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The market isn't quite free atm with the government directly competing with companies on wages.* Extended unemployment benefits may now be over, but many are s

The market isn't quite free atm with the government directly competing with companies on wages.* Extended unemployment benefits may now be over, but many are still not hungry enough to accept current wage levels. Post-lockdown demand is also different as many people realized life is better spending time with family than burning the midnight oil just to purchase more toys that will never be used. This is not to say wage increases are bad. They are good. This is what we would want to see: jobs paying too little not getting applicants, forcing companies to increase wages. It is, however, bad that the government interferes.

shlurpy 5y ago
Why is it bad? If government competition forces wages up, that seems like would finally solve the decades long wage stagnation that markets have been unable to, right?
- hellojesus 5y ago
  The government didn't compete by providing better goods/services. They just taxed everyone through inflation to pay for it. This is not sustainable and anti free market.
dvdhnt 5y ago
> It is, however, bad that the government interferes. I wrote something much longer, but to distill it down, the government didn't interfere. They did the very least they could possibly do compared to what they did for other transfers of wealth during the height of the pandemic. Most people can't just go spend time with their family, and those toys are distractions from the shit show that is our corporate democracy.
- hellojesus 5y ago
  The government absolutely did interfere. The government told businesses they can't operate; that is interference. Not only did they do that, but they also became arbiters of which businesses were "essential", part of the wealth transfer problem you mentioned. Couple that with ppp loans being processed by requested size because the government attached size percentages to the payouts realized by banks. Government paying people not to work was interference, along with everything else. I believe that people are owed just compensation for it too! But that would look a lot different than extended unemployment benefits - people would be receiving their full salary. All of this is interference and bad and not supportive of free markets. Rather, the government should have done the necessary thing and forced people to evaluate their own risk. Nobody wants to visit your store anymore? You go out of business, and the gov isn't on the hook. That would be free markets.
  - dvdhnt 5y ago
    While your points are well articulated, I think our perspectives are irreconcilable. Based on your arguments, health inspections, environmental impact reports, and laws against child labor would not exist. If the government did not intervene, we would still have slave markets in this country because, as these last few years have shown, many people still see others as nothing more than stock. Adam Smith emphasized the limiting of government intervention, not the complete removal of it. He also believed the government to be responsible for the education and defense of a country. While we can argue over what sectors are in fact 'essential', and about the government's execution, but it is reasonable to assume that preventing physical harm and death during the pandemic is a valid function of a country's government, according to the father of modern economics. Going further, he argued in favor of 'institutions that promote free and fair competition'. So, I would contend that payments to prevent citizens from starving, and from subjugating themselves to the enrichment of others for scraps while in fear of bodily harm, are not only in line with Smith's ideals, but those payments create fairer competition. If anything hurts the average business, it is entrenched conglomerates and chains, especially those with huge cash piles, that can easily raise wages to meet labor's demands. And that situation exists specifically because of a lack of government action to discourage the hoarding of capital.
    - hellojesus 5y ago
      On specific points, our views are likely irreconcilable. However, I would agree with a fair amount of your points. I only contest that there are responsibilities should the government wish to intervene. I believe the government has a duty to implement regulation when there is harm caused to a third, non voluntary party in a transaction. > Based on your arguments, health inspections, environmental impact reports, and laws against child labor would not exist. I agree about not having health inspections. This should be left to third party businesses which offer accreditation. Businesses can opt in/out, and consumers can determine their risk tolerance. After all, a company that poisons someone is liable. Companies likely would be incented to seek out a third party accreditation or face higher insurance premiums. Result is nearly identical while the mechanism is the market and not regulation. I think the Wagner Act, which is what forbade child labor, is terrible legislation. While it is preferable for children to not work, we have studies which show that child labor is mainly derived from poverty. Few parents would choose to work their children as opposed to educating them. The Wagner Act also forced unions upon businesses which I think is a tragedy. Businesses voluntarily transact. If they want to negotiate work conditions through a single point of contact, such as a union, they should be allowed to do so and only negotiate with a union. If they want to only negotiate with individuals, that