The Gaming Den

By your argument Gelare, the median standard of living would go down. After all, the same stuff is being produced for more overhead, leading to increased costs and inflation. The median income couldn't support as advantageous a lifestyle under those conditions. This is full of shit.
The number of poor people would be effected if the minimum wage kept people above the poverty line. They would still have less money but they could afford housing and food, so basic needs could be met. Your claim here is also full of shit. (Defining poor as: cannot meet basic needs)
Your point two is illogical. Any business that cannot sell what it produces for the value of the labor is already a failing model. You would have no job anyway as the company would have the options of either a) going under, or b) exploiting its workers. If a) the company has failed and the job is lost anyway. If b) you will have less money then you actually need to live so you wouldn't benefit from working at all.

All this anti-union talk is the spawn of hatred and stupidity, it only leads to exploitation; it should be purged with fire.

FrankTrollman wrote:And yet while there are many things that suck about society, the fact of the matter is that human society of today is, in industrialized countries, better than it has ever been in history. Lots of stuff would be better if it was radically changed, and I myself am very much classified as a radical by most people. But you can't lose sight of the forest for the trees here. Despite everything that is wrong with our governments and our economic systems, we still have it very good.

Whilst you're patently correct I'm sure you understand the frustration. Sure, I can go around being gay and not get jailed. But people still vote down gay marriage. Fuck those arseholes. Politics is so frustrating because there are many very obviously incorrect policies that still manage to be electable.

---

Gelare, your point makes no sense. Labour is not competitive at the very low end for people who are out of work and need to buy the next meal somehow. What are they going to do, hold off on eating until an employer is willing to pay them more?

@Akula: Please understand, I say this with the utmost intended respect. I'm sure you mean well and sincerely believe whatever it is you're saying, I just...have no idea what it is. Granted, this could be because it is 4:30 in the morning and my eyes are burning out of my skulls going over this stuff for so long, but I suspect it is because you are not articulating your position with the greatest clarity. If at all possible, please review econ 101 and get back to me.

@Draco: To say that my point makes no sense is, I think, a bit harsh, but your point is well taken that life at the extremes of the economic spectrum can get rough. And while it is entirely possible, and even likely, that people at the low end of the spectrum would settle for jobs that undervalue their labor if it meant getting to eat tonight, this does not necessarily make labor conditions at that end anti-competitive. Because the important competition going on here is not by the laborers, it's by the employers. The ones who can put employees to better use will bid up the wage to attract more people, even if the employees themselves do nothing in their downtime but sit on their asses. Labor is a scarce resource, and the people who value it most highly will offer more for it, which means that as long as the employer end of this system is competitive - that is, this:

me wrote:what they need is a well-functioning economy, such that innovators and entrepreneurs can devise new jobs to better use the talents of these workers.

then you'll get efficient wages.

Okay, let's try this again.

You said, "The median standard of living will not be effected because the guy in the middle will not change." Paraphrased of course.

My response is: If the consumer in the median has money X and buys item Y. Under your argument, (that a minimum wage will make employers pay more and cut into profits) the cost will be raised. Because the employer will want to make the same profit from a sale; but will not be able to at the same price if he has to pay more for labor. Thus he raises the price. The consumer will then have to absorb the cost. Meaning that item Y will cost more if the people who made it, or shipped it, or sold it, cost more to employ. Because you are correct that the median income wouldn't change, the same money will buy less. Thus the standard of living is lowered.

You then claim that the number of poor people is not changed by the minimum wage.

My argument is: Defining poor as: unable to meet basic needs. Without a definition the rest is meaningless. A minimum wage thus cannot leave the number of poor unchanged. If the minimum is set right it will allow people to meet their needs (food, shelter, safety) thus there are less people in abject poverty. Additionally, if a wage minimum is set, it stands to reason that employers will bid above that minimum in order to attract more skilled or better workers. (or even just more workers) Wouldn't it then seem to raise the wages for more workers and lift more out of poverty?

As to the final point. I essentially say that having 1000 people making one cent an hour is not going to help those people eat. If they do not get the ability to live off their labor, they might as well not have had the job in the first place. So if they would lose a job because it couldn't meet the identified minimum standard for subsisting, it wouldn't matter anyway. The worker might be better off for it.

