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No Minimum Wage

liltankjj
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3/11/2016 3:32:05 PM
Posted: 9 months ago
I have this theory that I've not yet challenged with opposition. So please hold no punches on this one. I believe that If it wasn't for minimum wage laws, there would be better opportunities for negotiating starting wage for jobs. I see that there are possible issues that can come of this and I would like to see your thoughts on it. I truly am looking at this as a learning experience so please elaborate your views or question my views freely. Thanks in advance.
Curiouszs
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3/11/2016 7:34:07 PM
Posted: 9 months ago
At 3/11/2016 3:32:05 PM, liltankjj wrote:
I believe that If it wasn't for minimum wage laws, there would be better opportunities for negotiating starting wage for jobs.

According to a Swedish friend, Sweden does not have a minimum wage but has extremely strong labor unions. So low-income workers in Sweden make almost as much as middle-income workers.

In countries without strong unions the workers are going to be severely exploited by employers. Unskilled workers have no bargaining power. If a worker thinks the wage being offered is too low, there are at least 100 other workers who are more than willing to take the job because they have a family to support, mortgage, etc.
liltankjj
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3/11/2016 8:20:45 PM
Posted: 9 months ago
At 3/11/2016 7:34:07 PM, Curiouszs wrote:
At 3/11/2016 3:32:05 PM, liltankjj wrote:
I believe that If it wasn't for minimum wage laws, there would be better opportunities for negotiating starting wage for jobs.

According to a Swedish friend, Sweden does not have a minimum wage but has extremely strong labor unions. So low-income workers in Sweden make almost as much as middle-income workers.

In countries without strong unions the workers are going to be severely exploited by employers. Unskilled workers have no bargaining power. If a worker thinks the wage being offered is too low, there are at least 100 other workers who are more than willing to take the job because they have a family to support, mortgage, etc.

I actually thought about this unskilled worker part. A really strong fix would be to educate the people. Also, if someone with no skills starts at a low wage they can then learn skills to later use as bargaining for a better wage else were. As for unions, that is another issue in and of itself. I feel as though they are a product of class warfare. The best step is educating and encouraging each other. Not everyone will be rich but we can give everyone the opportunity to get there.
ColeTrain
Posts: 4,313
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3/11/2016 9:26:30 PM
Posted: 9 months ago
At 3/11/2016 3:32:05 PM, liltankjj wrote:
I have this theory that I've not yet challenged with opposition. So please hold no punches on this one. I believe that If it wasn't for minimum wage laws, there would be better opportunities for negotiating starting wage for jobs. I see that there are possible issues that can come of this and I would like to see your thoughts on it. I truly am looking at this as a learning experience so please elaborate your views or question my views freely. Thanks in advance.

The biggest issue is that we not raise it. I'm sure you understand the reasons behind that, but if not, you can check out this debate: [http://www.debate.org...]

However, abolishing the MW would probably be a good idea, too. There are a couple of reasons why.

It would open up more employment opportunities. Here's the deal: when you have a minimum wage, that's federal mandates on what you can and can't pay a worker, regardless of how tough the job is or how much you can afford to pay for the job to be done. That stifles the market. Sure, you might say that leaves it open for abuse, and that's partially right. That leaves the option open for the employer to pay extremely low, unfair wages, but that doesn't ensure they will. Particularly because, when you have no federal regulations on wages, you can hire more workers, for less money. This is equitable to workers because a lot of jobs (entry-level) aren't really worthy of a high wage, and by abolishing the regulations that control economic stimulation in companies, you can have more work available. This creates competition, which drives up the real value of wages even higher than it already is. Employers won't be tempted to pay too low because they know they won't be able to hire anyone. Another thing is teens. Teens don't always need a high wage -- especially not $15 an hour. They have secondary income with their parents, in most cases, and need to just find a start in the workplace. Minimum wages price teens (and other generally low-skilled workers) out of jobs, even the rudimentary ones. The higher the wage, the worse these effects are.

There are other reasons, too, but I don't have time to articulate any further at the moment. What are your thoughts? Have you any arguments for abolishing the minimum wage?
"The right to 360 noscope noobs shall not be infringed!!!" -- tajshar2k
"So, to start off, I've never committed suicide." -- Vaarka
"I eat glue." -- brontoraptor
"I mean, at this rate, I'd argue for a ham sandwich presidency." -- ResponsiblyIrresponsible
"Overthrow Assad, heil jihad." -- 16kadams when trolling in hangout
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mc9
Posts: 1,038
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3/11/2016 10:02:05 PM
Posted: 9 months ago
At 3/11/2016 3:32:05 PM, liltankjj wrote:
I have this theory that I've not yet challenged with opposition. So please hold no punches on this one. I believe that If it wasn't for minimum wage laws, there would be better opportunities for negotiating starting wage for jobs. I see that there are possible issues that can come of this and I would like to see your thoughts on it. I truly am looking at this as a learning experience so please elaborate your views or question my views freely. Thanks in advance.

Okay so I see you're pushing for absolutely no minimum wage, I will give my opinion on it.

Minimum wage laws are necessary, even if there's a low minimum wage, it's what prevents businessses from cheating workers by paying them a cent per year and the workers not really having any good options. Now I agree there shouldn't be a $15 dollar an hour minimum wage but a baseline is necessary to protect workers rights.

Ask me any questions you feel
Naturalmoney.org
Posts: 25
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3/12/2016 9:54:43 AM
Posted: 9 months ago
At 3/11/2016 3:32:05 PM, liltankjj wrote:
I have this theory that I've not yet challenged with opposition. So please hold no punches on this one. I believe that If it wasn't for minimum wage laws, there would be better opportunities for negotiating starting wage for jobs. I see that there are possible issues that can come of this and I would like to see your thoughts on it. I truly am looking at this as a learning experience so please elaborate your views or question my views freely. Thanks in advance.

The problem is that if there is excess labour, the price of labour would go to zero. That is actually happening to illegal immigrants. If you are an employer willing to pay a decent wage, you will be forced out of competition if labour is a significant part of your cost. I think it is possible to end minimum wages when there is a basic income. People will then only be willing to jobs at low wages if they are attractive. Unattractive jobs will then require higher wages. But basic income is a complicated matter. The most important question: who is going to pay for that?
Chang29
Posts: 732
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3/13/2016 3:19:15 PM
Posted: 8 months ago
At 3/11/2016 3:32:05 PM, liltankjj wrote:
I have this theory that I've not yet challenged with opposition. So please hold no punches on this one. I believe that If it wasn't for minimum wage laws, there would be better opportunities for negotiating starting wage for jobs. I see that there are possible issues that can come of this and I would like to see your thoughts on it. I truly am looking at this as a learning experience so please elaborate your views or question my views freely. Thanks in advance.

In is a straight up liberty issue, two people should be able to negotiate a price for voluntary exchange of labor, free from outside coercion.
A free market anti-capitalist

If it can be de-centralized, it will be de-centralized.
ResponsiblyIrresponsible
Posts: 12,398
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3/13/2016 4:25:01 PM
Posted: 8 months ago
Most of the literature on the minimum wage finds that modest increases -- not $15 an hour, which is political grandstanding as far removed from actual economics as possible -- aren't associated with significant disemployment effects, so there isn't a big issue with having a reasonably high MW undergirded by a political-economy rationale: i.e., models that assume perfect information and no asymmetries of bargaining power are on the whole completely unreflective of reality, and thus it's probably far to say that the simplifying assumption in Micro 101 of "wage = MPL" need not actually hold.

