How should minimum wage be determined?

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Re: How should minimum wage be determined?

Postby EMTP » Thu Feb 26, 2015 10:21 pm UTC

TheGrammarBolshevik wrote:
EMTP wrote:
So if a law acts like a dick and robs us of liberty, why should we support it? (If your answer is, "It may hurt some people, but it will ultimately help more," then I think you are on dangerous ground.


You have just described every law, ever. As well as most actions, period. "Hurts some people and helps others" is the character of action in the fallen world we live in. If you believe your actions are free of all harm to others, you are very naive.

I think this is a strawman. Of course all laws will help some people and harm others. But I don't think mcd001 was saying that we shouldn't ever adopt a law that harms some people. Instead, they were saying that we shouldn't adopt a law just because it helps people more than it harms them. Whether this is right or not, it isn't a counterexample to point out that some laws harm people.


Kudos to you for that generous reading, but I think you're incorrect. Mcd001's response to me was to argue that laws against homicide and theft harm no one (which is of course not true.)

Mcd001 is making an argument that is pretty absurd in terms of common sense, but pretty understandable in the context of fundamentalist libertarianism: laws should be purely good and necessary from first principles, and not hurt anyone. They should not be subject to a cost/benefit analysis according to which some people will be disadvantaged and others will be helped. They should not be shaped according to empirical observations of the real world, since laws are a matter of Freedom. Fundamentalist libertarians do not think of lawmaking in a ultilitarian way. But of course it would better to let him explain his own views.
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Re: How should minimum wage be determined?

Postby mcd001 » Thu Feb 26, 2015 11:05 pm UTC

EMTP wrote:Except as I've shown, they do not cause a problem with society as a whole.

Except you have NOT shown that. The fact that you believe these studies are biased does not make their findings wrong, any more than my belief that your peer-reviewed studies are biased makes them wrong. Nor does the fact that they are peer reviewed impress me much, since all the peers doing the reviewing are looking through an identical ideological lens.

EMTP wrote:Your ideology says these laws are -- to use your word -- "evil."

A misstatement of what I said. My exact words:
So if a law acts like a dick and robs us of liberty, why should we support it? (If your answer is, "It may hurt some people, but it will ultimately help more," then I think you are on dangerous ground. It's very easy to justify benefits to the majority at the expense of a minority, and most things--even evil things--will bring some benefit to somebody.)

I said the law hurts people (acts like a dick) and leaves us less free (robs us of liberty). Then I said MOST things--even evil things--will bring some benefit to somebody. I did not conflate minimum wage laws with evil. In fact, what I said is pretty much identical with your statement :
EMTP wrote:"Hurts some people and helps others" is the character of action in the fallen world we live in.

We seem in agreement on this, if nothing else.


EMTP wrote:Of your citations, the first link is broken,

Sorry, cut and paste error. Here it is complete:
http://econweb.tamu.edu/jmeer/Meer_West ... m_Wage.pdf

EMTP wrote:the second is non-peer-reviewed congressional publication, and the third is a link to a Koch-funded libertarian editorial blog post condemning the minimum wage

Yes, and you attack the source of these documents, but not the content. My main point (that the minimum wage hurts the most vulnerable low-income workers) has yet to be addressed in a non-dismissive manner.
Would you agree with the following statement? "Raising the minimum wage will increase income for X low-income workers, but Y low-income workers will lose their jobs", where X is some number larger than Y, and Y is greater than zero.

X is the number helped, Y is the number hurt. If you can agree with this, then we have a starting point for a discussion. (If you disagree, then you are saying Y = 0, and I'd need to see some proof that raising the minimum wage would not cost a single job for anyone, anywhere, ever. Not *one* single job.)

Assuming agreement, the next question I'd ask is how big does Y (the number hurt) have to be relative to X (the number helped) before you would say it was a bad idea.

I suspect most people would be okay if X was 20 million and Y was 3. What if X = 7.6 million and Y = 100,000 (as the non-peer reviewed 2014 CBO report predicts for a $9.00 minimum wage)? What if X is just ONE more than Y?

You already know my answer (no value for Y greater than zero is acceptable to me), but this is partly because I am weighing a diffuse good (that is marginally larger income) with a horrific bad (loss of all income) and partly because I also consider the negative impact of such laws on personal liberty (which is apparently not a consideration for some here).

EMTP wrote:Laws prohibiting homicide harm abuse victims who kill their abusers. Laws against theft harm people defrauded of their property from reclaiming it from con artists. The laws harm innocent people accused of the crimes, who are forced to defend themselves and may lose. Both laws harm all taxpayers because we have to pay for them to be drafted and enforced.

Can't argue with that. Point taken.

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Re: How should minimum wage be determined?

Postby Thesh » Thu Feb 26, 2015 11:37 pm UTC

mcd001 wrote:I said the law hurts people (acts like a dick) and leaves us less free (robs us of liberty).


Depends on how you define freedom. If you define freedom as not having your actions restricted by law, then yes, but if you define freedom as the ability for you to do things you want to do, it's a lot more complicated. To me there are legal freedoms, social freedoms, and economic freedoms. Legal freedoms are the things the law prevents you from doing, social freedoms are things that society prevents you from doing (for example, society has in the past heavily restricted the freedom of women and homosexuals), and economic freedoms are things that basic economics prevents.

For economic freedom, you are limited by your income. Now, this is true for everyone; I want to live in a space station orbiting alpha centauri, but there are obvious economic reasons why I can't. Having high inequality effects the economic freedoms of the people at the bottom, and the inequality at the top not only gives them significantly more freedom, it gives them significantly more power. Too much inequality allows people at the top to stack the deck in their favor, dictating the amount of freedom that the people at the bottom have. Outsourcing, maintaining a low demand for labor relative to the supply, cutting social services, etc. are all ways to create systematic oppression of the masses. Minimum wage is a tool to combat this, to provide more freedom for the masses. Freedom to use a position of power to screw over others is not a very important freedom to maintain.
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Re: How should minimum wage be determined?

