How should minimum wage be determined?

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Re: How should minimum wage be determined?

Postby ucim » Thu Mar 05, 2015 5:06 pm UTC

Mokele wrote:And those decisions are grounds for forcing them into sexual slavery or starving to death?
Decisions have consequences. Tragic as it may be, her decisions are not my responsibility to subsidize.

Proof by anecdote is also a fallacy.

But in any case, the perceived* need for a minimum wage law has little to do with the right of a person to have a certain income. Rather, it is a consequence of the lack of productive things-to-do for people who have low skills or abilities. It's supply and demand. The supply of unskilled workers is just too high for the natural demand. So, wages go down. If the reverse were true (not enough workers), wages would go up because the job they were doing was valuable enough to pay the higher wage.

I think it would be real nice if everyone who wanted a job could get one that would support them. What needs to happen is job creation - useful job creation (jobs that actually add value and are therefore worth paying for). Do that and productivity goes up, wages go up, and legislation is unnecessary. The other thing that has to happen is an upgrade of people's skills and abilities (education, motivation, job training) on the lower end, so that these people can do the jobs that do come up.

Without that, you create a situation where a company has to pay $10 for a job that's only worth $3 to them. This is a drain on productivity.

* I'm not going to argue (here) whether or not the perception is an accurate reflection of reality.
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Re: How should minimum wage be determined?

Postby Mokele » Thu Mar 05, 2015 5:21 pm UTC

ucim wrote:Decisions have consequences. Tragic as it may be, her decisions are not my responsibility to subsidize.


No, they are your moral obligation. If you see a man starving when you have food you can easily spare, not giving him your food is nothing less than morally abhorrent, bordering on malicious sociopathy.

Any moral system that weights a human life (regardless of circumstances) as less important than money or property is worthless.

I think it would be real nice if everyone who wanted a job could get one that would support them. What needs to happen is job creation - useful job creation (jobs that actually add value and are therefore worth paying for). Do that and productivity goes up, wages go up, and legislation is unnecessary. The other thing that has to happen is an upgrade of people's skills and abilities (education, motivation, job training) on the lower end, so that these people can do the jobs that do come up.


Except you need a job for money, and you need money for food.

"Sorry you have to die, but you don't have the skills we're looking for right now. Can you try not eating for 18 months while we prepare a training system?"


The key point - Economic decisions have human costs. But every time economic debates come up, those are swept under the rug. Those "externalities" and "market mis-matches" and "poor decisions" are men, women, and children suffering, starving and even dying.

How many lives is a 0.2% increase in GDP worth?
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Re: How should minimum wage be determined?

Postby leady » Thu Mar 05, 2015 5:31 pm UTC

Mokele wrote:And those decisions are grounds for forcing them into sexual slavery or starving to death?

The fundamental basis of a decent and moral society is that society doesn't condemn you to death for any decision, no matter how poor, short of murder.

People make mistakes, take stupid chances, and do stupid things. I don't think they should die for that.


Apparently they are, because it happens. However I think we would strongly disagree on whether society is forcing the consequences - Reality is forcing the consequences. Whether you want society to keep enabling them is the key question. My cynical suspicion is that a citizen wage will just allow a great many people to simply up their game to the new societally accepted level.

If you can only stay in business by paying people less than they can live on, your business deserves to fail.

And I'm pretty sure these exact same arguments were made about child labor and workplace safety laws. Ethics trumps economics, always. Profits cannot make an action moral.


They probably are and the they are probably exactly the same ones the unions used in the 1920s too to stop certain demographics taking their jurbs. As a complete aside I've love to see whether anyone has analysed whether compulsory schooling has improved the lot of the bottom 10% of kids - I certainly wouldn't jump to the belief it has.

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Re: How should minimum wage be determined?

Postby EMTP » Thu Mar 05, 2015 11:28 pm UTC

leady wrote:Apparently they are, because it happens.


"It happens" is not a valid argument that something should be allowed to continue.

However I think we would strongly disagree on whether society is forcing the consequences - Reality is forcing the consequences.


That seems to be a pretty meaningless assertion. "Reality did it" is not a good excuse.

Society enforces the current economic order through its laws. Without society, there is no currency, no property, no banks, no factories or farms. So society cannot elude responsibility for what happens to the poor, because society's fingerprints are all over the economic game according to which they must be poor.

If you want a world governed by "reality," I presume you have no moral objection to a poor person shooting you in the head and taking your stuff. That is also "reality" absent the oppressive hand of the social order.
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Re: How should minimum wage be determined?

Postby KrytenKoro » Fri Mar 06, 2015 12:52 am UTC

ucim wrote:Rather, it is a consequence of the lack of productive things-to-do for people who have low skills or abilities. It's supply and demand. The supply of unskilled workers is just too high for the natural demand. So, wages go down. If the reverse were true (not enough workers), wages would go up because the job they were doing was valuable enough to pay the higher wage.

And I suppose you're able to design a capitalistic system in which an underpaid poverty-class is not an unavoidable feature? That would be real damn impressive, when no one else has been able to do it.

Without that, you create a situation where a company has to pay $10 for a job that's only worth $3 to them. This is a drain on productivity.

I could give two shits about maximizing productivity if the cost is an unavoidable loss of life. Talk about your "loss of freedoms", for fuck's sake.

...

It's sometimes amazing to me how many libertarians idolize stuff like the Declaration of Independence or Constitution (not saying you're one of those, this is just something on my mind), but continuously fail to remember that it demands "life, liberty, and the pursuit of happiness", in that order.
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Re: How should minimum wage be determined?

Postby ucim » Fri Mar 06, 2015 1:37 am UTC

KrytenKoro wrote:And I suppose you're able to design a capitalistic system in which an underpaid poverty-class is not an unavoidable feature? That would be real damn impressive, when no one else has been able to do it.
The poor will always be with us. That is, unless we become slaves to the poor. Then we will all be poor. As to "underpaid", what does that even mean?

Are you confusing how much a job is worth with how much a person is worth? Because it sure seems that way.

KrytenKoro wrote:I could give two shits about maximizing productivity if the cost is an unavoidable loss of life.
I am not trying to maximize productivity. I even argue against that as a goal. Where do you get that idea?

KrytenKoro wrote:It's sometimes amazing to me how many libertarians idolize stuff like the Declaration of Independence or Constitution (not saying you're one of those, this is just something on my mind), but continuously fail to remember that it demands "life, liberty, and the pursuit of happiness", in that order.
Yanno, in the original, it was "life, liberty, and property".

In any case, I'm not libertarian (just for the record). I also don't argue that we should exploit the poor until they die, which is the dramatic way in which opposition to various forms of socialism are bandied about. And I'm not even opposed to pieces of socialism - public libraries are mongo socialist and mongo good. I also think that it would be Good to figure out how to help the poor help themselves. But if helping one creates two, then this is not the right thing to do.

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Re: How should minimum wage be determined?

Postby jseah » Fri Mar 06, 2015 5:46 am UTC

Think we have a disagreement on responsibility.
ucim, I guess, would hold a position that 'we are not responsible for other people' (with a few caveats for children and parties wronged in some way). I think others may not agree.

That I think is the fundamental disconnect.
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Re: How should minimum wage be determined?

Postby leady » Fri Mar 06, 2015 10:22 am UTC

EMTP wrote:"It happens" is not a valid argument that something should be allowed to continue.


I didn't read it as a should / ought question - some decisions in isolation are as bad as drunkenly walking across a motorway, just far slower.

That seems to be a pretty meaningless assertion. "Reality did it" is not a good excuse.

Society enforces the current economic order through its laws. Without society, there is no currency, no property, no banks, no factories or farms. So society cannot elude responsibility for what happens to the poor, because society's fingerprints are all over the economic game according to which they must be poor.

If you want a world governed by "reality," I presume you have no moral objection to a poor person shooting you in the head and taking your stuff. That is also "reality" absent the oppressive hand of the social order.


I don't know - reality did it is a pretty good excuse in that people die because they are resource consuming animals. The gazelle that gets picked off isn't oppressed by society. But I think we all know that all these debates spiral into a "positive vs negative rights" and a geographical proximity debate. I don't believe positive rights are valid or proximity makes them more valid - you almost certainly do. If it helps you are in a massive majority so enjoy it :)

But to move out of retoricland to a real western country, everyone in these edge scenarios have already crashed through multiple support safety nets. The real question at hand is whether another safety net would have a material effect. I think it will - it will encourage an even greater number into bad decisions. You I imagine believe there is there is an optimum level of support packages including the minimum wage etc that will cover enough bad choices such that there are minimal drop outs. I think humans will expand to consume any amount of free lunch

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Re: How should minimum wage be determined?

Postby ucim » Fri Mar 06, 2015 2:16 pm UTC

jseah wrote:ucim, I guess, would hold a position that 'we are not responsible for other people' (with a few caveats for children and parties wronged in some way). I think others may not agree.
"We are responsible for other people" includes "other people are responsible for us". It's not a one-way street. But leady said it better:

leady wrote:But to move out of retoricland to a real western country, everyone in these edge scenarios have already crashed through multiple support safety nets. The real question at hand is whether another safety net would have a material effect. I think it will - it will encourage an even greater number into bad decisions. You I imagine believe there is there is an optimum level of support packages including the minimum wage etc that will cover enough bad choices such that there are minimal drop outs. I think humans will expand to consume any amount of free lunch
And that, right there, is the problem.

There are certainly cases where I think society should take responsibility. But it's fiendishly hard to do that in a systematic way without expanding the set of edge cases. This then becomes an argument for doing it more, until the edge expands to the edge of humanity. This is the idea behind citizens' wage. Then the edge cases become ones of amount (of money) rather than quantity (of included people). The end there is socialism, which has well-known problems, despite the stories of a few nordic countries. (And the question of which "ism" is best is a different question entirely.)

Even if there were an "ideal" balance, it would not come without edge cases, and at that point the proper response to those edge cases would be "too bad, it's your problem". Anything else would move society away from this presumed ideal balance.

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Re: How should minimum wage be determined?

Postby KrytenKoro » Fri Mar 06, 2015 3:29 pm UTC

ucim wrote:The poor will always be with us. That is, unless we become slaves to the poor. Then we will all be poor. As to "underpaid", what does that even mean?

Are you confusing how much a job is worth with how much a person is worth? Because it sure seems that way.


"Underpaid" as in "paid under the level needed to stay alive", which is why I mentioned a poverty-class, not just a poor-class. And as far as I've ever been informed, we as a species are absolutely not so resource-poor that attempting to ensure everyone has food and shelter will mean everyone starves -- in fact, everything I've ever seen as a conclusion was that we have enough food/space/etc. for everyone (maybe not enough extra organs for those awaiting surgery, in fairness), the main issue is getting it to them in an efficient manner. This "trying to save those starving = you just end up starving too" thing has no basis in reality, that I know of.

So, no, I'm not confusing how much a job is worth, because I'm using underpaid to mean something differently than you, I guess. I was responding to this:

But in any case, the perceived* need for a minimum wage law has little to do with the right of a person to have a certain income. Rather, it is a consequence of the lack of productive things-to-do for people who have low skills or abilities. It's supply and demand. The supply of unskilled workers is just too high for the natural demand. So, wages go down. If the reverse were true (not enough workers), wages would go up because the job they were doing was valuable enough to pay the higher wage.


