2016 US Presidential Election

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morriswalters
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Re: 2016 US Presidential Election

Postby morriswalters » Mon Jun 27, 2016 8:11 pm UTC

cphite wrote:And third... the number of people who actually work for minimum wage is very very small... somewhere around 4% of total workers; and only a very tiny percentage of those are people who rely on it as a primary source of income. It isn't nearly as big an issue as certain politicians and activists (but I repeat myself) make it out to be.

The minimum wage - and the incessant attempts to raise it - is a solution in search of a problem. It's a way for politicians to show that they're "doing something" for people; even if it ultimately ends up biting those same people in the ass.
Give or take about, three million people. Four percent sounds so small. Evidently 29 states already have a wage above the Federal Minimum. And we shall see as to the effects, since a National Experiment which should measure the effect is underway in California, where they just raised it to 15 plus.

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Re: 2016 US Presidential Election

Postby Lucrece » Mon Jun 27, 2016 9:03 pm UTC

That figure pertains to the federal minimum wage. Now grab that number and extend it to up to $13 and you'll get a bigger number. For some people, minimum wage is the official number; for others it's a threshold around that number. You'll be living in poverty with little potential for savings or investment even at $15/hr.
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Re: 2016 US Presidential Election

Postby Dauric » Mon Jun 27, 2016 9:06 pm UTC

Lucrece wrote:That figure pertains to the federal minimum wage. Now grab that number and extend it to up to $13 and you'll get a bigger number. For some people, minimum wage is the official number; for others it's a threshold around that number. You'll be living in poverty with little potential for savings or investment even at $15/hr.


If you're classified as a "Contractor" by your employer that threshold number gets even higher, all your benefits come out of your own pocket. You don't get paid-time-off, not even sick-days, so if you're not at work for -any- reason you're not making money.
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Re: 2016 US Presidential Election

Postby KnightExemplar » Mon Jun 27, 2016 9:08 pm UTC

Lucrece wrote:That figure pertains to the federal minimum wage. Now grab that number and extend it to up to $13 and you'll get a bigger number. For some people, minimum wage is the official number; for others it's a threshold around that number. You'll be living in poverty with little potential for savings or investment even at $15/hr.


Yeah. Except not really. At ~$8 / hour at my summer job (which was washing golf carts and picking up golf balls), I was living just fine and golfing with the extra money I had. The problem with minimum wage laws is that the disproportionately benefit folk who take on part-time jobs to pad their resume. Some jobs just aren't made for living on.

Actually fixing the real problem will take more than just raising the minimum wage.

I'm solidly against raising the minimum wage. There's no point in raising the wages I earned when I was in high school.
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Re: 2016 US Presidential Election

Postby Tyndmyr » Mon Jun 27, 2016 9:16 pm UTC

It depends where you are, what point you're at in your life, etc.

A reasonable wage for a summer job in the Midwest may not work out well for a 29 hr/week job(to avoid full time benefits) in a big city. Treating the US as an abstract average has it's limitations.

I do agree that for the high school job, the current minimum wage works out just fine, but that doesn't entirely conflict with what Lucrece is saying, where $15/hr may not be adequate for some.

This discrepancy is a big argument against a nationwide $15 standard, as it doesn't necessarily fix the latter while hurting the former.

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Re: 2016 US Presidential Election

Postby KnightExemplar » Mon Jun 27, 2016 9:30 pm UTC

Tyndmyr wrote:It depends where you are, what point you're at in your life, etc.

A reasonable wage for a summer job in the Midwest may not work out well for a 29 hr/week job(to avoid full time benefits) in a big city. Treating the US as an abstract average has it's limitations.

I do agree that for the high school job, the current minimum wage works out just fine, but that doesn't entirely conflict with what Lucrece is saying, where $15/hr may not be adequate for some.

This discrepancy is a big argument against a nationwide $15 standard, as it doesn't necessarily fix the latter while hurting the former.


There's no denying that $8/hr is an unlivable wage.

The issue is whether or not raising the minimum wage actually solves the issue of "too many people on unlivable wages / no wage at all". Raising the minimum wage dramatically will cause two things:

1. Push employers to renegotiate their workers as "contractors" instead of employees (and overcoming the regulatory hurdles associated with that. Ex: Barbers at barber shops are almost all contractors now... as are a ton of sales positions) After all, contractors aren't subject to minimum wages, or health care regulations. You just have to prove that the "contractors" are sufficiently independent.