Postby Puppyclaws » Thu Feb 26, 2015 11:47 pm UTC

mcd001 wrote:X is the number helped, Y is the number hurt. If you can agree with this, then we have a starting point for a discussion. (If you disagree, then you are saying Y = 0, and I'd need to see some proof that raising the minimum wage would not cost a single job for anyone, anywhere, ever. Not *one* single job.)

Assuming agreement, the next question I'd ask is how big does Y (the number hurt) have to be relative to X (the number helped) before you would say it was a bad idea.

I suspect most people would be okay if X was 20 million and Y was 3. What if X = 7.6 million and Y = 100,000 (as the non-peer reviewed 2014 CBO report predicts for a $9.00 minimum wage)? What if X is just ONE more than Y?

You already know my answer (no value for Y greater than zero is acceptable to me), but this is partly because I am weighing a diffuse good (that is marginally larger income) with a horrific bad (loss of all income) and partly because I also consider the negative impact of such laws on personal liberty (which is apparently not a consideration for some here).


So the thing is that this calculus (or should I say algebra) is nonsense; hurt WHOM, in WHAT way? Things like laws preventing people being fired due to their race probably have larger Y's than X's, in the strictest sense. After all, it's advantageous to a business to be able to fire people for any reason, and it probably gives an advantage to white people if people can be fired for their race (in the United States where it seems likeliest to happen to non-white individuals). Yet, I support this legislation. See if you can figure out why.

And then of course there is the fact that all good evidence suggests that there is not a substantial negative effect on jobs when the minimum wage goes up.

(p.s. personal liberty is improved when minimum wage is raised, because it grants greater freedom to those with the least)

Also, you state that you accept that you can only accept a situation where Y is 0. This means no law can ever be passed (as you apparently accept that even laws against theft & murder have "losers" or quantities of Y in your model).

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Re: How should minimum wage be determined?

Postby EMTP » Thu Feb 26, 2015 11:54 pm UTC

mcd001 wrote:Except you have NOT shown that.


You being in denial of the science does not change what the facts are. If you want to take Koch-funded blog posts and hold them up against peer reviewed science, that's your business, but I reject your false equivalence between my argument, based on science, and your argument, which you have supported with nothing but ideology and wishful thinking.

Sorry, cut and paste error. Here it is complete:
http://econweb.tamu.edu/jmeer/Meer_West ... m_Wage.pdf


Once again, this is the same unpublished, non peer-reviewed stuff, acknowledging that the minimum wage DOESN'T reduce employment, but hopefully presenting a new theory about how they might somehow cause harm.

Yes, and you attack the source of these documents, but not the content.


Your inability to provide any credible sources is the problem here. I provided scientific papers supporting my argument; you cited a Koch-funded right-wing think tanks editorial as a counterpoint.

My main point (that the minimum wage hurts the most vulnerable low-income workers) has yet to be addressed in a non-dismissive manner.


It's been refuted by the facts. You refuse to face the facts. Thus it is you who are dismissive -- dismissive of the reality which, unfortunately, doesn't support your ideological belief that the minimum wage is "evil."

What I would suggest is that you acknowledge that regardless of the good done by minimum wages, you are against them because you oppose this type of regulation of economic activity. Hence you don't have a position on how the minimum wage should be determined, any more than a devout Catholic has a position on the best method of surgical abortion.
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Re: How should minimum wage be determined?

Postby mcd001 » Fri Feb 27, 2015 1:43 am UTC

Puppyclaws wrote:So the thing is that this calculus (or should I say algebra) is nonsense; hurt WHOM, in WHAT way?

I doubt I could have made it any clearer. 'Whom' is the least skilled low-income workers. 'In what way' is by losing their jobs.

Puppyclaws wrote:Things like laws preventing people being fired due to their race probably have larger Y's than X's, in the strictest sense. After all, it's advantageous to a business to be able to fire people for any reason, and it probably gives an advantage to white people if people can be fired for their race (in the United States where it seems likeliest to happen to non-white individuals). Yet, I support this legislation. See if you can figure out why.

An interesting point, but it seems like the good you quote (business's ability to fire workers at will) is at best a diffuse good, while the bad (being fired) is a horrific bad. It may surprise you to learn that I also support this legislation. See if you can figure out why.

Puppyclaws wrote:And then of course there is the fact that all good evidence suggests that there is not a substantial negative effect on jobs when the minimum wage goes up.

Oh, of course. No substantial negative effect. This is patently true given a sufficiently generous definition of 'substantial'. I am curious; can you put a number to this? How many people do you suppose would lose there jobs if the minimum wage were raised to, say, $9/hour? or is that a question that shouldn't be asked before embarking on such an enterprise?

Puppyclaws wrote:Also, you state that you accept that you can only accept a situation where Y is 0. This means no law can ever be passed (as you apparently accept that even laws against theft & murder have "losers" or quantities of Y in your model).

No, it does not mean that at all. For example, the 'losers' created by laws against murder do not result BECAUSE of the law, but because of the imperfect methods we humans have for implementing and enforcing them. I have not and do not advocate the repeal of all laws that cannot be perfectly enforced.

EMTP wrote: It's been refuted by the facts. You refuse to face the facts. Thus it is you who are dismissive -- dismissive of the reality which, unfortunately, doesn't support your ideological belief that the minimum wage is "evil."

Once again, I have not said minimum wage laws were evil. As for the facts in the studies you cited, I haven't actually had time to give them more than a cursury review. So, I will take some time and study them in depth before commenting on them further (and unlike you, I will refrain from dismissing them out of hand because I think they they were authored by liberal academics with incorrect world-views). I wonder if I'll find an answer to the question I asked above.

Thesh wrote:Depends on how you define freedom. If you define freedom as not having your actions restricted by law, then yes, but if you define freedom as the ability for you to do things you want to do, it's a lot more complicated......Minimum wage is a tool to combat this, to provide more freedom for the masses. Freedom to use a position of power to screw over others is not a very important freedom to maintain.

I don't agree with everything you say here, but I must applaud you on the way you said it. This was one of the most thoughtful and cogent defenses of the minimum wage I have ever read! I need to spend some time pondering it.

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Re: How should minimum wage be determined?