Which was a further response to people saying we need a minimum wage or citizen's wage as a living wage, i.e., enough to keep people alive. Something which you argued is "not your responsibility to subsidize". If your response is in the same context as those posts surrounding it, then you're arguing that the supply of unskilled workers is too high for demand, so wages go down (below a living wage). In response, others are arguing that, well, if strapping everything to a barebones supply and demand structure means that people are being forced to starve, then it's our moral obligation to tinker with that so that wages remain above starvation levels. It's meaningless to argue "that's just how capitalism works" when people have already been saying "that's why capitalism sucks, and we can and should do better."

I am not trying to maximize productivity. I even argue against that as a goal. Where do you get that idea?

You criticizing a suggestion on the grounds that it is a "drain on productivity". That very strongly implies that you believe it's better to increase productivity. If increasing productivity is not a priority for you (at least to being higher priority than ensuring a living wage), then that's a nonsensical objection to have.

But if helping one creates two, then this is not the right thing to do.

You've not demonstrated that saving one person from starvation creates two people starving to death, no. Mostly you've just complained about the rich not living in quite so much luxury in the proposed systems. That's where people are getting this idea that you prioritize the acquisition of money and property over people's lives.
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Re: How should minimum wage be determined?

Postby leady » Fri Mar 06, 2015 4:03 pm UTC

I think we have too many related but different concepts floating around.

Lets try it another way - what problem do you want to solve using a minimum wage? (as defined as a the legal floor price of any type of labour). I'm pretty sure that unless the answer is "collapse low skilled employment", "force people into the black economy" or "improve the wage of geographical sticky jobs at the expense of those are location flexible" then a minimum wage isn't the correct solution.

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Re: How should minimum wage be determined?

Postby Mokele » Fri Mar 06, 2015 4:12 pm UTC

leady wrote:
EMTP wrote:If you want a world governed by "reality," I presume you have no moral objection to a poor person shooting you in the head and taking your stuff. That is also "reality" absent the oppressive hand of the social order.


I don't know - reality did it is a pretty good excuse in that people die because they are resource consuming animals. The gazelle that gets picked off isn't oppressed by society. But I think we all know that all these debates spiral into a "positive vs negative rights" and a geographical proximity debate. I don't believe positive rights are valid or proximity makes them more valid - you almost certainly do. If it helps you are in a massive majority so enjoy it :)


So you're 100% fine with someone showing up at your door, shooting you in the face without warning, taking all your stuff and eating your corpse? After all, "reality did it", and humans a resource-consuming animals that need resources to survive. Why shouldn't those resources and flesh to be consumed be yours?

The social contract is a two-way street. If I give up my "natural right" to kill and eat other humans if I'm hungry enough, I need some sort of assurance from society that I won't be condemning myself to starvation.

If society breaks its obligations via the safety net, why should the individual continue to honor their side of the bargain re: cannibalism?
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Re: How should minimum wage be determined?

Postby sevenperforce » Fri Mar 06, 2015 4:25 pm UTC

leady wrote:I think we have too many related but different concepts floating around.

Lets try it another way - what problem do you want to solve using a minimum wage? (as defined as a the legal floor price of any type of labour). I'm pretty sure that unless the answer is "collapse low skilled employment", "force people into the black economy" or "improve the wage of geographical sticky jobs at the expense of those are location flexible" then a minimum wage isn't the correct solution.

How about the goal of "Partially remedy the under-appraisal of unskilled labor brought about by the lack of bargaining power in the unskilled labor class, to the end that the lowest-earning members of society will be less likely to be forced into dependence on public assistance for their basic needs"?

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Re: How should minimum wage be determined?

Postby ucim » Fri Mar 06, 2015 4:46 pm UTC

KrytenKoro wrote:"Underpaid" as in "paid under the level needed to stay alive"
And I use "underpaid" to mean "paid less than the job is worth". So we are using the word in two different ways. People get underpaid when they don't have sufficient bargaining power. The low end tends to be in that situation. Minimum wage laws are a way to increase the bargaining power of the low end. I get that. I don't object to that.

But they are different from the unions in that there is no vetting. A union (at least in theory) also supports worker standards - if you hire a union worker you are (supposed to be) assured that the worker is at least minimally competent. The union's reputation depends on this. The union cares not a whit about those outside the union. The union would "let them starve to death" too.

The minimum wage laws differ here in that they do not ensure any level of competence whatsoever. And in the end, when I hire somebody, I'm doing it so that I can get a job done, not so that I can feed the worker's children. That said, I should not be able to abuse workers (pricewise or anyotherwise) just because I have the stronger hand.

So, to the OPQ (and upon reflection) I guess I think that minimum wage should be set at a level that, if earned full time, would provide an acceptable standard of living, where "acceptable" is yet to be defined objectively. It will be below average. Probably way below average. (Not everyone can be above average, except in Lake Woebegone). Defining "acceptable" however is a different, slippery question that lends itself to lots more emotional rhetoric.

Jobs that are not worth that much won't exist. Some people may not be able to get a job, because there may not be enough to go around. It's a very imperfect solution, but there are no good solutions.

What would you do with volunteer positions? Volunteer positions with a stipend? Volunteer positions with a nice stipend? I'm not even talking about burger flippers; I'm talking about airline pilots, whose typical method of entry is to essentially work for free for years in the regional airlines "building time"? How would you handle amateur theater?

But most of all my objections have been to this pervasive sense of entitlement that some posters seem to have. "You have too much money; I don't have enough; give it to me." It's always "the rich" who should pay, because "the rich" is always somebody else. There is a resentment about it that doesn't sit well.

KrytenKoro wrote:
ucim wrote:I am not trying to maximize productivity. I even argue against that as a goal. Where do you get that idea?
You criticizing a suggestion on the grounds that it is a "drain on productivity". That very strongly implies that you believe it's better to increase productivity. If increasing productivity is not a priority for you (at least to being higher priority than ensuring a living wage), then that's a nonsensical objection to have.
Ok, fair enough. Let me clarify.

The original post is here

No, let me reconsider. It might be that the job is worth $10, but the company can get away with paying $3 because of the lack of bargaining power at the bottom end. A minimum wage law would remedy that situation, and I guess I don't really have an objection to that. The company will simply have to pay what the job is actually worth, rather than what they could get away with. See this post, which is well put. But it presumes that the job is actually worth $10 to the company. Where this holds, the outcome should be good. But where this doesn't hold, the job simply won't exist. If the job is actually only worth $8, it won't exist. Or it will be outsourced.

sevenperforce wrote:How about the goal of "Partially remedy the under-appraisal of unskilled labor brought about by the lack of bargaining power in the unskilled labor class, to the end that the lowest-earning members of society will be less likely to be forced into dependence on public assistance for their basic needs"?
I can go with that. Well put.

Is there a better or more comprehensive way of achieving this goal? (while respecting volunteer and near/volunteer labor)?

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Re: How should minimum wage be determined?

Postby ShadE » Fri Mar 06, 2015 5:02 pm UTC

Instead of a minimum 'wage' exactly how about a minimum 'percent of business leader(s)'... whether it be just the CEO/Small Business Owner or the average of top management. This has the benefit of striking some sort of balance in the economy as a whole... as well as being scalable to impact large corporations as well as small businesses in similar ways.

As an example let's say the Walmart CEO makes $12,307/hr... assuming 2080 hrs worked... which may be light for a high level executive... but whatever. If the lowest Walmart can pay someone is 1% of that then their 'minimum wage' is $123/hr. You could go the other way (like they just did) and pay $10/hr minimum which makes the top pay $1000/hr. $2M annually would be crazy to pay a CEO, right? Can you imagine the lack of multiple mansions and private jets? Interestingly the minimum is $20,800 per year which is strikingly close to the 2015 poverty line for a household of 3 ($20,090).

As an alternative example a sole proprietor could make $48/hr ($100K/yr) making the minimum wage for their business $0.48/hr. This would almost certainly determine that there would be some sort of market based adjustment above that... unless there is a portion of the local workforce willing to work for that.

You could throw in a graduated percentage system instead of the flat 1%. You could also throw in variants where stock compensation is distributed in a similar way.

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Re: How should minimum wage be determined?

Postby leady » Fri Mar 06, 2015 5:30 pm UTC

I'm a little amused by all the suggestions that a society that doesn't facilitate people to iterate through bad life choices lead to me being shot in the face :) - I'm pretty sure there must be a balance somewhere before a cannabalism based society kicks in

How about the goal of "Partially remedy the under-appraisal of unskilled labor brought about by the lack of bargaining power in the unskilled labor class, to the end that the lowest-earning members of society will be less likely to be forced into dependence on public assistance for their basic needs"?


Thats actually not a bad one, but I think would only effect subsets of labour that has a marginal perceived value very close to the min wage level as it stands and were there is hidden value (i.e. the types of jobs that without a min wage would pay slightly above it in perfect world, but get rounded down + those where the employer has informational leverage). It won't achieve the aim you've listed though, just make it a bit better.

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Re: How should minimum wage be determined?

Postby Tyndmyr » Fri Mar 06, 2015 8:02 pm UTC

ucim wrote:What would you do with volunteer positions? Volunteer positions with a stipend? Volunteer positions with a nice stipend? I'm not even talking about burger flippers; I'm talking about airline pilots, whose typical method of entry is to essentially work for free for years in the regional airlines "building time"? How would you handle amateur theater?


Community theater is usually an all or mostly volunteer venture. Applying minimum wage restrictions to volunteer positions would essentially kill most such programs, being pretty rough on what's a fairly nice hobby(I'm no longer involved, but I have numerous friends that are).

No, let me reconsider. It might be that the job is worth $10, but the company can get away with paying $3 because of the lack of bargaining power at the bottom end. A minimum wage law would remedy that situation, and I guess I don't really have an objection to that. The company will simply have to pay what the job is actually worth, rather than what they could get away with. See this post, which is well put. But it presumes that the job is actually worth $10 to the company. Where this holds, the outcome should be good. But where this doesn't hold, the job simply won't exist. If the job is actually only worth $8, it won't exist. Or it will be outsourced.


The "won't exist" is particularly troublesome. Outsourcing, sure, that works for some things. Not every job can reasonably be outsourced, though. The industry with the largest number of minimum wage jobs is food service/prep. The rest are mostly also in the service industry(lawn care, retail, etc, etc). Those generally can't be significantly outsourced. Either you replace the job with automation, or you kill the job entirely.

Either is bad. They kill the on-ramp to a working career. Kid just getting started in life, no experience, maybe some college, has a rough time getting a job as it is. Gotta get some experience so you can move on to a slightly less sucky job, and so on.

ShadE wrote:Instead of a minimum 'wage' exactly how about a minimum 'percent of business leader(s)'... whether it be just the CEO/Small Business Owner or the average of top management. This has the benefit of striking some sort of balance in the economy as a whole... as well as being scalable to impact large corporations as well as small businesses in similar ways.

As an example let's say the Walmart CEO makes $12,307/hr... assuming 2080 hrs worked... which may be light for a high level executive... but whatever. If the lowest Walmart can pay someone is 1% of that then their 'minimum wage' is $123/hr. You could go the other way (like they just did) and pay $10/hr minimum which makes the top pay $1000/hr. $2M annually would be crazy to pay a CEO, right? Can you imagine the lack of multiple mansions and private jets? Interestingly the minimum is $20,800 per year which is strikingly close to the 2015 poverty line for a household of 3 ($20,090).

As an alternative example a sole proprietor could make $48/hr ($100K/yr) making the minimum wage for their business $0.48/hr. This would almost certainly determine that there would be some sort of market based adjustment above that... unless there is a portion of the local workforce willing to work for that.

