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I never said anything about the Netherlands' unemployment rate. I said that all else being equal, the country with the higher minimum wage will have higher unem

I never said anything about the Netherlands' unemployment rate. I said that all else being equal, the country with the higher minimum wage will have higher unemployment, because there is a larger barrier to entry to the job market. But if you would care to explain how a business that takes in some amount of revenue (say $100,000 a month) can magically afford to hire more employees when the minimum wage goes from $7 an hour to $15 an hour, I'm all ears.

DenisM 17y ago
This is easy. When all your competitiors have to pay higher wages it drives consumer prices up and so your revenue goes up as well such that you can also pay higher wages. It only breaks down when some stores do not abide by the rules or when there is a substitute. Substitutes of course can be hunted down and taxed as well, to maintian equilibrium. As a side not, kindly lay off sarcasm. Thanks.
- discojesus 17y ago
  This is easy. When all your competitiors have to pay higher wages it drives consumer prices up and so your revenue goes up as well such that you can also pay higher wages. This is an argument for the ability of a business to keep the same number of employees, not to hire more. Keeping the same staff you had the day before doesn't make the unemployment rate go down. This also assumes that your revenue goes up, which may not be the case since the government has instituted a staff-wide pay raise, but not all of your customers' incomes have gone up as well. And sarcasm is sometimes a very effective way of getting a point across. Sarcasm in my opinion is fair game; being malicious is something else altogether. *also, this doesn't answer the most basic question that proponents of higher minimum wage never seem to be able to answer, which is - if $5 an hour is bad, and $15 an hour is great, why not $30 an hour? And $50 an hour would be amazing, lifting people right out of poverty within weeks! So why not? After all, the unemployment rate doesn't go up as the minimum wage increases, right?
  - apu 17y ago
    $5/hr * 40 hrs/week * 50 weeks/yr = $10,000/yr salary is not really enough to survive. $15/$5 * $10,000/yr = $30,000/yr is. The point is not to make minimum-wage workers rich -- just enough so that they should be able to survive without having to work insane hours. And by your logic, if businesses can hire X new employees per year at a $5 minimum wage, then they should be able to hire 5X new employees with a $1 minimum wage. So should we lower the minimum wage even more so that businesses can hire more people and thus lower unemployment rates?
    - discojesus 17y ago
      The point is not to make minimum-wage workers rich -- just enough so that they should be able to survive without having to work insane hours. $30k a year to survive isn't some natural law - when you make minimum wage $15 an hour, the prices for goods and services based on minimum wage labor goes up, and $30k a year is no longer enough to survive, so somebody gets the bright idea to say "hey we need to make the minimum wage higher..." also, you didn't refute my argument - if the minimum wage has nothing to do with the unemployment rate, then there would be no reason not to raise the minimum wage to something extremely high like $50 an hour. Of course, in reality, there is a very good reason not to make the minimum wage $50 an hour - it would cause much of the country to become unemployed. So should we lower the minimum wage even more so that businesses can hire more people and thus lower unemployment rates? Not to lower unemployment rates; you should lower it because a marketplace of individuals making voluntary exchanges is much better at deciding the value of someone's labor than the government is. The bottom line that for some reason people refuse to accept is just because you legislate it doesn't make it so. Wal-mart greeters don't make $50 an hour for a good reason - their labor doesn't generate anywhere near $50 an hour in extra revenue, and many people are willing to do the job for much less. (Sure you can arbitrarily decide to pay them $50 an hour, but don't act surprised when a candy bar becomes $10 and a gallon of gas goes up to $25 to compensate).
