled people out of the labor force. [https://www.wikiwand.com/en/Earned_income_tax_credit https://www.wikiwand.com/en/Earned_income_tax_credit]
    - AstralStorm 6y ago
      How do you convert the current job "market" into an actual market? Legislation to mandate hiring transparency? Some sort of collective bargaining to even out the power discrepancy in wage setting? At the same time avoiding making everyone a gig worker, as would be so seductive and disastrous due to lack of personal stability?
    - cratermoon 6y ago
      > How would you engage with his claim Show me the money (i.e. not a blog post. Something peer-reviewed) Also, how does lowering someone's tax burden help if they aren't being paid a living wage? Plus they have to file for it at the end of the tax year, instead of just having the money to pay bills.

epivosism 6y ago

Downvoters have a duty to explain how they calculated their proposed minimum wage: i.e. what calculations you ran to show this proposal is welfare-maximizing at exactly 15$ or whatever, not 16$ or 50$. Otherwise arguments for a minimum wage don't have to take into account the costs, which are things like "person with no experience can't be hired to get more experience" for N$/hour, N<minimum wage. And since the arguments naturally sound more "caring" than "no minimum wage", the natural bias will be to favor them, and proposing minimum wages will be a popular action (which is what we observe). There must be some upper limit below 50$/hour, right? What are the limiting factors that come into play there, and why don't they come into play at 15$/hour?

nieve 6y ago
"Upvoters have a duty to explain how they calculated their proposed minimum possible livable wage wage: i.e. what calculations you ran to show this proposal is profit-maximizing at exactly 15$ or whatever, not 16$ or 50$."
- CryptoPunk 6y ago
  Profit maximizing would be slavery with $0 wages. But social utility maximizing is the price that emerges spontaneously when people are free to broadcast job offers and to contract, that is set by supply and demand: https://en.wikipedia.org/wiki/Supply_and_demand https://en.wikipedia.org/wiki/Supply_and_demand
  - AstralStorm 6y ago
    Unfortunately for us, there is no such thing as free market. Deregulated markets devolve into might makes right (by size), regulated ones are facing the problem of justification for everything. In terms of wages, the markets in the US are extremely deregulated, in addition to lobbying messing with the politics. Somehow actual solutions are presented as less free market when they don't actually impact how trades are made. Big corporations can always undercut small companies on costs by investing into capital expensive technologies. Does it mean the smaller companies should be allowed to run wage slavery? No, because then we run into arbitrary wage differentiation. The proper way to evaluate the minimum wage is to compute local Purchasing Power Parity, check how many PPP-dollars are required for life, then set the minimum wage at slightly higher level to compensate for how rarely it is adjusted. These numbers will be a bit different per state in plain US dollars. Anything else is not a living wage, and a living wage is the only reasonable way of approaching it. From capitalist point of view, a business that cannot supply a minimum wage is insufficiently competitive and should fail. It is trying to run feudal by creating wage slaves. Alternative approach would be interventions to lower PPP-adjusted cost of living, such as building cheap or free housing, not means tested food stamps, free healthcare, free education etc. But these are much less predictable, and put the onus on government, while at the same time allowing bigger corporations to undercut their salaries, so it is at best a part of a combined approach.

ClumsyPilot 6y ago

"There is absolutely no public welfare benefit in creating statutory minimums on wages, benefits and working conditions" This is so flat wrong, have you ever bothered to read how theae laws came about? Maybe you should not assume that people who put them in place arw idiota.

CryptoPunk 6y ago
There are many popularly supported laws based that are based on economic fallacies, like this Venezuelan law enacted in 2011: http://www.bloomberg.com/news/articles/2011-11-25/chavez-price-caps-spark-panic-buying-of-coffee-toilet-paper http://www.bloomberg.com/news/articles/2011-11-25/chavez-pri... >>“The law of supply and demand is a lie,” Karlin Granadillo, the head of a price control agency set up to enforce the new regulations, said yesterday on state television. “These are not arbitrary measures. They are necessary.” Or the many rent control laws in place all across the US. Rent control is unequivocally a harmful law: https://www.econlib.org/library/Enc/RentControl.html https://www.econlib.org/library/Enc/RentControl.html