is again their prerogative. A hybrid approach is fine too. The Wagner Act led to terrible band-aids like right to work which just make negotiation standards even worse. The same Wagner Act implemented a federal minimum wage which is in direct contradiction to free markets and equally as garbage as the aforementioned effects. > If the government did not intervene, we would still have slave markets in this country because, as these last few years have shown, many people still see others as nothing more than stock. Slaves are third parties subject to involuntary negative consequence so the government is perfectly fine to implement regulation here. > While we can argue over what sectors are in fact 'essential', and about the government's execution, but it is reasonable to assume that preventing physical harm and death during the pandemic is a valid function of a country's government, according to the father of modern economics. While it is true that I think the government should not have intervened by shutting any business down, I did concede they could make such a decision in the pursuit of public health. However, if they are to take this route, the government must provide just compensation. This is in direct accordance with the 5th Ammendment: "...nor shall private property be taken for public use, without just compensation." The government effectively commandeered private property (businesses, rental properties, etc.) for public use (barriers against disease transmission). $300 extra in federal unemployment is not just compensation. Neither are PPP loans which were corruptly or incompetently administered. My point is that the government neither left it to the free market nor fulfilled the requirements of the law. > If anything hurts the average business, it is entrenched conglomerates and chains, especially those with huge cash piles, that can easily raise wages to meet labor's demands. I believe the violation of the law, whether having significant or marginal impact upon the victim, is a violation, and I therefore do not differentiate as to whether something was fine just because a victim is better capitalized. A very similar argument was just attempted on a constitution-violating "wealth tax", stating it only impacted billionaires so it's just fine. Thankfully it was pulled because it was ridiculous and illegal. So I think we're mostly the same in opinion! I just am unflexible with violation based on emotional fairness; rather I default to a strict adherence of the law and/or belief that it should default to the market wherever possible.
greedo 5y ago
Yet most of the studies on this show that states that stopped extended unemployment benefits didn't have better results in terms of filling jobs than states that had a more generous plan. What's funny is that for YEARS we've had employers saying "We'll go out of business if the minimum wage is raised $1." But now, they seem to find a way to pay much higher wages. It's just complete BS. When I was a wee lad working in California fast food, minimum wage went up $.15, to a whopping $3.10/hour. What did the franchisee I worked for do? He figured out that at Store A, he had used roughly 30000 man hours of labor. $.15 increase in minimum wage meant an additional labor cost of $4500 (not counting payroll taxes, so maybe an additional 25%). So he tells the store manager, cut the total # of hours used by 1400 over the course of the year. No thought given to how this would affect QOS, just cut the costs. So shortsighted.
- hellojesus 5y ago
  What you described is a poor business decision. Companies that make poor decisions tend to go out of business. I would also say that job fills are lagging enough not to have conclusive data yet. While you mention that jobs weren't filled in states ending benefits moreso than those that did, there are some articles out there that argue against that claim: https://www.zerohedge.com/markets/experiment-over-labor-market-normalizing-republican-states-remains-broken-blue-states https://www.zerohedge.com/markets/experiment-over-labor-mark... The above looks more at jobless claims and unemployment rates than total jobs filled. The US data, which is limited for me to perform eda since I'm on mobile, appears to be largely unchanged for states when comparing to a year ago: https://www.bls.gov/news.release/laus.t03.htm https://www.bls.gov/news.release/laus.t03.htm From that we can maybe say that, although not encouraging job fills, at least ending the federal part of the unemployment saves tax dollars. But I also don't think that is the full story. Although the extra $300/week ended in some states, the existing state money was still there, and that can go a long way to living a life of leisure when you're only other expenses are food and housing (let's not forget that there was also an eviction moratorium/no doc 12 month forbearance so the housing costs, even without $300 extra, are still subsidized by tax payers). Even when the eviction moratorium ends, most evictions have to go through the courts which are going to be slow due to the amount of cases that will be filed. And none of this touches on the stickiness of wages (hence businesses trying to avoid) and what that means for someone that just got a year+ of paid vacation while retaining their prior annual income or even exceeding it. I don't think we will have a complete picture for awhile.
mbrodersen 5y ago
There is no such thing as “free markets” unless you talk crime. Legal markets are always defined and shaped by governments, politics, regulations, rules, agreements etc. It might be the case that market A is less restricted than market B but none of the markets are “free”.