A society with no MW would probably require a much higher EITC, but even then there are limits to its effectiveness. A much better approach, I think, is to balance the two.
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liltankjj
Posts: 430
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3/14/2016 2:08:08 PM
Posted: 8 months ago
At 3/11/2016 9:26:30 PM, ColeTrain wrote:
At 3/11/2016 3:32:05 PM, liltankjj wrote:
I have this theory that I've not yet challenged with opposition. So please hold no punches on this one. I believe that If it wasn't for minimum wage laws, there would be better opportunities for negotiating starting wage for jobs. I see that there are possible issues that can come of this and I would like to see your thoughts on it. I truly am looking at this as a learning experience so please elaborate your views or question my views freely. Thanks in advance.

The biggest issue is that we not raise it. I'm sure you understand the reasons behind that, but if not, you can check out this debate: [http://www.debate.org...]

However, abolishing the MW would probably be a good idea, too. There are a couple of reasons why.

It would open up more employment opportunities. Here's the deal: when you have a minimum wage, that's federal mandates on what you can and can't pay a worker, regardless of how tough the job is or how much you can afford to pay for the job to be done. That stifles the market. Sure, you might say that leaves it open for abuse, and that's partially right. That leaves the option open for the employer to pay extremely low, unfair wages, but that doesn't ensure they will. Particularly because, when you have no federal regulations on wages, you can hire more workers, for less money. This is equitable to workers because a lot of jobs (entry-level) aren't really worthy of a high wage, and by abolishing the regulations that control economic stimulation in companies, you can have more work available. This creates competition, which drives up the real value of wages even higher than it already is. Employers won't be tempted to pay too low because they know they won't be able to hire anyone. Another thing is teens. Teens don't always need a high wage -- especially not $15 an hour. They have secondary income with their parents, in most cases, and need to just find a start in the workplace. Minimum wages price teens (and other generally low-skilled workers) out of jobs, even the rudimentary ones. The higher the wage, the worse these effects are.

There are other reasons, too, but I don't have time to articulate any further at the moment. What are your thoughts? Have you any arguments for abolishing the minimum wage?

After reading over this, I am obliged to say that your thoughts have been very insightful and I happen to find myself in concurrence with what you have said. I have always believed the people will indeed do the right thing, generally speaking. So I really like the point you made about competition. I can believe it would be very competitive. I also believe that this has a connection with education as well. If it is up to the individual to effect their own wage then they will be more motivated. I feel like higher minimum wage supports the employee while lower minimum wage supports the employer. By this logic, I would say that no wage regulation would be fair ground.
liltankjj
Posts: 430
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3/14/2016 2:11:44 PM
Posted: 8 months ago
At 3/11/2016 10:02:05 PM, mc9 wrote:
At 3/11/2016 3:32:05 PM, liltankjj wrote:
I have this theory that I've not yet challenged with opposition. So please hold no punches on this one. I believe that If it wasn't for minimum wage laws, there would be better opportunities for negotiating starting wage for jobs. I see that there are possible issues that can come of this and I would like to see your thoughts on it. I truly am looking at this as a learning experience so please elaborate your views or question my views freely. Thanks in advance.

Okay so I see you're pushing for absolutely no minimum wage, I will give my opinion on it.

Minimum wage laws are necessary, even if there's a low minimum wage, it's what prevents businessses from cheating workers by paying them a cent per year and the workers not really having any good options. Now I agree there shouldn't be a $15 dollar an hour minimum wage but a baseline is necessary to protect workers rights.

Ask me any questions you feel

I see. I believe that if an employer is trying to pay too low they would have a hard time hiring due to the fact that other employer would be willing to pay more. I feel that by advertising a cent a year a business would go under in the blink of an eye. The most important resource in business is that of the human kind.
liltankjj
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3/14/2016 2:23:11 PM
Posted: 8 months ago
At 3/12/2016 9:54:43 AM, Naturalmoney.org wrote:
At 3/11/2016 3:32:05 PM, liltankjj wrote:
I have this theory that I've not yet challenged with opposition. So please hold no punches on this one. I believe that If it wasn't for minimum wage laws, there would be better opportunities for negotiating starting wage for jobs. I see that there are possible issues that can come of this and I would like to see your thoughts on it. I truly am looking at this as a learning experience so please elaborate your views or question my views freely. Thanks in advance.

The problem is that if there is excess labour, the price of labour would go to zero. That is actually happening to illegal immigrants. If you are an employer willing to pay a decent wage, you will be forced out of competition if labour is a significant part of your cost.
What makes you believe this? I think it goes into who is willing to work for less. Using your example of illegal immigration, they will work for a lot less because of the opportunities of where they come from. Though the pay is low to people of the USA for those escaping worse situations, it is an opportunity.

I think it is possible to end minimum wages when there is a basic income. People will then only be willing to jobs at low wages if they are attractive. Unattractive jobs will then require higher wages. But basic income is a complicated matter.
Here is another point I'm not sure I am tracking with. Why do you feel people will want to do attractive jobs at a lower wage? I think I understand the unattractive jobs at higher wages but It would still be based on what an individual employee is willing to do for a particular amount of pay.
The most important question: who is going to pay for that?
I'm not sure what you mean by this question.
liltankjj
Posts: 430
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3/14/2016 2:24:27 PM
Posted: 8 months ago
At 3/13/2016 3:19:15 PM, Chang29 wrote:
At 3/11/2016 3:32:05 PM, liltankjj wrote:
I have this theory that I've not yet challenged with opposition. So please hold no punches on this one. I believe that If it wasn't for minimum wage laws, there would be better opportunities for negotiating starting wage for jobs. I see that there are possible issues that can come of this and I would like to see your thoughts on it. I truly am looking at this as a learning experience so please elaborate your views or question my views freely. Thanks in advance.

In is a straight up liberty issue, two people should be able to negotiate a price for voluntary exchange of labor, free from outside coercion.

Now that is something I am getting at. Outside interference in personal matters.
liltankjj
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3/14/2016 2:29:09 PM
Posted: 8 months ago
At 3/13/2016 4:25:01 PM, ResponsiblyIrresponsible wrote:
Most of the literature on the minimum wage finds that modest increases -- not $15 an hour, which is political grandstanding as far removed from actual economics as possible -- aren't associated with significant disemployment effects, so there isn't a big issue with having a reasonably high MW undergirded by a political-economy rationale: i.e., models that assume perfect information and no asymmetries of bargaining power are on the whole completely unreflective of reality, and thus it's probably far to say that the simplifying assumption in Micro 101 of "wage = MPL" need not actually hold.

A society with no MW would probably require a much higher EITC, but even then there are limits to its effectiveness. A much better approach, I think, is to balance the two.

First off I'm not familiar with some of your abbreviations. What is EITC? What is MPL? I am assuming MW is minimum wage. This is hindering me from understanding your point. Thanks in advance.
ResponsiblyIrresponsible
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3/14/2016 5:01:02 PM
Posted: 8 months ago
At 3/14/2016 2:29:09 PM, liltankjj wrote:
First off I'm not familiar with some of your abbreviations. What is EITC?

Earned income tax credit, which is a low-wage subsidy that is in some ways a substitute to the minimum wage.

What is MPL?

Marginal product of labor.

I am assuming MW is minimum wage.

Yup.

This is hindering me from understanding your point. Thanks in advance.
~ResponsiblyIrresponsible

DDO's Economics Messiah
ColeTrain
Posts: 4,313
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3/15/2016 3:19:12 AM
Posted: 8 months ago
At 3/14/2016 2:08:08 PM, liltankjj wrote:
At 3/11/2016 9:26:30 PM, ColeTrain wrote:
At 3/11/2016 3:32:05 PM, liltankjj wrote:
I have this theory that I've not yet challenged with opposition. So please hold no punches on this one. I believe that If it wasn't for minimum wage laws, there would be better opportunities for negotiating starting wage for jobs. I see that there are possible issues that can come of this and I would like to see your thoughts on it. I truly am looking at this as a learning experience so please elaborate your views or question my views freely. Thanks in advance.