2. Destroy jobs: ie through automation.

And then of course, as a side effect:

3. Rich still get richer anyway. High school jobs (like myself, a long time ago) would benefit greatly from a minimum wage hike. But I don't see that as helping society in general... but instead a benefit to those who have more free time through high school. In theory, poorer families may benefit from a minimum wage hike if the kids also contributed and got a job, but it'd be the middle / upper class folk with extra cars and more transportation opportunities who'll stand to gain from higher minimum wage.

I mean, hey, golf balls won't pickup themselves at the driving range. But that grocery store that's walking distance from where you live? Turns out they all use automatic-checkout lines now instead of cashiers.

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

So first: raising the minimum wage won't actually help barbers, low-paying sales staff, taxi drivers, and many other low-paying jobs that happen to be "independent contractors" instead of actual employees. In fact, raising the minimum wage will cause more and more jobs to become independent contractors.

Which is bad enough, because small-business statistics are sufficiently fucked up as they are. You see, that's not one business with 12 employees at the barbershop. That's 13 businesses (the landlord + 12 independent barbers / stylists). That's not an office with a sales staff of 20. That's one hub with 20 independent contractors (also a job I personally did in college: selling knives). Small businesses create jobs my fucking ass.
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Re: 2016 US Presidential Election

Postby Thesh » Mon Jun 27, 2016 10:28 pm UTC

So, wait, we are paying people shit wages in order to be less productive? Seems like a lose-lose to me.

For the barbers, as long as there are enough minimum wage jobs around, you will not be able to pay barbers less as they will just leave for those minimum wage jobs. In fact, the only thing minimum wage should do in the long run is shape the markets by shifting the demand for goods and services and cost of labor. Prices for products that involve a high degree of minimum wage labor will go up the most, prices in more productive industries with higher profit margins will go down. Inflation will reduce real wages at the top, while wages at the bottom go up. As long as there are jobs for people to do, minimum wage should not lead to a reduced demand for labor in the long run. It can occur in the short run, sure, as prices change, and demand for goods and services change, the markets need to adjust, but if you have regular small increases rather than irregular large increases the impact should be nil. As long as the increase in minimum wage is gradual, it doesn't matter if it's $1/hr, $10/hr, or $100/hr, people will remain employed, although at some point further increases in minimum wage will just lead to inflation with no net improvement in economic outcomes.
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Re: 2016 US Presidential Election

Postby Dark567 » Mon Jun 27, 2016 10:48 pm UTC

Thesh wrote: Inflation will reduce real wages at the top, while wages at the bottom go up. As long as there are jobs for people to do, minimum wage should not lead to a reduced demand for labor in the long run.
Sure it will. It decreases the relative costs of automation and makes it more attractive.

As long as the increase in minimum wage is gradual, it doesn't matter if it's $1/hr, $10/hr, or $100/hr, people will remain employed, although at some point further increases in minimum wage will just lead to inflation with no net improvement in economic outcomes.
What!? No. That is not how econ works. If you raise minimum wage to $100 dollars, without printing a bunch of money prior to, you will cause massive job losses. A lot of previous jobs that were profitable no longer are. Sure at some point after we print enough money $100 minimum wage will become viable again after all sorts of inflation induced effects on savings, capital etc etc. but the amount of damage done would be huge.
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Re: 2016 US Presidential Election

Postby Thesh » Mon Jun 27, 2016 11:01 pm UTC

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Re: 2016 US Presidential Election

Postby Thesh » Mon Jun 27, 2016 11:03 pm UTC

Dark567 wrote:
Thesh wrote: Inflation will reduce real wages at the top, while wages at the bottom go up. As long as there are jobs for people to do, minimum wage should not lead to a reduced demand for labor in the long run.
Sure it will. It decreases the relative costs of automation and makes it more attractive.


See bolded part. If we've automated so much that there are no longer jobs for people to do, then that would be great.