shlurpy 5y ago

Why is it bad? If government competition forces wages up, that seems like would finally solve the decades long wage stagnation that markets have been unable to, right?

hellojesus 5y ago
The government didn't compete by providing better goods/services. They just taxed everyone through inflation to pay for it. This is not sustainable and anti free market.

dvdhnt 5y ago

> It is, however, bad that the government interferes. I wrote something much longer, but to distill it down, the government didn't interfere. They did the very least they could possibly do compared to what they did for other transfers of wealth during the height of the pandemic. Most people can't just go spend time with their family, and those toys are distractions from the shit show that is our corporate democracy.

hellojesus 5y ago
The government absolutely did interfere. The government told businesses they can't operate; that is interference. Not only did they do that, but they also became arbiters of which businesses were "essential", part of the wealth transfer problem you mentioned. Couple that with ppp loans being processed by requested size because the government attached size percentages to the payouts realized by banks. Government paying people not to work was interference, along with everything else. I believe that people are owed just compensation for it too! But that would look a lot different than extended unemployment benefits - people would be receiving their full salary. All of this is interference and bad and not supportive of free markets. Rather, the government should have done the necessary thing and forced people to evaluate their own risk. Nobody wants to visit your store anymore? You go out of business, and the gov isn't on the hook. That would be free markets.
- dvdhnt 5y ago
  While your points are well articulated, I think our perspectives are irreconcilable. Based on your arguments, health inspections, environmental impact reports, and laws against child labor would not exist. If the government did not intervene, we would still have slave markets in this country because, as these last few years have shown, many people still see others as nothing more than stock. Adam Smith emphasized the limiting of government intervention, not the complete removal of it. He also believed the government to be responsible for the education and defense of a country. While we can argue over what sectors are in fact 'essential', and about the government's execution, but it is reasonable to assume that preventing physical harm and death during the pandemic is a valid function of a country's government, according to the father of modern economics. Going further, he argued in favor of 'institutions that promote free and fair competition'. So, I would contend that payments to prevent citizens from starving, and from subjugating themselves to the enrichment of others for scraps while in fear of bodily harm, are not only in line with Smith's ideals, but those payments create fairer competition. If anything hurts the average business, it is entrenched conglomerates and chains, especially those with huge cash piles, that can easily raise wages to meet labor's demands. And that situation exists specifically because of a lack of government action to discourage the hoarding of capital.
  - hellojesus 5y ago
    On specific points, our views are likely irreconcilable. However, I would agree with a fair amount of your points. I only contest that there are responsibilities should the government wish to intervene. I believe the government has a duty to implement regulation when there is harm caused to a third, non voluntary party in a transaction. > Based on your arguments, health inspections, environmental impact reports, and laws against child labor would not exist. I agree about not having health inspections. This should be left to third party businesses which offer accreditation. Businesses can opt in/out, and consumers can determine their risk tolerance. After all, a company that poisons someone is liable. Companies likely would be incented to seek out a third party accreditation or face higher insurance premiums. Result is nearly identical while the mechanism is the market and not regulation. I think the Wagner Act, which is what forbade child labor, is terrible legislation. While it is preferable for children to not work, we have studies which show that child labor is mainly derived from poverty. Few parents would choose to work their children as opposed to educating them. The Wagner Act also forced unions upon businesses which I think is a tragedy. Businesses voluntarily transact. If they want to negotiate work conditions through a single point of contact, such as a union, they should be allowed to do so and only negotiate with a union. If they want to only negotiate with individuals, that is again their prerogative. A hybrid approach is fine too. The Wagner Act led to terrible band-aids like right to work which just make negotiation standards even worse. The same Wagner Act implemented a federal minimum wage which is in direct contradiction to free markets and equally as garbage as the aforementioned effects. > If the government did not intervene, we would still have slave markets in this country because, as these last few years have shown, many people still see others as nothing more than stock. Slaves are third parties subject to involuntary negative consequence so the government is perfectly fine to implement regulation here. > While we can argue over what sectors are in fact 'essential', and about the government's execution, but it is reasonable to assume that preventing physical harm and death during the pandemic is a valid function of a country's government, according to the father of modern economics. While it is true that I think the government should not have intervened by shutting any business down, I did concede they could make such a decision in the pursuit of public health. However, if they are to take this route, the government must provide just compensation. This is in direct accordance with the 5th Ammendment: "...nor shall private property be taken for public use, without just compensation." The government effectively commandeered private property (businesses, rental properties, etc.) for public use (barriers against disease transmission). $300 extra in federal unemployment is not just compensation. Neither are PPP loans which were corruptly or incompetently administered. My point is that the government neither left it to the free market nor fulfilled the requirements of the law. > If anything hurts the average business, it is entrenched conglomerates and chains, especially those with huge cash piles, that can easily raise wages to meet labor's demands. I believe the violation of the law, whether having significant or marginal impact upon the victim, is a violation, and I therefore do not differentiate as to whether something was fine just because a victim is better capitalized. A very similar argument was just attempted on a constitution-violating "wealth tax", stating it only impacted billionaires so it's just fine. Thankfully it was pulled because it was ridiculous and illegal. So I think we're mostly the same in opinion! I just am unflexible with violation based on emotional fairness; rather I default to a strict adherence of the law and/or belief that it should default to the market wherever possible.