You could throw in a graduated percentage system instead of the flat 1%. You could also throw in variants where stock compensation is distributed in a similar way.


This would actually have essentially no effect, and would be substantially similar to no minimum wage. You will note that whenever people talk about CEOs, they are invariably talking about the "top x CEOs" not an average of all CEOs or a nice random sampling of CEOs. The guys at the very top are way, way above the average. This is an expected result for almost any population.

The average CEO in the US makes $153,353(http://www.payscale.com/research/US/Job=Chief_Executive_Officer_(CEO)/Salary). While this is a nice salary, multiple mansions and private jets are not really in the offing here. Surely a salary that is 1% of that is way below even minimum wage employment.

Therefore, this policy would provide no significant effect for driving wages higher for unskilled workers, and would serve only to limit the ability to attract top tier talent with money.

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Re: How should minimum wage be determined?

Postby EMTP » Fri Mar 06, 2015 8:31 pm UTC

Tyndmyr wrote:This would actually have essentially no effect, and would be substantially similar to no minimum wage. You will note that whenever people talk about CEOs, they are invariably talking about the "top x CEOs" not an average of all CEOs or a nice random sampling of CEOs. The guys at the very top are way, way above the average. This is an expected result for almost any population.

The average CEO in the US makes $153,353(http://www.payscale.com/research/US/Job=Chief_Executive_Officer_(CEO)/Salary). While this is a nice salary, multiple mansions and private jets are not really in the offing here. Surely a salary that is 1% of that is way below even minimum wage employment.

Therefore, this policy would provide no significant effect for driving wages higher for unskilled workers, and would serve only to limit the ability to attract top tier talent with money.


There are a number of issues here:
1. Your link is to a self-reported salary survey, which is hardly the final word in data collection.
2. Most CEO compensation is not salary but rather bonuses, stock options, etc.
3. The salaries of CEOs which are public record are quite a bit higher than the numbers you are quoting:

In 2010 the average (mean) compensation of CEOs of companies in the S&P 500 was $11,358,445 (only $1,093,989 was in salary).


1% of that is probably a fair wage. And the companies of the S&P 500 employ many millions of people.

This would tend to advantage small companies over large ones, obviously, which may or may not be desirable. And other questions would remain, such as, what about franchises? If you work for McDonalds or Starbucks, is your minimum compensation pegged to the national or international CEO or to the owner of that particular site? (Hey, I just found an easy way to bring back Mom-and-Pop restaurants!)

Ballooning pay for CEOs is weird, and like ballooning college costs, it's hard to see an improvement in the product that justifies the expense. Whereas in the college market it's easy to see how tuition has become unmoored from competitive pressures, I don't think we have the full story of how that has happened (if it has) with CEO pay. So perhaps it is better to treat that as a separate issue, and stick to mandating reasonable compensation for workers without reference to over-compensation of their overseers.
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Re: How should minimum wage be determined?

Postby ucim » Fri Mar 06, 2015 8:47 pm UTC

Tyndmyr wrote:Community theater is usually an all or mostly volunteer venture. Applying minimum wage restrictions to volunteer positions would essentially kill most such programs, being pretty rough on what's a fairly nice hobby(I'm no longer involved, but I have numerous friends that are).
I'm also involved, and agree. But there is a continuum between doing skits for the local church group all the way to Broadway stardom. Somewhere somebody's going to say "wait a minute, that's a job, not a hobby - you have to pay at least minimum wages to everyone involved". And whatever is used to make this determination (e.g. non-profit group) can be gamed, or at least accused of being gamed.

In movies, this makes it very hard to make a low budget film. (More specifically, hard to show such a film, therefore hard to get backing for.)

Online it pretty much shot down AOL's community leader program.

I'm not sure how they get around it in the airlines, but they do.

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Re: How should minimum wage be determined?

Postby sevenperforce » Fri Mar 06, 2015 9:10 pm UTC

ShadE wrote:Instead of a minimum 'wage' exactly how about a minimum 'percent of business leader(s)'... whether it be just the CEO/Small Business Owner or the average of top management. This has the benefit of striking some sort of balance in the economy as a whole... as well as being scalable to impact large corporations as well as small businesses in similar ways.

As an example let's say the Walmart CEO makes $12,307/hr... assuming 2080 hrs worked... which may be light for a high level executive... but whatever. If the lowest Walmart can pay someone is 1% of that then their 'minimum wage' is $123/hr.

"1%" (0.01) is a fairly arbitrary fraction. Actually, I take that back; it's a completely arbitrary fraction, because it's merely 10-2, and 10 is a completely arbitrary base. Why not make the fraction 0.003 or 0.047 or 0.000226 or 0.28735 or 0.0072973525698 or any other random number?
Spoiler:
No offense to ShadE, but I find it funny when people assume "1%" or any other round-number percentage has some specific significance or uniqueness. Sure, the number 1 is mathematically unique, but "1%" is just 0.01, which only looks unique because we happen to use base 10.

In base 2, "1%" works out to 0.2510.
In base 8, "1%" works out to 0.015610.
In base 12, "1%" works out to 0.0069410.
In base 16, "1%" works out to 0.0039110.
In base 30, "1%" works out to 0.001111110.
In base 60, "1%" works out to 0.000277810.

There's nothing particularly round or unique or meaningful about 1%. /endrant
And I don't think it's "scalable to impact large corporations as well as small businesses" at all. Your example demonstrates that. You'd just have to have an arbitrary fraction for every different business. Not to cry "socialism" but if you're going to set wages for every single business in existence then you might as well just go ahead and do a centrally managed economy.

You could go the other way (like they just did) and pay $10/hr minimum which makes the top pay $1000/hr. $2M annually would be crazy to pay a CEO, right? Can you imagine the lack of multiple mansions and private jets?

Everyone wants to complain about how horrible it is to have multiple mansions and private jets, but multiple mansions and private jets aren't actually bad things.

I mean, they're seen as ostentatious and therefore wasteful, and I get that. But in terms of how the money is spent, there are some major benefits. Building a mansion results in the employment of construction workers, the development (and thus appreciation) of land, an increase to local property values, an increase in tax revenue (from sales tax to property tax to income tax on employment), and more. Later, the mansion can be sold, which directly increases GDP and will result in capital gains tax revenue, or it can be passed on to an heir, resulting in estate tax revenue. Similarly, buying a private jet (or several) employs pilots and other airline personnel, sends revenue to industry, produces income and sales tax revenue, and drives technological advancement.

I would say it's a pretty safe bet that the overall economy benefits as much or more from the CEO of Coca-Cola dropping $5 million on a private jet (with the ongoing commitment to employing a flight crew and annual upkeep) than it would if that $5 million were forcibly taken from the CEO and redistributed to Coca-Cola's 40,000 forklift operators, delivery drivers, and other low-paid employees to increase their hourly wage by 6 cents.

The whole "private jet evil" thing reminds me of a meme some Republican hyperconservative relative of mine posted a while back, complaining about how Obama has spent over $40 million on vacations with his family. SHOCKER OH EM GEE HOW HORRIBLE!!! But of course that's a purely emotional reaction because they haven't bothered to actually think about the numbers at all. Through six years in the White House, that's $6.7 million per year. Assuming a modest two 2-week family vacations per year, that's $3.3 million for a two-week family vacation. Obviously, it's neither safe nor feasible for the First Family to fly commercially, and they require extensive constant security details. Chartering a private jet capable of holding the whole family and a full rotating set of security teams would easily be in excess of $250,000 one-way (even without the significantly higher operating costs of Air Force One), leaving $200,000 per day for the two-week vacation. Assuming three guards per person and an extra for the president, that's 13 security guards 24/7. Using four 6-hour rotating shifts, that means 52 agents, each probably drawing in the neighborhood of $600/day, reducing your daily budget to $168,000. Go ahead, conservative relative of mine, try to find a way to lodge and feed the First Family along with fifty agents for barely over 150k.

Similarly, a private jet for a CEO is NOT an unreasonable expenditure. Many CEOs have a contractual requirement to use private transportation even on personal business to decrease the risk of kidnapping. Commercial flights are a form of public transportation, and public transportation is unreliable, which isn't good when you need to go testify in front of a Senate subcommittee. Like it or not, CEOs actually have real, important roles and the importance of those roles really does necessitate some markedly higher expenses.

Anyway.

ucim wrote:It might be that the job is worth $10, but the company can get away with paying $3 because of the lack of bargaining power at the bottom end. A minimum wage law would remedy that situation, and I guess I don't really have an objection to that. The company will simply have to pay what the job is actually worth, rather than what they could get away with. See this post, which is well put. But it presumes that the job is actually worth $10 to the company. Where this holds, the outcome should be good. But where this doesn't hold, the job simply won't exist. If the job is actually only worth $8, it won't exist. Or it will be outsourced.

Right. The existence of a large unskilled labor pool means that there will necessarily be an average market value for 1 hour of unskilled labor. If an employer has an unskilled position open, but that position cannot earn the employeras much per hour as the average market value for an hour of unskilled labor, then that position won't last very long.

So a "minimum wage" already existing as some fraction of the average market value for an hour of unskilled labor makes a good deal of sense. If a business cannot manage to make more profit off an hour of unskilled labor than the market value of that hour of labor, it's not a very profitable or healthy business. Sure, the business might be able to find someone willing to work for substantially less than the market average, but only by exploiting that person's individual lack of options.

Sure, you can say "an hour of unskilled labor is only worth what the company is able to pay for it" but that's not entirely true; because unskilled labor is interchangeable, its worth is more dictated by the going rate at large. If the company can't manage to turn a profit while paying something close to the going rate, it shouldn't have the position in the first place.

sevenperforce wrote:How about the goal of "Partially remedy the under-appraisal of unskilled labor brought about by the lack of bargaining power in the unskilled labor class, to the end that the lowest-earning members of society will be less likely to be forced into dependence on public assistance for their basic needs"?
I can go with that. Well put.

Is there a better or more comprehensive way of achieving this goal? (while respecting volunteer and near/volunteer labor)?

Unionize everyone!

No, that would be a terrible idea. Besides, unions rarely comprise exclusively bottom-rung employees.

It's hard to remedy such a basic problem without a direct mandate of some kind. We recognize that the problem is one of (usually non-malicious) exploitation: a company paying substantially less than the going rate for unskilled labor will only be able to continue doing so by exploiting some specific disadvantage in its labor force. Either their workers are undocumented immigrants, or have an arrest record, or are partly disabled, or are a disadvantaged class/race, or lack reliable transportation, or something like that. We can try to remove some of these disadvantages (work visas, generous expungements, affirmative action, public transportation) but it's whack-a-mole; there's always going to be another way a company can find to trap individuals into working for a lot less than the going rate.

And even without this exploitation, there's still going to be a huge gulf between the going rate for an hour of unskilled labor and the average business value of an hour of unskilled labor, a gulf made broad due to the lack of collective bargaining power. For people at the bottom rung of the workforce, barely living paycheck to paycheck and often saddled with debt, going on strike simply isn't an option, so that sort of collective bargaining is pointless.

A mandated minimum, then, seems to be the only option.

As far as setting that minimum? Well, since we know that minimum wage increases do have a tendency to drive up the cost of living, we probably shouldn't set the minimum wage based on a certain cost of living estimate. Instead, we should set it as a fraction of the average business value of an hour of unskilled labor. Survey industries employing a large number of unskilled workers and try to get an estimate of how much value they are able to create using an hour of unskilled labor. If the average company can turn an hour of unskilled labor into $22, then the minimum wage should be some set fraction of that...we could start with 50% just to see how it works.