Dark567 wrote:
Thesh wrote: As long as the increase in minimum wage is gradual, it doesn't matter if it's $1/hr, $10/hr, or $100/hr, people will remain employed, although at some point further increases in minimum wage will just lead to inflation with no net improvement in economic outcomes.
What!? No. That is not how econ works. If you raise minimum wage to $100 dollars, without printing a bunch of money prior to, you will cause massive job losses. A lot of previous jobs that were profitable no longer are. Sure at some point after we print enough money $100 minimum wage will become viable again after all sorts of inflation induced effects on savings, capital etc etc. but the amount of damage done would be huge.


See bolded part. And yes, maintaining proper monetary policy so the economy is not cash starved is assume.
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Re: 2016 US Presidential Election

Postby KnightExemplar » Mon Jun 27, 2016 11:03 pm UTC

Thesh wrote:For the barbers, as long as there are enough minimum wage jobs around, you will not be able to pay barbers less as they will just leave for those minimum wage jobs.


The point of my post, is that barbers aren't typically paid anymore. They're independent contractors and are effectively unaffected by minimum wage law. They also have to pay social security taxes, Affordable Care Act taxes and everything on their own.

Change minimum wages all you want. You're not going to affect barbers or stylists's pay (at least, those who are independent contractors)
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Re: 2016 US Presidential Election

Postby Thesh » Mon Jun 27, 2016 11:05 pm UTC

If you can make more working at a grocery store than being a barber, then people won't become barbers, and if you want to hire one you will need to pay more.
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Re: 2016 US Presidential Election

Postby Tyndmyr » Mon Jun 27, 2016 11:13 pm UTC

Thesh wrote:If you can make more working at a grocery store than being a barber, then people won't become barbers, and if you want to hire one you will need to pay more.


Assuming that the grocery store jobs are available, and have not been largely displaced by self checkout lines and similar.

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Re: 2016 US Presidential Election

Postby KnightExemplar » Mon Jun 27, 2016 11:15 pm UTC

Thesh wrote:If you can make more working at a grocery store than being a barber, then people won't become barbers, and if you want to hire one you will need to pay more.


I don't think you understand how this works. A lot of Barbers / Stylists go to a barber / salon to rent out a booth. As I stated earlier: its not one barbershop with 12 employees. Its actually 13 independent businesses working in there. Each individual barber is technically their own business. The industry has evolved to avoid minimum wage law and regulation. (Its not really malicious or anything, its just how that industry works... or at least how a large chunk of the grooming business works)

---------

Your statement is somewhat true in some cases: where a major corporation creates "independent contractor" salesmen. These corporations set the rates for various jobs ($X per sale plus some percent-based sales commissions). So these prices are arguably similar to "hiring" an employee. But... no sane person would work in these crappy jobs if they could get a job elsewhere.

Door to Door Kitchen Knife Salesman is one of the worst jobs I have ever had in my life. And from my understanding, door-to-door insurance salesman is also up there. Yeah, maybe some people can convince themselves that its awesome by drinking enough of the Kool-aid, but the turnover on these jobs is ridiculously high. In the few months I was a door-to-door knife salesman, the number of dropouts was utterly massive. And when the parent corporation is pushing classes and training with the same sleazy tactics they taught you... you know you want to get out.

--------

A new development is this new "gig" economy, (IE: Uber drivers are also immune from minimum wage law), the effects of minimum wage laws are further diminished. Uber claims all of the drivers are independent contractors for example.

Which is fine. Its perfectly fine that you can't make a living wage just with Uber. Its a gig, its a thing you do while in between jobs or as supplemental income. If people were actually trying to live off of Uber alone, then those people will have issues. And the poor people who think that Uber is their only hope of paying the bills this month and putting some food on the table?

Well yeah, that sucks. But raising the minimum wage will do precisely jack shit for them. Or for any of the other "independent contractors" either. The best hope we can give them is a real job elsewhere. And those jobs will disappear if we raise wages too much.