Akula wrote:Under your argument, (that a minimum wage will make employers pay more and cut into profits)

I have to stop you there, because that is not my argument. My argument is that employers will pay nothing, as they fire the workers whose marginal product is less than the minimum wage. This does mean that the price of goods in affected industries will probably go up, but honestly, when minimum wage laws are as low as they are in the U.S. anyway, this effect is so small as to be practically indiscernible.

Akula wrote:You then claim that the number of poor people is not changed by the minimum wage.

My argument is: [stuff]

Here you are honestly missing the point. There is no such thing as a minimum "set right". There is a minimum set some arbitrary place, and the people whose marginal products are below this arbitrary place will become unemployed, going from "impoverished" to "absolutely no income whatsoever". Full stop.

Akula wrote:If they do not get the ability to live off their labor, they might as well not have had the job in the first place. So if they would lose a job because it couldn't meet the identified minimum standard for subsisting, it wouldn't matter anyway. The worker might be better off for it.

There is no such thing as the "identified minimum standard for subsisting". This is a meaningless concept and you should get rid of it immediately. There is a poverty line, but it's drawn entirely arbitrarily - we could put it at any other place and it would correspond to a different standard of living and it would still be arbitrary. There are people who are richer and there are people who are poorer, and if you have the really very sad and unfortunate luck to be one of the people whose marginal product is so low that you seriously can't afford a dollar per meal - and these people do exist, they're mostly mentally disabled in some way and it's really very sad - the solution is not to saddle some innocent ice cream shop owner with the financial burden of supporting you when you can't contribute to his business. That'll put him and you out of work, and is really fucked up. There's other, better social programs for this kind of thing. Get your food stamps, get your welfare, get your social security. Fuck the minimum wage.

Also, thank you, sincerely, for taking the time to rephrase your concerns, I hope my replies have made it worth your while.

Gelare wrote: I have to stop you there, because that is not my argument. My argument is that employers will pay nothing, as they fire the workers whose marginal product is less than the minimum wage. This does mean that the price of goods in affected industries will probably go up, but honestly, when minimum wage laws are as low as they are in the U.S. anyway, this effect is so small as to be practically indiscernible.

Wouldn't that then increase scarcity of those products, or just flat make them unavailable?

Here you are honestly missing the point. There is no such thing as a minimum "set right". There is a minimum set some arbitrary place, and the people whose marginal products are below this arbitrary place will become unemployed, going from "impoverished" to "absolutely no income whatsoever". Full stop.

Ironically, you can make more begging than at a job sometimes. I see your point about there being no minimum "set right" though, I'll concede that.

There is no such thing as the "identified minimum standard for subsisting". This is a meaningless concept and you should get rid of it immediately.

But I have one, it isn't a academically defined concept; however, I can certainly state the point at which I am no longer subsisting. I'm sure that it could then be converted into a number. I am no longer subsisting if I am too hungry to preform meaningful work, am not clothed, and cannot get a place to sleep safely for 8 hours every day.

There is a poverty line, but it's drawn entirely arbitrarily - we could put it at any other place and it would correspond to a different standard of living and it would still be arbitrary.

People have needs, they have to have them. How is that arbitrary?

There are people who are richer and there are people who are poorer, and if you have the really very sad and unfortunate luck to be one of the people whose marginal product is so low that you seriously can't afford a dollar per meal - and these people do exist, they're mostly mentally disabled in some way and it's really very sad - the solution is not to saddle some innocent ice cream shop owner with the financial burden of supporting you when you can't contribute to his business. That'll put him and you out of work, and is really fucked up. There's other, better social programs for this kind of thing. Get your food stamps, get your welfare, get your social security. Fuck the minimum wage.

In your ice cream store, no one was forced to hire you. If the store cannot get value out of your employment, it shouldn't have employed you. I saw a minimum wage as more of an economic program to ensure that a company isn't slashing its costs to increase profits at the expense of employees. If you work for a company that is profitable, you should at least be able to live on that. If the company has to exploit its own people to be viable, I frankly don't see how it could be an allowable concept. I think it should be illegal to pay people salaries that cannot eat, sleep, and clothe themselves off of.

