4 ms·

It will be interesting to see what happens. One thing I really like about the US federal system is how each jurisdiction applies massive economic interventions.

by arjie 5mo ago

It will be interesting to see what happens. One thing I really like about the US federal system is how each jurisdiction applies massive economic interventions. We get to run many experiments and see what happens. I recall that I was curious about the Seattle driver minimum wage law and the results were so interesting to me[0]: > We find that the minimum pay law raised delivery pay per task, though the increases in base pay per task were partially offset by a substantial reduction in average tips, a major component of delivery pay. At the same time, the policy led to a reduction in the number of tasks completed by highly attached incumbent drivers (but not an increase in exit from delivery work), completely offsetting increased pay per task and leading to zero effect on monthly earnings. We find evidence that drivers experienced more unpaid idle time and longer distances driven between tasks, but find no evidence that drivers reduced their total time working on delivery apps and only limited evidence of switching from delivery to ride-hailing work. Using a simple model of the labor market for platform delivery drivers, we show that our evidence is consistent with free entry of drivers into the delivery market driving down the task-finding rate until expected earnings return to their pre-reform level. These findings highlight the challenges of raising pay in spot markets for tasks where there is free entry of workers. 0: https://www.nber.org/papers/w34545 https://www.nber.org/papers/w34545

Ferret7446 5mo ago
Economics 101 happens. I don't think we need yet another example of the obvious thing happening. I have no idea why people keep talking about raising pay as if they were in a video game where resources just spawn out of thin air
- tpxl 5mo ago
  Resources have a way of spawning for CEOs, why not for minimum wage workers?
  - akramachamarei 5mo ago
    Do they? It's an interesting question whether resources can be spawned by fiat. I think the only entity capable of doing so is the government, i.e. when it prints money.
    - tpxl 5mo ago
      Well companies can issue stock, which is more or less spawning resources, but that's not what I meant. When people with more money than they need want more of it, things get done, including fucking over the customers, the partners and the workers. When wageslaves want more money they get dragged through the media for their greed (as is happening now).
  - watwut 5mo ago
    That is fairly reasonable description of how world works. Well connected CEO can spawn money they way minimum wage workers cant. And we in fact have tons of Epstein files showing exactly that in play, as a side benefit of those being released.
- VanTheBrand 5mo ago
  You may need to retake economics 101 perhaps if you think raising a wage floor has a single predictable outcome in every scenario, which seems to be what you are implying. It puts varying pressures on other elements in a dynamic system in different ratios and with second order effects that can’t be fully predicted until you “run the experiment.”
  - bko 5mo ago
    You don't know what the definitive predictable identical outcome would be. But you know the effect at the margin. At the margin, a wage floor will prevent some percent of transactions that would have taken place if a wage floor was not in place. It's not complicated. Some people will benefit, sure, but some commerce just won't take place. Consider a price floor on selling a used car. Suppose you had a car to sell. Would it make you feel better if there were a law that prevents you from selling your car for less than some amount? Sure maybe without the floor, your car would have sold for less than the floor amount. But would you want a price floor as a seller of a car? How about as a buyer of a car? Chances are if your car is worth less than the floor, no one will buy your car now. The price floor doesn't magically make your car more valuable, just makes it harder to sell.
    - jfengel 5mo ago
      You don't actually know that. It's too simple a model. Real world data on minimum wages do not bear it out. There are more variables than the graphs you get in the first two weeks of Econ 101. If you make it to the end of the semester, or even to the midterm, you'll know that the simple predictions you got on the first quiz were false.
      - mchusma 5mo ago