Postby Puppyclaws » Fri Feb 27, 2015 2:10 am UTC

mcd001 wrote: It may surprise you to learn that I also support this legislation. See if you can figure out why.


Given the rest of what you have said, I literally can't.

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Re: How should minimum wage be determined?

Postby leady » Fri Feb 27, 2015 10:42 am UTC

I'm lost too and I think I hold similar positions to mcd001 :)

However I'm of the opinion that demographics with legal protections are actually harmed more than they benefit in the long term. You hire people you can fire, which is a similar hard to trace consequence like the costs of the minimum wage.

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Re: How should minimum wage be determined?

Postby jseah » Fri Feb 27, 2015 12:10 pm UTC

Thesh wrote:Outsourcing, maintaining a low demand for labor relative to the supply, cutting social services, etc. are all ways to create systematic oppression of the masses.

How are any of those things that companies do specifically to 'oppress the masses' instead of in the name of profit?

If another company can do things better and cheaper, does it not make sense to outsource to them?
If you only need ten shift workers, why would you hire more? Regardless of how many people are banging on your door for a job?

The problems you mention come when money is allowed to manipulate the political process. Not as an inherent function of the maliciousness of corporations, which is the impression your statements give off.
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Re: How should minimum wage be determined?

Postby CorruptUser » Fri Feb 27, 2015 2:44 pm UTC

Not to mention that the whole "don't outsource to cheaper places" can be summed up as "they are too poor to trade with us, let's keep them in poverty". Turns out sweatshops are a MASSIVE improvement; seriously, subsistence farming and child prostitution suck.

Some people think we are all the same, that the difference between those born in the west and elsewhere is just skin color. Those people are delusional fools. The real difference is that the people born in the west have things like vaccines and iodine fortification and pasteurization. You know those old stereotypes of "lazy Mexicans" or "lazy nwords"? Those things had basis in reality; hookworms. Hookworms were one if the greatest menaces if the 19th century and prior, causing mental retardation and sluggishness, you know, "laziness". You can thank the Rockefellers for getting rid of that.

But you need money and jobs to do this. Just giving the money to the countries doesn't work. The sweatshops do. People work in the sweatshops so their kids can work in factories so their kids can work in air conditioned union auto plants. But they have to work in sweatshops because without things like vitamin supplements in food, they cant do the work the air conditioned union auto plants require.

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Re: How should minimum wage be determined?

Postby Tyndmyr » Fri Feb 27, 2015 2:58 pm UTC

EMTP wrote:
mcd001 wrote:Except you have NOT shown that.


You being in denial of the science does not change what the facts are. If you want to take Koch-funded blog posts and hold them up against peer reviewed science, that's your business, but I reject your false equivalence between my argument, based on science, and your argument, which you have supported with nothing but ideology and wishful thinking.


I don't suppose you have any objections other than that you dislike people somehow associated with the group? All studies are funded by someone. Everyone has viewpoints. Not all of those things listed are blog posts, obviously. And, if it IS merely a blog post, criticizing the methodology or data should be very easy.

After all, if you only want to see liberal sources against a traditionally liberal cause, yes, you're going to see sort of a one sided view. That, however, is not very reasonable. Rather than looking for the most partisan options available, how about we try to clearly state how you think minimum wage works, along with a causal mechanism, and then work from there? Rather than starting from the premise that it must be good BEFORE looking for a mechanism or anything.

CorruptUser wrote:Not to mention that the whole "don't outsource to cheaper places" can be summed up as "they are too poor to trade with us, let's keep them in poverty". Turns out sweatshops are a MASSIVE improvement; seriously, subsistence farming and child prostitution suck.


Exactly. "Don't outsource" is the old "they took er jerbs" argument. The world is connected now, and the economy doesn't really stop at borders these days...it's really quite an outmoded way of looking at the world, and stems from simplistic, disproven views of economics, such as mercantilism. Trade is quite a healthy thing indeed, and pretending that the alternative would be strictly superior is really strange and unsupported.

Immigration and outsourcing are good for the labor market. Yes, they may not be particularly good for the individual making a vastly above average way who would prefer protectionism for his job, at the expense of everyone else, but they do represent a net gain.

There's a lot of talk about exploitation, but it's mostly just folks preferring self interest to anything like fair competition or net overall gain. It really is amazing how swiftly advocates of a higher minimum wage abandon principles of fairness when they are applied on a grander scale, where they are not the beneficiaries.

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Re: How should minimum wage be determined?

Postby cphite » Fri Feb 27, 2015 3:27 pm UTC

EMTP wrote:
The point is, there really aren't that many people who are actually living off of these wages.


Not many. Except for the millions of people who live off these wages (3.3 million in 2013). 5% of the American workforce is a large number of people, and almost by definition they are the people with the smallest margin between themselves and utter destitution.


About one fifth of people who earn minimum wage are earning it as their only source of income - that is that "living off these wages" means. That's 660,000 people - which really isn't that many people.

The vast majority of minimum wage jobs are supplementary income.

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Re: How should minimum wage be determined?

Postby CorruptUser » Fri Feb 27, 2015 4:00 pm UTC

And the majority of those are ex cons. It's hard to feel sorry for them. I mean, we should; if they want to turn their life around and make something of themselves, yeah let them so they don't go back to crime. Really , the problem is that if a company hires an ex con and the ex con does something, the company is liable because they "knew" about the "history". Probably should change the laws to protect businesses from that sort of shit. I mean it's one thing if you hire a convicted pedophile to run a daycare, but it's another if the guy you hired at McD's had been in a fight a decade ago and he assaults a particularly cruel customer. But hard to feel sorry for them.

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Re: How should minimum wage be determined?

Postby Thesh » Fri Feb 27, 2015 4:45 pm UTC

jseah wrote:
Thesh wrote:Outsourcing, maintaining a low demand for labor relative to the supply, cutting social services, etc. are all ways to create systematic oppression of the masses.

How are any of those things that companies do specifically to 'oppress the masses' instead of in the name of profit?