The biggest issue is that we not raise it. I'm sure you understand the reasons behind that, but if not, you can check out this debate: [http://www.debate.org...]

However, abolishing the MW would probably be a good idea, too. There are a couple of reasons why.

It would open up more employment opportunities. Here's the deal: when you have a minimum wage, that's federal mandates on what you can and can't pay a worker, regardless of how tough the job is or how much you can afford to pay for the job to be done. That stifles the market. Sure, you might say that leaves it open for abuse, and that's partially right. That leaves the option open for the employer to pay extremely low, unfair wages, but that doesn't ensure they will. Particularly because, when you have no federal regulations on wages, you can hire more workers, for less money. This is equitable to workers because a lot of jobs (entry-level) aren't really worthy of a high wage, and by abolishing the regulations that control economic stimulation in companies, you can have more work available. This creates competition, which drives up the real value of wages even higher than it already is. Employers won't be tempted to pay too low because they know they won't be able to hire anyone. Another thing is teens. Teens don't always need a high wage -- especially not $15 an hour. They have secondary income with their parents, in most cases, and need to just find a start in the workplace. Minimum wages price teens (and other generally low-skilled workers) out of jobs, even the rudimentary ones. The higher the wage, the worse these effects are.

There are other reasons, too, but I don't have time to articulate any further at the moment. What are your thoughts? Have you any arguments for abolishing the minimum wage?

After reading over this, I am obliged to say that your thoughts have been very insightful and I happen to find myself in concurrence with what you have said.

That's good. :P

I have always believed the people will indeed do the right thing, generally speaking.

Eh, that's sticky ground to stand on. People normatively do what will benefit themselves... if it helps others, that's normally just an added bonus.

So I really like the point you made about competition. I can believe it would be very competitive.

Yep. It's a strong one, primarily because it's square logic. If you need workers, you'll pay what's necessary to price their work out of a wage that's too low.

I also believe that this has a connection with education as well. If it is up to the individual to effect their own wage then they will be more motivated. I feel like higher minimum wage supports the employee while lower minimum wage supports the employer. By this logic, I would say that no wage regulation would be fair ground.

Yeah, this is somewhat true. Further education, in large part, is dependent upon capability and ability, not solely motivation, but I see what you mean.
"The right to 360 noscope noobs shall not be infringed!!!" -- tajshar2k
"So, to start off, I've never committed suicide." -- Vaarka
"I eat glue." -- brontoraptor
"I mean, at this rate, I'd argue for a ham sandwich presidency." -- ResponsiblyIrresponsible
"Overthrow Assad, heil jihad." -- 16kadams when trolling in hangout
"Hillary Clinton is not my favorite person ... and her campaign is as inspiring as a bowl of cottage cheese." -- YYW
ColeTrain
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3/15/2016 3:25:33 AM
Posted: 8 months ago
At 3/13/2016 4:25:01 PM, ResponsiblyIrresponsible wrote:
Most of the literature on the minimum wage finds that modest increases -- not $15 an hour, which is political grandstanding as far removed from actual economics as possible -- aren't associated with significant disemployment effects, so there isn't a big issue with having a reasonably high MW undergirded by a political-economy rationale: i.e., models that assume perfect information and no asymmetries of bargaining power are on the whole completely unreflective of reality, and thus it's probably far to say that the simplifying assumption in Micro 101 of "wage = MPL" need not actually hold.

I just don't trust the literature, particularly when it shows nearly no harms (which is entirely illogical, and I know you know that) of raising a minimum wage. This makes me question methodological procedures, the actual specifics of the wage increase, and the accuracy of the models. There's going to be backlash (even if it's not severe) of raising a minimum wage. There are too many companies that are just staying afloat, but nothing more. These companies have to get the money from somewhere, and literature on the subject indicate most of it will be passed on to consumers. Either way, they'll have to get it somehow -- whether it be by cutting hours, workers, or raising prices. It worries me that so many blindly support the $15 figure, and just a hike in general, without proper understanding of the economic environment and the imperative literature of the subject.

A society with no MW would probably require a much higher EITC, but even then there are limits to its effectiveness. A much better approach, I think, is to balance the two.

I think I'd generally agree. A minimum wage, in essence, can protect workers from abuse. I think it's reasonable grounds in that alone to at least have one, but I'd keep it low. Rather than raising the MW, keep it low and allow it to stimulate competition. Simultaneously, use the EITC to a greater degree. Would you agree?
"The right to 360 noscope noobs shall not be infringed!!!" -- tajshar2k
"So, to start off, I've never committed suicide." -- Vaarka
"I eat glue." -- brontoraptor
"I mean, at this rate, I'd argue for a ham sandwich presidency." -- ResponsiblyIrresponsible
"Overthrow Assad, heil jihad." -- 16kadams when trolling in hangout
"Hillary Clinton is not my favorite person ... and her campaign is as inspiring as a bowl of cottage cheese." -- YYW
ResponsiblyIrresponsible
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3/15/2016 3:33:28 AM
Posted: 8 months ago
At 3/15/2016 3:25:33 AM, ColeTrain wrote:
I just don't trust the literature, particularly when it shows nearly no harms (which is entirely illogical, and I know you know that) of raising a minimum wage.

It's not illogical. There are actually several plausible possibilities: (a) workers aren't paid their "marginal product of labor" (which is very likely); (b) raising wages bolsters productivity; and (c) shifting income toward lower-income workers creates a consumption effect that offsets the increase in costs. But I think the efficiency wage hypothesis is probably the most likely outcome.

This makes me question methodological procedures, the actual specifics of the wage increase, and the accuracy of the models.

The specifics of the wage hike matter a lot, but the work on this has actually been pretty one-sided: even the CBO generally came down on the side of Card and Krueger, because even the job loss estimate was incredibly small relative to the benefits. Most of the time, also, the "job losses" take the form of a reduction in future hires -- arguably, it's even DESIRABLE to create fewer, higher-paying jobs than more low-paying jobs.

There's going to be backlash (even if it's not severe) of raising a minimum wage.

Sure, I wouldn't deny that.

There are too many companies that are just staying afloat, but nothing more.

Most of them are energy companies, lol. But, sure, some would take a hit from a higher MW hike -- but my focus (and where the focus ought to be) is on the general-equilibrium effects, and the work on this is a lot more powerful than anecdotes, especially when the counterfactual of slightly higher wages often differs considerably from the doom-and-gloom narrative of so-called "small business owners."

These companies have to get the money from somewhere, and literature on the subject indicate most of it will be passed on to consumers.

You can't have it both ways, dude, lol. Either it's passed on, in which case businesses are generally able to cover the costs of the wage hike, or businesses are forced to shed jobs. You're right that much of it is passed on, but it's pennies on the dollar and has virtually no impact on the general price level.

Either way, they'll have to get it somehow -- whether it be by cutting hours, workers, or raising prices.

Again, the efficiency wage hypothesis is an incredibly powerful explanation.

It worries me that so many blindly support the $15 figure, and just a hike in general, without proper understanding of the economic environment and the imperative literature of the subject.

Sure, a lot of people do support $15 blindly. I don't support $15. My support for this, as you know, isn't exactly blind, though.

I think I'd generally agree. A minimum wage, in essence, can protect workers from abuse. I think it's reasonable grounds in that alone to at least have one, but I'd keep it low. Rather than raising the MW, keep it low and allow it to stimulate competition. Simultaneously, use the EITC to a greater degree. Would you agree?

