4 ms·

I think "lower salaries == more people employed" is an overly simplified model economists teach us to justify dropping wages. Imho lower salaries doesn't creat

I think "lower salaries == more people employed" is an overly simplified model economists teach us to justify dropping wages. Imho lower salaries doesn't create more jobs it just creates more desperate people willing to work for lower salaries because of its downward loop. I know this opinion is not popular in the states. But this has nothing to do with socialism. Socialism is about common ownership, common management. Minimum salaries is about raising the middle class.

bsder 12y ago
Exactly. What this is likely to do is to displace immigrants working illegally with citizens working legally. Imagine what would happen to California unemployment if all the agribusinesses suddenly had to pay a real minimum wage. Illegal immigration would get almost completely displaced with actual citizens willing to do the work now that there was a reasonable wage behind it.
- icebraining 12y ago
  If you're already hiring illegal aliens, why would you respect the minimum wage?
- bayesianhorse 12y ago
  Problem with that assessment: Switzerland doesn't have a lot of illegal immigrants or even a lot of low-skilled legal immigrants for that matter. Even if there were illegal immigrants being displaced, where would the supply of legal labor come from, suddenly? Certainly not from the jobless. It's simply an illusion that people on a broad scale would choose unemployment because of low wages...
  - NicoJuicy 12y ago
    Switzerland even wants to limit immigrants who come to work in Swiss. They introduced immigration quotes, which is illegal for the EU : http://goo.gl/xBmX12 http://goo.gl/xBmX12
    - bayesianhorse 12y ago
      Oh, that issue is even more complicated. For one thing, Switzerland isn't in the EU, but they benefit and depend more than they'd like to admit from trading with the EU and from highly skilled immigrants they don't have to pay to educate. So they do have certain treaties about free trade, and mobility of workers is an important condition in these treaties. In breaking the treaty, there will be at least some consequences. Also, the opinion about immigrants in Switzerland seems to be very complicated. People seem to both feel "We have to much immigration", but they don't want to get rid of the immigrants they know and depend on. For that matter, they think there are too many Germans in Switzerland, on the other hand their economy extremely depends on those immigrants. The government will be hard pressed to find enough immigrants they can get rid of without serious consequences and even antagonizing those voters who voted for the restrictions in the first place.
bayesianhorse 12y ago
That assessment is wrong. Higher wages in reality and theory usually mean less demand for labor. Employers have to compensate by raising wages or letting employees go, and both decisions negatively impact the business. I'm not an opponent of a sensible minimum wage legislation, but I'm not kidding myself over the consequences. In Switzerland I highly doubt if minimum wage is doing anything good...
- rodgerd 12y ago
  I guess the multiple peer-reviewed studies which have been published countering that particular bit of econo-religious dogma have passed you by. Which surprises me, given I'm pretty sure at least one of them made HN.
- vasilipupkin 12y ago
  in Chicago minimum wage is one of the highest, if not the highest in the country and so is the unemployment rate. The effect of raising minimum wage will highly depend on what level it is raised to and how strong the local economy is.
  - vasilipupkin 12y ago
    Normally, I am not too bothered by the downvotes, but this one makes me chuckle. effects of unemployment rate is not a settled matter in economics, and it's highly politicized - with left wing leaning economists publishing all sorts of empirical studies showing no effect or mixed effect and right wing economists doing the opposite. But, clearly, raising minimum wage to $15 in a strong economy like Seattle will have a less adverse effect, if any, than in a weak local economy such as Chicago
    - morgante 12y ago
      The downvotes are because you didn't make a clear point. Chicago has a high minimum wage and high unemployment, seemingly affirming the economic rule of price floors creating surpluses. So was that your point? Just stating a data point and then offering a generic platitude (things depend on things) isn't making a substantive contribution.
NicoJuicy 12y ago
I don't think you understand Swiss, the large incomes and low unemployment rate is mostly due to the protectionism of the country. Which would fail in a country that is bound to globalized economic rules. They also do a lot themselves (eg. agriculture, which is heavily subsidized), which is why the unemployment rate is so low. Everything there is extremely expensive because of the higher salaries. Which would make it impossible to live there with a lower income. Your statement: lower salaries doesn't create more jobs is false through my point of view. I live in Belgium and a lot of multinationals don't ever consider Belgium because of the high taxes (= which create higher salaries, but only the governement is taking the biggest portion). Our politicians try to compensate this by heavily subsidizing multinationals (which create 1000's of jobs in a snap, while heavily taxing the SMB's at the same time), which isn't the way to go. PS. Switzerland tries to introduce immgration quotas, which would be illegal as member of the EU : http://goo.gl/xBmX12 http://goo.gl/xBmX12 (is an example of their protectionism) PS 2. High taxes in Belgium isn't the only reason why multinations neglect us, but it's an important one :)

bsder 12y ago

Exactly. What this is likely to do is to displace immigrants working illegally with citizens working legally. Imagine what would happen to California unemployment if all the agribusinesses suddenly had to pay a real minimum wage. Illegal immigration would get almost completely displaced with actual citizens willing to do the work now that there was a reasonable wage behind it.