Akula wrote:If you work for a company that is profitable, you should at least be able to live on that. If the company has to exploit its own people to be viable, I frankly don't see how it could be an allowable concept. I think it should be illegal to pay people salaries that cannot eat, sleep, and clothe themselves off of.

The problem here is that morality and sympathy really don't have anything to do with basic economics, though some would have you think that they do. This is not an indictment of those ideals - i I don't think any reasonable person would want people to starve for example, it just....doesn't work that way.

Let's examine your point: "If you work for a company that is profitable, then you should be at least able to live off of that". Clearly that is an impossibility in some cases. If the company is profitable, it is profitable at some price/cost point for its goods or services. If you raise the cost point by paying workers more, then the business owner will have to raise his prices to be as profitable. If the market will not tolerate a price raise because the perceived value derived from the increased price is thought too low, then the business owner can only accept a lower profit margin. But why would he do that? He could simply close his business and invest his money where his rate of return was higher. If you reduce his profit margin to, oh 3% let's say, he could close his shop and put his money in the bank and get that rate of return with no risk and no effort. So clearly, the rate of return must exceed the savings interest rate or there won't be businesses at all. But he is not the only player. Typically his business if fueled by debt. This debt is required to maintain cash flows - pay for raw good and materials, make payroll on down months and the like. Now in my business, the bank requires a few things to extend this debt ( in addition to requiring that my family's house be used for collateral in case my business fails). It requires 6% net profits each year, for my line of work and cash flow rates. This is after all expenses are paid. If I can't hit that mark, then I lose my revolving debt, which means the cash stops flowing. This would put me out of business, since my customers pay 30 - 90 days after receipt of services and I and my employees have to eat in the interim. But the owner's rate of return and the bank's required rate of return are still not everything. There is additional costs to consider. If I pay more per hour, then my direct costs as an owner increase beyond the per-hour rate increase. For example, my state unemployment insurance rates are a direct cost on every dollar paid in wages. So are my professional liability rates for errors and omissions insurance, so are my FICA (social security) and Medicare portions. So raising the hourly rate of a worker has a pronounced effect on corporate profitability. At some point it is simpler for me to just fold up shop and invest my time and money elsewhere. But we still are not done. Let's say that I have some extra money to invest but I know that if I hire a worker, I am going to have to pay them a wage that barely allows me to meet my obligations under federal and state employment law and provides a very marginal increase in profits. I could hire that worker, or I could invest the money elsewhere or maybe just buy myself something I need for the business or invest it in some other way or even pay myself a bonus for working 70 hours a week, a fair amount of it uncompensated by my customers. People with a wad of cash in their hands, either literally or figuratively, have to consider the opportunity costs of their decisions because these are real costs.

Based on this, you can see why making a law to force business owners to pay an arbitrary wage is a bad idea. First, no business would open unless the profit margin obtained under the new plan exceeded the savings interest rate, the bank's demanded rate of profit and the bond rate in the stock market (fairly safe investments). Secondly, all of those business that already exist would have to pay their people more overnight and thus will raise their rate. So McDonalds (which does not pay a subsistence rate around here), would charge, oh $10 for a burger. Would you pay that much? Not I. Guess they will be closing down. And If you "forced" them to charge $2 for a burger? Well they would go broke and then close down. Once again, no business.

Edit: No one that works for me makes anything near minimum wage, but I think you can see why the Minimum Wage, which is a fine idea for what it is intended to do, is going about the problem the wrong way. Raising the rate to the point where the business is not as profitable is just a nail in the coffin of the business. Now if it is an extremely profitable business, then maybe that is ok, but if it is not - and not all small businesses are, then that is a bad thing. It does encourage businesses to look to automation and other ways to make the same workers be more productive. For an example, both of my local McDonalds recently installed robotic drink dispensers at the drive thru window. They select cup size, dispense the product and queue the finished cups on a conveyor to be handed through the window by the worker when the proper car pulls up. Now McDonalds clearly did this for a reason, that machine probably cost $7,000 - $15,000. But they increased order accuracy and speed (it is quite fast). Oh, they got rid of the person who used to do that job and closed one of the windows, since the drive thru worker now had more time to handle payment. Was this linked to wages? Oh I don't know, there is no way to tell, but the machine was bought for a reason, wasn't it?