It depends on what you consider "low." I think a better word is "moderate." There are trade-offs associated with both the MW and the EITC, so ideally we'd be able to find the so-called "optimal" level of both and balance the two. That may require trial and error, of course. I'm convinced that the current level of the MW is far too low relative to that optimal level.
~ResponsiblyIrresponsible

DDO's Economics Messiah
ColeTrain
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3/15/2016 3:53:41 AM
Posted: 8 months ago
At 3/15/2016 3:33:28 AM, ResponsiblyIrresponsible wrote:
At 3/15/2016 3:25:33 AM, ColeTrain wrote:
I just don't trust the literature, particularly when it shows nearly no harms (which is entirely illogical, and I know you know that) of raising a minimum wage.

It's not illogical. There are actually several plausible possibilities: (a) workers aren't paid their "marginal product of labor" (which is very likely); (b) raising wages bolsters productivity; and (c) shifting income toward lower-income workers creates a consumption effect that offsets the increase in costs. But I think the efficiency wage hypothesis is probably the most likely outcome.

I'd agree. I think you misinterpreted my meaning, though. I was leading to a point, which you eventually agreed to. Sorry if that was unclear.
Even though I agree with your efficiency wage hypothesis, 10 men can do a job better than 1. I'm just throwing numbers around, but I think you get the gist of what I'm saying. Even if raising a wage makes X worker work harder, he can't replace what workers Y, Z, and A can do, etc. Obviously, something would need to be done to ensure Y, Z, and A do as much as they can, too, but that's where the EITC comes in. It allows for companies to bolster wages by way of competition, etc.

Sorry if that is not properly articulated, I'm really tired atm, lol.

This makes me question methodological procedures, the actual specifics of the wage increase, and the accuracy of the models.

The specifics of the wage hike matter a lot, but the work on this has actually been pretty one-sided: even the CBO generally came down on the side of Card and Krueger, because even the job loss estimate was incredibly small relative to the benefits.

Again, though, it's dependent upon the size of the increase.

Most of the time, also, the "job losses" take the form of a reduction in future hires --

True. It's still a concern when companies have to cut existing workers to compensate for higher wages all around, particularly in smaller businesses. It allows the free market economy to run its course, and create economic growth.

arguably, it's even DESIRABLE to create fewer, higher-paying jobs than more low-paying jobs.

Fair.

There's going to be backlash (even if it's not severe) of raising a minimum wage.

Sure, I wouldn't deny that.

There are too many companies that are just staying afloat, but nothing more.

Most of them are energy companies, lol.

Lol xD

But, sure, some would take a hit from a higher MW hike -- but my focus (and where the focus ought to be) is on the general-equilibrium effects, and the work on this is a lot more powerful than anecdotes, especially when the counterfactual of slightly higher wages often differs considerably from the doom-and-gloom narrative of so-called "small business owners."

I see what you mean. I still don't think the effect on small businesses is entirely "counterfactual," but you're right that many have exaggerated the actual impact.

These companies have to get the money from somewhere, and literature on the subject indicate most of it will be passed on to consumers.

You can't have it both ways, dude, lol. Either it's passed on, in which case businesses are generally able to cover the costs of the wage hike, or businesses are forced to shed jobs. You're right that much of it is passed on, but it's pennies on the dollar and has virtually no impact on the general price level.

Yeah, I know. I was just suggesting different variations.

Either way, they'll have to get it somehow -- whether it be by cutting hours, workers, or raising prices.

Again, the efficiency wage hypothesis is an incredibly powerful explanation.

Yeah, I just don't buy all of it... particularly when the EITC could be complemented to, essentially, achieve the same ends with more desirable means.

It worries me that so many blindly support the $15 figure, and just a hike in general, without proper understanding of the economic environment and the imperative literature of the subject.

Sure, a lot of people do support $15 blindly. I don't support $15. My support for this, as you know, isn't exactly blind, though.

Haha, I'm not talking about you, dude. I respect you about stuff like this more than virtually anyone else. :)

I think I'd generally agree. A minimum wage, in essence, can protect workers from abuse. I think it's reasonable grounds in that alone to at least have one, but I'd keep it low. Rather than raising the MW, keep it low and allow it to stimulate competition. Simultaneously, use the EITC to a greater degree. Would you agree?

It depends on what you consider "low." I think a better word is "moderate." There are trade-offs associated with both the MW and the EITC, so ideally we'd be able to find the so-called "optimal" level of both and balance the two. That may require trial and error, of course. I'm convinced that the current level of the MW is far too low relative to that optimal level.

I'm inclined to disagree. Perhaps it's too low -- but not far too low. I think it's arguable the MW is sufficient to spur competition in wages and benefit economic growth if complemented by the EITC. I think the trade-offs work best if left at the current minimum or raised slightly. Let's say, maybe upper $8ish lower $9 ish something.
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3/15/2016 4:00:31 AM
Posted: 8 months ago
At 3/15/2016 3:53:41 AM, ColeTrain wrote:
I'd agree. I think you misinterpreted my meaning, though. I was leading to a point, which you eventually agreed to. Sorry if that was unclear.

I don't think I did. You said the idea that it could lead to no harms is illogical, though that isn't necessarily the case.

Even though I agree with your efficiency wage hypothesis, 10 men can do a job better than 1. I'm just throwing numbers around, but I think you get the gist of what I'm saying.

Not necessarily true, lol. If I hire -- and this is an extreme example -- 10 children in Bangladesh, they won't outperform a better paid American worker.

The same line of logic is extended to trade theory: the logic is that globalization might drive down wages and lead capital to flock to one country, but asymmetries in productivity tend to make up the difference.

Even if raising a wage makes X worker work harder, he can't replace what workers Y, Z, and A can do, etc.

That presupposes an equal and opposite, or greater, layoff.. which is unlikely, lol.

Obviously, something would need to be done to ensure Y, Z, and A do as much as they can, too, but that's where the EITC comes in. It allows for companies to bolster wages by way of competition, etc.

And I'm all for the EITC.

Sorry if that is not properly articulated, I'm really tired atm, lol.

This makes me question methodological procedures, the actual specifics of the wage increase, and the accuracy of the models.

The specifics of the wage hike matter a lot, but the work on this has actually been pretty one-sided: even the CBO generally came down on the side of Card and Krueger, because even the job loss estimate was incredibly small relative to the benefits.

Again, though, it's dependent upon the size of the increase.

Most of the time, also, the "job losses" take the form of a reduction in future hires --

True. It's still a concern when companies have to cut existing workers to compensate for higher wages all around, particularly in smaller businesses. It allows the free market economy to run its course, and create economic growth.

I can't imagine a net reduction in the existing pool of workers unless we raise the MW to $15 tomorrow, which would just be looney.

arguably, it's even DESIRABLE to create fewer, higher-paying jobs than more low-paying jobs.

Fair.

There's going to be backlash (even if it's not severe) of raising a minimum wage.

Sure, I wouldn't deny that.

There are too many companies that are just staying afloat, but nothing more.

Most of them are energy companies, lol.

Lol xD

But, sure, some would take a hit from a higher MW hike -- but my focus (and where the focus ought to be) is on the general-equilibrium effects, and the work on this is a lot more powerful than anecdotes, especially when the counterfactual of slightly higher wages often differs considerably from the doom-and-gloom narrative of so-called "small business owners."

I see what you mean. I still don't think the effect on small businesses is entirely "counterfactual," but you're right that many have exaggerated the actual impact.

By counterfactual, I meant a "what if" scenario -- if we changed this variable, what happens to the remaining variables in the experiment.