It depends. Right now they are exploiting cheap labor in third world countries, which does two things: reduces demand for labor in the US, keeping wages low, and it is causing third world economies to develop around the basis of cheap labor to the west, providing disincentives to raise wages there. The upshot of this is that the only people who really benefit are the wealthy in either country. While they may be doing it solely out of profits for their own company, they are also not using the savings in a way that's useful to the US economy, and are basically sitting on that wealth. No, outsourcing isn't inherently bad, but that combined with other policies is being used to make a small population richer at the expense of the masses in the US and the third world countries who should be focusing their labor on their own needs first, before focusing on exports for the benefit of a select few people who own the factories.

Yes, it can all be done under the guise of "well, we just want to help corporate profits" but what we see as a whole is that a handful of very rich people who have no need for more money are using political connections to further their wealth at the expense of everyone else; there is no explanation for this other than that they are pushing for these policies because they desire more *power* not because they have need for the money.

EDIT: I should note that even if their intentions are entirely "What's best for the company" it does not change the effects of their actions, which is the rich getting richer at the expense of the poor and middle class.
Last edited by Thesh on Fri Feb 27, 2015 5:03 pm UTC, edited 1 time in total.
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Re: How should minimum wage be determined?

Postby ucim » Fri Feb 27, 2015 5:03 pm UTC

Thesh wrote:Right now they are exploiting cheap labor in third world countries,...
Isn't that how all capitalism works? The reason people work for money is that they need money. All employment is exploitation. People are paid what the job is worth, not what the person is worth.
Thesh wrote:...which does two things: reduces demand for labor in the US, keeping wages low...
Translation: it's my ox that's getting gored this time.
Thesh wrote:...and it is causing third world economies to develop around the basis of cheap labor to the west, providing disincentives to raise wages there...
Again, the incentive to raise wages comes from lack of people willing to do the work for less. It would seem to me (simplistic bozo that I am) that as the west employs more third world people, it reduces the pool of available third-world laborers, and provides an incentive for third-world employers to raise the wages they pay.

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Re: How should minimum wage be determined?

Postby Thesh » Fri Feb 27, 2015 5:10 pm UTC

ucim wrote: People are paid what the job is worth, not what the person is worth.


Worth being defined as what people are paid. Meaningless statement. Change economic policies and all of a sudden the job is worth more. If they are focusing their economy on their people, then they have more goods and services available for their people and thus can pay more making the jobs worth more.

ucim wrote:[Translation: it's my ox that's getting gored this time.


Translation: The great capitalism God decreed that wages should be X amount, so fuck everyone who is getting screwed by the policies.

ucim wrote:]Again, the incentive to raise wages comes from lack of people willing to do the work for less. It would seem to me (simplistic bozo that I am) that as the west employs more third world people, it reduces the pool of available third-world laborers, and provides an incentive for third-world employers to raise the wages they pay.


The wages are limited by the market for goods and services in their own country. If all their labor is being used for exports, then it is impossible to raise real wages without cutting exports. Besides, they are maintaining a pretty high supply of labor relative to the demand today anyway.
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Re: How should minimum wage be determined?

Postby CorruptUser » Fri Feb 27, 2015 5:34 pm UTC

Thesh, do you really believe that the poor third world workers are being screwed by the jobs coming in?

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Re: How should minimum wage be determined?

Postby Chen » Fri Feb 27, 2015 5:37 pm UTC

Thesh wrote:The upshot of this is that the only people who really benefit are the wealthy in either country.


Uh the laborers in the factories who no longer have to subsistence farm for their food benefit quite a bit. Else they wouldn't be taking those factory jobs.

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Re: How should minimum wage be determined?

Postby CorruptUser » Fri Feb 27, 2015 5:44 pm UTC

Heh, Ayn Rand had a really long speech in Atlas Shrugged about this sort of thing. Paraphrasing. "We all looked at the business owner and saw his mansion and limousine, and decided we deserved to take it from him. What we ignored were the millions of other people who looked at us and our homes and decided they deserved our iceboxes."

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Re: How should minimum wage be determined?

Postby cphite » Fri Feb 27, 2015 5:49 pm UTC

Thesh wrote:
ucim wrote: People are paid what the job is worth, not what the person is worth.


Worth being defined as what people are paid. Meaningless statement. Change economic policies and all of a sudden the job is worth more. If they are focusing their economy on their people, then they have more goods and services available for their people and thus can pay more making the jobs worth more.


Artificially inflating the cost of something via mandate does not make it worth more, it simply makes it cost more. If the cost of labor is more than a job is worth, companies will generally look for alternatives. In most cases, that means hiring less people or restricting the hours of the people they hire. In more extreme cases, it means replacing people entirely. For example, a lot of fast food places are going to be moving to robotic systems to replace employees. More and more stores are adding self-serve checkouts.

ucim wrote:[Translation: it's my ox that's getting gored this time.


Translation: The great capitalism God decreed that wages should be X amount, so fuck everyone who is getting screwed by the policies.


Employment is a two way street. Certainly the employee has an interest in getting paid more; but the employer has an interest in getting work for money paid. If the cost of labor is made artificially high, it will eventually be replaced by something else whenever possible.

The bottom line is that employment works like any other market. Employers are looking to obtain the best labor for the best price. Laborers are looking to obtain the best price for their labor. When an outside party tries to artificially increase the cost, the result is unpredictable at best.

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Re: How should minimum wage be determined?

Postby ucim » Fri Feb 27, 2015 5:55 pm UTC

Thesh wrote:Change economic policies and all of a sudden the job is worth more.
... or disappears. The extra money comes from somewhere, the extra costs are passed on to consumers in some fashion. It could be by hiring fewer workers (now some people who had a shitty job have no job), or it could be by rasing prices (now people who could afford three big macs can only afford two), it could be by reducing dividends (now the pension funds that hold that stock have lower returns, the general public has less money, and the economy slows down a touch); most likely it's a combination of all of these. The more people the effect gets spread out over, the harder it is to measure. But it does not disappear; it still hurts people. Just not the people you're focused on.