      - fauigerzigerk 17y ago
        In my view, there are some aspects that go beyond the traditional ideological boundaries in this debate. Regardless of what minimum wages do to unemployment, there's also the question of what they do to innovation. If a business has a large supply of cheap labour, what is the incentive to use technology to reduce dumb work? There's undoubtedly less incentive and therefore I think a case could be made for high minimum wages in order to foster innovation. At the end of the day, I believe that high tech societies have less unemployment, and apart from that reducing dumb work is what I consider progress for humanity. On the other hand, high minimum wages are a disincentive for some people who do dumb work to learn something and become innovative themselves. So this is a counter argument to some degree. However, there are a lot of people who will never become educated or innovative or entrepreneural and pushing them into abject poverty violates my sense of human dignity. Human dignity is the answer to your question of why not $50 minimum wage. It's subjective, I agree, but people living in a card board box violates my sense of human dignity as does watching people die from treatable diseases. Not being able to buy each new edition of the iPhone does not violate my sense of human dignity, nor does living in a run down neighbourhood. One question that opponents of minimum wages never answer is what about the next generation? You can take the position that people who do nothing to help themselves deserve to live in poverty. But poverty is passed on to the next generation. Some admirable individuals are able to break that viscious cycle but most are not. It's very difficult to help the kids of poor people gain access to equal opportunities without to some degree helping their parents. I'm afraid there's no way around spreading the wealth around a bit to people who may not deserve it if you want equal opportunities for the next generation.
lucumo 17y ago
> I said that all else being equal, the country with the higher minimum wage will have higher unemployment, because there is a larger barrier to entry to the job market. While this seems a straight-forward thought, the fact whether or not minimum wages affect employment is undecided amongst economists. Charges of ideological bias are flung from both sides, but there seems to be no concensu: "Until the 1990s, economists generally agreed that raising the minimum wage reduced employment. This consensus was weakened when some well-publicized empirical studies showed the opposite, but others consistently confirmed the original view. Today's consensus, if one exists, is that increasing the minimum wage has, at worst, minor negative effects." [1] http://en.wikipedia.org/wiki/Minimum_wage#Empirical_studies http://en.wikipedia.org/wiki/Minimum_wage#Empirical_studies [1] http://en.wikipedia.org/wiki/Minimum_wage#Surveys_of_economists http://en.wikipedia.org/wiki/Minimum_wage#Surveys_of_economi...
- DanielBMarkham 17y ago
  the fact whether or not minimum wages affect employment is undecided amongst economists. Income minus expenses still equals the bottom line, right? I mean if you have two businesses on the internet selling the same product and one has three times the labor cost of the other, math doesn't suddenly change because economists can't get their act together, does it? Some real, live businessperson still has to add and subtract to eek out a business model, right? Or perhaps I missed something. It sounded like you were making a macro-economic argument in response to a micro-economic one.
MaysonL 17y ago
An interesting side note: Forbes magazine had an article a couple of decades ago on a study comparing McDonalds franchises which found that those who paid more than minimum wage were more profitable than those that paid minimum wage (and yes the study did control for socio-economic status of the location: it was an apples to apples comparison).