These companies have to get the money from somewhere, and literature on the subject indicate most of it will be passed on to consumers.

You can't have it both ways, dude, lol. Either it's passed on, in which case businesses are generally able to cover the costs of the wage hike, or businesses are forced to shed jobs. You're right that much of it is passed on, but it's pennies on the dollar and has virtually no impact on the general price level.

Yeah, I know. I was just suggesting different variations.

Either way, they'll have to get it somehow -- whether it be by cutting hours, workers, or raising prices.

Again, the efficiency wage hypothesis is an incredibly powerful explanation.

Yeah, I just don't buy all of it... particularly when the EITC could be complemented to, essentially, achieve the same ends with more desirable means.

Not the same ends, though, since both of them have potential harms.

It worries me that so many blindly support the $15 figure, and just a hike in general, without proper understanding of the economic environment and the imperative literature of the subject.

Sure, a lot of people do support $15 blindly. I don't support $15. My support for this, as you know, isn't exactly blind, though.

Haha, I'm not talking about you, dude. I respect you about stuff like this more than virtually anyone else. :)

I know, lol -- and much appreciated.

I think I'd generally agree. A minimum wage, in essence, can protect workers from abuse. I think it's reasonable grounds in that alone to at least have one, but I'd keep it low. Rather than raising the MW, keep it low and allow it to stimulate competition. Simultaneously, use the EITC to a greater degree. Would you agree?

It depends on what you consider "low." I think a better word is "moderate." There are trade-offs associated with both the MW and the EITC, so ideally we'd be able to find the so-called "optimal" level of both and balance the two. That may require trial and error, of course. I'm convinced that the current level of the MW is far too low relative to that optimal level.

I'm inclined to disagree. Perhaps it's too low -- but not far too low. I think it's arguable the MW is sufficient to spur competition in wages and benefit economic growth if complemented by the EITC. I think the trade-offs work best if left at the current minimum or raised slightly. Let's say, maybe upper $8ish lower $9 ish something.

I think that's far too low, whether it's relative to the median wage (which is a reasonable benchmark) or in real terms, since it's been trending down in real terms since the late 1960s.
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ColeTrain
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3/15/2016 4:10:16 AM
Posted: 8 months ago
At 3/15/2016 4:00:31 AM, ResponsiblyIrresponsible wrote:
At 3/15/2016 3:53:41 AM, ColeTrain wrote:
I'd agree. I think you misinterpreted my meaning, though. I was leading to a point, which you eventually agreed to. Sorry if that was unclear.

I don't think I did. You said the idea that it could lead to no harms is illogical, though that isn't necessarily the case.

But you conceded that the money has to come from somewhere, and at least some people will be harmed, even if it's marginally... unless I misread something...

Even though I agree with your efficiency wage hypothesis, 10 men can do a job better than 1. I'm just throwing numbers around, but I think you get the gist of what I'm saying.

Not necessarily true, lol. If I hire -- and this is an extreme example -- 10 children in Bangladesh, they won't outperform a better paid American worker.

Eh. It depends on the work. Many hands make light work. Really, this is entirely subjective to the type of job it is.

The same line of logic is extended to trade theory: the logic is that globalization might drive down wages and lead capital to flock to one country, but asymmetries in productivity tend to make up the difference.

Right, but again, this isn't always what happens. Labor laws decline concurrent with practices, many times. This includes lackadaisical wage regulation, too. [http://cdn.static-economist.com...]

Even if raising a wage makes X worker work harder, he can't replace what workers Y, Z, and A can do, etc.

That presupposes an equal and opposite, or greater, layoff.. which is unlikely, lol.

I was only giving an extreme example, as you were.

Obviously, something would need to be done to ensure Y, Z, and A do as much as they can, too, but that's where the EITC comes in. It allows for companies to bolster wages by way of competition, etc.

And I'm all for the EITC.

Great, so am I. :)

Sorry if that is not properly articulated, I'm really tired atm, lol.

This makes me question methodological procedures, the actual specifics of the wage increase, and the accuracy of the models.

The specifics of the wage hike matter a lot, but the work on this has actually been pretty one-sided: even the CBO generally came down on the side of Card and Krueger, because even the job loss estimate was incredibly small relative to the benefits.

Again, though, it's dependent upon the size of the increase.

Most of the time, also, the "job losses" take the form of a reduction in future hires --

True. It's still a concern when companies have to cut existing workers to compensate for higher wages all around, particularly in smaller businesses. It allows the free market economy to run its course, and create economic growth.

I can't imagine a net reduction in the existing pool of workers unless we raise the MW to $15 tomorrow, which would just be looney.

Haha.

arguably, it's even DESIRABLE to create fewer, higher-paying jobs than more low-paying jobs.

Fair.

There's going to be backlash (even if it's not severe) of raising a minimum wage.

Sure, I wouldn't deny that.

There are too many companies that are just staying afloat, but nothing more.

Most of them are energy companies, lol.

Lol xD

But, sure, some would take a hit from a higher MW hike -- but my focus (and where the focus ought to be) is on the general-equilibrium effects, and the work on this is a lot more powerful than anecdotes, especially when the counterfactual of slightly higher wages often differs considerably from the doom-and-gloom narrative of so-called "small business owners."

I see what you mean. I still don't think the effect on small businesses is entirely "counterfactual," but you're right that many have exaggerated the actual impact.

By counterfactual, I meant a "what if" scenario -- if we changed this variable, what happens to the remaining variables in the experiment.

I see.

These companies have to get the money from somewhere, and literature on the subject indicate most of it will be passed on to consumers.

You can't have it both ways, dude, lol. Either it's passed on, in which case businesses are generally able to cover the costs of the wage hike, or businesses are forced to shed jobs. You're right that much of it is passed on, but it's pennies on the dollar and has virtually no impact on the general price level.

Yeah, I know. I was just suggesting different variations.

Either way, they'll have to get it somehow -- whether it be by cutting hours, workers, or raising prices.

Again, the efficiency wage hypothesis is an incredibly powerful explanation.

Yeah, I just don't buy all of it... particularly when the EITC could be complemented to, essentially, achieve the same ends with more desirable means.

Not the same ends, though, since both of them have potential harms.

Well, I guess the same intended ends. Both are politically aimed (however plausible) to reduce poverty, income inequality, and help the labor market in general. Together is the only way these are even remotely possible.

It worries me that so many blindly support the $15 figure, and just a hike in general, without proper understanding of the economic environment and the imperative literature of the subject.

Sure, a lot of people do support $15 blindly. I don't support $15. My support for this, as you know, isn't exactly blind, though.

Haha, I'm not talking about you, dude. I respect you about stuff like this more than virtually anyone else. :)

I know, lol -- and much appreciated.

Sure thing. :)

I think I'd generally agree. A minimum wage, in essence, can protect workers from abuse. I think it's reasonable grounds in that alone to at least have one, but I'd keep it low. Rather than raising the MW, keep it low and allow it to stimulate competition. Simultaneously, use the EITC to a greater degree. Would you agree?

It depends on what you consider "low." I think a better word is "moderate." There are trade-offs associated with both the MW and the EITC, so ideally we'd be able to find the so-called "optimal" level of both and balance the two. That may require trial and error, of course. I'm convinced that the current level of the MW is far too low relative to that optimal level.

I'm inclined to disagree. Perhaps it's too low -- but not far too low. I think it's arguable the MW is sufficient to spur competition in wages and benefit economic growth if complemented by the EITC. I think the trade-offs work best if left at the current minimum or raised slightly. Let's say, maybe upper $8ish lower $9 ish something.