Thesh wrote:Translation: The great capitalism God decreed that wages should be X amount, so fuck everyone who is getting screwed by the policies.
That's any worse than "The great socialism God decreed that wages should be Y amount, so fuck everyone who is getting screwed by the policies."? Really - your objection is that {policy} hurts American wages (never mind that it helps overseas wages, otherwise there'd be no takers).

Thesh wrote:The wages are limited by the market for goods and services in their own country. If all their labor is being used for exports, then it is impossible to raise real wages without cutting exports.
I'm sorry; perhaps I'm a bit thick here. If there is demand for these goods in their own country, then it stimulates production. This boosts their economy. This allows them to demand higher wages. This reduces the adverse impact on American wages. Over time, the overseas economy improves, and US trade with them increases, which also boosts the economy.

Your objection seems to be that the relatively high wages in the US should be protected against the relatively low wages overseas. This is an odd ideological stand to take, while at the same time saying that (in the US) the rich are too rich and the poor don't have enough money. So, what's the (ideological) difference between the US poor and the overseas poor?

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Re: How should minimum wage be determined?

Postby CorruptUser » Fri Feb 27, 2015 6:11 pm UTC

The hope is that the rise in wages in paid for by reduced manager wages. I wouldn't mind that too much; virtually no employee is worth 8 figures. What we really need is a ban on corporate incest; you should not be on the board of companies where your board members work. But idk how to write that law without screwing over innocent people.

Anyway, consider the following scenario. There are crop pickers and bakers. Bakers are skilled labor. Pickers are unskilled labor. Both need to work for pies to be created. Which is worth more? In a closed system, the bakers and pickers will reach some sort of equillibrium where the trainable people become bakers and the untrainable pickers, and prices adjust to how difficult it is to be a baker. But the bakers open up the town to millions of unskilled workers via globalization. So the pickers end up screwed over in the short run. Eventually the third world develops skills and starts producing its own bakers, and flavor scientists who create more recipes, and eventually everyone has more pies and tastier pies. But until then, the town's pickers are screwed. Is that fair to them?

Anyway, some good news. The race to the bottom? WE HIT THE BOTTOM. Bangladesh was the lowest of the low, and textiles can't move anywhere else. So as long as we don't fuck things up, like with removing vaccines or something, it's all going to get better.

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Re: How should minimum wage be determined?

Postby Thesh » Fri Feb 27, 2015 6:21 pm UTC

1) the inflation bogieman - if wages across all sectors increase with productivity, prices in low productivity sectors go up, prices in competitive sectors that grow productivity above average see prices decrease, and prices everywhere else remain unchanged. Yes, there is some inflation, but overall since all wages go up everyone sees a net benefit. This is what has been happening for as long as productivity has grown and no one felt the pain before. In fact, we even have a 2% inflation target regardless of what wages do.

2) If there is domestic demand for goods and services, locally but it's more profitable to use all investments to further facilitate exports, then you end up with inflation, not growth. If instead that 25% of the Chinese economy went to the domestic market, then it would significantly benefit the heavily impoverished peoples of China. Exports are only good for your economy if you are exporting things you don't benefit from and getting things that you do benefit from. The Chinese people are not getting very much back, mostly wealth for the elites that are being held in foreign economies, but they are using a bunch of resources that their own people could desperately use.

And no, my argument is not that we shouldn't outsource, it's that the economic policies of all countries should be what's in the best interest of their citizens. China's and the US's policies are what's in the best interest of the upper class only. The US needs to maintain a high demand for labor, and that has not been occurring because the same people who are outsourcing are not able to find new jobs for the laid off people to do because of the demand/pay catch 22, and they are using their power to prevent the US from doing things like spending money on infrastructure to boost demand for labor, as that would hurt their bottom line at the benefit of the vast majority of Americans.
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Re: How should minimum wage be determined?

Postby sevenperforce » Fri Feb 27, 2015 6:35 pm UTC

CorruptUser wrote:Consider the following scenario. There are crop pickers and bakers. Bakers are skilled labor. Pickers are unskilled labor. Both need to work for pies to be created. Which is worth more? In a closed system, the bakers and pickers will reach some sort of equillibrium where the trainable people become bakers and the untrainable pickers, and prices adjust to how difficult it is to be a baker.

One can imagine the fairest possible scenario taking proportionality of labor division into account. If making 500 loaves of bread per day requires the work of 20 bakers and 60 pickers, then each baker should be making three times as much as each picker. That is, the revenue from the 500 loaves sold each day is split among those twenty bakers with the understanding that each also represents the accumulated labor of three pickers.

With that sort of a basic "branching" approach forming the basis for division of revenue, it's not hard to see how it would come to make sense for the upper echelon of the company to be taking a much larger percentage of revenue than individuals at the lowest branches.
Last edited by sevenperforce on Fri Feb 27, 2015 6:37 pm UTC, edited 1 time in total.

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Re: How should minimum wage be determined?

Postby ucim » Fri Feb 27, 2015 6:36 pm UTC

CorruptUser wrote:But the bakers open up the town to millions of unskilled workers via globalization. So the pickers end up screwed over in the short run. [...] Is that fair to them?
To prevent that, economic policy makers make it unprofitable to use imported labor. The local pickers are happy. But the overseas shlumps are screwed out of jobs they could have done, that would have been open to them except for this externally-applied artificial policy. Is that fair to them?

Thesh wrote:the inflation bogieman
... wasn't part of this. And inflation is not harmless. It's an invisible tax on assets.
Spoiler:
I forget the name of it, but take $100 and buy gold with it. Wait twenty years and sell the gold. You'll get (say) $180 for it, and be taxed on the $80 "profit". But the can of soup you want now costs $1.80 instead of $1, and the $50 tuning wrench now costs $90.
Thesh wrote:If there is domestic demand for goods and services, locally but it's more profitable to use all investments to further facilitate exports, then you end up with inflation, not growth.
Prices rise to compete with the world market, just like wages did. And on the other side, wages are driven down to compete with this cheap labor, just like prices did.

Thesh wrote:And no, my argument is not that we shouldn't outsource, it's that the economic policies of all countries should be what's in the best interest of their citizens.
This sounds like "The economic policies of corporations should be what is in the best interest of the stockholders." I don't understand the ideological difference. It's another case of whose ox is gored.