I just want to say that Gelare's method of arguing is a big blow against his own positions. When he opens with 'as everyone knows, minimum wage laws hurt the poor,' as if it were commonly accepted fact, and then walks it back to 'oh, well, the studies are inconclusive, but...' that's a big hint that he's just making shit up and hoping nobody actually checks.

Here's my challenge: can anyone find an example of a country without significant union activity or minimum wage laws where they would be willing to accept the average lifestyle?

Gelare wrote: If at all possible, please review econ 101 and get back to me.

That's your problem right there. You think there is an economic science. At all. And you're wrong.

I'm in medicine, and this morning I was in a conference about medical research and there were various presentations showing various studies. Some of it probably sounds like magic or star trek technobabble to lay people (there was seriously a presentation on "Magnetic nanomolecules in stem cell labeling"), but we were able to talk to each other as colleagues because there is in fact a unified medical language. And that unified medical language exists because there is in fact a unified medical science. And we are able to have that because there is a common goal: increasing the length and quality of life of patients.

Economics does not have a unified goal. Some people want it to stabilize society, to keep resentment and desperation from cresting to the point where the government is overthrown. Some people want it to maximize the amount of wealth that can be extracted by an investor. Some people want it to maximize the amount of goods and services delivered to people in society. And those different goals produce naturally different metrics by which to judge the success or failure of a program.

When you increase the minimum wage, capital doesn't just sit in the dark and masturbate - it finds something profitable to hire people to do at the new minimum wage. People then have jobs that give them more disposable income and they are able to buy more goods and services which creates more opportunities for investment. It becomes a powerful stimulus pushing the economic Demand that drives a capitalist economy. If you're Keynes, that's good. More consumer dollars means more consumer purchases and more economic activity.

But if you're Milton Friedman or Ludwig Mises, that's bad. It's bad because your actual metric of how well the economy is doing is how much return an investor gets on their investment. And of course, a minimum wage drives down marginal profits. So to them, that's bad. Because they don't care about how much is produced in the entire economy, merely how much profit is made by those who own the means of production.

So when you walk in all haughty about how you know economics 101, what you're really telling me is that you don't know shit. Because the truth is that there is no Economics 101. There are multiple economic systems because there are multiple economic goals. It isn't medicine, because there isn't one patient. One economic doctor is trying to treat the rate of goods going onto the shelves and into the homes; another economic doctor is trying to treat the threat of revolution; and still another economic doctor is treating the bank accounts of the moneyed classes. And if you don't understand your biases, which you obviously don't, then your economic proscriptions are more than a bit laughable.

-Username17

Akula wrote:Wouldn't that then increase scarcity of those products, or just flat make them unavailable?

It would increase the scarcity, yeah, but eventually the scarcity would drive up the price to which is actually is profitable to hire people at the minimum wage. Bear in mind, though, that at this point, some jobs have already been lost, and less is being produced overall. But honestly, the effect of minimum wage laws in countries like the U.S. is just really, really small, so this is the kind of thing you'd only be able to notice if you were looking in that specific manufacturing sector - it wouldn't be even a blip as far as the median family is concerned.

Akula wrote:Ironically, you can make more begging than at a job sometimes. I see your point about there being no minimum "set right" though, I'll concede that.

I hear stories of cops offering rewards to beggars who give them good information, and the beggars rejecting the rewards because they know they make more than the cops do. Bear in mind, before everyone jumps on me, that I'm not saying that cops should all go become beggars, I'm just relaying some anecdotal evidence for storytelling's sake.

Akula wrote:People have needs, they have to have them. How is that arbitrary?

