4 ms·

"a large fraction of minimum wage workers are teens" -- how large? source? in the end, it does not matter - if they don't need to work, where is the problem? wh

by bakhy 12y ago

"a large fraction of minimum wage workers are teens" -- how large? source? in the end, it does not matter - if they don't need to work, where is the problem? why should we even encourage them to work, to bring down the price of labor of those who already earn the least? the data on minimum wage you quote is incorrect. i happen to know that Austria does have minimum wage, just not a single global one. i was offered work there, and then found out that they have minimum wages defined per occupation (country-wide collective bargain), and there exists a minimum wage for programmers in Austria. i actually found that unnecessary :D i believe in Sweden there is a similar situation, the unions are very politically strong there. as for Germany, when exactly did it have high unemployment, and how high? this is very sketchy. also, a factor for Germany is that a lot of people work part-time, which has reduced reported unemployment here. but i must admit, even if unemployment is slightly greater, i don't care. because i believe that removing minimum wages in those countries that have it, even if it would hire some people, would cause a big drop in the pay and quality of life of many, many more people who would have been employed anyway. this is something that ultimately needs empiric check (Germany is also soon about to introduce minimum wage so there's another opportunity), but you already waved that off - what was it you said, we should not be fooled by lack of evidence to support your claim? :D lastly, yes, i do not have economic background so i cannot phrase things in expert terms, but i would appreciate hearing some reason why it does not make sense. the point is, since demand is always equally present, and the supply is limited and independent of the demand (that is what i found incredible in the comment above - a company that offers great pay will easily find employees, but it will not choose to hire more simply because a lot of people applied, which is specific for labor markets), then the price of low-educated labor simply goes down until it hits some bottom, i.e. it becomes too low to earn a living, or it becomes comparable to social security payments. is it really so hard to grasp? or are you simply trying to discredit me and avoid the whole argument?

glenra 12y ago
> (that is what i found incredible in the comment above - a company that offers great pay will easily find employees, but it will not choose to hire more simply because a lot of people applied, which is specific for labor markets) How is this feature specific to labor markets? Suppose a company is buying laptop computers to accomplish some task. If the company is willing to offer great pay - a high price - in exchange for laptop computers, they will easily find laptops, but they won't choose to buy more laptops simply because a lot of vendors submitted bids. Right? Going back a bit, it's not true about either workers or laptops that "demand is always equally present". And it is true about both workers and laptops that "the supply is [somewhat, in the short term] limited and independent of the demand". I honestly don't get the point you're trying to make. People respond to incentives. If companies can hire people for less than the value of their labor product, companies will expand and try to hire more people. If they can't, companies will contract and hire fewer. In the extreme cases supply fluctuates via emigration/immigration. People have a reserve price - they generally aren't willing to work unless offered enough to make it worth their while, just as they aren't willing to sell a bicycle unless offered enough on eBay to make it worthwhile. Sometimes that price is less than the minimum, and sometimes it's more, in which case the minimum becomes irrelevant because it's less than the market rate. I think I'm done looking up specific numbers for you; it never makes any difference to your views. Yes, collective bargaining exists in some sectors in Europe - it exists in some sectors in the US too! But there's no national minimum in those countries, which is what matters most for general employment. (And yes, these things are always in flux. Switzerland just last month voted on whether to have a $25/hour minimum, but 75% of the electorate voted against it - common sense prevailed for once!)
- bakhy 12y ago
  first of all, we are looking at it from different sides :) i was talking about the demand for jobs, not workers, and the supply of jobs. perhaps that created some of the misunderstanding. the laptop example also illustrates the difference quite well. majority of the people need work, and they have to work, whether they like the price they will get or not. in the end they must eat. so, the demand for jobs (or, the supply of workers) cannot fall below a certain level, particularly the low skilled ones. laptops are not such a necessity, so people may choose, if conditions become too unfavorable, to simply not buy them. this is why producers, who of course want to get the highest price possible, cannot raise prices as they wish. with low-skilled labor, however, companies can lower wages as much as they like. if they reach the point where people can no longer feed themselves, people don't simply decide not to work (really?!) - we then have a revolution. your comparisons actually demonstrate this quite clearly, it really amazes me that you can compare a low skill workers quest for jobs with selling a bike on eBay without noticing any difference. "I think I'm done looking up specific numbers for you; it never makes any difference to your views." -- that's a cheap shot. i gave some arguments, you ignored them, and you're now just weaseling out. the effects of a nation-wide collective bargain, which defines a mandatory minimum wage for all sorts of professions, are pretty much the same. in fact, since many professions have pretty healthy situations in the job market, i would say that that actually is harmful in the way you described. but ultimately, i explained that i actually accept that a minimum wage may mildly increase unemployment. did you just skip that part?
  - glenra 12y ago
    The problem is that you demand support even for claims of mine that are easy for you to verify for yourself and that you have no reason to doubt. While on the flip side you never provide any numbers of your own, so it's unbalanced. But what the heck, I'll do it one last time. >"a large fraction of minimum wage workers are teens" -- how large? source? Half of all minimum wage workers are under age 25; 62% are still enrolled in school, and the average family income of people earning minimum wage is in excess of $60,000/year. I found this out just now by googling the string "what percent of minimum wage workers are teen", which led me to these links: http://www.bls.gov/cps/minwage2011.htm http://www.bls.gov/cps/minwage2011.htm http://www.heritage.org/research/reports/2013/02/who-earns-the-minimum-wage-suburban-teenagers-not-single-parents http://www.heritage.org/research/reports/2013/02/who-earns-t... It is true that SOME minimum-wage workers desperately need a job. But it is also true that SOME people desperately need a laptop computer! The overall characteristics of a market - whether a market for labor or a market for laptops - aren't driven by just the few who have the most inelastic demand. Employers have to offer wages high enough that on the margin, those people who are indifferent between employers or willing to wait a little longer for "the right job offer" are inclined to accept the one being offered. This means the average job pays a lot MORE than the bare minimum that the most desperate people would be willing to accept. Even if there were no minimum wage, wages would not drop to starvation levels for that reason. In short, Malthus and Keynes were wrong to predict a "race to the bottom". We don't need a minimum wage to have high average wages, high entry-level wages or a high standard of living. (In fact, the minimum wage does far more harm than good to the lowest-skilled workers - it reduces job quality and availability, cutting off some of the bottom rungs of the economic ladder.)