greedo 5y ago

Yet most of the studies on this show that states that stopped extended unemployment benefits didn't have better results in terms of filling jobs than states that had a more generous plan. What's funny is that for YEARS we've had employers saying "We'll go out of business if the minimum wage is raised $1." But now, they seem to find a way to pay much higher wages. It's just complete BS. When I was a wee lad working in California fast food, minimum wage went up $.15, to a whopping $3.10/hour. What did the franchisee I worked for do? He figured out that at Store A, he had used roughly 30000 man hours of labor. $.15 increase in minimum wage meant an additional labor cost of $4500 (not counting payroll taxes, so maybe an additional 25%). So he tells the store manager, cut the total # of hours used by 1400 over the course of the year. No thought given to how this would affect QOS, just cut the costs. So shortsighted.

hellojesus 5y ago
What you described is a poor business decision. Companies that make poor decisions tend to go out of business. I would also say that job fills are lagging enough not to have conclusive data yet. While you mention that jobs weren't filled in states ending benefits moreso than those that did, there are some articles out there that argue against that claim: https://www.zerohedge.com/markets/experiment-over-labor-market-normalizing-republican-states-remains-broken-blue-states https://www.zerohedge.com/markets/experiment-over-labor-mark... The above looks more at jobless claims and unemployment rates than total jobs filled. The US data, which is limited for me to perform eda since I'm on mobile, appears to be largely unchanged for states when comparing to a year ago: https://www.bls.gov/news.release/laus.t03.htm https://www.bls.gov/news.release/laus.t03.htm From that we can maybe say that, although not encouraging job fills, at least ending the federal part of the unemployment saves tax dollars. But I also don't think that is the full story. Although the extra $300/week ended in some states, the existing state money was still there, and that can go a long way to living a life of leisure when you're only other expenses are food and housing (let's not forget that there was also an eviction moratorium/no doc 12 month forbearance so the housing costs, even without $300 extra, are still subsidized by tax payers). Even when the eviction moratorium ends, most evictions have to go through the courts which are going to be slow due to the amount of cases that will be filed. And none of this touches on the stickiness of wages (hence businesses trying to avoid) and what that means for someone that just got a year+ of paid vacation while retaining their prior annual income or even exceeding it. I don't think we will have a complete picture for awhile.

mbrodersen 5y ago

There is no such thing as “free markets” unless you talk crime. Legal markets are always defined and shaped by governments, politics, regulations, rules, agreements etc. It might be the case that market A is less restricted than market B but none of the markets are “free”.