Look "needs" and "wants" are words that get thrown around a lot, but they actually mean very little. It is physically possible for me to survive by scrounging food from trash cans. It's a crappy way to live, and I sure as hell don't want to live that way, but it is very nearly free. Same goes for clothing, shelter is a discarded cardboard box, and drink is had at public water fountains. It's a hard knock life, and it sucks, but the way to address it is not to take out our egalitarian rage on the business owners who are trying to employ these people, and who will be losing money (and therefore won't employ these people) if a minimum wage is instituted. You don't want people to be in that position, which is great; get them out of it with smart policy, not crappy policy.

Akula wrote:In your ice cream store, no one was forced to hire you. If the store cannot get value out of your employment, it shouldn't have employed you.

Yes! Correct! Now I see we're on the same page, you're absolutely right; and if the store cannot get value out of your employment equal to or greater than what they have to pay you, they will not employ you.

Akula wrote:I think it should be illegal to pay people salaries that cannot eat, sleep, and clothe themselves off of.

This goes back to the "needs" thing. If one person needs a worker and the other person is a worker and they can mutually agree on a price to do business at, they should do so. If this price is lower than what we, as society, consider to be the minimum standard of living we want to exist in our country, we should jolly well give that guy welfare. But forcing him to be employed at a wage he can't earn is just gonna get him fired, and then he's worse off still.

angelfromanotherpin wrote:I just want to say that Gelare's method of arguing is a big blow against his own positions. When he opens with 'as everyone knows, minimum wage laws hurt the poor,' as if it were commonly accepted fact, and then walks it back to 'oh, well, the studies are inconclusive, but...' that's a big hint that he's just making shit up and hoping nobody actually checks.

The studies are inconclusive because the minimum wage laws in the U.S. enforce levels so close to the actual lowest wage that someone is actually being paid that the impact is too small to be noticed. You want to see unemployment? Go institute this "living wage" nonsense some people are pushing. Double or triple the minimum wage or more. After all, living wage, people should be able to live on it, right? Gods help you.

I'll get around to Frank's systematic destruction of my profession later. All in a day's work!

Gelare wrote:The studies are inconclusive because the minimum wage laws in the U.S. enforce levels so close to the actual lowest wage that someone is actually being paid that the impact is too small to be noticed.

Yeah, the U.S. is the only country with minimum wage laws. It's not like there are countries with Labor governments....

oh wait

Australia, Austria, Sweden, Switzerland, Norway, these are all countries with really significant minimum wages. Check out their unemployment figures, then check out the size of those countries' middle classes. I'll wait.

Of course, even in America, if you look at which states have minimum wages higher than the federal minimum, you'll note an uncanny correspondence with those states which contribute more to the country in federal taxes than they receive in federal monies. It's almost like those states have more functional economies.

Gelare wrote:

Akula wrote:In your ice cream store, no one was forced to hire you. If the store cannot get value out of your employment, it shouldn't have employed you.

Yes! Correct! Now I see we're on the same page, you're absolutely right; and if the store cannot get value out of your employment equal to or greater than what they have to pay you, they will not employ you.

I don't think anyone disagrees with you on the point about the business hiring or not hiring someone. I think the disagreement stems from the idea that the ice cream shop owner should be able to benefit from human desperation and hire someone on today at $1 per hour. In an unregulated economic environment, where does it end?

As a society, we have decided that there are some exploits you cannot make, even if they're acceptible to someone, somewhere, and that is a good thing. I'm not trying to slippery-slope things here, but the fact that McDonald's can't staff itself with 12 year olds to replace the 16 year olds they already hire is a good thing. Despite that some 12 year olds would like that.

Akula wrote:I think it should be illegal to pay people salaries that cannot eat, sleep, and clothe themselves off of.

This goes back to the "needs" thing.

I find your "needs" argument somewhat silly because one of the points of society and progress is to get us past the point of individual foraging and gathering. Should we endorse shanking people for their lunch money? It's what humans did for thousands of years and "it is physically possible for you to survive" that way.

@angel: I knew someone was going to make that argument, I swear I saw it coming. Look at all those european countries, they're doing great and they have minimum wages, therefore you're wrong!

Okay, look. My position is that the minimum wage is dumb. Your position is that the minimum wage plus a humongous, expansive social welfare system works well. The counterfactual to look at here is not an anarcho-capitalist state, it's to look at the social welfare system, minus the minimum wage laws.

