5 ms·

"I suggest offering more money instead" To an extent that's true, but this type of sentiment is airily tossed around by people who've never had to make payroll.

by alvah 5y ago

"I suggest offering more money instead" To an extent that's true, but this type of sentiment is airily tossed around by people who've never had to make payroll. There's often little or even no profit to be made at the rate offered - should the business increase their offer to the point where a loss is guaranteed?

csa 5y ago
> To an extent that's true, but this type of sentiment is airily tossed around by people who've never had to make payroll. There's often little or even no profit to be made at the rate offered - should the business increase their offer to the point where a loss is guaranteed? Maybe they shouldn’t be in business. Imho, these are effectively zombie businesses, and it would probably be better for the overall market efficiency (esp. wrt labor and asset allocation) if they closed.
- alvah 5y ago
  I suspected that would be the response. If you close down all the businesses that can't survive paying more for unskilled or semi-skilled labour, what do all the unskilled and semi-skilled people do? Where do they get the opportunity to upskill?
  - mavelikara 5y ago
    > If you close down all the businesses that can't survive paying more for unskilled or semi-skilled labour, what do all the unskilled and semi-skilled people do? They get deployed in other commercial activities that can make more efficient use of their time, and hence, pay them more.
    - alvah 5y ago
      Very good in theory. Any suggestions on how to get from here to there in the real world, without massive disruption to people's real lives? The consequences of massively & rapidly increasing the number of unemployed doesn't seem to be covered in the libertarian literature. History books do cover this though.
      - laughingbovine 5y ago
        This is a strange argument. Are you saying that we should never raise minimum wage? It isn't even keeping up with inflation. As for the history books, I recall we've raised the minimum wage in the past. The US still exists, so i guess the history books say its ok?
        alvah 5y ago
        It's not strange at all, you just didn't understand the point. Libertarian theory has all kinds of bizarre reasoning about human nature, which doesn't translate into the real world. History, on the other hand, does provide a guide to how large numbers of actual people have behaved in the past, when cast on to the scrap heap of life. Human nature doesn't change rapidly. I'm not taking your bait (never raise minimum wage), but it's important to be aware that, at the margin, increasing the cost of any business input will result in business attempting to substitute that input to the extent possible - i.e. fewer jobs.
  - darkhorse22 5y ago
    They don't, so there will be much more unrest.
  - nradov 5y ago
    Keeping zombie businesses alive for the sake of steady employment is one of the reasons that Japan has been stagnant for many years. A healthy economy needs creative destruction.
    - csa 5y ago
      As someone who has seen this firsthand while living in Japan, I agree with your statement. What is more, one of the things that I love about the US is that we seem to be fairly good at deconstructing and reconstructing relatively quickly and efficiently. Our system isn’t perfect (tends to favor the capital class and stick it to labor more than I would prefer), but I personally think it’s much better than what Japan has done.
  - bialpio 5y ago
    But if you don't close those businesses, you get people who are one financial emergency away from bankruptcy. You get people who have no chance of bettering their lives. I do not have a solution, but that does not mean that I cannot call out what I see as the problem.
    - alvah 5y ago
      I agree with you in theory. Theory often fails to survive the first contact with the enemy (reality) though.
      - bialpio 5y ago
        Reality is not the enemy here, hard life is and I'd like to think that we're all in this together & we'll help each other out. :-) I'm hoping we're becoming an advanced enough society that we'll be able to at least provide food, shelter and basic health insurance for everyone free of charge. But enough dreaming for today...
nradov 5y ago
At that point the business should either pivot to a new strategy, or liquidate in an orderly fashion and return any remaining capital to investors. If your business is on an unsustainable path then there's no point in continuing.
bialpio 5y ago
If the only way for the business to be profitable is to pay less than a living wage, then that business is in fact _not_ profitable. I'd rather subsidize people that are between jobs rather than business owners (because I'd still have to subsidize food stamps for their employees). If the company cannot make money without exploiting workers, maybe it shouldn't exist? And then I'll happily pay the (now ex-) owner's unemployment benefit until they land a job.
- not2b 5y ago
  Yes, if your company pays so little that your employees need state aid to eat and pay rent, they aren't on welfare, you (the employer) are.

