5 ms·

All for the low low price of exploiting the lowest paid members of the working class and increased inequality. What a terrible trade…

by mhoad 5y ago

nomilk 5y ago
Australian unemployment is incredibly low at the moment (I could be wrong, but I don't think it's been this low since the 1970's!). See here: https://i.imgur.com/nR8sJTd.png https://i.imgur.com/nR8sJTd.png This means employees can pick and choose who they work for. When some professions pay more than others, that's an important signal to the labour force to consider swapping. It shouldn't be assumed to be meaningless or flippantly legislated away.
- deleted 5y ago
  [deleted]
- djrobstep 5y ago
  > When some professions pay more than others, that's an important signal to the labour force to consider swapping. But now they can get paid more without swapping. Honestly, a cynic would think you're just scrambling around for any rationale to justify your ideological hatred of workers getting decent wages.
  - nomilk 5y ago
    Let's be grateful there aren't any cynics in this forum. We should seek to make sense of microeconomics no differently to how Attenborough seeks to understand the natural world. To observe, analyse, explain, and ultimately try to understand what's going on. We can't infer he has a "hatred" of dung beetles because he explains their activities! Price floors introduce distortions which reduce efficiency. It's easy to look at one tiny labour market, like NSW Amazon delivery drivers, and think it's great drivers will make more. Now consider when they go to spend that money. They will have slightly reduced range (some sellers will no longer be profitable and will cease selling), and their pay won't go as far, since they themselves will, like everyone else, be paying more for delivery. Now for the mind blowing part: consider what happens when everyone attempts the same trick of legislating a price floor in the market for their own labour. Now everyone's pay goes up 20% but when they go to spend it, it only goes 60% or 50% as far as it once did when markets were efficient. This doesn't even touch on 2 other major considerations of price floors: 1. If wages are low in one profession, you must ask "compared to what?", and if the answer is another higher-paying profession, then you should consider switching. That is allocative efficiency. It's easy to overlook the gains when thinking of a few hundred workers, but across an entire populace, the gains are enormous. 2. A price floor on labour will put some people entirely out of work, since some people's marginal value will be less than the floor. As a rule of thumb, any NSW driver who doesn't produce A$37.80 of value per hour for Amazon won't have a job after the measure is fully phased in.
    - djrobstep 5y ago
      What your econ 101 analysis ignores is that wages are very often not determined by productivity or the value they are generating for the employer, but by bargaining power. This is particularly so at the low end of the labor market. In the real world, there's plenty of evidence that minimum wages have a positive influence of employment, wellbeing, and allocative efficiency. To the extent that they eliminate jobs in truly low-productivity sectors, that's actually a good thing, as those people can be moved into higher productivity sectors - you just need a welfare state that handles the income instability and retraining costs for those involved.
superfunny 5y ago
Why do people get paid higher wages? Why does a software engineer make more than a janitor? Is it hereditary? Is it merely luck? Is it privilege? It is something encoded in the law?
- gruez 5y ago
  It's pretty simple: supply and demand
bagacrap 5y ago
This seems like such a thoughtless, knee jerk response to the points being made. You must not think that replacing a worker with a robot reduces inequality? That /employing/ is the same as /exploiting/ iff the employee is poor? I mean inequality is a poor metric anyway. Absolute communism reduces inequality to zero, but it doesn't improve overall outcomes.

All for the low low price of exploiting the lowest paid members of the working class and increased inequality. What a terrible trade…

by mhoad 5y ago

All for the low low price of exploiting the lowest paid members of the working class and increased inequality. What a terrible trade…

nomilk 5y ago

Australian unemployment is incredibly low at the moment (I could be wrong, but I don't think it's been this low since the 1970's!). See here: https://i.imgur.com/nR8sJTd.png https://i.imgur.com/nR8sJTd.png This means employees can pick and choose who they work for. When some professions pay more than others, that's an important signal to the labour force to consider swapping. It shouldn't be assumed to be meaningless or flippantly legislated away.

deleted 5y ago
[deleted]
djrobstep 5y ago
> When some professions pay more than others, that's an important signal to the labour force to consider swapping. But now they can get paid more without swapping. Honestly, a cynic would think you're just scrambling around for any rationale to justify your ideological hatred of workers getting decent wages.
- nomilk 5y ago
  Let's be grateful there aren't any cynics in this forum. We should seek to make sense of microeconomics no differently to how Attenborough seeks to understand the natural world. To observe, analyse, explain, and ultimately try to understand what's going on. We can't infer he has a "hatred" of dung beetles because he explains their activities! Price floors introduce distortions which reduce efficiency. It's easy to look at one tiny labour market, like NSW Amazon delivery drivers, and think it's great drivers will make more. Now consider when they go to spend that money. They will have slightly reduced range (some sellers will no longer be profitable and will cease selling), and their pay won't go as far, since they themselves will, like everyone else, be paying more for delivery. Now for the mind blowing part: consider what happens when everyone attempts the same trick of legislating a price floor in the market for their own labour. Now everyone's pay goes up 20% but when they go to spend it, it only goes 60% or 50% as far as it once did when markets were efficient. This doesn't even touch on 2 other major considerations of price floors: 1. If wages are low in one profession, you must ask "compared to what?", and if the answer is another higher-paying profession, then you should consider switching. That is allocative efficiency. It's easy to overlook the gains when thinking of a few hundred workers, but across an entire populace, the gains are enormous. 2. A price floor on labour will put some people entirely out of work, since some people's marginal value will be less than the floor. As a rule of thumb, any NSW driver who doesn't produce A$37.80 of value per hour for Amazon won't have a job after the measure is fully phased in.
  - djrobstep 5y ago
    What your econ 101 analysis ignores is that wages are very often not determined by productivity or the value they are generating for the employer, but by bargaining power. This is particularly so at the low end of the labor market. In the real world, there's plenty of evidence that minimum wages have a positive influence of employment, wellbeing, and allocative efficiency. To the extent that they eliminate jobs in truly low-productivity sectors, that's actually a good thing, as those people can be moved into higher productivity sectors - you just need a welfare state that handles the income instability and retraining costs for those involved.

superfunny 5y ago

Why do people get paid higher wages? Why does a software engineer make more than a janitor? Is it hereditary? Is it merely luck? Is it privilege? It is something encoded in the law?

gruez 5y ago
It's pretty simple: supply and demand

bagacrap 5y ago

This seems like such a thoughtless, knee jerk response to the points being made. You must not think that replacing a worker with a robot reduces inequality? That /employing/ is the same as /exploiting/ iff the employee is poor? I mean inequality is a poor metric anyway. Absolute communism reduces inequality to zero, but it doesn't improve overall outcomes.