CorruptUser wrote:virtually no employee is worth 8 figures.
To whom? As decided by whom, and how?

sevenperforce wrote:If making 500 loaves of bread per day requires the work of 20 bakers and 60 pickers, then each baker should be making three times as much as each picker.
This does not take into account the extra talent needed to become a baker, and the extra investment in time and energy.

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Re: How should minimum wage be determined?

Postby Tyndmyr » Fri Feb 27, 2015 7:16 pm UTC

CorruptUser wrote:And the majority of those are ex cons. It's hard to feel sorry for them. I mean, we should; if they want to turn their life around and make something of themselves, yeah let them so they don't go back to crime. Really , the problem is that if a company hires an ex con and the ex con does something, the company is liable because they "knew" about the "history". Probably should change the laws to protect businesses from that sort of shit. I mean it's one thing if you hire a convicted pedophile to run a daycare, but it's another if the guy you hired at McD's had been in a fight a decade ago and he assaults a particularly cruel customer. But hard to feel sorry for them.


*shrug* I have nothing against rehabilitating ex cons. But sadly, minimum wage isn't really a good means of addressing that. A *huge* part of the problem is that they simply won't be hired to begin with, high minimum wage or low. As you say, liability is an issue, and addressing that is one potential option.

As for minimum wage employees, yes, that is overwelmingly not their sole income. They also trend very young. Even nowadays, minimum wage as a career is not anything like a normal career trajectory. "living wage" talk does frequently mis-represent the issue.

Thesh wrote:Yes, it can all be done under the guise of "well, we just want to help corporate profits" but what we see as a whole is that a handful of very rich people who have no need for more money are using political connections to further their wealth at the expense of everyone else; there is no explanation for this other than that they are pushing for these policies because they desire more *power* not because they have need for the money.


Much of the rest of the world feels the same way about the US. We are so wealthy in comparison to them, how could we want more?

Well, we do. We always want more. There are people who will, in all seriousness, complain about barely scraping by on a salary of a million dollars. They want more. They have plans for what they will do when they get more. Despite inhabiting a different social strata than you or I, wealth means something very similar to them as it does to us. They still want it for it's own sake. "need" is an incredibly subjective word sometimes.

Thesh wrote:
ucim wrote: People are paid what the job is worth, not what the person is worth.


Worth being defined as what people are paid. Meaningless statement. Change economic policies and all of a sudden the job is worth more. If they are focusing their economy on their people, then they have more goods and services available for their people and thus can pay more making the jobs worth more.


Ah, you believe a centrally controlled economy produces more goods and services. Citation, please.

Thesh wrote:
ucim wrote:[Translation: it's my ox that's getting gored this time.


Translation: The great capitalism God decreed that wages should be X amount, so fuck everyone who is getting screwed by the policies.


You misunderstand. Your dislike of capitalism is not what is being criticized here. The hilarious disconnect between your concern over those getting screwed by low wages here, and people getting screwed by low wages elsewhere is what is being criticized. Self interest is a much more reasonable explanation of this behavior, as your ideology is not consistent.

CorruptUser wrote:Heh, Ayn Rand had a really long speech in Atlas Shrugged about this sort of thing. Paraphrasing. "We all looked at the business owner and saw his mansion and limousine, and decided we deserved to take it from him. What we ignored were the millions of other people who looked at us and our homes and decided they deserved our iceboxes."


That's the second Ayn Rand quote I've seen today that was strangely excellent. The other was regarding the barbarism of slavery. It's...unsettling. I view her philosophies as often simplistic, and her fiction as kinda wooden, but sometimes there are excellent quotes.

Of course, Chairman Mao had some excellent quotes as well.

The hope is that the rise in wages in paid for by reduced manager wages. I wouldn't mind that too much; virtually no employee is worth 8 figures. What we really need is a ban on corporate incest; you should not be on the board of companies where your board members work. But idk how to write that law without screwing over innocent people.


Of course an employee can be worth 8 figures. If not hiring him would be more costly, then obviously, he's worth it. The calculus is the same as for any other employee or wage. It's simply a difficult level to obtain, not an impossible one.

Thesh wrote:1) the inflation bogieman - if wages across all sectors increase with productivity, prices in low productivity sectors go up, prices in competitive sectors that grow productivity above average see prices decrease, and prices everywhere else remain unchanged. Yes, there is some inflation, but overall since all wages go up everyone sees a net benefit. This is what has been happening for as long as productivity has grown and no one felt the pain before. In fact, we even have a 2% inflation target regardless of what wages do.


This misrepresents what inflation is, and why we have that target. It is NOT because inflation is good, and thus, more is better. Inflation has a cost.

The target is simply set at 2% because deflation also has a cost...a particularly painful one, and fiscal policy is not perfectly precise. So, it's safer to err on the side of inflation. Ideally, you'd want a perfectly stable economy without deflation or inflation, but real world considerations mean this is impractical.

This does NOT mean that adding inflation is fine, and will have no impact.

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Re: How should minimum wage be determined?

Postby CorruptUser » Fri Feb 27, 2015 7:26 pm UTC

sevenperforce wrote:
CorruptUser wrote:Consider the following scenario. There are crop pickers and bakers. Bakers are skilled labor. Pickers are unskilled labor. Both need to work for pies to be created. Which is worth more? In a closed system, the bakers and pickers will reach some sort of equillibrium where the trainable people become bakers and the untrainable pickers, and prices adjust to how difficult it is to be a baker.

One can imagine the fairest possible scenario taking proportionality of labor division into account. If making 500 loaves of bread per day requires the work of 20 bakers and 60 pickers, then each baker should be making three times as much as each picker. That is, the revenue from the 500 loaves sold each day is split among those twenty bakers with the understanding that each also represents the accumulated labor of three pickers.

With that sort of a basic "branching" approach forming the basis for division of revenue, it's not hard to see how it would come to make sense for the upper echelon of the company to be taking a much larger percentage of revenue than individuals at the lowest branches.