Yes, this means a company that can't turn a profit while paying its workers $11/hr will fail. But businesses fail all the time. If the average banana import company is able to make 50 cents per pound of bananas, and my business can't manage to make 25 cents per pound of bananas, my business will fail...the sooner, the better.

leady wrote:
How about the goal of "Partially remedy the under-appraisal of unskilled labor brought about by the lack of bargaining power in the unskilled labor class, to the end that the lowest-earning members of society will be less likely to be forced into dependence on public assistance for their basic needs"?


Thats actually not a bad one, but I think would only effect subsets of labour that has a marginal perceived value very close to the min wage level as it stands and were there is hidden value (i.e. the types of jobs that without a min wage would pay slightly above it in perfect world, but get rounded down + those where the employer has informational leverage). It won't achieve the aim you've listed though, just make it a bit better.

Yes, this is true.

Tying the minimum wage to some market variable is a better idea than, say, tying it to the actual profits of each individual business. Employees are not investors; they are an investment. There is no reason to think that employees deserve some fraction of profits. The whole point of having a business is to make it profitable; you make it profitable by buying goods, managing them wisely, and selling them for more than you bought them for. Labor, skilled or unskilled, is one of those goods you use in the creation of your end product. If wages were tied to the profits of the business, you destroy the entire incentive to make a business profitable.

Unskilled labor is basically a raw material. Sure, you can try to increase profit by getting your raw materials as cheaply as possible, but at some point you're going to have to depend on exploitation of some kind to get those raw materials more cheaply. A good business is able to turn a higher profit than its competitors even if it pays the same price for its raw materials as they do.

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Re: How should minimum wage be determined?

Postby Quercus » Fri Mar 06, 2015 9:34 pm UTC

Spoilered for off-topic.

Spoiler:
sevenperforce wrote:
You could go the other way (like they just did) and pay $10/hr minimum which makes the top pay $1000/hr. $2M annually would be crazy to pay a CEO, right? Can you imagine the lack of multiple mansions and private jets?

Everyone wants to complain about how horrible it is to have multiple mansions and private jets, but multiple mansions and private jets aren't actually bad things.


In general it's not the multiple mansions and private jets that bother me*, it's the massive amounts of money sitting around in tax havens that bothers me (again, standard caveats apply - IANAEconomist, so I'm quite willing to be corrected on this if I'm wrong).

*That's not quite true, they bother me on a personal level (more the mansions, I can see the business case for private jets), but then I'm bothered by the notion of owning more than one car, even though I would be quite able to afford that. It's just that I don't have an economic objection to them.

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Re: How should minimum wage be determined?

Postby KrytenKoro » Fri Mar 06, 2015 10:49 pm UTC

ucim wrote:But most of all my objections have been to this pervasive sense of entitlement that some posters seem to have. "You have too much money; I don't have enough; give it to me." It's always "the rich" who should pay, because "the rich" is always somebody else. There is a resentment about it that doesn't sit well.

Inasmuch as the "rich" should pay, it would be because, somehow, they can afford to part with that money without starving. The whole "if you have two shirts give to your brother who has none", not "if you have three, give to the brother who has one, so he doesn't feel less than you." I'm not in any way suggesting wage equality, where you only choose to do one job over the other because you like the work and not because the wages are better, and to be frank, I don't think anyone else in this thread has. What I'm seeing is people suggesting "let's make sure people aren't starving simply because that's best for the economy" (even when some models claim that increased wage inequality is worse in the long run).

That's the goal of the living/citizen's wage -- not "tear down the rich", but "at the very least ensure we don't have a system that demands that millions starve to feed it".

But where this doesn't hold, the job simply won't exist. If the job is actually only worth $8, it won't exist. Or it will be outsourced.

Or, if it's not worth 10$, but is still a necessary job, it will get a subsidy, like all the other technically worthless industries (oil, corn, banking, etc.)
From the elegant yelling of this compelling dispute comes the ghastly suspicion my opposition's a fruit.

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Re: How should minimum wage be determined?

Postby ucim » Fri Mar 06, 2015 11:17 pm UTC

KrytenKoro wrote:That's the goal of the living/citizen's wage
That may be the goal, but I don't think it will accomplish that goal without adverse effects. It was the goal of welfare, and it didn't work. Giving people money for not working tends to encourage people to not work. Even when they want to.

Giving people money for working however does not do this. It empowers people. It gives them pride in what they do.

Now, a minimum wage relates to people being paid for doing a productive job. But a citizens' wage relates to people being paid for doing nothing at all. The two are fundamentally different.

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Re: How should minimum wage be determined?

Postby EMTP » Sat Mar 07, 2015 1:47 am UTC

ucim wrote:
KrytenKoro wrote:That's the goal of the living/citizen's wage
That may be the goal, but I don't think it will accomplish that goal without adverse effects [citation needed]. It was the goal of welfare, and it didn't work [citation needed]. Giving people money for not working tends to encourage people to not work. Even when they want to [citation needed].

Giving people money for working however does not do this[citation needed]. It empowers people [citation needed]. It gives them pride in what they do [citation needed].


I don't know if you are aware the extent to which the libertarian/neoclassist belief system you are describing here is based on faith, rather than empirical observation. The kindest thing that can be said about it is that there are some parts of it that may not be completely wrong, merely grossly oversimplified.

Providing people with an minimum income has been implemented in some places, like Norway and Alaska, where the state owns resources that generate a lot of money. It has also been attempted in some special circumstances, such as unconditional cash transfers to the poor. Observed effects have included higher IQs (see my post above), less poverty, better school attendance, higher test scores, and healthier people. Other side effects may include becoming the happiest people in America.

Now, a minimum wage relates to people being paid for doing a productive job. But a citizens' wage relates to people being paid for doing nothing at all. The two are fundamentally different.

Jose


They are different, but whether they are "fundamentally different" is a matter of opinion. They both function to transfer money to poor people. They both have impressive empirical evidence of benefiting poor people. Of course one need not chose one or the other; we can have both. $12/hour and a basic income of, say, $10,000 a year.

You are persistently assuming as natural artificial social conventions. For example, it pains you to contemplate people "being paid for doing nothing at all," assuming that the natural state of affairs is that people don't receive currency except from working. But you can probably think of several other examples of this that you do accept as normal. People who inherit assets that generate income, for example, are "being paid for doing nothing at all," as are the banks who receive QE stimulus from the Fed, and those who receive Social Security, etc. People who use roads, schools, police, and fire departments are making use of them without regard for whether they pay taxes to support them, and hence are being paid in kind "for doing nothing at all."

There's no reason why our economic system can't guarantee every participant usable roads, a minimum income, or basic healthcare, or anything else we, as a society, agree is vital and can afford to distribute to all. Those you envisage as "doing nothing" under such a scheme are the people who are the losers in the game we call "capitalism." They may be losers because they are unskilled, or living through a depression, or are mentally ill, or have substance abuse problems, or they may be aimless or lazy [1]. The question we are entertaining, both in discussions of a minimum wage and of a basic income, is not whether there are going to be winners or losers in capitalism, which we all agree that there are, or whether a regulated market economy is better than the known alternatives, which we also seem to agree it is. The question is whether the consequences of failure in the game of capitalism need to be utter destitution and/or death.

What I would ask of you, if you want to make the argument that "being paid for doing nothing at all" is a bad thing, is that you provide some evidence that that is the case, and that you make some effort to take into account the positive effects of protecting people from destitution, rather than simply restating what you believe are the ills of such an approach without any effort to engage with the benefits which, even if you believe a basic income on balance to be a bad idea, are many and important.

-----------------------------------------

A pertinent article:

The fact is that we are all walking around with a random and totally unfair assortment of genetic variants that make us more or less content, anxious, depressed or prone to use drugs.


Emphasis mine.
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Re: How should minimum wage be determined?

Postby Tyndmyr » Mon Mar 09, 2015 8:16 pm UTC

EMTP wrote:
Tyndmyr wrote:This would actually have essentially no effect, and would be substantially similar to no minimum wage. You will note that whenever people talk about CEOs, they are invariably talking about the "top x CEOs" not an average of all CEOs or a nice random sampling of CEOs. The guys at the very top are way, way above the average. This is an expected result for almost any population.

The average CEO in the US makes $153,353(http://www.payscale.com/research/US/Job=Chief_Executive_Officer_(CEO)/Salary). While this is a nice salary, multiple mansions and private jets are not really in the offing here. Surely a salary that is 1% of that is way below even minimum wage employment.

Therefore, this policy would provide no significant effect for driving wages higher for unskilled workers, and would serve only to limit the ability to attract top tier talent with money.


There are a number of issues here:
1. Your link is to a self-reported salary survey, which is hardly the final word in data collection.
2. Most CEO compensation is not salary but rather bonuses, stock options, etc.
3. The salaries of CEOs which are public record are quite a bit higher than the numbers you are quoting:

In 2010 the average (mean) compensation of CEOs of companies in the S&P 500 was $11,358,445 (only $1,093,989 was in salary).


1% of that is probably a fair wage. And the companies of the S&P 500 employ many millions of people.


Ah, see, you have done precisely what I was just talking about. The S&P 500, are, by definition, not a random sampling or anything like it. They are the top tier companies.

Describing ANY profession's wages by averaging the top 500 individuals would be very skewed indeed, unless it was something so niche that it barely had 500 in it.

This would tend to advantage small companies over large ones, obviously, which may or may not be desirable. And other questions would remain, such as, what about franchises? If you work for McDonalds or Starbucks, is your minimum compensation pegged to the national or international CEO or to the owner of that particular site? (Hey, I just found an easy way to bring back Mom-and-Pop restaurants!)


How is a McDonalds owned by a local not a mom and pop restaurant? Seriously, what's the issue with franchisees in specific? Is there any good reason why minimum wages should work differently because of a branding, etc package purchased by the owner?

Ballooning pay for CEOs is weird, and like ballooning college costs, it's hard to see an improvement in the product that justifies the expense. Whereas in the college market it's easy to see how tuition has become unmoored from competitive pressures, I don't think we have the full story of how that has happened (if it has) with CEO pay. So perhaps it is better to treat that as a separate issue, and stick to mandating reasonable compensation for workers without reference to over-compensation of their overseers.


How exactly do you measure CEOing? What is the product you see no improvement in?

Is it productivity? Because that seems like something CEOs should be working on. And that is going up.

ucim wrote:
Tyndmyr wrote:Community theater is usually an all or mostly volunteer venture. Applying minimum wage restrictions to volunteer positions would essentially kill most such programs, being pretty rough on what's a fairly nice hobby(I'm no longer involved, but I have numerous friends that are).
I'm also involved, and agree. But there is a continuum between doing skits for the local church group all the way to Broadway stardom. Somewhere somebody's going to say "wait a minute, that's a job, not a hobby - you have to pay at least minimum wages to everyone involved". And whatever is used to make this determination (e.g. non-profit group) can be gamed, or at least accused of being gamed.

In movies, this makes it very hard to make a low budget film. (More specifically, hard to show such a film, therefore hard to get backing for.)

Online it pretty much shot down AOL's community leader program.

I'm not sure how they get around it in the airlines, but they do.

Jose


If you're anywhere close to the line, there ends up being this awkward zone of discomfort. Is this position really one or the other? What happens if someone sues us? Can we afford the lawsuit, or do we just die?

On a tangental note, something similar is what killed the idea of community driven content in most MMOs. Some sort of GM-like status used to be a popular thing for particularly involved player volunteers, but that's long dead now, and currently popular MMOs do not seem interested in revisiting that.