I think that's far too low, whether it's relative to the median wage (which is a reasonable benchmark) or in real terms, since it's been trending down in real terms since the late 1960s.

Yeah. I still think being "too low" by most standards affirms competition, which should drive lower wages up, while protecting *more* liberty and economic freedom.
"The right to 360 noscope noobs shall not be infringed!!!" -- tajshar2k
"So, to start off, I've never committed suicide." -- Vaarka
"I eat glue." -- brontoraptor
"I mean, at this rate, I'd argue for a ham sandwich presidency." -- ResponsiblyIrresponsible
"Overthrow Assad, heil jihad." -- 16kadams when trolling in hangout
"Hillary Clinton is not my favorite person ... and her campaign is as inspiring as a bowl of cottage cheese." -- YYW
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3/15/2016 4:13:05 AM
Posted: 8 months ago
At 3/15/2016 4:10:16 AM, ColeTrain wrote:
But you conceded that the money has to come from somewhere, and at least some people will be harmed, even if it's marginally... unless I misread something...

No I didn't, lol. I said, generally speaking, there are trade-offs, but they need not be material amid modest increases.

Eh. It depends on the work. Many hands make light work. Really, this is entirely subjective to the type of job it is.

Sure.

The same line of logic is extended to trade theory: the logic is that globalization might drive down wages and lead capital to flock to one country, but asymmetries in productivity tend to make up the difference.

Right, but again, this isn't always what happens. Labor laws decline concurrent with practices, many times. This includes lackadaisical wage regulation, too. [http://cdn.static-economist.com...]

I'm too tired to decipher this, dude, lol.

Even if raising a wage makes X worker work harder, he can't replace what workers Y, Z, and A can do, etc.

That presupposes an equal and opposite, or greater, layoff.. which is unlikely, lol.

I was only giving an extreme example, as you were.

But the same logic applies, and I don't that example is all that extreme: your example assumes outright layoffs.

Obviously, something would need to be done to ensure Y, Z, and A do as much as they can, too, but that's where the EITC comes in. It allows for companies to bolster wages by way of competition, etc.

And I'm all for the EITC.

Great, so am I. :)

Sorry if that is not properly articulated, I'm really tired atm, lol.

This makes me question methodological procedures, the actual specifics of the wage increase, and the accuracy of the models.

The specifics of the wage hike matter a lot, but the work on this has actually been pretty one-sided: even the CBO generally came down on the side of Card and Krueger, because even the job loss estimate was incredibly small relative to the benefits.

Again, though, it's dependent upon the size of the increase.

Most of the time, also, the "job losses" take the form of a reduction in future hires --

True. It's still a concern when companies have to cut existing workers to compensate for higher wages all around, particularly in smaller businesses. It allows the free market economy to run its course, and create economic growth.

I can't imagine a net reduction in the existing pool of workers unless we raise the MW to $15 tomorrow, which would just be looney.

Haha.

arguably, it's even DESIRABLE to create fewer, higher-paying jobs than more low-paying jobs.

Fair.

There's going to be backlash (even if it's not severe) of raising a minimum wage.

Sure, I wouldn't deny that.

There are too many companies that are just staying afloat, but nothing more.

Most of them are energy companies, lol.

Lol xD

But, sure, some would take a hit from a higher MW hike -- but my focus (and where the focus ought to be) is on the general-equilibrium effects, and the work on this is a lot more powerful than anecdotes, especially when the counterfactual of slightly higher wages often differs considerably from the doom-and-gloom narrative of so-called "small business owners."

I see what you mean. I still don't think the effect on small businesses is entirely "counterfactual," but you're right that many have exaggerated the actual impact.

By counterfactual, I meant a "what if" scenario -- if we changed this variable, what happens to the remaining variables in the experiment.

I see.

These companies have to get the money from somewhere, and literature on the subject indicate most of it will be passed on to consumers.

You can't have it both ways, dude, lol. Either it's passed on, in which case businesses are generally able to cover the costs of the wage hike, or businesses are forced to shed jobs. You're right that much of it is passed on, but it's pennies on the dollar and has virtually no impact on the general price level.

Yeah, I know. I was just suggesting different variations.

Either way, they'll have to get it somehow -- whether it be by cutting hours, workers, or raising prices.

Again, the efficiency wage hypothesis is an incredibly powerful explanation.

Yeah, I just don't buy all of it... particularly when the EITC could be complemented to, essentially, achieve the same ends with more desirable means.

Not the same ends, though, since both of them have potential harms.

Well, I guess the same intended ends. Both are politically aimed (however plausible) to reduce poverty, income inequality, and help the labor market in general. Together is the only way these are even remotely possible.

Yes, to a point, though I don't think it's for the sake of the labor market. It's not a jobs program, and people shouldn't market it as such.

It worries me that so many blindly support the $15 figure, and just a hike in general, without proper understanding of the economic environment and the imperative literature of the subject.

Sure, a lot of people do support $15 blindly. I don't support $15. My support for this, as you know, isn't exactly blind, though.

Haha, I'm not talking about you, dude. I respect you about stuff like this more than virtually anyone else. :)

I know, lol -- and much appreciated.

Sure thing. :)

I think I'd generally agree. A minimum wage, in essence, can protect workers from abuse. I think it's reasonable grounds in that alone to at least have one, but I'd keep it low. Rather than raising the MW, keep it low and allow it to stimulate competition. Simultaneously, use the EITC to a greater degree. Would you agree?

It depends on what you consider "low." I think a better word is "moderate." There are trade-offs associated with both the MW and the EITC, so ideally we'd be able to find the so-called "optimal" level of both and balance the two. That may require trial and error, of course. I'm convinced that the current level of the MW is far too low relative to that optimal level.

I'm inclined to disagree. Perhaps it's too low -- but not far too low. I think it's arguable the MW is sufficient to spur competition in wages and benefit economic growth if complemented by the EITC. I think the trade-offs work best if left at the current minimum or raised slightly. Let's say, maybe upper $8ish lower $9 ish something.

I think that's far too low, whether it's relative to the median wage (which is a reasonable benchmark) or in real terms, since it's been trending down in real terms since the late 1960s.

Yeah. I still think being "too low" by most standards affirms competition, which should drive lower wages up, while protecting *more* liberty and economic freedom.
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Chang29
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3/15/2016 6:41:24 AM
Posted: 8 months ago
This looks like criminals talking about who to assault next.

Two people are capable of determining what is a fair wage.
A free market anti-capitalist

If it can be de-centralized, it will be de-centralized.
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3/15/2016 4:45:11 PM
Posted: 8 months ago
At 3/15/2016 6:41:24 AM, Chang29 wrote:
This looks like criminals talking about who to assault next.

Two people are capable of determining what is a fair wage.

Can you at least take the time to respond to me -- or, for that matter, to attempt to address the arguments I've made in this thread?

Seriously, you haven't contributed anything in the way of substance, and this new charge -- likening disagreement with you on the minimum wage, based on academic research, to a criminal assault -- is highly offensive, as much as it is irresponsible.
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liltankjj
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3/15/2016 8:43:51 PM
Posted: 8 months ago
At 3/15/2016 3:19:12 AM, ColeTrain wrote:
At 3/14/2016 2:08:08 PM, liltankjj wrote:
At 3/11/2016 9:26:30 PM, ColeTrain wrote:
At 3/11/2016 3:32:05 PM, liltankjj wrote:
I have this theory that I've not yet challenged with opposition. So please hold no punches on this one. I believe that If it wasn't for minimum wage laws, there would be better opportunities for negotiating starting wage for jobs. I see that there are possible issues that can come of this and I would like to see your thoughts on it. I truly am looking at this as a learning experience so please elaborate your views or question my views freely. Thanks in advance.