So it takes one trucker and 20 workers to make and deliver a wind turbine, therefore the trucker should be paid 20x as much? Maybe someone creates a crop-picking machine, and you now have 20 pickers and 60 bakers, are the pickers now 3x as valuable? Your "worth" is a combination of how much you output and how many other people are capable of doing it.

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Re: How should minimum wage be determined?

Postby sevenperforce » Fri Feb 27, 2015 8:27 pm UTC

CorruptUser wrote:
sevenperforce wrote:
CorruptUser wrote:Consider the following scenario. There are crop pickers and bakers. Bakers are skilled labor. Pickers are unskilled labor. Both need to work for pies to be created. Which is worth more? In a closed system, the bakers and pickers will reach some sort of equillibrium where the trainable people become bakers and the untrainable pickers, and prices adjust to how difficult it is to be a baker.

One can imagine the fairest possible scenario taking proportionality of labor division into account. If making 500 loaves of bread per day requires the work of 20 bakers and 60 pickers, then each baker should be making three times as much as each picker. That is, the revenue from the 500 loaves sold each day is split among those twenty bakers with the understanding that each also represents the accumulated labor of three pickers.

With that sort of a basic "branching" approach forming the basis for division of revenue, it's not hard to see how it would come to make sense for the upper echelon of the company to be taking a much larger percentage of revenue than individuals at the lowest branches.


So it takes one trucker and 20 workers to make and deliver a wind turbine, therefore the trucker should be paid 20x as much? Maybe someone creates a crop-picking machine, and you now have 20 pickers and 60 bakers, are the pickers now 3x as valuable? Your "worth" is a combination of how much you output and how many other people are capable of doing it.

Perhaps "fairest possible scenario" didn't really get at what I was saying. I was suggesting that in a very simple situation, such as the one you posited, the "default" division of responsibility in a shared-step production scenario would probably run along those lines. More by way of explanation (of why executives come to earn so much) than as an ideal.

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Re: How should minimum wage be determined?

Postby cphite » Fri Feb 27, 2015 10:59 pm UTC

It all comes down to supply and demand.

Being a baker takes skill and knowledge. Being a picker takes the ability to move around and pick something. Therefore, there are a lot more people who have the attributes needed to be a picker than have the attributes to be a baker, and therefore as long as there is a need for pickers and bakers, the labor of the baker has more value. Because it's a less common skill set.

If there is a shortage of people with the skills to be a baker, the value goes up even more; if there is an influx of people with that skill set, the value goes down. Simultaneously, if the local population is absolutely crazy about bread, the value of bakers goes up; if the locals are kind of meh about baked goods, the value goes down. Supply and demand.

It is not about how many pickers versus bakers are needed except for how those numbers relate to the available numbers of pickers and bakers. In other words, if you need 20 bakers and 60 pickers, the wages for the bakers is based on how many bakers are available for hire; and the wages for the pickers is based on how many pickers are available for hire. The two are independent of one another. The key difference between the two is that, as was mentioned previously, the baker position is a skilled position which limits the number of viable candidates versus an unskilled position.

It's supply and demand. Is the relative rarity of your labor versus someones need for that labor. If your labor requires a special skill, or training, or experience, or some physical attribute that you have, that is of value to whoever is looking to buy it, it's worth more.

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Re: How should minimum wage be determined?

Postby ucim » Fri Feb 27, 2015 11:11 pm UTC

cphite wrote:If there is a shortage of people with the skills to be a baker
...or a shortage of people who want to bake. To add to what you are saying, the thing about allocating value of labor based on what is "fair" is that it totally ignores desire. This is the big flaw in centralized authority systems, and what distinguishes them from the free market. If few want to do a job, the price goes up. The holdouts reap the rewards of waiting for it, whether that is the extra money they get by doing it, or the letting somebody else do it. Either way, it's a win.

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Re: How should minimum wage be determined?

Postby jseah » Sat Feb 28, 2015 12:05 am UTC

cphite wrote:If the cost of labor is more than a job is worth, companies will generally look for alternatives. In most cases, that means hiring less people or restricting the hours of the people they hire. In more extreme cases, it means replacing people entirely. For example, a lot of fast food places are going to be moving to robotic systems to replace employees. More and more stores are adding self-serve checkouts.
<...>
Employment is a two way street. Certainly the employee has an interest in getting paid more; but the employer has an interest in getting work for money paid. If the cost of labor is made artificially high, it will eventually be replaced by something else whenever possible.

On the other hand, I support a minimum wage for the completely wrong reason.

Namely that I think our organizations have not been that enthusiastic at implementing the changes required to make full use of automation technology. There is still a ton more productivity to be gained by adding a few more machines.

Minimum wage is effectively an indirect subsidy to investment in labour productivity increasing technologies and organizational structure, by way of increasing the cost of the default (have more people).
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Re: How should minimum wage be determined?

Postby ucim » Sat Feb 28, 2015 12:41 am UTC

jseah wrote:On the other hand, I support a minimum wage for the completely wrong reason.

Namely that I think our organizations have not been that enthusiastic at implementing the changes required to make full use of automation technology.
Why is automation good?

There are certainly benefits to automation, but there are also costs, not the least of which is the cost of the machines themselves. If the machines cost too much (so that they need this subsidy), then the net benefit is negative. Why do you want to push a negative benefit?

Jose
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Re: How should minimum wage be determined?

Postby jseah » Sat Feb 28, 2015 12:49 am UTC

ucim wrote:
jseah wrote:On the other hand, I support a minimum wage for the completely wrong reason.

Namely that I think our organizations have not been that enthusiastic at implementing the changes required to make full use of automation technology.
Why is automation good?

There are certainly benefits to automation, but there are also costs, not the least of which is the cost of the machines themselves. If the machines cost too much (so that they need this subsidy), then the net benefit is negative. Why do you want to push a negative benefit?

Jose

I'd rather see machines do work than humans. It's a fundamental laziness I guess.

EDIT: another reason is that I see alot of potential improvements passed by because the change requires too much effort from the people implementing the change, not the cost of the machines.
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Re: How should minimum wage be determined?