by bakhy 12y ago

glenra 12y ago

> (that is what i found incredible in the comment above - a company that offers great pay will easily find employees, but it will not choose to hire more simply because a lot of people applied, which is specific for labor markets) How is this feature specific to labor markets? Suppose a company is buying laptop computers to accomplish some task. If the company is willing to offer great pay - a high price - in exchange for laptop computers, they will easily find laptops, but they won't choose to buy more laptops simply because a lot of vendors submitted bids. Right? Going back a bit, it's not true about either workers or laptops that "demand is always equally present". And it is true about both workers and laptops that "the supply is [somewhat, in the short term] limited and independent of the demand". I honestly don't get the point you're trying to make. People respond to incentives. If companies can hire people for less than the value of their labor product, companies will expand and try to hire more people. If they can't, companies will contract and hire fewer. In the extreme cases supply fluctuates via emigration/immigration. People have a reserve price - they generally aren't willing to work unless offered enough to make it worth their while, just as they aren't willing to sell a bicycle unless offered enough on eBay to make it worthwhile. Sometimes that price is less than the minimum, and sometimes it's more, in which case the minimum becomes irrelevant because it's less than the market rate. I think I'm done looking up specific numbers for you; it never makes any difference to your views. Yes, collective bargaining exists in some sectors in Europe - it exists in some sectors in the US too! But there's no national minimum in those countries, which is what matters most for general employment. (And yes, these things are always in flux. Switzerland just last month voted on whether to have a $25/hour minimum, but 75% of the electorate voted against it - common sense prevailed for once!)

bakhy 12y ago
first of all, we are looking at it from different sides :) i was talking about the demand for jobs, not workers, and the supply of jobs. perhaps that created some of the misunderstanding. the laptop example also illustrates the difference quite well. majority of the people need work, and they have to work, whether they like the price they will get or not. in the end they must eat. so, the demand for jobs (or, the supply of workers) cannot fall below a certain level, particularly the low skilled ones. laptops are not such a necessity, so people may choose, if conditions become too unfavorable, to simply not buy them. this is why producers, who of course want to get the highest price possible, cannot raise prices as they wish. with low-skilled labor, however, companies can lower wages as much as they like. if they reach the point where people can no longer feed themselves, people don't simply decide not to work (really?!) - we then have a revolution. your comparisons actually demonstrate this quite clearly, it really amazes me that you can compare a low skill workers quest for jobs with selling a bike on eBay without noticing any difference. "I think I'm done looking up specific numbers for you; it never makes any difference to your views." -- that's a cheap shot. i gave some arguments, you ignored them, and you're now just weaseling out. the effects of a nation-wide collective bargain, which defines a mandatory minimum wage for all sorts of professions, are pretty much the same. in fact, since many professions have pretty healthy situations in the job market, i would say that that actually is harmful in the way you described. but ultimately, i explained that i actually accept that a minimum wage may mildly increase unemployment. did you just skip that part?
- glenra 12y ago
  The problem is that you demand support even for claims of mine that are easy for you to verify for yourself and that you have no reason to doubt. While on the flip side you never provide any numbers of your own, so it's unbalanced. But what the heck, I'll do it one last time. >"a large fraction of minimum wage workers are teens" -- how large? source? Half of all minimum wage workers are under age 25; 62% are still enrolled in school, and the average family income of people earning minimum wage is in excess of $60,000/year. I found this out just now by googling the string "what percent of minimum wage workers are teen", which led me to these links: http://www.bls.gov/cps/minwage2011.htm http://www.bls.gov/cps/minwage2011.htm http://www.heritage.org/research/reports/2013/02/who-earns-the-minimum-wage-suburban-teenagers-not-single-parents http://www.heritage.org/research/reports/2013/02/who-earns-t... It is true that SOME minimum-wage workers desperately need a job. But it is also true that SOME people desperately need a laptop computer! The overall characteristics of a market - whether a market for labor or a market for laptops - aren't driven by just the few who have the most inelastic demand. Employers have to offer wages high enough that on the margin, those people who are indifferent between employers or willing to wait a little longer for "the right job offer" are inclined to accept the one being offered. This means the average job pays a lot MORE than the bare minimum that the most desperate people would be willing to accept. Even if there were no minimum wage, wages would not drop to starvation levels for that reason. In short, Malthus and Keynes were wrong to predict a "race to the bottom". We don't need a minimum wage to have high average wages, high entry-level wages or a high standard of living. (In fact, the minimum wage does far more harm than good to the lowest-skilled workers - it reduces job quality and availability, cutting off some of the bottom rungs of the economic ladder.)