Sure, if you're far away from that zone in either direction, 'snot a big deal, and somehow, huge industries seem able to skirt the rules that you and I can't anyway...but if you're in that squishy in between zone, and probably lacking in legal professionals or money to pay them(because seriously, if you're a volunteer org, you probably have jack all for money)....it's just a huge hinderance to growth, or even entire organizational models. You can have someone who would genuinely love to volunteer, and someone who would love the help to do something cool, and nobody wants to take the risk.

sevenperforce wrote:The whole "private jet evil" thing reminds me of a meme some Republican hyperconservative relative of mine posted a while back, complaining about how Obama has spent over $40 million on vacations with his family. SHOCKER OH EM GEE HOW HORRIBLE!!!


Yeah, those are obnoxious. Secret Service protection is a cost of governance. If you want to posit that they are too expensive as an organization or something, well, sure, propose away, but it's hardly Obama's personal decision to waste money. It's not as if "dismiss all secret service agents" is something he should unilaterally do or something. It's just not a fair evaluation.

Unionize everyone!

No, that would be a terrible idea. Besides, unions rarely comprise exclusively bottom-rung employees.


*shrug* Unions have a place. Not EVERYWHERE, I agree, but unions do have a history of providing counterbalance in some particularly extreme scenarios. Usually, it's best if folks can cooperate sufficiently as to avoid this strife, but unions are the threat for if that breaks down. They cease to be a reasonable threat if they exist everywhere anyway, or if they are stomped out entirely. Both break the system. You want a nice happy medium, where folks are able to start/join a union if they wish to do so, but are not absolutely required to do so.

And generally, a union is more effective if they have some degree of unity anyway. A shared profession or what not is good. Everyone joining the same union would be obviously bad, as concerns would be too varied to be unified, but

Let's look at a union dominated profession...filmmaking. Is it extreme there? Sure. Why? Well, the environment makes it really, really easy to treat people as disposable otherwise, and there used to be some really terrible abuses as a result. Unions are the backlash to that. So it is in a great many union histories.

Unions are neither inherently good or evil. They're just a form of organization, like corporations. The key is to design a system that avoids power being entirely concentrated anywhere, so folks are motivated to cooperate. A minimum wage does not really fix this. It simply attempts to address one of the symptoms of wildly unequal power. Sort of. In a really ineffectual fashion. There's still nigh-endless ways a crappy boss can make life miserable for a worker if the boss has essentially all the power. Sure, you can try making special laws for each of them, but shit, the guy with the power is way less at risk for breaking laws anyway.

KrytenKoro wrote:That's the goal of the living/citizen's wage -- not "tear down the rich", but "at the very least ensure we don't have a system that demands that millions starve to feed it".


So? The existing system doesn't demand that. The people that starve mostly starve because they don't have enough capitalism, not because they have too much. And capitalism would LOVE to go there, make sweatshops, and feed them enough to be good little workers. And people starving on terrible subsistence farming lifestyles would LOVE to do that. And from there, they make the next hop up the chain, or their children do.

It is not essential to capitalism that people starve. Indeed, that's kind of a waste of perfectly good human capital that could be used.

KrytenKoro wrote:Or, if it's not worth 10$, but is still a necessary job, it will get a subsidy, like all the other technically worthless industries (oil, corn, banking, etc.)


You're not making a convincing case that subsidies are handed out on the base of necessity, there.

I think you mean "politically essential" instead.

EMTP wrote:
ucim wrote:
KrytenKoro wrote:That's the goal of the living/citizen's wage
That may be the goal, but I don't think it will accomplish that goal without adverse effects [citation needed]. It was the goal of welfare, and it didn't work [citation needed]. Giving people money for not working tends to encourage people to not work. Even when they want to [citation needed].

Giving people money for working however does not do this[citation needed]. It empowers people [citation needed]. It gives them pride in what they do [citation needed].


I don't know if you are aware the extent to which the libertarian/neoclassist belief system you are describing here is based on faith, rather than empirical observation. The kindest thing that can be said about it is that there are some parts of it that may not be completely wrong, merely grossly oversimplified.


Screw pride, working gives you skills. There are perfectly good reasons why people with experience are preferred over those without it. And not being employed means you get stuck in a cycle of not having experience, so not being able to get a job, so not being able to get experience.

Yeah, you could go to college endlessly on a basic wage, I guess. It ain't the same.

EMTP wrote:Providing people with an minimum income has been implemented in some places, like Norway and Alaska, where the state owns resources that generate a lot of money.


You could not live off it in Alaska. Alaska is a damned expensive place to live. It also only exists in these places because, as you say, these guys have a ton of natural resources. That's great. But unless you can suddenly create comparative natural resources everywhere to pay for this, without somehow devaluing the existing ones, that doesn't give you a model that can be replicated.

Anyway, for reference, alaska gives you somewhere between $1-2 grandish a year. That's wildly below a living wage.

To the best of my knowledge, Norway never actually implemented the basic wage program, just talked about it a lot.

So, that's pretty GD weak support.

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Re: How should minimum wage be determined?

Postby moiraemachy » Tue Mar 10, 2015 1:04 am UTC

Tyndmyr wrote:
EMTP wrote:Providing people with an minimum income has been implemented in some places, like Norway and Alaska, where the state owns resources that generate a lot of money.

You could not live off it in Alaska. Alaska is a damned expensive place to live. It also only exists in these places because, as you say, these guys have a ton of natural resources. That's great. But unless you can suddenly create comparative natural resources everywhere to pay for this, without somehow devaluing the existing ones, that doesn't give you a model that can be replicated.

Better examples are France (€470 per month), UK (£71 per week) and Germany (€391 + "financial assistance with housing and health care"). The link to the French system is particularly enlightening, because it explains how the system is set up to avoid making low-wage look worse than unemployment. Denmark, Sweden and Finland have a system in place, but I am not quite sure on the exact requirements, and they are kinda too rich to count.

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Re: How should minimum wage be determined?

Postby leady » Tue Mar 10, 2015 10:32 am UTC

err no those are just welfare bundles that are both recipient behaviour dependent and taper off (although I have it on several good authorities that the German system can be played with minimal effort forever) - so not really too close to a citizen wage.

It would be interesting if governments could experiment properly with such concepts by taking two towns of similar size and put them under different welfare systems - unfortunately I think that would cause riots

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Re: How should minimum wage be determined?

Postby moiraemachy » Tue Mar 10, 2015 2:31 pm UTC

leady wrote:err no those are just welfare bundles that are both recipient behaviour dependent and taper off (although I have it on several good authorities that the German system can be played with minimal effort forever)
That's not a bug, that's a feature. The whole point of these programs is to give money first, ask questions later. The requirements are only in place for those who are really perfectly qualified but too lazy.

I believe these programs are much closer to a guaranteed minimum income than, say, USA's welfare network: cash is given directly to recipients, in amounts designed to allow them to live with dignity. These programs trust the recipients' autonomy, and encourages them to plan their finances. Contrast this with giving people stuff (because they can't choose for themselves), and in amount designed to keep them just barely out of starvation.

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Re: How should minimum wage be determined?

Postby leady » Tue Mar 10, 2015 3:01 pm UTC

They are closer sure, but with that closeness comes evidence of less encouraging but wholly predictable outcomes - basically that the closer you get to a good, none tested benefit that more people will (quite rationally) think sod working for minimum wage, or even more generally. In the UK since 2008, 1 million people on incapacity magicallly started working once forced to by the tightening of the rules (the overzealousness of ATOS aside). In Germany you'll find a fair number of 30 year old undergraduates through the same effect

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Re: How should minimum wage be determined?

Postby EMTP » Tue Mar 10, 2015 4:14 pm UTC

Tyndmyr wrote:Ah, see, you have done precisely what I was just talking about. The S&P 500, are, by definition, not a random sampling or anything like it. They are the top tier companies.


As I said, I'm using objective, verified information published by publicly traded companies. If you have a better data set, please present it. A self-reported salary survey ain't it.

The companies comprising the S&P 500 employ more than 1 in 7 nonfarm workers in America. That's far from being a tiny elite sample.

This would tend to advantage small companies over large ones, obviously, which may or may not be desirable. And other questions would remain, such as, what about franchises? If you work for McDonalds or Starbucks, is your minimum compensation pegged to the national or international CEO or to the owner of that particular site? (Hey, I just found an easy way to bring back Mom-and-Pop restaurants!)


How is a McDonalds owned by a local not a mom and pop restaurant? Seriously, what's the issue with franchisees in specific? Is there any good reason why minimum wages should work differently because of a branding, etc package purchased by the owner?


You have missed my point entirely, and are reiterating it in an effort to refute it.

Ballooning pay for CEOs is weird, and like ballooning college costs, it's hard to see an improvement in the product that justifies the expense. Whereas in the college market it's easy to see how tuition has become unmoored from competitive pressures, I don't think we have the full story of how that has happened (if it has) with CEO pay. So perhaps it is better to treat that as a separate issue, and stick to mandating reasonable compensation for workers without reference to over-compensation of their overseers.


How exactly do you measure CEOing? What is the product you see no improvement in?


Again, you seem to be reiterating the point rather than critiquing it.

Is it productivity? Because that seems like something CEOs should be working on. And that is going up.


Painfully slowly, it is. But the CEO pay is skyrocketing:
Over the entire period from 1978 to 2013, CEO compensation increased about 937 percent, a rise more than double stock market growth and substantially greater than the painfully slow 10.2 percent growth in a typical worker’s compensation over the same period. If we had included Facebook in our sample then CEO compensation would have risen 1,596 percent from 1978 to 2013.


Compare that to an average growth in productivity of less than 2% per year over the same period.



KrytenKoro wrote:
EMTP wrote:I don't know if you are aware the extent to which the libertarian/neoclassist belief system you are describing here is based on faith, rather than empirical observation. The kindest thing that can be said about it is that there are some parts of it that may not be completely wrong, merely grossly oversimplified.


Screw pride, working gives you skills. There are perfectly good reasons why people with experience are preferred over those without it. And not being employed means you get stuck in a cycle of not having experience, so not being able to get a job, so not being able to get experience.

Yeah, you could go to college endlessly on a basic wage, I guess. It ain't the same.


If you see the primary benefit of work as acquiring skills, then the incentive to work should be little harmed by paying people a basic income.

EMTP wrote:Providing people with an minimum income has been implemented in some places, like Norway and Alaska, where the state owns resources that generate a lot of money.


You could not live off it in Alaska. Alaska is a damned expensive place to live. It also only exists in these places because, as you say, these guys have a ton of natural resources. That's great. But unless you can suddenly create comparative natural resources everywhere to pay for this, without somehow devaluing the existing ones, that doesn't give you a model that can be replicated.

Anyway, for reference, alaska gives you somewhere between $1-2 grandish a year. That's wildly below a living wage.


None of that is relevant. We don't have perfect controlled experiments in social science. So if we want to know how the society would react to a basic income, the logical thing to do is to look at societies where some or all of the people have been given some amount of money unconditionally. The specific circumstances, an oil boom, international aid, whatever, aren't really pertinent.

As to whether we can afford a basic income, it's fairly obvious that we can, through the usual methods. I don't care particularly about "devaluing the existing ones," or indeed if the wealthy pay more taxes. The cost of any proposal must be taken into account, but we are a very wealthy society and we can afford quite a bit. Remember, we are spending a lot of this money already in the form of SNAP, Social Security, unemployment insurance, disability insurance, etc.
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Re: How should minimum wage be determined?

