4 ms·

Wouldn't it be easier to specify the minimum wage in real instead of nominal dollars?

tablespoon 5y ago
> Wouldn't it be easier to specify the minimum wage in real instead of nominal dollars? Yes, but then you couldn't do nothing and use inflation to reduce it without political host.
foxyv 5y ago
The problem with this is, who gets to say what a nominal dollar is? There are like ten different versions of inflation calculation. It wouldn't be hard to cherry pick the commodities that set inflation low. Or, if you are really devious, you could subsidize only those commodities that are in the index as a loss leader for stuff people actually need. Personally I would prefer to use a percentage of the 99th percentile of earners. So if the rich get richer, the minimum wage goes up.
- TheCoelacanth 5y ago
  The Federal Reserve decides what a nominal dollar is. It's the real dollars that are in question.
- danbruc 5y ago
  This could just be part of the law. In the end it is not that much different than the current situation, every couple of years the minimum wage gets adjusted after looking at the numbers. Having the law state the minimum wage in real dollars and specifying how convert the value would in the end just automate this process and adjust the minimum wage every year or so.
  - dragonwriter 5y ago
    > the current situation, every couple of years the minimum wage gets adjusted after looking at the numbers. For large values of “couple” (counting the last few back: 2007, 1996, 1989, 1977.) Each of those spread out increases over a few years, but even then there was a wide gap between the last incrrease.and the next adjustment.)
  - uhhhhhhhhhhhhhh 5y ago
    well then people would just fight over who controls nominality
dragonwriter 5y ago
> Wouldn't it be easier to specify the minimum wage in real instead of nominal dollars? No, because price data (and thus conversion from “real” dollars to actual currency, that is, “nominal dollars", based on some past bemchmark) are only available retrospectively. But you probably want to know what the minomum wage in nominal dollars is before you have to pay someone.
- danbruc 5y ago
  That is not really a problem as long as inflation or deflation is not crazy over a year or so. Just make the minimum wage X real dollars based on method such and such and the numbers from last year.
- actually_a_dog 5y ago
  You would implement that by setting it to $X real and nominal at some base point, then using the CPI to readjust yearly or something. There's no problem knowing what minimum wage is or will be at any given time.

> Wouldn't it be easier to specify the minimum wage in real instead of nominal dollars? Yes, but then you couldn't do nothing and use inflation to reduce it without political host.

foxyv 5y ago

The problem with this is, who gets to say what a nominal dollar is? There are like ten different versions of inflation calculation. It wouldn't be hard to cherry pick the commodities that set inflation low. Or, if you are really devious, you could subsidize only those commodities that are in the index as a loss leader for stuff people actually need. Personally I would prefer to use a percentage of the 99th percentile of earners. So if the rich get richer, the minimum wage goes up.

TheCoelacanth 5y ago
The Federal Reserve decides what a nominal dollar is. It's the real dollars that are in question.
danbruc 5y ago
This could just be part of the law. In the end it is not that much different than the current situation, every couple of years the minimum wage gets adjusted after looking at the numbers. Having the law state the minimum wage in real dollars and specifying how convert the value would in the end just automate this process and adjust the minimum wage every year or so.
- dragonwriter 5y ago
  > the current situation, every couple of years the minimum wage gets adjusted after looking at the numbers. For large values of “couple” (counting the last few back: 2007, 1996, 1989, 1977.) Each of those spread out increases over a few years, but even then there was a wide gap between the last incrrease.and the next adjustment.)
- uhhhhhhhhhhhhhh 5y ago
  well then people would just fight over who controls nominality

dragonwriter 5y ago

> Wouldn't it be easier to specify the minimum wage in real instead of nominal dollars? No, because price data (and thus conversion from “real” dollars to actual currency, that is, “nominal dollars", based on some past bemchmark) are only available retrospectively. But you probably want to know what the minomum wage in nominal dollars is before you have to pay someone.

danbruc 5y ago
That is not really a problem as long as inflation or deflation is not crazy over a year or so. Just make the minimum wage X real dollars based on method such and such and the numbers from last year.
actually_a_dog 5y ago
You would implement that by setting it to $X real and nominal at some base point, then using the CPI to readjust yearly or something. There's no problem knowing what minimum wage is or will be at any given time.