        I think it does bear that out in general, although it is slightly more complicated. What seems to happen 1. Low-wage workers, as a collective group, experience an increase in earnings (Dube & Zipperer, 2024). 2. Total job losses do take place, but are minor and teens/part-time/new entrants workers lose more often (Belman & Wolfson, 2014; Redmond & McGuinness, 2024). 3. Lost hours & increased prices - businesses primarily absorb the cost by slightly reducing weekly hours worked & increasing prices for consumers (Redmond & McGuinness, 2024) I would agree that modest minimum wage increases are far from the worst thing the government does, compared to other government interventions.
- imglorp 5mo ago
  What? Uber saw adjusted EBITDA of $2.5 billion, up 35% year-over-year" in 4q25 (per them). Money poured in. I have no idea why people keep talking about raising pay is a problem. Workers paid more spend more, stimulating growth at all levels. Economics 101.
  - gruez 5mo ago
    > Workers paid more spend more, stimulating growth at all levels. Economics 101. But per the original study, they didn't get paid more?
  - philipallstar 5mo ago
    Because then fewer people will use Uber. Customers don't have a whole-economy view. If you raised the price of an Uber to $200 a ride minimum, would that be a good thing? After all, workers paid more spend more, stimulating growth at all levels! It's a bit like California raising fast food minimum wages causing thousands of jobs to be lost[0]. [0] https://tfppwire.com/new-data-shows-california-lost-staggering-36565-fast-food-jobs-since-20-minimum-wage-kicked-in https://tfppwire.com/new-data-shows-california-lost-staggeri...
    - oblio 5mo ago
      Yeah, about that source: > About > TFPP Wire helps you stay ahead with breaking news, analysis, and bold <<conservative>> insights on the economy, politics, national security, culture, and more. It quotes California Globe: > About Us > California Globe is an independent, professional news website obsessively chronicling everything political throughout the state of California. We are <<pro-growth and pro-business>>, non-partisan and objective; we report what we see and hear without fear or favor. "pro-growth and pro-business" (dogwhistle for conservative), I'm sure their reporting is super unbiased, their sources are obviously not incentivized to distort facts. Oh, wait: > Explained Altaf Chaus, who owns and operates three Burger King franchise restaurants in San Jose Ah, yes, the capitalist is complaining. > By June 2024, <<Stanford University>> found that over 10,000 fast food jobs were already lost. > The "Stanford University" study behind that 10,000-jobs figure is an article titled "California Loses Nearly 10,000 Fast-Food Jobs After $20 Minimum Wage Signed Last Fall," written by economist Lee Ohanian and published April 24, 2024 by the <<Hoover Institution>>. The Hoover Institution is a think tank located on Stanford's campus and affiliated with the university, which is almost certainly why outlets describe it as a "Stanford University" finding. (Hoover itself notes that opinions on its site don't necessarily reflect the views of the Hoover Institution or Stanford University.) > <<Here's the catch: the article has been retracted.>> According to the notice now on the page, the author cited data reported by the Wall Street Journal and interpreted those data as being seasonally adjusted; following publication, those data were identified as not being seasonally adjusted, so the article was retracted to avoid misinformation. The seasonal-adjustment issue matters a lot here, because fast-food employment naturally fluctuates with the seasons, so unadjusted month-to-month numbers can show "losses" that are really just normal seasonal patterns. https://en.wikipedia.org/wiki/Hoover_Institution https://en.wikipedia.org/wiki/Hoover_Institution > It is widely described as <<conservative>>, although its directors have contested the idea that it is partisan. You need a more balanced news diet.
xg15 5mo ago
> ...leading to zero effect on monthly earnings. We find evidence that drivers experienced more unpaid idle time and longer distances driven between tasks, but find no evidence that drivers reduced their total time working on delivery apps Same effective income despite more idle time doesn't sound so bad.
- orangecat 5mo ago
  It's bad because they're spending the same amount of time "working", but generating less output. It's a loss for customers, who either have to pay more or forego the service altogether.
  - shimman 5mo ago
    You do realize these are humans and not machines right?
    - roughly 5mo ago
      No, we're talking economics here - picture a spherical human in a perfect marketplace
      - yladiz 5mo ago
        And humans are not purely economic machines.
  - Fraterkes 5mo ago
    And it’s a win for the new group of drivers who ostensibly used to have a worse paying job. These dollars probably have more marginal utility for the people delivering doordash than for those consumers. If we want to be technical.
sapphicsnail 5mo ago
I don't think you should take what the NBER says at face value.