icebraining 12y ago
If you're already hiring illegal aliens, why would you respect the minimum wage?
bayesianhorse 12y ago
Problem with that assessment: Switzerland doesn't have a lot of illegal immigrants or even a lot of low-skilled legal immigrants for that matter. Even if there were illegal immigrants being displaced, where would the supply of legal labor come from, suddenly? Certainly not from the jobless. It's simply an illusion that people on a broad scale would choose unemployment because of low wages...
- NicoJuicy 12y ago
  Switzerland even wants to limit immigrants who come to work in Swiss. They introduced immigration quotes, which is illegal for the EU : http://goo.gl/xBmX12 http://goo.gl/xBmX12
  - bayesianhorse 12y ago
    Oh, that issue is even more complicated. For one thing, Switzerland isn't in the EU, but they benefit and depend more than they'd like to admit from trading with the EU and from highly skilled immigrants they don't have to pay to educate. So they do have certain treaties about free trade, and mobility of workers is an important condition in these treaties. In breaking the treaty, there will be at least some consequences. Also, the opinion about immigrants in Switzerland seems to be very complicated. People seem to both feel "We have to much immigration", but they don't want to get rid of the immigrants they know and depend on. For that matter, they think there are too many Germans in Switzerland, on the other hand their economy extremely depends on those immigrants. The government will be hard pressed to find enough immigrants they can get rid of without serious consequences and even antagonizing those voters who voted for the restrictions in the first place.

bayesianhorse 12y ago

That assessment is wrong. Higher wages in reality and theory usually mean less demand for labor. Employers have to compensate by raising wages or letting employees go, and both decisions negatively impact the business. I'm not an opponent of a sensible minimum wage legislation, but I'm not kidding myself over the consequences. In Switzerland I highly doubt if minimum wage is doing anything good...

rodgerd 12y ago
I guess the multiple peer-reviewed studies which have been published countering that particular bit of econo-religious dogma have passed you by. Which surprises me, given I'm pretty sure at least one of them made HN.
vasilipupkin 12y ago
in Chicago minimum wage is one of the highest, if not the highest in the country and so is the unemployment rate. The effect of raising minimum wage will highly depend on what level it is raised to and how strong the local economy is.
- vasilipupkin 12y ago
  Normally, I am not too bothered by the downvotes, but this one makes me chuckle. effects of unemployment rate is not a settled matter in economics, and it's highly politicized - with left wing leaning economists publishing all sorts of empirical studies showing no effect or mixed effect and right wing economists doing the opposite. But, clearly, raising minimum wage to $15 in a strong economy like Seattle will have a less adverse effect, if any, than in a weak local economy such as Chicago
  - morgante 12y ago
    The downvotes are because you didn't make a clear point. Chicago has a high minimum wage and high unemployment, seemingly affirming the economic rule of price floors creating surpluses. So was that your point? Just stating a data point and then offering a generic platitude (things depend on things) isn't making a substantive contribution.

NicoJuicy 12y ago

I don't think you understand Swiss, the large incomes and low unemployment rate is mostly due to the protectionism of the country. Which would fail in a country that is bound to globalized economic rules. They also do a lot themselves (eg. agriculture, which is heavily subsidized), which is why the unemployment rate is so low. Everything there is extremely expensive because of the higher salaries. Which would make it impossible to live there with a lower income. Your statement: lower salaries doesn't create more jobs is false through my point of view. I live in Belgium and a lot of multinationals don't ever consider Belgium because of the high taxes (= which create higher salaries, but only the governement is taking the biggest portion). Our politicians try to compensate this by heavily subsidizing multinationals (which create 1000's of jobs in a snap, while heavily taxing the SMB's at the same time), which isn't the way to go. PS. Switzerland tries to introduce immgration quotas, which would be illegal as member of the EU : http://goo.gl/xBmX12 http://goo.gl/xBmX12 (is an example of their protectionism) PS 2. High taxes in Belgium isn't the only reason why multinations neglect us, but it's an important one :)