DenisM 17y ago

This is easy. When all your competitiors have to pay higher wages it drives consumer prices up and so your revenue goes up as well such that you can also pay higher wages. It only breaks down when some stores do not abide by the rules or when there is a substitute. Substitutes of course can be hunted down and taxed as well, to maintian equilibrium. As a side not, kindly lay off sarcasm. Thanks.

discojesus 17y ago
This is easy. When all your competitiors have to pay higher wages it drives consumer prices up and so your revenue goes up as well such that you can also pay higher wages. This is an argument for the ability of a business to keep the same number of employees, not to hire more. Keeping the same staff you had the day before doesn't make the unemployment rate go down. This also assumes that your revenue goes up, which may not be the case since the government has instituted a staff-wide pay raise, but not all of your customers' incomes have gone up as well. And sarcasm is sometimes a very effective way of getting a point across. Sarcasm in my opinion is fair game; being malicious is something else altogether. *also, this doesn't answer the most basic question that proponents of higher minimum wage never seem to be able to answer, which is - if $5 an hour is bad, and $15 an hour is great, why not $30 an hour? And $50 an hour would be amazing, lifting people right out of poverty within weeks! So why not? After all, the unemployment rate doesn't go up as the minimum wage increases, right?
- apu 17y ago
  $5/hr * 40 hrs/week * 50 weeks/yr = $10,000/yr salary is not really enough to survive. $15/$5 * $10,000/yr = $30,000/yr is. The point is not to make minimum-wage workers rich -- just enough so that they should be able to survive without having to work insane hours. And by your logic, if businesses can hire X new employees per year at a $5 minimum wage, then they should be able to hire 5X new employees with a $1 minimum wage. So should we lower the minimum wage even more so that businesses can hire more people and thus lower unemployment rates?
  - discojesus 17y ago
    The point is not to make minimum-wage workers rich -- just enough so that they should be able to survive without having to work insane hours. $30k a year to survive isn't some natural law - when you make minimum wage $15 an hour, the prices for goods and services based on minimum wage labor goes up, and $30k a year is no longer enough to survive, so somebody gets the bright idea to say "hey we need to make the minimum wage higher..." also, you didn't refute my argument - if the minimum wage has nothing to do with the unemployment rate, then there would be no reason not to raise the minimum wage to something extremely high like $50 an hour. Of course, in reality, there is a very good reason not to make the minimum wage $50 an hour - it would cause much of the country to become unemployed. So should we lower the minimum wage even more so that businesses can hire more people and thus lower unemployment rates? Not to lower unemployment rates; you should lower it because a marketplace of individuals making voluntary exchanges is much better at deciding the value of someone's labor than the government is. The bottom line that for some reason people refuse to accept is just because you legislate it doesn't make it so. Wal-mart greeters don't make $50 an hour for a good reason - their labor doesn't generate anywhere near $50 an hour in extra revenue, and many people are willing to do the job for much less. (Sure you can arbitrarily decide to pay them $50 an hour, but don't act surprised when a candy bar becomes $10 and a gallon of gas goes up to $25 to compensate).
    - fauigerzigerk 17y ago
      In my view, there are some aspects that go beyond the traditional ideological boundaries in this debate. Regardless of what minimum wages do to unemployment, there's also the question of what they do to innovation. If a business has a large supply of cheap labour, what is the incentive to use technology to reduce dumb work? There's undoubtedly less incentive and therefore I think a case could be made for high minimum wages in order to foster innovation. At the end of the day, I believe that high tech societies have less unemployment, and apart from that reducing dumb work is what I consider progress for humanity. On the other hand, high minimum wages are a disincentive for some people who do dumb work to learn something and become innovative themselves. So this is a counter argument to some degree. However, there are a lot of people who will never become educated or innovative or entrepreneural and pushing them into abject poverty violates my sense of human dignity. Human dignity is the answer to your question of why not $50 minimum wage. It's subjective, I agree, but people living in a card board box violates my sense of human dignity as does watching people die from treatable diseases. Not being able to buy each new edition of the iPhone does not violate my sense of human dignity, nor does living in a run down neighbourhood. One question that opponents of minimum wages never answer is what about the next generation? You can take the position that people who do nothing to help themselves deserve to live in poverty. But poverty is passed on to the next generation. Some admirable individuals are able to break that viscious cycle but most are not. It's very difficult to help the kids of poor people gain access to equal opportunities without to some degree helping their parents. I'm afraid there's no way around spreading the wealth around a bit to people who may not deserve it if you want equal opportunities for the next generation.

lucumo 17y ago

> I said that all else being equal, the country with the higher minimum wage will have higher unemployment, because there is a larger barrier to entry to the job market. While this seems a straight-forward thought, the fact whether or not minimum wages affect employment is undecided amongst economists. Charges of ideological bias are flung from both sides, but there seems to be no concensu: "Until the 1990s, economists generally agreed that raising the minimum wage reduced employment. This consensus was weakened when some well-publicized empirical studies showed the opposite, but others consistently confirmed the original view. Today's consensus, if one exists, is that increasing the minimum wage has, at worst, minor negative effects." [1] http://en.wikipedia.org/wiki/Minimum_wage#Empirical_studies http://en.wikipedia.org/wiki/Minimum_wage#Empirical_studies [1] http://en.wikipedia.org/wiki/Minimum_wage#Surveys_of_economists http://en.wikipedia.org/wiki/Minimum_wage#Surveys_of_economi...

DanielBMarkham 17y ago
the fact whether or not minimum wages affect employment is undecided amongst economists. Income minus expenses still equals the bottom line, right? I mean if you have two businesses on the internet selling the same product and one has three times the labor cost of the other, math doesn't suddenly change because economists can't get their act together, does it? Some real, live businessperson still has to add and subtract to eek out a business model, right? Or perhaps I missed something. It sounded like you were making a macro-economic argument in response to a micro-economic one.

MaysonL 17y ago

An interesting side note: Forbes magazine had an article a couple of decades ago on a study comparing McDonalds franchises which found that those who paid more than minimum wage were more profitable than those that paid minimum wage (and yes the study did control for socio-economic status of the location: it was an apples to apples comparison).