by arjie 5mo ago

Ferret7446 5mo ago

Economics 101 happens. I don't think we need yet another example of the obvious thing happening. I have no idea why people keep talking about raising pay as if they were in a video game where resources just spawn out of thin air

tpxl 5mo ago
Resources have a way of spawning for CEOs, why not for minimum wage workers?
- akramachamarei 5mo ago
  Do they? It's an interesting question whether resources can be spawned by fiat. I think the only entity capable of doing so is the government, i.e. when it prints money.
  - tpxl 5mo ago
    Well companies can issue stock, which is more or less spawning resources, but that's not what I meant. When people with more money than they need want more of it, things get done, including fucking over the customers, the partners and the workers. When wageslaves want more money they get dragged through the media for their greed (as is happening now).
- watwut 5mo ago
  That is fairly reasonable description of how world works. Well connected CEO can spawn money they way minimum wage workers cant. And we in fact have tons of Epstein files showing exactly that in play, as a side benefit of those being released.
VanTheBrand 5mo ago
You may need to retake economics 101 perhaps if you think raising a wage floor has a single predictable outcome in every scenario, which seems to be what you are implying. It puts varying pressures on other elements in a dynamic system in different ratios and with second order effects that can’t be fully predicted until you “run the experiment.”
- bko 5mo ago
  You don't know what the definitive predictable identical outcome would be. But you know the effect at the margin. At the margin, a wage floor will prevent some percent of transactions that would have taken place if a wage floor was not in place. It's not complicated. Some people will benefit, sure, but some commerce just won't take place. Consider a price floor on selling a used car. Suppose you had a car to sell. Would it make you feel better if there were a law that prevents you from selling your car for less than some amount? Sure maybe without the floor, your car would have sold for less than the floor amount. But would you want a price floor as a seller of a car? How about as a buyer of a car? Chances are if your car is worth less than the floor, no one will buy your car now. The price floor doesn't magically make your car more valuable, just makes it harder to sell.
  - jfengel 5mo ago
    You don't actually know that. It's too simple a model. Real world data on minimum wages do not bear it out. There are more variables than the graphs you get in the first two weeks of Econ 101. If you make it to the end of the semester, or even to the midterm, you'll know that the simple predictions you got on the first quiz were false.
    - mchusma 5mo ago
      I think it does bear that out in general, although it is slightly more complicated. What seems to happen 1. Low-wage workers, as a collective group, experience an increase in earnings (Dube & Zipperer, 2024). 2. Total job losses do take place, but are minor and teens/part-time/new entrants workers lose more often (Belman & Wolfson, 2014; Redmond & McGuinness, 2024). 3. Lost hours & increased prices - businesses primarily absorb the cost by slightly reducing weekly hours worked & increasing prices for consumers (Redmond & McGuinness, 2024) I would agree that modest minimum wage increases are far from the worst thing the government does, compared to other government interventions.
imglorp 5mo ago
What? Uber saw adjusted EBITDA of $2.5 billion, up 35% year-over-year" in 4q25 (per them). Money poured in. I have no idea why people keep talking about raising pay is a problem. Workers paid more spend more, stimulating growth at all levels. Economics 101.
- gruez 5mo ago
  > Workers paid more spend more, stimulating growth at all levels. Economics 101. But per the original study, they didn't get paid more?
- philipallstar 5mo ago
  Because then fewer people will use Uber. Customers don't have a whole-economy view. If you raised the price of an Uber to $200 a ride minimum, would that be a good thing? After all, workers paid more spend more, stimulating growth at all levels! It's a bit like California raising fast food minimum wages causing thousands of jobs to be lost[0]. [0] https://tfppwire.com/new-data-shows-california-lost-staggering-36565-fast-food-jobs-since-20-minimum-wage-kicked-in https://tfppwire.com/new-data-shows-california-lost-staggeri...
  - oblio 5mo ago
    Yeah, about that source: > About > TFPP Wire helps you stay ahead with breaking news, analysis, and bold <<conservative>> insights on the economy, politics, national security, culture, and more. It quotes California Globe: > About Us > California Globe is an independent, professional news website obsessively chronicling everything political throughout the state of California. We are <<pro-growth and pro-business>>, non-partisan and objective; we report what we see and hear without fear or favor. "pro-growth and pro-business" (dogwhistle for conservative), I'm sure their reporting is super unbiased, their sources are obviously not incentivized to distort facts. Oh, wait: > Explained Altaf Chaus, who owns and operates three Burger King franchise restaurants in San Jose Ah, yes, the capitalist is complaining. > By June 2024, <<Stanford University>> found that over 10,000 fast food jobs were already lost. > The "Stanford University" study behind that 10,000-jobs figure is an article titled "California Loses Nearly 10,000 Fast-Food Jobs After $20 Minimum Wage Signed Last Fall," written by economist Lee Ohanian and published April 24, 2024 by the <<Hoover Institution>>. The Hoover Institution is a think tank located on Stanford's campus and affiliated with the university, which is almost certainly why outlets describe it as a "Stanford University" finding. (Hoover itself notes that opinions on its site don't necessarily reflect the views of the Hoover Institution or Stanford University.) > <<Here's the catch: the article has been retracted.>> According to the notice now on the page, the author cited data reported by the Wall Street Journal and interpreted those data as being seasonally adjusted; following publication, those data were identified as not being seasonally adjusted, so the article was retracted to avoid misinformation. The seasonal-adjustment issue matters a lot here, because fast-food employment naturally fluctuates with the seasons, so unadjusted month-to-month numbers can show "losses" that are really just normal seasonal patterns. https://en.wikipedia.org/wiki/Hoover_Institution https://en.wikipedia.org/wiki/Hoover_Institution > It is widely described as <<conservative>>, although its directors have contested the idea that it is partisan. You need a more balanced news diet.

xg15 5mo ago

> ...leading to zero effect on monthly earnings. We find evidence that drivers experienced more unpaid idle time and longer distances driven between tasks, but find no evidence that drivers reduced their total time working on delivery apps Same effective income despite more idle time doesn't sound so bad.

orangecat 5mo ago
It's bad because they're spending the same amount of time "working", but generating less output. It's a loss for customers, who either have to pay more or forego the service altogether.
- shimman 5mo ago
  You do realize these are humans and not machines right?
  - roughly 5mo ago
    No, we're talking economics here - picture a spherical human in a perfect marketplace
    - yladiz 5mo ago
      And humans are not purely economic machines.
- Fraterkes 5mo ago
  And it’s a win for the new group of drivers who ostensibly used to have a worse paying job. These dollars probably have more marginal utility for the people delivering doordash than for those consumers. If we want to be technical.

sapphicsnail 5mo ago

I don't think you should take what the NBER says at face value.