I'm saying that X is bad. You're saying that X + Y is good. X + Y may well be good, but to compare our two positions, we have to consider a place that just has Y. So yeah, get on that.

Gelare wrote:I'm saying that X is bad. You're saying that X + Y is good. X + Y may well be good, but to compare our two positions, we have to consider a place that just has Y. So yeah, get on that.

If you feel that no comparison is valid, how can you claim that X is bad?

Either a higher minimum wage necessarily comes with higher unemployment or it doesn't. And it clearly doesn't, as is empirically demonstrated every day. It doesn't do it in Australia, and it doesn't do it in Massachusetts.

So you can believe whatever you want, but I'm not going to give your words any regard.

Well, Gelare, that's because the studies you picked aren't studies, but in fact are political documents (why do you pick those?) published by elected Republicans who are against the establishment of a minimum wage.

They 'don't understand' (indirect quote from your third link) why the empirical studies have results contrary to their beliefs.

Duh.

-Crissa

I think bringing Europe into this is a not-so-good idea. European countries are slowly going broke (EA13 average gross debt is 68.6% of GDP in 2006, the lowest it has been in 3 years), with average debt ratios as a percentage of GDP higher than that of the US (at 61.1% for 2006), which is the last remaining superpower, is borrowing heavily for the war and is by far the government doing the most military spending. We hear how great it is in Europe and (having been there) I have to agree, it seems to work well, for now. But their debt is ever mounting as the top ever so slowly stops spinning.

The US could adopt a European model by reducing military spending to the same percentage of GDP as it is in some country like Austria (so we are as effective internationally as lets say, Austria, which is to say, not at all), and begin paying all of that savings out in the form of huge social welfare programs. And then, it would still go broke, right along with its European pals, because the short term gains for the average guy in Europe are unsustainable in the long term as the European's mounting debt clearly indicates.

Basically, the US can no longer afford guns or butter and all of this arguing back and forth over how much butter gets spread to the masses is useless because we are all doomed to go the same way the Soviet Union did if Europe doesn't stop its out of control spending (on whatever it is that occupies its GDP. Ideas, anyone?) and the US doesn't stop its out of control spending (wars, gilding the military, entitlements). This is hardly a ringing endorsement of the planned entitlement spending increases in the US (and entitlement spending is by far the largest part of the deficient-laden US budget), nor is it an endorsement of continuance of wars or spending unneeded for core national security. We should probably all pay higher taxes in the US, cut spending and put the balance toward debt reduction. Hmm I wonder what the chances of that will be.

LL wrote:We should probably all pay higher taxes in the US, cut spending and put the balance toward debt reduction.

Look, I'm not going to make the same ridiculous claims of Gelare that there is some sort of universally agreed upon economic truths. But your reaction to harsh economic times is the response of Hoover. There is a reason that your plan was regarded as economic orthodoxy in 1925, and laughed at openly in 1945.

Paradox of Thrift. Just saying.

-Username17

Yes I am well aware of the Paradox of Thrift. I could have been clearer. I think government spending right now is critically important, but in the long term do not believe that a government routinely spending more than it makes is the way to economic victory. Eventually the government issued bonds are not worth what they are printed on, the currency isn't worth what it is printed on and loans both domestic and foreign dry up. When that happens, the entitlements dry up and their is rioting in the streets.

Point taken, nonetheless.

CatharzGodfoot wrote:

Gelare wrote:I'm saying that X is bad. You're saying that X + Y is good. X + Y may well be good, but to compare our two positions, we have to consider a place that just has Y. So yeah, get on that.

If you feel that no comparison is valid, how can you claim that X is bad?

I don't feel that no comparison is valid, quite the opposite. My statements are thoroughly falsifiable through proper studies, that compared a place without X but with Y (which we'll call, oh, I don't know, the "control group") to a place with X and Y (which we could call - I've got this one - the "experimental group"). If the control group had lower unemployment, my theory would be vindicated, and if the experimental group had lower unemployment, it would be rejected.