by alvah 5y ago

csa 5y ago

> To an extent that's true, but this type of sentiment is airily tossed around by people who've never had to make payroll. There's often little or even no profit to be made at the rate offered - should the business increase their offer to the point where a loss is guaranteed? Maybe they shouldn’t be in business. Imho, these are effectively zombie businesses, and it would probably be better for the overall market efficiency (esp. wrt labor and asset allocation) if they closed.

alvah 5y ago
I suspected that would be the response. If you close down all the businesses that can't survive paying more for unskilled or semi-skilled labour, what do all the unskilled and semi-skilled people do? Where do they get the opportunity to upskill?
- mavelikara 5y ago
  > If you close down all the businesses that can't survive paying more for unskilled or semi-skilled labour, what do all the unskilled and semi-skilled people do? They get deployed in other commercial activities that can make more efficient use of their time, and hence, pay them more.
  - alvah 5y ago
    Very good in theory. Any suggestions on how to get from here to there in the real world, without massive disruption to people's real lives? The consequences of massively & rapidly increasing the number of unemployed doesn't seem to be covered in the libertarian literature. History books do cover this though.
    - laughingbovine 5y ago
      This is a strange argument. Are you saying that we should never raise minimum wage? It isn't even keeping up with inflation. As for the history books, I recall we've raised the minimum wage in the past. The US still exists, so i guess the history books say its ok?
      - alvah 5y ago
        It's not strange at all, you just didn't understand the point. Libertarian theory has all kinds of bizarre reasoning about human nature, which doesn't translate into the real world. History, on the other hand, does provide a guide to how large numbers of actual people have behaved in the past, when cast on to the scrap heap of life. Human nature doesn't change rapidly. I'm not taking your bait (never raise minimum wage), but it's important to be aware that, at the margin, increasing the cost of any business input will result in business attempting to substitute that input to the extent possible - i.e. fewer jobs.
- darkhorse22 5y ago
  They don't, so there will be much more unrest.
- nradov 5y ago
  Keeping zombie businesses alive for the sake of steady employment is one of the reasons that Japan has been stagnant for many years. A healthy economy needs creative destruction.
  - csa 5y ago
    As someone who has seen this firsthand while living in Japan, I agree with your statement. What is more, one of the things that I love about the US is that we seem to be fairly good at deconstructing and reconstructing relatively quickly and efficiently. Our system isn’t perfect (tends to favor the capital class and stick it to labor more than I would prefer), but I personally think it’s much better than what Japan has done.
- bialpio 5y ago
  But if you don't close those businesses, you get people who are one financial emergency away from bankruptcy. You get people who have no chance of bettering their lives. I do not have a solution, but that does not mean that I cannot call out what I see as the problem.
  - alvah 5y ago
    I agree with you in theory. Theory often fails to survive the first contact with the enemy (reality) though.
    - bialpio 5y ago
      Reality is not the enemy here, hard life is and I'd like to think that we're all in this together & we'll help each other out. :-) I'm hoping we're becoming an advanced enough society that we'll be able to at least provide food, shelter and basic health insurance for everyone free of charge. But enough dreaming for today...

nradov 5y ago

At that point the business should either pivot to a new strategy, or liquidate in an orderly fashion and return any remaining capital to investors. If your business is on an unsustainable path then there's no point in continuing.

bialpio 5y ago

If the only way for the business to be profitable is to pay less than a living wage, then that business is in fact _not_ profitable. I'd rather subsidize people that are between jobs rather than business owners (because I'd still have to subsidize food stamps for their employees). If the company cannot make money without exploiting workers, maybe it shouldn't exist? And then I'll happily pay the (now ex-) owner's unemployment benefit until they land a job.

not2b 5y ago
Yes, if your company pays so little that your employees need state aid to eat and pay rent, they aren't on welfare, you (the employer) are.