Postby ShadE » Tue Mar 10, 2015 4:57 pm UTC

sevenperforce wrote:
ShadE wrote:Instead of a minimum 'wage' exactly how about a minimum 'percent of business leader(s)'... whether it be just the CEO/Small Business Owner or the average of top management. This has the benefit of striking some sort of balance in the economy as a whole... as well as being scalable to impact large corporations as well as small businesses in similar ways.

As an example let's say the Walmart CEO makes $12,307/hr... assuming 2080 hrs worked... which may be light for a high level executive... but whatever. If the lowest Walmart can pay someone is 1% of that then their 'minimum wage' is $123/hr.

"1%" (0.01) is a fairly arbitrary fraction. Actually, I take that back; it's a completely arbitrary fraction, because it's merely 10-2, and 10 is a completely arbitrary base. Why not make the fraction 0.003 or 0.047 or 0.000226 or 0.28735 or 0.0072973525698 or any other random number?
Spoiler:
No offense to ShadE, but I find it funny when people assume "1%" or any other round-number percentage has some specific significance or uniqueness. Sure, the number 1 is mathematically unique, but "1%" is just 0.01, which only looks unique because we happen to use base 10.

In base 2, "1%" works out to 0.2510.
In base 8, "1%" works out to 0.015610.
In base 12, "1%" works out to 0.0069410.
In base 16, "1%" works out to 0.0039110.
In base 30, "1%" works out to 0.001111110.
In base 60, "1%" works out to 0.000277810.

There's nothing particularly round or unique or meaningful about 1%. /endrant
And I don't think it's "scalable to impact large corporations as well as small businesses" at all. Your example demonstrates that. You'd just have to have an arbitrary fraction for every different business. Not to cry "socialism" but if you're going to set wages for every single business in existence then you might as well just go ahead and do a centrally managed economy.


Agreed. 1% is completely arbitrary and was mostly chosen for ease of math (all my base are belong to 10). The main thought was just establishing a wage-range linking the top and bottom. I also agree that it smacks of socialism, but with constantly compounding income inequality what other options are there? If government is going to intervene with a 'minimum wage' there are probably better ways to do it than one specific amount for the entire country.

The other obvious impact with my thought is that it would lead to additional specialization. Apple could outsource all 'unskilled' positions to other companies... custodial being one that I have seen. Those companies would have lower paid CEOs/owners therefore be able to pay the bottom rung workers less.

Basically I envision that all companies have some pool of current wage expense... the key to the re-emergence of the middle class and 'fair' pay at the bottom tier is to figure out how to grow that pool and distribute it in a way so that everybody with a job makes a wage that is more than an LED TV above poverty (i.e. my Walmart $10 example previously). At the same time it has to be small business friendly and not stifle innovation. I mean there is certainly capacity at some companies... GM is giving $5B back to stockholders... which is >$23K for each employee it has in the US. Definitely not saying 'screw the stockholders', but ideally employees would share in some of that.

There has to be some way to calculate a range, or table of ranges, that achieves this for both large and small businesses... I am just not smart enough to figure it out on my lunch break!!

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Re: How should minimum wage be determined?

Postby Tyndmyr » Tue Mar 10, 2015 5:52 pm UTC

leady wrote:err no those are just welfare bundles that are both recipient behaviour dependent and taper off (although I have it on several good authorities that the German system can be played with minimal effort forever) - so not really too close to a citizen wage.

It would be interesting if governments could experiment properly with such concepts by taking two towns of similar size and put them under different welfare systems - unfortunately I think that would cause riots


Right. Needs based welfare is a common thing, and we have a fairly decent variety of evidence regarding it, though there is substantial variation between systems. It isn't quite the same as the basic income concept, though, and doesn't really provide evidence for basic income being superior to itself.

EMTP wrote:
Tyndmyr wrote:Ah, see, you have done precisely what I was just talking about. The S&P 500, are, by definition, not a random sampling or anything like it. They are the top tier companies.


As I said, I'm using objective, verified information published by publicly traded companies. If you have a better data set, please present it. A self-reported salary survey ain't it.

The companies comprising the S&P 500 employ more than 1 in 7 nonfarm workers in America. That's far from being a tiny elite sample.


It IS a tiny sample set for "CEOs". Statistically, a tiny, non-randomly selected sample set makes the data garbage. You're well aware of that.

Self reporting is quite common in a number of statistical surveys, including a ton of economic studies. It isn't perfect, but it isn't reason to disregard something entirely, or to ignore basic rules of surveying. Your average is, bluntly, not a survey of all CEOs. It isn't measuring that thing at all.

EMTP wrote:
Ballooning pay for CEOs is weird, and like ballooning college costs, it's hard to see an improvement in the product that justifies the expense. Whereas in the college market it's easy to see how tuition has become unmoored from competitive pressures, I don't think we have the full story of how that has happened (if it has) with CEO pay. So perhaps it is better to treat that as a separate issue, and stick to mandating reasonable compensation for workers without reference to over-compensation of their overseers.


How exactly do you measure CEOing? What is the product you see no improvement in?


Again, you seem to be reiterating the point rather than critiquing it.


No. I am pointing out that you are arguing from ignorance. You're arguing that it can't be measured. You use words like "product", but you never define what that product is.

This isn't reiteration, this is disagreement. I feel you're not supporting anything...you've simply started from an assumption that CEOs are being paid too much, based on highly biased data about how much they're being paid, and no objective criteria given for "too much".

How does this differ in any substantial way from saying "Other people have too much money, and should give it to me?"

Over the entire period from 1978 to 2013, CEO compensation increased about 937 percent, a rise more than double stock market growth and substantially greater than the painfully slow 10.2 percent growth in a typical worker’s compensation over the same period. If we had included Facebook in our sample then CEO compensation would have risen 1,596 percent from 1978 to 2013.


Again, you are comparing ALL productivity to "not-all CEO compensation". So...not apples to apples whatsoever.

EMTP wrote:If you see the primary benefit of work as acquiring skills, then the incentive to work should be little harmed by paying people a basic income.


It is a beneficial outcome of work. It is not the incentive. Pay is a primary incentive.

Shit, you KNOW pay matters. If you didn't, you wouldn't be grousing about how much pay CEOs get.

Having work experience is very useful, but this does not mean pay is meaningless.

EMTP wrote:None of that is relevant. We don't have perfect controlled experiments in social science. So if we want to know how the society would react to a basic income, the logical thing to do is to look at societies where some or all of the people have been given some amount of money unconditionally. The specific circumstances, an oil boom, international aid, whatever, aren't really pertinent.


Wait, the "neither of your examples are about the thing you said they were" isn't relevant?

Like, we're not talking about minor errors here. Getting a grand or two a year in alaska isn't even close to a living wage. It's about 10% of the alaska poverty level. It is a bit like saying that allowances work for children, so we can totally base our whole economy off them. Talking about perfection is irrelevant. I never asked for perfection. But I DID ask for relevant data. Being off by an order of magnitude is kind of a big deal for this sort of number.

And yes, specific circumstances are relevant in economics. Do you seriously think that the effects of an oil boom are not significantly different from the effects of international aid? On what basis? If you're generalizing to that degree, you are not conducting economics, but preaching about your faith.

As to whether we can afford a basic income, it's fairly obvious that we can, through the usual methods. I don't care particularly about "devaluing the existing ones," or indeed if the wealthy pay more taxes. The cost of any proposal must be taken into account, but we are a very wealthy society and we can afford quite a bit. Remember, we are spending a lot of this money already in the form of SNAP, Social Security, unemployment insurance, disability insurance, etc.


What do you mean "the usual methods"?

Why is this fairly obvious? What level of living wage do you propose, and what is the cost?

By it's nature it must cost more than current welfare, if it is to fulfill their role and also subsidize more individuals. The entire concept of needs based welfare exists because not everyone is needy, and it's cheaper to pay only the needy.

Look, let's break this out. If you guarantee everyone 20k a year(11,670 is the current individual poverty level, and clearly, you are unsatisfied with this level of assistence, yes?), at 318.9m people, you need to pay out 6.378 t dollars per year. Keep in mind that our current GDP is only 16.77t. So, you want to blow roughly 38% of our economy per year on a massive experiment that has not been tested in any meaningful way. And that's before we even start considering secondary effects, which are necessarily significant on anything even vaguely close to that size.

Obviously it'll work, right? Who needs to bother even running numbers to understand economics? :roll:

ShadE wrote:There has to be some way to calculate a range, or table of ranges, that achieves this for both large and small businesses... I am just not smart enough to figure it out on my lunch break!!


Why does there have to be? Wanting something doesn't make it real.

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Re: How should minimum wage be determined?

Postby EMTP » Tue Mar 10, 2015 7:39 pm UTC

It IS a tiny sample set for "CEOs". Statistically, a tiny, non-randomly selected sample set makes the data garbage. You're well aware of that.


Again, no. These are the companies employing one out of seven American workers. If you think they aren't representative, feel free to provide real data.

Several other data sources reflect the same trend. Execucomp CEO salary survey, for example, looks at the S&P 1500 since 1994. In that time, at those 1500+ companies, total compensation for CEOs including stock options has more than doubled, from $2.15 million yearly to $6.23 million in 2004. (Source, page 38.)

Again, you seem to be reiterating the point rather than critiquing it.


No. I am pointing out that you are arguing from ignorance. You're arguing that it can't be measured. You use words like "product", but you never define what that product is.


Nope, that's exactly wrong. Remember the 31st law of internet arguments: a mistaken argument cannot be saved by the mistaken invocation of a logical fallacy.

I said "It's difficult to see the added value." You replied "No it's not, because it's very difficult to define or measure the value." You are exactly agreeing with my position. It's a shame you don't recognize the common ground.
How does this differ in any substantial way from saying "Other people have too much money, and should give it to me?"


It differs in many ways, not least that I am in the tax bracket of the CEO, not the minimum wage worker, so if you wanted to personalize and misstate the argument, the correct formulation would be "I and others of my class make too much money, and we should give some to people who are poor."

If you could put your emotions aside for a second, you would see what issues are raised by the skyrocketing of executive pay, and they should already be familiar to you: Are these executives making use of rents? Is the market correctly valuing these CEOs at hundreds of times what the average worker is worth, or is there a market failure here? Even if the market is working perfectly, is this radical inequality morally justified, and if it is, is it pragmatically a good idea, or might it tend to undermine respect for the economic system itself?
It is a beneficial outcome of work. It is not the incentive. Pay is a primary incentive.

Shit, you KNOW pay matters. If you didn't, you wouldn't be grousing about how much pay CEOs get.

Having work experience is very useful, but this does not mean pay is meaningless.


You are arguing that the benefits of work go beyond being paid. Are you saying that working people are too stupid to realize these intangible benefits, so they must be forced to chose between work and starvation?

Wait, the "neither of your examples are about the thing you said they were" isn't relevant?


No, the claim you made in you original post is irrelevant. This modified version is just embarrassingly wrong.

But feel free to redeem yourself by quoting the place where I said that these examples were exactly identical to the basic income programs being proposed in this thread. If you can't (and you can't) consider that poor reading comprehension on your part does not constitute an "error" on someone else's part.

Why is this fairly obvious? What level of living wage do you propose, and what is the cost?


I already laid that out, above. Try reading the thread.

By it's nature it must cost more than current welfare, if it is to fulfill their role and also subsidize more individuals. The entire concept of needs based welfare exists because not everyone is needy, and it's cheaper to pay only the needy.


Sorry, your belief system does not count as evidence. Evidence counts as evidence.