Now, to be fair, good comparisons are remarkably hard to come by, since there are a million confounding factors that differentiate nations from one another, and it's extraordinarily difficult to keep them from screwing up the results. So it's tough, nothing I can do about it, but it's not impossible. I'm giving you a hypothesis, which I backed up with real economic theory, that is falsifiable. I'm not sure what more you could expect of me.

This, on the other hand:

angelfromanotherpin wrote:Either a higher minimum wage necessarily comes with higher unemployment or it doesn't. And it clearly doesn't, as is empirically demonstrated every day. It doesn't do it in Australia, and it doesn't do it in Massachusetts.

utterly fails to grasp the point. My claim is that instituting a minimum wage, all other things being equal, will reduce employment. What angel here appears to be saying is that places that have minimum wage laws and other things don't have higher unemployment. Which is dumb, because it actually ignores the minimum wage laws in favor of all the other things.

Gelare, can you show the structural unemployment rate of any country anywhere at any point in history rising in response to the institution of a minimum wage law?

If your interpretation is correct, the structural unemployment rate should rise permanently so long as the minimum wage restrictions remain. Is there any empirical data to support that?

-Username17

violence in the media wrote:I find your "needs" argument somewhat silly because one of the points of society and progress is to get us past the point of individual foraging and gathering. Should we endorse shanking people for their lunch money? It's what humans did for thousands of years and "it is physically possible for you to survive" that way.

I believe this stems from a misunderstanding of what I'm arguing, which is not that people should be left to die on the streets. I have specifically and repeatedly said that people should not be forced to live the sickening lifestyles you're describing, and that the way we prevent this - something you want! - is through other welfare programs. The minimum wage puts a disproportionate burden on the employer, and makes everyone - everyone, the employer and the worker and you for paying to administrate such bad policies! - worse off.

There's better ways to achieve your goals. The minimum wage is not the answer.

Gelare, there's no evidence for your position that minimum wage puts any imposition on employers. They have to pay a wage regardless, and that wage has to be worth something to the employee.

Either there is a base level value for employment, or there isn't. Your position is that there is not, and employees should just not work until they're offered a wage they find appropriate. However, people can't actually do that, whereas employers can decide to not hire all day, it won't cause them to starve.

However, that ignores what reality has born out: That without a minimum wage, the bottom most wage spirals down until it is incapable of sustenance, while the economy dwindles as masses don't have spending power. And it is that mass spending power of the collective which outstrips the known effect of a possible decrease in the number of people employed, coupled with an increase in those people's wages.

It's no different than a Roman soldier's wage, or the price of a coin in ancient Japan; both were set upon a minimum by which the person could survive, and went up from there.

Pure Capitalism suggests that you could employ people for less than they need for sustenance, because the two are not related. And this led to sharecroppers and company towns.

-Crissa

FrankTrollman wrote:Gelare, can you show the structural unemployment rate of any country anywhere at any point in history rising in response to the institution of a minimum wage law?

If your interpretation is correct, the structural unemployment rate should rise permanently so long as the minimum wage restrictions remain. Is there any empirical data to support that?

-Username17

Well, first off, you're basically right, if my interpretation is correct there would be a small increase in the structural unemployment rate, which would gradually vanish as prosperity happens and the minimum wage that people would be paid in the absence of such a law approaches and overtakes the minimum wage proscribed by law. And worry not, I appreciate the irony of your resorting to the language of the social science you just disavowed the existence of to deal with me, and I appreciate the gesture.

That being said, I don't know if I'm able to produce that data for you, but I'm fairly certain I'm not going to. The overall unemployment impact of minimum wage laws generally converges to around 1%-3% of the small segment of society affected by these laws. On an aggregate level, that's close to indiscernible, and I honestly don't have sufficient interest to go track such studies down on the internet. You've got your medical conferences, after all, and I've got my crazy, lunatic, Friedman-and-Hayek-worshipping extravaganzas. We're going out for Indian food tonight, made with real sweatshop labor - deeeelicious.


However, there's also the matter of your denial of the existence of economics as a social science. I'll attempt to condense your arguments to their essence. You say that economics has no unified goal. Indeed, there are multiple and often mutually incompatible goals, and thus there is no such science as economics. I'm trying to find other parts to your argument, but the rest of your post appears to be comparisons to the medical profession (which aren't especially relevant) and arguments for why minimum wage laws can shock people into innovation, which is actually pretty good, but also not related to whether economics is a science.