The biggest issue is that we not raise it. I'm sure you understand the reasons behind that, but if not, you can check out this debate: [http://www.debate.org...]

However, abolishing the MW would probably be a good idea, too. There are a couple of reasons why.

It would open up more employment opportunities. Here's the deal: when you have a minimum wage, that's federal mandates on what you can and can't pay a worker, regardless of how tough the job is or how much you can afford to pay for the job to be done. That stifles the market. Sure, you might say that leaves it open for abuse, and that's partially right. That leaves the option open for the employer to pay extremely low, unfair wages, but that doesn't ensure they will. Particularly because, when you have no federal regulations on wages, you can hire more workers, for less money. This is equitable to workers because a lot of jobs (entry-level) aren't really worthy of a high wage, and by abolishing the regulations that control economic stimulation in companies, you can have more work available. This creates competition, which drives up the real value of wages even higher than it already is. Employers won't be tempted to pay too low because they know they won't be able to hire anyone. Another thing is teens. Teens don't always need a high wage -- especially not $15 an hour. They have secondary income with their parents, in most cases, and need to just find a start in the workplace. Minimum wages price teens (and other generally low-skilled workers) out of jobs, even the rudimentary ones. The higher the wage, the worse these effects are.

There are other reasons, too, but I don't have time to articulate any further at the moment. What are your thoughts? Have you any arguments for abolishing the minimum wage?

After reading over this, I am obliged to say that your thoughts have been very insightful and I happen to find myself in concurrence with what you have said.

That's good. :P

I have always believed the people will indeed do the right thing, generally speaking.

Eh, that's sticky ground to stand on. People normatively do what will benefit themselves... if it helps others, that's normally just an added bonus.

Well, I don't view it as too shaky. Doing the right thing doesn't mean that you don't have to care about yourself. I don't believe selfishness is a bad trait. It is possible to be both selfless and selfish at once. Of course, I will look out for me and mine first because no one will care about me like I can. In that same sense, If someone can help me and I can help them then generally I will do good by them. In short, Your success is all on you and only you so focus on you is how I see it.
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3/15/2016 8:52:05 PM
Posted: 8 months ago
At 3/13/2016 4:25:01 PM, ResponsiblyIrresponsible wrote:
Most of the literature on the minimum wage finds that modest increases -- not $15 an hour, which is political grandstanding as far removed from actual economics as possible -- aren't associated with significant disemployment effects, so there isn't a big issue with having a reasonably high MW undergirded by a political-economy rationale: i.e., models that assume perfect information and no asymmetries of bargaining power are on the whole completely unreflective of reality, and thus it's probably far to say that the simplifying assumption in Micro 101 of "wage = MPL" need not actually hold.

A society with no MW would probably require a much higher EITC, but even then there are limits to its effectiveness.
Why do you feel a higher EITC might be required?
A much better approach, I think, is to balance the two.
Not sure If I am in line with either of the two honestly.
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3/15/2016 8:59:28 PM
Posted: 8 months ago
At 3/15/2016 8:52:05 PM, liltankjj wrote:
Why do you feel a higher EITC might be required?

I mean, are you going to let companies pay people 10 cents an hour without the slightest wage subsidy? If you're looking to discourage work, that's the best way to do it.

A much better approach, I think, is to balance the two.

Not sure If I am in line with either of the two honestly.

Why not?
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liltankjj
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3/15/2016 9:07:42 PM
Posted: 8 months ago
At 3/15/2016 8:59:28 PM, ResponsiblyIrresponsible wrote:
At 3/15/2016 8:52:05 PM, liltankjj wrote:
Why do you feel a higher EITC might be required?

I mean, are you going to let companies pay people 10 cents an hour without the slightest wage subsidy? If you're looking to discourage work, that's the best way to do it.
I don't believe companies will pay that low bud. And you're right that would be discouraging to the point that that business won't be able to hire anyone at that rate and inevitably fail.

A much better approach, I think, is to balance the two.

Not sure If I am in line with either of the two honestly.

Why not?
Well, I've already voiced my stance against wage regulation as for taxes on income that's a whole nother elephant to eat.
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3/15/2016 9:17:23 PM
Posted: 8 months ago
At 3/15/2016 9:07:42 PM, liltankjj wrote:
I don't believe companies will pay that low bud.

Obviously the example was hyperbolic, but pick a wage rate that is "too low" to actually encourage meaningful labor force participation, and substitute that in. The minimum wage in large part exists as an equalizer -- at the very least, a mechanism that in some meaningful way improves employee bargaining power. By removing that, employers have the leverage to bid wages down even further, and that gives rise to my earlier argument: people will be discouraged from working more and productivity, as a result, will tend to fall.

And you're right that would be discouraging to the point that that business won't be able to hire anyone at that rate and inevitably fail.

At 10 cents, they wouldn't. But at $5 an hour (or, again, a more realistic number, rather than a hyperbole to make a point)? Absolutely they would survive -- and we can even observe that over the past few years, there's been little, if any, meaningful upward pressure on wages even as the unemployment rate has come down considerably. Much of that has to do with asymmetries of bargaining power that takes root in globalization.

The idea that markets would self-correct to the point that we would find a "sweet spot" wage that would both encourage labor force participation -- i.e., shift labor supply meaningfully so as to bolster productivity (that's been crap over recent years) -- and allow companies to stay in business is a canard, especially when wages THEMSELVES determine productivity, employee discipline, morale, etc. (i.e., the efficiency wage hypothesis).

In all likelihood, people would be forced to accept whatever job is offered to them and depend on government assistance to get by. The EITC is a much, much better alternative than "free money."

A much better approach, I think, is to balance the two.

Not sure If I am in line with either of the two honestly.

Why not?
Well, I've already voiced my stance against wage regulation

It's not really "wage regulation." I mean, I guess in a sense it is, but the implication of the term "regulation" is that the MW is distortionary. In reality, the minimum wage is designed such that the identity we often talk about in Micro 101 -- wages equal marginal product of labor -- actually holds. We're actually trying to ensure that markets actually work.

as for taxes on income that's a whole nother elephant to eat.

The EITC isn't a tax on income. It's a tax credit given to low-income workers that increases with hours worked. It's designed to supplement antipoverty spending without, again, "giving away free money": i.e., people are given the incentive to work more in order to increase their take-home pay even if their physical wages won't budge.
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3/15/2016 9:48:26 PM
Posted: 8 months ago
At 3/15/2016 9:17:23 PM, ResponsiblyIrresponsible wrote:
At 3/15/2016 9:07:42 PM, liltankjj wrote:
I don't believe companies will pay that low bud.

Obviously the example was hyperbolic, but pick a wage rate that is "too low" to actually encourage meaningful labor force participation, and substitute that in. The minimum wage in large part exists as an equalizer -- at the very least, a mechanism that in some meaningful way improves employee bargaining power. By removing that, employers have the leverage to bid wages down even further, and that gives rise to my earlier argument: people will be discouraged from working more and productivity, as a result, will tend to fall.

Yes, I understand that your example wasn't serious, just working in the confines of it. I believe you are over simplifying this situation. By doing this you overlook a few key variables here. One specifically the competitive nature of business especially in a free market.
And you're right that would be discouraging to the point that that business won't be able to hire anyone at that rate and inevitably fail.

At 10 cents, they wouldn't. But at $5 an hour (or, again, a more realistic number, rather than a hyperbole to make a point)? Absolutely they would survive

Here you have overlooked the fact of inflation on the currency. 2 - 3 decades ago $5 at a starting rate for low-skill work such as flipping a burger would be enough with secondary income of say a parent.
-- and we can even observe that over the past few years, there's been little, if any, meaningful upward pressure on wages even as the unemployment rate has come down considerably. Much of that has to do with asymmetries of bargaining power that takes root in globalization.
I agree with the effects of globalization I'm not yet sure where I stand on it.