Welfare is its current form is selective not just to save money, but for all the other reasons you and others have been pitching in this thread: People who feel morally offended at "subsidizing" others. People who are concerned it will disincentive work. And so on.

A universal basic income would pay out more in benefits than the current patchwork system, but on the other hand would be vastly cheaper and easier to administer than the current age-tested, means-tested, poly-program system.

It might also reduce the cost of healthcare, prisons, etc.

Overall I imagine a basic income of $10k, as suggested above, would have additional costs. The expense can be paid through this new thing called "taxes." Since Americans are dangerously undertaxed, that would be a win-win.
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Re: How should minimum wage be determined?

Postby Chen » Tue Mar 10, 2015 7:47 pm UTC

EMTP wrote:Again, no. These are the companies employing one out of seven American workers. If you think they aren't representative, feel free to provide real data.

Several other data sources reflect the same trend. Execucomp CEO salary survey, for example, looks at the S&P 1500 since 1994. In that time, at those 1500+ companies, total compensation for CEOs including stock options has more than doubled, from $2.15 million yearly to $6.23 million in 2004.

(Source, page 38.)


http://www.aei.org/publication/the-aver ... ss-than-1/

The CEOs of HUGE companies do make huge amounts of money. Overall CEO compensation is nowhere near those though. Even the S&P 1500 is only 1500 companies. From the above link there almost 250 000 CEOs in the US. Your S&G 500 or even 1500 is a TINY fraction of those.

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Re: How should minimum wage be determined?

Postby EMTP » Tue Mar 10, 2015 8:03 pm UTC

Chen wrote:The CEOs of HUGE companies do make huge amounts of money. Overall CEO compensation is nowhere near those though. Even the S&P 1500 is only 1500 companies. From the above link there almost 250 000 CEOs in the US. Your S&G 500 or even 1500 is a TINY fraction of those.


Your source's definition of a CEO is interesting. Check out this page: http://www.bls.gov/oes/current/oes111011.htm. Under "Industries with the highest levels of employment in this occupation" it lists "Elementary and Secondary Schools" (12,230 CEOs,) "Local Government (OES Designation)" (16,750 CEOs,) and "State Government (OES Designation)" (6,130 CEOs.)

Now, I don't wish to shock you, but I think the dispassionate scholars of the Koch-funded American Enterprise Institute may be slightly misleading you here. While I don't doubt that the BLS has a consistent definition of "CEO" according to which the people above are CEOs, I do not think that is what most people mean when they talk about CEOs.

I would suggest we limit "CEO" for the purposes of this discussion to the chief executives of publicly traded, profit-seeking companies. I will cheerfully concede that the CEOs of nonprofits, schools and local governments (whatever that may mean) aren't experiencing the same salary inflation.
"Reasonable – that is, human – men will always be capable of compromise, but men who have dehumanized themselves by becoming the blind worshipers of an idea or an ideal are fanatics whose devotion to abstractions makes them the enemies of life."
-- Alan Watts, "The Way of Zen"

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Re: How should minimum wage be determined?

Postby Tyndmyr » Tue Mar 10, 2015 8:45 pm UTC

EMTP wrote:
It IS a tiny sample set for "CEOs". Statistically, a tiny, non-randomly selected sample set makes the data garbage. You're well aware of that.


Again, no. These are the companies employing one out of seven American workers. If you think they aren't representative, feel free to provide real data.

Several other data sources reflect the same trend. Execucomp CEO salary survey, for example, looks at the S&P 1500 since 1994. In that time, at those 1500+ companies, total compensation for CEOs including stock options has more than doubled, from $2.15 million yearly to $6.23 million in 2004. (Source, page 38.)


That's not how sampling works. The fact that you have an entirely non-random selection already kills any validity for extending it as a generalization of the population. Secondly, you need to sample from the population of CEOs. The fact that workers are not spread evenly between CEOs is trivial and unrelated. It is not a point in it's favor, it merely demonstrates the bias.

The total number of CEOs is significantly larger. I do not believe that you simply are unaware of this. Even if you restrict it to publicly traded, that's about 19,000 stocks in total, US only*. 1500 would be an excellent sample size for that quantity if it was distributed randomly. Taking the top 1500, not even a little valid.

This is seriously basic statistics here.

*You're looking at about 5,000 and change on the major exchanges, and the rest on a less widespread basis, but still public. Note that CEOs exist for privately owned companies as well, so the total number is of course higher. Koch industries seems to be an example that you might have heard of. Or, yknow...Dell. Surely, such individuals must be counted to make a statement about the profession. We do not ONLY count programmers who work for publicly traded firms, after all. Nor does any other profession have such unusual standards. If you're a programmer, you're a programmer, regardless of if you work at a large company or a small one.

How does this differ in any substantial way from saying "Other people have too much money, and should give it to me?"


It differs in many ways, not least that I am in the tax bracket of the CEO, not the minimum wage worker, so if you wanted to personalize and misstate the argument, the correct formulation would be "I and others of my class make too much money, and we should give some to people who are poor."


I, bluntly, am not a CEO, and even the average CEO wage is more than I make. I'm hardly poor, but 150kish is probably more than most of us make. However, this is a reference to, again, the curious tendency to only worry about inequality within certain bands. Ie, those who make more than the speaker, usually. OBVIOUSLY, that's too much money. But there's a lack of concern about people making far, far less money overseas. Why? Where is the line, and why does it exist? What methodology are we using here, and why is it valid?

If you could put your emotions aside for a second, you would see what issues are raised by the skyrocketing of executive pay, and they should already be familiar to you: Are these executives making use of rents? Is the market correctly valuing these CEOs at hundreds of times what the average worker is worth, or is there a market failure here? Even if the market is working perfectly, is this radical inequality morally justified, and if it is, is it pragmatically a good idea, or might it tend to undermine respect for the economic system itself?


Radical inequality within a field is frequent, particularly at the very high end. The very top sports stars command an impressive salary compared to average, likewise the very top movie stars make a stunning wage, while the idea of the starving actor waiting tables unable to get a gig is something of a steriotype.

What do all these fields have in common? They have comparatively few openings. Competition is brutal. Therefore, being merely average in such a field is simply not good enough. Such fields are playing with only a small chunk of the bell curve. See also, CEOs.

Also, implying that I am arguing out of emotion is a touch rude. Any dislike conveyed is not due to the position you are taking, but the way in which you are taking it, and the apparent dishonesty of your arguments.

It is a beneficial outcome of work. It is not the incentive. Pay is a primary incentive.

Shit, you KNOW pay matters. If you didn't, you wouldn't be grousing about how much pay CEOs get.

Having work experience is very useful, but this does not mean pay is meaningless.


You are arguing that the benefits of work go beyond being paid. Are you saying that working people are too stupid to realize these intangible benefits, so they must be forced to chose between work and starvation?


There certainly are benefits beyond being paid. Surely not everyone chooses the job that pays the most, but other factors are taken into account as well. This is trivial. However, pay is quite major.

It is not a matter of stupidity, per se(intelligence is a distribution, of course)...it is a matter of structuring financial benefits so as to overwelm other incentives. You will have stupidity either way, in roughly the same degree, discounting second order effects. However, if a person makes $20k/yr for doing nothing, but makes comparatively little more for giving up a large degree of time, having to pay for child care, having to maintain transportation, etc, they may decide that the costs simply outweight the benefits, and cease working. As finances are the dominant reason for employment, any significant change to this would significantly alter the employment landscape.

This will affect society negatively in a number of ways, some of which are not easily undone. If your society has most of it's poor simply stop working for a number of years, any skills or relevant work experience they possess will atrophy, and if they do decide to return to work, they will be further disadvantaged, even compared to their initially poor position.

In short, if we go to a basic income society, and it doesn't work out, going back screws over a ton of people. Mostly poor folks. This is a severe cost, and it is one that the average worker cannot fully judge, because it's a policy level thing. Predicting government policy in detail years or decades in advance is not an easy thing. Hell, plenty of people didn't predict the recession before it happened.

Wait, the "neither of your examples are about the thing you said they were" isn't relevant?


No, the claim you made in you original post is irrelevant. This modified version is just embarrassingly wrong.

But feel free to redeem yourself by quoting the place where I said that these examples were exactly identical to the basic income programs being proposed in this thread. If you can't (and you can't) consider that poor reading comprehension on your part does not constitute an "error" on someone else's part.


You just tried to defend it by saying "it's not perfect". Nobody demanded perfection. However, you did make claims like "This may seem like feel-goodism, but in fact it's supported by data:", while citing things that were not, actually basic income at all. Not only were they not living wages, as proposed here, but they are not distributed in the same matter. Any such comparison that would consider these as equal would be so generic as to consider ALL changes in wealth as equivalent. Bringing up "exactly the same" or "perfect" as if these were unreasonable things demanded of you is simply disingenuous, as nobody did that.

You just brought crappy, irrelevant data is all. Thus, your idea remains unsupported by actual evidence.

Why is this fairly obvious? What level of living wage do you propose, and what is the cost?


I already laid that out, above. Try reading the thread.


You have given a great number of generalities. You have not laid out anything like a plan in significant detail. In particular, you have skimmed over cost, instead focusing on grand, poorly supported benefits, with no attempt at a comparison to the current system.

By it's nature it must cost more than current welfare, if it is to fulfill their role and also subsidize more individuals. The entire concept of needs based welfare exists because not everyone is needy, and it's cheaper to pay only the needy.


Sorry, your belief system does not count as evidence. Evidence counts as evidence.

Welfare is its current form is selective not just to save money, but for all the other reasons you and others have been pitching in this thread: People who feel morally offended at "subsidizing" others. People who are concerned it will disincentive work. And so on.

A universal basic income would pay out more in benefits than the current patchwork system, but on the other hand would be vastly cheaper and easier to administer than the current age-tested, means-tested, poly-program system.

It might also reduce the cost of healthcare, prisons, etc.

Overall I imagine a basic income of $10k, as suggested above, would have additional costs. The expense can be paid through this new thing called "taxes." Since Americans are dangerously undertaxed, that would be a win-win.


If you're buying x for everyone, instead of only a few people, it's going to cost more. Maybe not proportionately more, but still more. This is a pretty basic assumption. Marginal costs cannot be assumed to be negative.

I do not care one whit for moral offense. I dislike this program because it is to economics what promises of free energy are to science. If we just twiddle the numbers "so", we can ignore all those pesky rules, numbers and trade-offs, and everyone will live happily ever after.

A basic income of $10k would not raise individuals above the poverty level by itself. If you're going to cut health care, current means tested aid, and so forth, someone at the low end of the scale could end up significantly worse off. Someone on the high end, well, they weren't getting means tested aid anyway. So, from an income equality perspective, I can't imagine why you'd want that. But hey, let's just run the numbers as if you suddenly started the program today, at a mere 10k.

In any case, the necessary taxes required to raise the 3.188T yearly would, if used as a straight income tax boost to EVERY level, and was not reduced at all by any deductions or other means, require a 23.8% increase. This is highly optimistic, as in the real world, deductions, etc exist. So, it'd probably need to be way higher. And if you want to only tax the rich, and thus, only increase the higher brackets, you'd need to run the numbers higher still.

So, really, you're talking about a drastic and sudden change to the entire US economy, and a vast increase in taxation and related costs.

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EMTP
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Re: How should minimum wage be determined?

Postby EMTP » Wed Mar 11, 2015 1:55 am UTC

Tyndmyr wrote:That's not how sampling works.