Postby ucim » Sat Feb 28, 2015 2:33 am UTC

jseah wrote:I'd rather see machines do work than humans. It's a fundamental laziness I guess.
You can be lazy while you see other people do the work. :)

jseah wrote:EDIT: another reason is that I see alot of potential improvements passed by because the change requires too much effort from the people implementing the change, not the cost of the machines.
But if it's too much effort, then it's not worth it, and building and installing and programming and maintaining the machines is more work than what would be saved.

However, I do see your point; I'm trying to get a group I work with to adopt a system that will automate a huge amount of stuff; they don't even want to give more than a cursory look at it before dismissing it as "too much trouble". So, they don't grok the system, and don't see the benefit.

But minimum wages don't enter into it. Raising the cost of labor in order to force adoption of a less efficient machine over a more flexible and person is ungoodthinkful.

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Re: How should minimum wage be determined?

Postby elasto » Sat Feb 28, 2015 3:49 am UTC

And all of this is why, ultimately, I think a citizen's wage is a much better idea: Then the market could determine the correct wage for a position even if it's 10c/hour. Unskilled jobs could even start returning from overseas...

Because, let's think what the purpose of a minimum wage is: It's to ensure that noone is in poverty when our nations are so rich: because the children of a labourer deserve peace of mind just like the children of a stockbroker; Because the children of a road-sweeper should have access to quality healthcare and education just like the children of a Senator; Because the children of a janitor should be able to afford three healthy meals a day and a heated home just like the children of a CEO...

The minimum wage is the right idea - liberty to all through being free to improve themselves through the lower levels of Maslow's Hierarchy of needs being taken care of - just the wrong vehicle to deliver it.

(It's complicated by notions of the 'deserving' and 'undeserving' poor: If someone works then they are more 'deserving' of society's blessing, and a minimum wage appears to target thusly - but there are many 'deserving' reasons someone might be unwilling or unable to work - for example maybe they want to take care of a disabled parent. Unlike the minimum wage, a citizen's wage ensures noone 'deserving' gets overlooked.)

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Re: How should minimum wage be determined?

Postby ucim » Sat Feb 28, 2015 4:17 am UTC

elasto wrote:I think a citizen's wage is a much better idea
Who's going to pay it? And who's going to flip burgers for next to nothing if they already get paid for doing next to nothing? Sure, there will be people who like to work who will volunteer to work for free for the right cause, but "the right cause" is not going to be "so Joe Sixpack can have a burger whenever he wants one". That only generates resentment, and people will leave the "job". Unless it pays so much that the citizens' wage is dwarfed (thus nullifying its effect while feeding hyperinflation).

There is nothing wrong with needing to work for a living. It's what drives the economy. A citizens' wage, to be effective, would have to be indexed to inflation. But it would also cause inflation. I don't see this spiral ending well unless producing the goods that this citizens' wage would buy ends up having a zero cost.

elasto wrote:Because, let's think what the purpose of a minimum wage is: It's to ensure that noone is in poverty when our nations are so rich
No, that's not the purpose at all. That's the purpose of welfare.
Spoiler:
... and there are many issues with that too.
The purpose of the minimum wage is... well... I don't really know. Aside from the politics involved, I don't think it has a purpose, except to act as a kind of "collective bargaining of last resort". Which isn't in itself a bad thing. But it carries the same bad aspects (and good aspects) that ordinary unions carry, and should be thought of as such. And just like unions hurt non-union members, a minimum wage hurts those who didn't get a job because of it.

elasto wrote:Because the children of a road-sweeper should have...
Oh, think of the children!

Yanno, if you have children, they are your responsibility, not mine.

Money buys stuff. People with more money can buy more stuff. Education and health care are stuff that money can buy. I don't have a problem with the wealthy being able to buy more education and more health care. That's what money is for.

That said, I think that, wealthy nation that we are, there are some important things that we as a nation can afford to make more universal, and education and health care are in that set. But burritos, movies, and beer are not in that set. I have a problem giving my money (through taxation) to be used for burritos, movies, and beer, so that the recipients can sit around when there's work to be done. And that's what a citizen's wage does. And ideologically, it's corrupt if you don't give this "citizens' wage" to non-citizens too. After all, you're not supposed to "do" anything to "deserve" this wage, right?

Back to the minimum wage - with analogy to unions - how are union wages determined? Is it easy to get into the union? If you get into the union, do you get a job? Does this situation hurt anybody?

Why would a minimum wage be different?

Jose
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Re: How should minimum wage be determined?

Postby CorruptUser » Sat Feb 28, 2015 4:50 am UTC

elasto wrote:Because, let's think what the purpose of a minimum wage is:


Originally it was Eugenics; ensure that the people too untrainable to be useful to society could not find employment, and they'd starve to death (or at least their kids would). Yeah, people were dicks.

Still are.

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Re: How should minimum wage be determined?

Postby ucim » Sat Feb 28, 2015 5:56 am UTC

CorruptUser wrote:
elasto wrote:Because, let's think what the purpose of a minimum wage is:
Originally it was Eugenics; ensure that the people too untrainable to be useful to society could not find employment, and they'd starve to death (or at least their kids would).

Got a cite for this?

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Re: How should minimum wage be determined?

Postby CorruptUser » Sat Feb 28, 2015 6:15 am UTC

ucim wrote:
CorruptUser wrote:
elasto wrote:Because, let's think what the purpose of a minimum wage is:
Originally it was Eugenics; ensure that the people too untrainable to be useful to society could not find employment, and they'd starve to death (or at least their kids would).

Got a cite for this?

Jose


Sure do.

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Re: How should minimum wage be determined?

Postby morriswalters » Sat Feb 28, 2015 11:15 am UTC

Anytime I see something like that and realize that Glenn Beck believes it, I hold my nose and take a second look. I'm still reading but my take away to this point is that while some dicks believed this, others who supported a minimum age didn't. From a footnote on page 214.
Not all progressives endorsed eugenics, and not all of those who endorsed eugenics were progressives, traditionally defined, still less proponents of minimum wages. Taussig was not especially well-disposed to minimum wages, but his intemperate remarks measure the influence of eugenic ideas upon economics in the Progressive Era.

However it informs my beliefs about economists in general.


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