The unified goal of economics is to explain how economies work and how economic agents interact, and sometimes, when we're lucky, apply it to the real world. There are a ton of sub-fields, and there are certainly a whole lot of competing theories, from Friedman to Keynes and even farther off their respective ends right into crazytown. That there is so much debate and disagreement is a sign of a healthy, evolving field.

People used to think that the other planets in our solar system revolved around the Earth. Ptolemy's system of epicycles was accurate, brilliant, and wrong. And now we know better. People used to think that the wealth of a nation is measured in its reserves of gold and bullion. Gold is shiny; it's quite compelling. But that was also horribly, horribly wrong. For the record, we used to think that free markets can solve everything, but outside of a non-existent Coasian world, we now know that's wrong too.

To say that economics doesn't exist simply because people have different objectives and different uses for it is staggeringly misguided. Economics tells us how humanity has prospered, and how we can help it along even further. This stuff makes the world a better place. We had to repay you medics somehow, after all.

I was quite careful to say that there is not an economic science. As in one. And I stand by that assessment.

You look at it as a field with healthy debate and competing theories - I don't. I see a number of fields that aren't even really talking to each other and happen to call themselves the same thing. Astrology is not the same field as Astronomy, and if it called itself Astronomy it would still be a different field.

The "Absence of Consumption" theory of Value is a god damned joke. It isn't that I haven't read papers by The Ludwig von Mises Institute or The Heartland Institute. It's that having read them I am simultaneously deeply unimpressed with their reasoning, and unable to seriously consider it the same field of research as Amartya Sen or Karl Marx. I don't see competing ideas in a field, because Mahoney does not actually debate Krugman. Nor do they have any incentive to give any ground, because funding for their respective research comes from different people who have different agendas. The Heartland Institute does not need to produce any successful models, they need to produce an academic sounding justification for lowering taxes. People who want to pay less taxes will always fund them, whether their stuff works or not.

And that is why I can't consider all the stuff that gets called "economics" to be science. Let alone a single science. Tom McClintock does not use the scientific method, he uses faith. And his believers give him money because they believe in his ideas, not because he can actually demonstrate any special predictive powers over future economic events. But because he tells people what they want to hear, his predictions don't have to be right. And so his statements, and the statements of his allies are not science.

If there is no evidence you could be confronted with that would make you abandon your model, you are not a scientist. And your writings do not belong in the nonfiction section.

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Now that being said, I'm actually open to a serious discussion of life without a minimum wage. However, the think tanks arguing for that almost universally would argue even harder against such a system if it didn't involve people dying in the street.

See, all that crap about prices seeking their natural level only happens in the absence of need. If one person is facing death at the hand's of the slavemaster's whip or the gaunt maw of famine, then that guy gets whatever the boss man feels like giving him and there is no bargaining and prices do not adjust or become efficient or any of that shit. Some people are hungry, and other people starve, and the economy stagnates.

So to make a no minimum wage system work, you'd pretty much have to go full commie. Each person would be guaranteed a stipend that would support them whether they worked or not, and any work they did on top of that would be voluntary and for whatever agreed upon wage. Wages would fall precipitously because a number of people would literally just be working for weed money, and the monstrous profits that corps would bring in would be offset only by the huge and progressive taxation needed to pay for it all.

But... while I can see the definite advantages of doing things that way (almost no bureaucratic overhead when the Dole is fixed based on proving that you're a citizen with a pulse rather than proving some sort of need based criteria), do you honestly think that would fly?

Aside from the fact that Phillip Morris would straight up hire mercenaries to overthrow the government if that went down, think of what that would do to brain drain! No domestic corporation is going to hire a foreigner when Americans work for Doritos and canned cheez. The steady river of educated Indians and Chinese people would dry up over night. Indeed, the most qualified Americans would take contract work overseas and send money back to their families.

I just don't see it being a viable option. At least, not in the foreseeable future. People need to not starve while they make shoes. And the minimum wage has been an incredibly effective means of guarantying that.

-Username17