It most certainly is, in this case, because no one is claiming that the salaries of the S&P500 CEOs = the average of all other CEOs. You are the one who has decided that unless every CEO is paid millions, CEO pay is not a real issue.

The fact that workers are not spread evenly between CEOs is trivial and unrelated. It is not a point in it's favor, it merely demonstrates the bias.


No, given that we're discussing the difference between what front-line workers are paid and what the CEO of the company is paid, the number of people working in companies that express this dynamic is very much at issue. When we're discussing inequality, the status of the CEOs where people actually work matters.

The total number of CEOs is significantly larger. I do not believe that you simply are unaware of this. Even if you restrict it to publicly traded, that's about 19,000 stocks in total, US only*. 1500 would be an excellent sample size for that quantity if it was distributed randomly. Taking the top 1500, not even a little valid.


It's perfectly valid for the way I am using the information. You want to cram your statistical average with the "CEOs" of primary schools and local governments. That is a dishonest way to avoid talking about CEO pay.

This was brought up in the context of suggesting a band of salaries according to which the CEO could not make more than 100 times the lowest-paid employee. For a policy like that, there is no necessity that all CEOs make millions. Your woebegone blue-collar state government CEOs (and, just to reiterate, WTF?) would simply not be affected.

I, bluntly, am not a CEO, and even the average CEO wage is more than I make. I'm hardly poor, but 150kish is probably more than most of us make. However, this is a reference to, again, the curious tendency to only worry about inequality within certain bands. Ie, those who make more than the speaker, usually. OBVIOUSLY, that's too much money. But there's a lack of concern about people making far, far less money overseas. Why? Where is the line, and why does it exist? What methodology are we using here, and why is it valid?


What is morality? Does the universe have a beginning? Does the tree make a sound?

What concerns people about CEO pay, and the reason you get more concern about that than you do about, say, Facebook billionaires, is that to many people, it does not seem as if the CEOs are doing much for their millions and millions and millions of dollars. And those CEOs, in many cases, feel free to pay poverty wages to thousands of their front-line employees, lending to fiascos like Walmart's $6.2 billion of taxer payer money for food stamps and other welfare for their employees. So the notions people have of basic fairness get engaged.

Radical inequality within a field is frequent, particularly at the very high end. The very top sports stars command an impressive salary compared to average, likewise the very top movie stars make a stunning wage, while the idea of the starving actor waiting tables unable to get a gig is something of a steriotype.

What do all these fields have in common? They have comparatively few openings. Competition is brutal. Therefore, being merely average in such a field is simply not good enough. Such fields are playing with only a small chunk of the bell curve. See also, CEOs.


Right, and can you show any evidence that this brutal competition has in fact led to better, smarter, more effective CEOs? Or that these folks are in any way an elite, or doing a job the average blue-collar worker could not?

Also, implying that I am arguing out of emotion is a touch rude. Any dislike conveyed is not due to the position you are taking, but the way in which you are taking it, and the apparent dishonesty of your arguments.


Consider it a compliment to your intelligence that I attribute your failure to understand the argument and the evidence to emotion.

Were you not emotional, you would have picked up on the fact that I didn't bring up CEO pay, came down against pegging worker income to CEO pay, and in fact have said nothing more definite than that some CEOs are making a lot of money and that it is "hard to see" the value justifying it. This is a very gentle, "let's consider" non-argument sort of a thing to say, and it is hard for me to see how you can have constructed it into a call for class warfare, sans emotion.

It is not a matter of stupidity, per se(intelligence is a distribution, of course)...it is a matter of structuring financial benefits so as to overwelm other incentives. You will have stupidity either way, in roughly the same degree, discounting second order effects. However, if a person makes $20k/yr for doing nothing, but makes comparatively little more for giving up a large degree of time, having to pay for child care, having to maintain transportation, etc, they may decide that the costs simply outweight the benefits, and cease working. As finances are the dominant reason for employment, any significant change to this would significantly alter the employment landscape.

This will affect society negatively in a number of ways, some of which are not easily undone. If your society has most of it's poor simply stop working for a number of years, any skills or relevant work experience they possess will atrophy, and if they do decide to return to work, they will be further disadvantaged, even compared to their initially poor position.


You are arguing that it is important for your long-term prosperity to work and gain skills. I repeat my question: Are you saying that America's workforce is not smart enough to come to the conclusion you just did about the value of work?

You just tried to defend it by saying "it's not perfect". Nobody demanded perfection. However, you did make claims like "This may seem like feel-goodism, but in fact it's supported by data:", while citing things that were not, actually basic income at all. . . . You just brought crappy, irrelevant data is all. Thus, your idea remains unsupported by actual evidence.


Ah, but here is your error, because I didn't claim they were a basic income. Let's look at the quote in context:

Many of our social problems -- a lot of the crime, some of the mental illness, a lot of the failures of the educational system, a lot of the substance abuse -- can be traced back to unstable homes and poor upbringing. To address this, we direct a lot of aid at children (who are "deserving") without acknowledging the basic reality that the children will not prosper without stable homes, and you do not have stable homes without stable parents.

This may seem like feel-goodism, but in fact it's supported by data . . .


The examples that follow illustrate that households which get cash transfers from the state have more children get better grades, score higher on IQ tests, graduate from college, etc.

I didn't call those programs a "basic income." What I said was that the measured effects of these unconditional cash transfers suggests that it is not merely feel-goodism to suggest that households with more money due to cash transfers might lead to other social benefits.

If you want to make the claim that one program of unconditional cash transfer is going to have radically different effects than another program of unconditional cash transfer, feel free to make that argument.

Essentially, and I'm sad to say this is something of a pattern with you, you did a quick, sloppy read, and based on your misreading of the argument, decided the evidence was poor. Unfortunately, you got it completely wrong.

You have given a great number of generalities.


It's always funny when someone who posted one link to one Koch-funded think tank's screed accuses the person offering source after source of speaking in generalities.

You have not laid out anything like a plan in significant detail. In particular, you have skimmed over cost, instead focusing on grand, poorly supported benefits, with no attempt at a comparison to the current system.


If you can't multiply $10k by the US population, I don't think that's my problem.

Do your own homework, please.
If you're buying x for everyone, instead of only a few people, it's going to cost more. Maybe not proportionately more, but still more. This is a pretty basic assumption. Marginal costs cannot be assumed to be negative.


Not necessarily. Imagine a program to provide fluoride to poor families only. First you need a registry of the indigent. Then you verify their incomes so no one is cheating you. Then you ship the fluoride tabs to the eligible houses. Then you pay a fleet of vans to distribute the tabs to qualifying homeless people.

Or, you could simply put the fluoride in the water and be done with it. That's going to be cheaper.

A basic income of $10k would not raise individuals above the poverty level by itself. If you're going to cut health care, current means tested aid, and so forth, someone at the low end of the scale could end up significantly worse off. Someone on the high end, well, they weren't getting means tested aid anyway. So, from an income equality perspective, I can't imagine why you'd want that.


No one said it would replace every government program. In particular, I said nothing about healthcare. The goal in terms of simplicity would be to set it high enough that it could replace things like unemployment insurance and Social Security. $10k hits the lower end of those kinds of payments. Of course, $15k would be better!

In any case, the necessary taxes required to raise the 3.188T yearly would, if used as a straight income tax boost to EVERY level, and was not reduced at all by any deductions or other means, require a 23.8% increase. This is highly optimistic, as in the real world, deductions, etc exist. So, it'd probably need to be way higher. And if you want to only tax the rich, and thus, only increase the higher brackets, you'd need to run the numbers higher still.


Look, you can multiply!

I probably would not immediately cut the kids a check from the day they pop, so cut about 25% of the cost there. No more Social Security, food stamps, etc; that'd save about $1.5 trillion. What's left is not really all that much.

So, really, you're talking about a drastic and sudden change to the entire US economy, and a vast increase in taxation and related costs.


No one said anything about "sudden." Obviously, a basic income would be a drastic change. It doesn't follow that such a change would be a bad thing. A libertarian in particular should see the potential opportunity to eliminate entire government departments and huge swathes of the government bureaucracy. Social Security administration: no, just a check. Public housing: no, a check. Food stamps, disability insurance, unemployment insurance: a check, a check, a check.
"Reasonable – that is, human – men will always be capable of compromise, but men who have dehumanized themselves by becoming the blind worshipers of an idea or an ideal are fanatics whose devotion to abstractions makes them the enemies of life."
-- Alan Watts, "The Way of Zen"

elasto
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Re: How should minimum wage be determined?

Postby elasto » Wed Mar 11, 2015 7:43 am UTC

I agree completely with EMTP.

And just to poke more holes in the 'we need pay to incentivise people to work' position:

Mums are worth £172,000 a year for the mountain of chores they carry out – £30,000 more than the Prime Minister earns.

They rack up 119 hours of unpaid work a week on average, completing an array of tasks that range from nanny to chauffeur and teacher to head chef.

If they were paid the going rate for all these jobs – such as £30 an hour as an entertainer or £20 as a personal trainer – the total would top David Cameron’s £142,000 salary for running the country.

Eight out of 10 mothers said the toughest part of the job was the emotional demands placed on them by their families – a psychologist would charge around £47 an hour.

Nearly the same number said exhaustion was the hardest aspect, while a third felt there was a lack of training for the most important role in their lives.

They most missed sleep, girls’ nights out and watching their favourite TV shows.

link


Sorry, there's just a total misconception here about how hard ordinary people work - whether in paid employment or outside of it. A citizen's wage isn't going to threaten that.

leady
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Re: How should minimum wage be determined?

Postby leady » Wed Mar 11, 2015 11:03 am UTC

The daily mirror promoting a Ra Ra piece?

even if any of that were true, it doesn't take a huge leap of thought to realise that a parent has mega incentives in investing in their children, that don't exist elsewhere

Anyone though that doesn't believe that a $20k citizen wage won't come with a huge set of moral hazards is close to massively deluded. Hell as soon as I'd paid off my mortgage I'd be sitting back and doing nothing for 50 years...
Last edited by leady on Wed Mar 11, 2015 12:08 pm UTC, edited 1 time in total.

Chen
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Re: How should minimum wage be determined?

Postby Chen » Wed Mar 11, 2015 12:04 pm UTC

elasto wrote:I agree completely with EMTP.

And just to poke more holes in the 'we need pay to incentivise people to work' position:

Mums are worth £172,000 a year for the mountain of chores they carry out – £30,000 more than the Prime Minister earns.

They rack up 119 hours of unpaid work a week on average, completing an array of tasks that range from nanny to chauffeur and teacher to head chef.

If they were paid the going rate for all these jobs – such as £30 an hour as an entertainer or £20 as a personal trainer – the total would top David Cameron’s £142,000 salary for running the country.

Eight out of 10 mothers said the toughest part of the job was the emotional demands placed on them by their families – a psychologist would charge around £47 an hour.

Nearly the same number said exhaustion was the hardest aspect, while a third felt there was a lack of training for the most important role in their lives.

They most missed sleep, girls’ nights out and watching their favourite TV shows.

link


Sorry, there's just a total misconception here about how hard ordinary people work - whether in paid employment or outside of it. A citizen's wage isn't going to threaten that.


What do you mean by ordinary people? All those tasks fall to ANY parent. Instead of being a full time stay-at-home parent (what I'm assuming the 119 hours refers to), some people chose to farm out some of these activities to specialists (daycare, cleaning services etc) and then do specialized work themselves to pay for it. This specialization usually allows for more efficient working and leads to more efficient use of time. You know, the whole reason we specialize to begin with.


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