The idea that markets would self-correct to the point that we would find a "sweet spot" wage that would both encourage labor force participation -- i.e., shift labor supply meaningfully so as to bolster productivity (that's been crap over recent years) -- and allow companies to stay in business is a canard, especially when wages THEMSELVES determine productivity, employee discipline, morale, etc. (i.e., the efficiency wage hypothesis).
I'm not sure what you mean about a sweet spot, If there is no MW then it would be a sweet spot per business. Not nationally. This, in turn, would lead to more responsibility falling on the individual. (Which is something I find very important.) If that Individual is looking for a certain "sweet spot". Please correct me if I misunderstood your use of the term sweet spot.

In all likelihood, people would be forced to accept whatever job is offered to them and depend on government assistance to get by.
I fail to see how you make this connection with no MW. I see (with better guidance and education) a more effective employee who does their homework before just prancing into any old place of business asking for a job not even having a clue of expectations. Of course, this change wouldn't happen over night.
The EITC is a much, much better alternative than "free money."
From my research, the EITC seems like free money. a sneaky form of wealth redistribution.
A much better approach, I think, is to balance the two.

Not sure If I am in line with either of the two honestly.

Why not?
Well, I've already voiced my stance against wage regulation

It's not really "wage regulation." I mean, I guess in a sense it is, but the implication of the term "regulation" is that the MW is distortionary. In reality, the minimum wage is designed such that the identity we often talk about in Micro 101 -- wages equal marginal product of labor -- actually holds. We're actually trying to ensure that markets actually work.
Yea by regulating a minimum pay, which can be raised on a whim by the powers that be. What I see is that it handicaps the everyday American. People have the potential to be better. But they have to be allowed to stand on their own, even if that means bumping one's head a few times. Furthermore, is Micro 101 a class you have taken?

as for taxes on income that's a whole nother elephant to eat.

The EITC isn't a tax on income. It's a tax credit given to low-income workers that increases with hours worked. It's designed to supplement antipoverty spending without, again, "giving away free money": i.e., people are given the incentive to work more in order to increase their take-home pay even if their physical wages won't budge.

I'm aware it's not a tax on income bud. Work with me here. This is needed because of the tax on income. It's a credit that goes on top of your tax bill or refund. It comes from others pockets, though. The incentive in it is unnecessary If we wouldn't tax income. This wouldn't be a problem in the least, but let's mess with that elephant in another thread.
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3/15/2016 10:03:51 PM
Posted: 8 months ago
At 3/15/2016 9:48:26 PM, liltankjj wrote:
Yes, I understand that your example wasn't serious, just working in the confines of it. I believe you are over simplifying this situation.

How? The same logic extends even if we lift the hyperbolic "10 cents" example, and it's borne out by the actual behavior of wages in the data, as well as the lackluster performance of trend labor force participation, which has damaging ramifications for productivity.

By doing this you overlook a few key variables here. One specifically the competitive nature of business especially in a free market.

No, I didn't -- in fact, I argued (preemptively, because I knew you were going there) that this "free market" line is a cop-out and a canard used by people uninterested in the rigor of grappling with reality as it actually exists outside of an Ayn Rand novel.

There is no free market. There never has been and there never will be.

And you're right that would be discouraging to the point that that business won't be able to hire anyone at that rate and inevitably fail.

At 10 cents, they wouldn't. But at $5 an hour (or, again, a more realistic number, rather than a hyperbole to make a point)? Absolutely they would survive

Here you have overlooked the fact of inflation on the currency. 2 - 3 decades ago $5 at a starting rate for low-skill work such as flipping a burger would be enough with secondary income of say a parent.

No, I haven't overlooked that fact at all, lollollol. You just don't know what you're talking about.

There is no inflation (or, because it appears I have to be very, very literal with you: there is very, very little inflation -- FAR too low inflation) -- if you actually look at the data on this, the real exchange rate has been fairly stable for decades. The purchasing power of wages matters far more than the purchasing power of a physical dollar in your pocket. Your argument is predicated on the notion that REAL wages have stagnated by virtue of inflation, but if that were the case upward nominal rigidities would have to have persisted throughout your entire sample, and they haven't.

I mean, it always stuns me when people are just completely undeterred by reality. For the past six years supposedly learned people stroke their chins and screamed that inflation was on the way -- and it didn't happen. That's because no economic model whatsoever suggested it would happen. The only real wage that has fallen, ironically, is the minimum wage -- and that would fall even if the inflation rate were .00000005 percent. That has everything to do with the lack of indexation, not with this "inflation genie."

-- and we can even observe that over the past few years, there's been little, if any, meaningful upward pressure on wages even as the unemployment rate has come down considerably. Much of that has to do with asymmetries of bargaining power that takes root in globalization.

I agree with the effects of globalization I'm not yet sure where I stand on it.

You don't know where you stand on globalization? I mean, that's another issue that's just incredibly cut and dry -- if you can't see that, I'll point you to the five remaining protectionists in the 21st century. Perhaps speaking with them will change your mind.

I'm not sure what you mean about a sweet spot, If there is no MW then it would be a sweet spot per business. Not nationally.

So you completely misunderstood my point, and decided instead to go on an irrelevant rant about... something else. Nice.

By a "sweet spot," I meant that there are two countervailing considerations: safeguarding business profits (what you just mentioned as the "sweet spot" for business) and encouraging labor force participation. If wages are really low, businesses are happy because they get to pad their bottom lines. If wages are really high, workers are happy and they work longer hours.

My point is, there's a balance between these two points, and your analysis assumes market forces will address that balance -- but they won't, and as a result people will either choose to (a) not participate in the labor force, and thus take a government welfare check (which could be COMPLETELY avoided with the EITC) or (b) take a piss-poor, slave-labor wage to even survive. Both of these considerations bear down on productivity, meaning that even MORE labor is required, but within a smaller pool. No one wins from that consideration except the extremely affluent.

This, in turn, would lead to more responsibility falling on the individual. (Which is something I find very important.)

Yes, because dropping out of the labor force -- due to slave-labor wages -- and taking a government welfare check is "personal responsibility."

/sarcasm

If that Individual is looking for a certain "sweet spot". Please correct me if I misunderstood your use of the term sweet spot.

You did misunderstand it. In fact, you didn't understand a single word I said.

I fail to see how you make this connection with no MW.

I explained it multiple times, including above. It seems like a pretty easy connection that almost anyone could reasonably make. Give it another try.

I see (with better guidance and education) a more effective employee who does their homework before just prancing into any old place of business asking for a job not even having a clue of expectations. Of course, this change wouldn't happen over night.

So let me make sure I understand your point: your explanation for wage stagnation is that employees are uneducated, don't do their homework, and just prance into an old place of employment without having a clue of the expectations of the place?

That's your argument? It has nothing to do with globalization -- an area where you concede ignorance -- or systemic asymmetries of economic and political power?

Because if so, that might just be the most facile, ideologically-charged argument I've ever heard.

The EITC is a much, much better alternative than "free money."
From my research, the EITC seems like free money. a sneaky form of wealth redistribution.

If that's the case, you don't know what the EITC is. It is the exact OPPOSITE of "free money" (which is why so many conservatives and libertarians support it). Your system, ironically, is much more conducive to free money, since people would likely drop out of the labor force and depend on government welfare checks for any meager degree of sustenance.

Will respond to the rest in a second.
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