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The basic issue is that economics is not an empirical discipline but rather a deductive one. You cannot test anything in isolation because you cannot have a con

The basic issue is that economics is not an empirical discipline but rather a deductive one. You cannot test anything in isolation because you cannot have a control. All economists can say is "If you do X when nothing else changes Y will result". It is basic economics that when the government mandates a price floor then anyone who cannot sell their goods for anything below that floor will not be able to sell their goods. Thus it will hurt those it's trying to help. No studies are going to disprove that. It's elementary logic.

cjo 13y ago
> It is basic economics that when the government mandates a price floor then anyone who cannot sell their goods for anything below that floor will not be able to sell their goods. Thus it will hurt those it's trying to help. Applying this to the low end of the labor market is pushed in a lot of Econ 101 classes but it requires so many assumptions to be true that the model only has a passing resemblance to reality. To use your own logic, you can't say that raising the minimum wage won't also change other variables important to the model but assumed to be constant (maybe it causes companies to outsource, maybe it causes workers to emmigrate, maybe it raises worker productivity) - so if economists are truly constrained to ceteris paribus situations then they have nothing to say about the effects in reality from a minimum wage increase.
- jswinghammer 13y ago
  Yes they can. This is because we can discuss what higher prices do-invariably they cause market actors to seek substitutes. If you push a $15 minimum wage it stands to reason that there would be demand for any machinery that would allow for cost savings. It would be good for the sectors of the economy that would supply these cost savings technologies. Ultimately marginal workers would get hurt even further once these technologies emerged.
  - cjo 13y ago
    Sounds like it's a choice between a short period of minimum wage pay and then getting replaced by "cost saving technologies", or a slightly longer period of subsistence wages and then still getting replaced. It's easy to argue that since the cost of technology goes down with time that any replacement of workers due to a minimum wage hike will happen anyways when the tech gets cheap enough. Here's a question. Both market concentration (as in oligopoly) and unemployment have significant downward effects on wages especially in the low end of the labor market. I don't like minimum wage and I wish we didn't have it but it's the best solution I've seen to these problems. Do you have a solution to these problems?
    - jswinghammer 13y ago
      Ideally I would abolish fractional reserve lending and the inflation that goes along with it. That inflation of the money supply has a medium and long term effect of raising prices. In a free market prices would drop thus your bad wage gets better even if you can't ever find a better job.
      - cjo 13y ago
        Well I certainly agree that money in general and our relationship to it could use a good rethinking - which is a surprisingly unpopular opinion considering America's financial sector pretty much imploded just a few years ago. But I don't follow how solving that problem addresses markets becoming concentrated and member firms using that advantage to push wages down towards subsistence levels. That I think requires some sort of collective bargaining, which minimum wage is a type of (although it's likely not the best.)
        jswinghammer 13y ago
        Marx was concerned about wages being pushed down but even in his own lifetime it never really happened that way. It's something that seems desirable for the businessman if possible but something that they have no control over. The reason being that other companies will compete for workers and have an easy competitive advantage over firms who are trying to drive workers to poverty. Markets work to coordinate prices for both consumers and producers. Those who resist the laws of markets pay eventually. Might not happen right away but it happens-always. My point is that low wages are never good exactly but they can be better if those wages pay for more year over year. It's like getting a raise without having to negotiate or even do anything for it.
  - crdoconnor 13y ago
    >Yes they can. This is because we can discuss what higher prices do-invariably they cause market actors to seek substitutes. If you push a $15 minimum wage it stands to reason that there would be demand for any machinery that would allow for cost savings Wake me when there's an affordable machine that can clean my office as well as a human. And no, I don't mean a Roomba - they're toys. This capitalist techno-utopianism is totally divorced from the real world. Even automated checkouts (which have been around for over a decade) still haven't eliminated cashiers and for good reason - because people suck at using them.
crdoconnor 13y ago
Empirical studies that show no rise in unemployment do actually disprove that. This attitude that empirical study doesn't matter, that only the accepted dogma of the economic establishment matters is primarily responsible for the disastrous state of the world economy. People with your staunch beliefs would do better studying at a theological college where less harm will be done.

cjo 13y ago

> It is basic economics that when the government mandates a price floor then anyone who cannot sell their goods for anything below that floor will not be able to sell their goods. Thus it will hurt those it's trying to help. Applying this to the low end of the labor market is pushed in a lot of Econ 101 classes but it requires so many assumptions to be true that the model only has a passing resemblance to reality. To use your own logic, you can't say that raising the minimum wage won't also change other variables important to the model but assumed to be constant (maybe it causes companies to outsource, maybe it causes workers to emmigrate, maybe it raises worker productivity) - so if economists are truly constrained to ceteris paribus situations then they have nothing to say about the effects in reality from a minimum wage increase.

jswinghammer 13y ago
Yes they can. This is because we can discuss what higher prices do-invariably they cause market actors to seek substitutes. If you push a $15 minimum wage it stands to reason that there would be demand for any machinery that would allow for cost savings. It would be good for the sectors of the economy that would supply these cost savings technologies. Ultimately marginal workers would get hurt even further once these technologies emerged.
- cjo 13y ago
  Sounds like it's a choice between a short period of minimum wage pay and then getting replaced by "cost saving technologies", or a slightly longer period of subsistence wages and then still getting replaced. It's easy to argue that since the cost of technology goes down with time that any replacement of workers due to a minimum wage hike will happen anyways when the tech gets cheap enough. Here's a question. Both market concentration (as in oligopoly) and unemployment have significant downward effects on wages especially in the low end of the labor market. I don't like minimum wage and I wish we didn't have it but it's the best solution I've seen to these problems. Do you have a solution to these problems?
  - jswinghammer 13y ago
    Ideally I would abolish fractional reserve lending and the inflation that goes along with it. That inflation of the money supply has a medium and long term effect of raising prices. In a free market prices would drop thus your bad wage gets better even if you can't ever find a better job.
    - cjo 13y ago
      Well I certainly agree that money in general and our relationship to it could use a good rethinking - which is a surprisingly unpopular opinion considering America's financial sector pretty much imploded just a few years ago. But I don't follow how solving that problem addresses markets becoming concentrated and member firms using that advantage to push wages down towards subsistence levels. That I think requires some sort of collective bargaining, which minimum wage is a type of (although it's likely not the best.)
      - jswinghammer 13y ago
        Marx was concerned about wages being pushed down but even in his own lifetime it never really happened that way. It's something that seems desirable for the businessman if possible but something that they have no control over. The reason being that other companies will compete for workers and have an easy competitive advantage over firms who are trying to drive workers to poverty. Markets work to coordinate prices for both consumers and producers. Those who resist the laws of markets pay eventually. Might not happen right away but it happens-always. My point is that low wages are never good exactly but they can be better if those wages pay for more year over year. It's like getting a raise without having to negotiate or even do anything for it.
- crdoconnor 13y ago
  >Yes they can. This is because we can discuss what higher prices do-invariably they cause market actors to seek substitutes. If you push a $15 minimum wage it stands to reason that there would be demand for any machinery that would allow for cost savings Wake me when there's an affordable machine that can clean my office as well as a human. And no, I don't mean a Roomba - they're toys. This capitalist techno-utopianism is totally divorced from the real world. Even automated checkouts (which have been around for over a decade) still haven't eliminated cashiers and for good reason - because people suck at using them.

crdoconnor 13y ago

Empirical studies that show no rise in unemployment do actually disprove that. This attitude that empirical study doesn't matter, that only the accepted dogma of the economic establishment matters is primarily responsible for the disastrous state of the world economy. People with your staunch beliefs would do better studying at a theological college where less harm will be done.