4 ms·

In my opinion is all these studies are myopic. The reality is probably more complicated and can be broken down into a few steps Short term: Employees get paid

by Zhenya 13y ago

In my opinion is all these studies are myopic. The reality is probably more complicated and can be broken down into a few steps Short term: Employees get paid more and the number of employees stays close to the same. The businesses must operate as they did before Medium Term: The quality of employee goes up. The people who are willing to trade their time for more $ is a different demographic as you climb the $/hour slope. Long Term: Businesses find a way to remove high costs out of their operating costs and will automate the jobs were possible. This will improve productivity of each paid employee but the total employee count will go down (all other things held constant). The productivity and manual labor has been shifted from person to machine.

hkmurakami 13y ago
In economics, we consider "capital (machinery, automation, software, etc) input" to be fixed. Only labor input can change. But in the long term capital investments can be made to reduce labor in the input mix. That's probably what you're referring to here.
- robomartin 13y ago
  And in economics you are wrong. In the real world everything is variable. Many eons ago --before surface mount was commonplace-- I was employing engineering students to stuff circuit boards for a low volume product (a few thousand units per year). Part of the job entailed bending component leads based on how they had to be mounted to the board. I didn't have the money or the volume for fancy automated tools. We used prototyping-level hand tools to bend the components. After wave soldering we'd clip the leads by hand and test. Back then minimum wage was $6 or $7. I was paying the kids $10. I bought an old Bridgeport CNC milling machine for $1,800. I devoted a week to making better lead-forming tools and a mass lead cutting machine using a cheap router motor. Within a week the same worker could do nearly ten times more work. I eventually let go of half the crew. Costs are everything in business. If government unilaterally and unnaturally forces an increase in costs businesses will naturally respond with cost-saving measures and technology. This can also include taking the work to lower labor cost markets...forever. That's how it works in the real world. At one point an artificially high minimum wage will result in less jobs, not more.
  - drabiega 13y ago
    > artificially high minimum wage Artificially high? If you're making a profit but your employees need public assistance, you're literaly profiting at the expense of the taxpayers. You are in effect benefiting from an artificially low prevailing wage. If you can't afford to pay them a living wage, society would be better off if resources were allocated elsewhere.
    - yetanotherphd 13y ago
      >If you can't afford to pay them a living wage, society would be better off if resources were allocated elsewhere. Since hiring a person can only increase that person's income, and decrease the amount of welfare they can claim, this is wrong. If there were a better allocation of that person's labor (e.g. a higher paying job) that person would surely take it.
      - drabiega 13y ago
        When you pay less than a living wage you are not reducing the cost to produce whatever you are producing, you are using taxes as an input. If you literally cannot afford to pay your employees a living wage, that means it's real cost (including the taxpayer's assistance) is greater than what people are willing to pay for it and we'd all be better off if our taxes just supported that person instead of supported that person and lined your pockets.
        yetanotherphd 13y ago
        But that is wrong. Suppose I invented a machine that let any person churn out $3 in gold per hour. Now suppose everyone who was currently unemployed started doing this, and collecting slightly less benefits. Would society be better of banning this machine, because it couldn't produce a "living wage"? Because this is what you are proposing.
        stefan_kendall 13y ago

by Zhenya 13y ago

hkmurakami 13y ago

In economics, we consider "capital (machinery, automation, software, etc) input" to be fixed. Only labor input can change. But in the long term capital investments can be made to reduce labor in the input mix. That's probably what you're referring to here.

robomartin 13y ago
And in economics you are wrong. In the real world everything is variable. Many eons ago --before surface mount was commonplace-- I was employing engineering students to stuff circuit boards for a low volume product (a few thousand units per year). Part of the job entailed bending component leads based on how they had to be mounted to the board. I didn't have the money or the volume for fancy automated tools. We used prototyping-level hand tools to bend the components. After wave soldering we'd clip the leads by hand and test. Back then minimum wage was $6 or $7. I was paying the kids $10. I bought an old Bridgeport CNC milling machine for $1,800. I devoted a week to making better lead-forming tools and a mass lead cutting machine using a cheap router motor. Within a week the same worker could do nearly ten times more work. I eventually let go of half the crew. Costs are everything in business. If government unilaterally and unnaturally forces an increase in costs businesses will naturally respond with cost-saving measures and technology. This can also include taking the work to lower labor cost markets...forever. That's how it works in the real world. At one point an artificially high minimum wage will result in less jobs, not more.
- drabiega 13y ago
  > artificially high minimum wage Artificially high? If you're making a profit but your employees need public assistance, you're literaly profiting at the expense of the taxpayers. You are in effect benefiting from an artificially low prevailing wage. If you can't afford to pay them a living wage, society would be better off if resources were allocated elsewhere.
  - yetanotherphd 13y ago
    >If you can't afford to pay them a living wage, society would be better off if resources were allocated elsewhere. Since hiring a person can only increase that person's income, and decrease the amount of welfare they can claim, this is wrong. If there were a better allocation of that person's labor (e.g. a higher paying job) that person would surely take it.
    - drabiega 13y ago
      When you pay less than a living wage you are not reducing the cost to produce whatever you are producing, you are using taxes as an input. If you literally cannot afford to pay your employees a living wage, that means it's real cost (including the taxpayer's assistance) is greater than what people are willing to pay for it and we'd all be better off if our taxes just supported that person instead of supported that person and lined your pockets.
      - yetanotherphd 13y ago
        But that is wrong. Suppose I invented a machine that let any person churn out $3 in gold per hour. Now suppose everyone who was currently unemployed started doing this, and collecting slightly less benefits. Would society be better of banning this machine, because it couldn't produce a "living wage"? Because this is what you are proposing.
        stefan_kendall 13y ago