Besides, any level of employment, even at low wages and sucky hours, is good because you're paying half the social security tax and the employer is now forced to provide healthcare coverage of some kind. If more jobs in the low-paying field are converted to independent contractor status or "gig" status (like Taxi Drivers who have lost their job to Uber), then its a net loss.
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Re: 2016 US Presidential Election

Postby morriswalters » Mon Jun 27, 2016 11:57 pm UTC

KnightExemplar wrote:Which is fine. Its perfectly fine that you can't make a living wage just with Uber. Its a gig, its a thing you do while in between jobs or as supplemental income. If people were actually trying to live off of Uber alone, then those people will have issues. And the poor people who think that Uber is their only hope of paying the bills this month and putting some food on the table?
In other words a way to make Uber profitable at the expense of everyone else. Taxi companies got the idea of using contract employees some 40 years ago. Uber found out how to get rid of the Taxis. By putting the poor burden on some poor schmuck who can't calculate the cost. Much like your knife sellers.

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Re: 2016 US Presidential Election

Postby Thesh » Tue Jun 28, 2016 12:45 am UTC

KnightExemplar wrote:I don't think you understand how this works. A lot of Barbers / Stylists go to a barber / salon to rent out a booth. As I stated earlier: its not one barbershop with 12 employees. Its actually 13 independent businesses working in there. Each individual barber is technically their own business. The industry has evolved to avoid minimum wage law and regulation. (Its not really malicious or anything, its just how that industry works... or at least how a large chunk of the grooming business works)


It doesn't matter whether they are salaried, hourly, independent contractors, whatever, that is completely irrelevant. If they can make more money doing another job, they will do that other job. We do not have a caste system, peoples jobs aren't their identity and vice versa, and thus they can quit and get a new job at any time. If people still want their services, they will pay more for them, period, if they don't then the job goes away. So, if minimum wage is raised enough then barbers, hair stylists, cab drivers, any job that made anywhere around or below the new minimum wage will see pay raises. This is simply Baumol's cost disease.
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Re: 2016 US Presidential Election

Postby Lucrece » Tue Jun 28, 2016 1:01 am UTC

KnightExemplar wrote:
Lucrece wrote:That figure pertains to the federal minimum wage. Now grab that number and extend it to up to $13 and you'll get a bigger number. For some people, minimum wage is the official number; for others it's a threshold around that number. You'll be living in poverty with little potential for savings or investment even at $15/hr.


Yeah. Except not really. At ~$8 / hour at my summer job (which was washing golf carts and picking up golf balls), I was living just fine and golfing with the extra money I had. The problem with minimum wage laws is that the disproportionately benefit folk who take on part-time jobs to pad their resume. Some jobs just aren't made for living on.

Actually fixing the real problem will take more than just raising the minimum wage.

I'm solidly against raising the minimum wage. There's no point in raising the wages I earned when I was in high school.



Which is why I said minimum wage increase to $15 was a joke, and instead programs should aim to train people to get into higher paying jobs.

I also didn't say locally owned businesses. I said to work with local companies (even if they're international orgs situated there) to determine what technical jobs with wage thresholds above 50-60k a year were in need so you could train willing participants to fill those jobs.

As in, move people to emerging industries and since lower educated folk are attached to habits and re-training out of their own pocket is unattractive, the government can place incentives to train in new industries when some industry is declining.
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Re: 2016 US Presidential Election

Postby sardia » Tue Jun 28, 2016 1:19 am UTC

Lucrece wrote:
KnightExemplar wrote:Yeah. Except not really. At ~$8 / hour at my summer job (which was washing golf carts and picking up golf balls), I was living just fine and golfing with the extra money I had. The problem with minimum wage laws is that the disproportionately benefit folk who take on part-time jobs to pad their resume. Some jobs just aren't made for living on.
Actually fixing the real problem will take more than just raising the minimum wage.
I'm solidly against raising the minimum wage. There's no point in raising the wages I earned when I was in high school.

Which is why I said minimum wage increase to $15 was a joke, and instead programs should aim to train people to get into higher paying jobs.
I also didn't say locally owned businesses. I said to work with local companies (even if they're international orgs situated there) to determine what technical jobs with wage thresholds above 50-60k a year were in need so you could train willing participants to fill those jobs.
As in, move people to emerging industries and since lower educated folk are attached to habits and re-training out of their own pocket is unattractive, the government can place incentives to train in new industries when some industry is declining.

All this stuff about teaching and retraining is nice and all, but it doesn't get to the heart of the problem*. Sometimes you need to dish out cold hard cash. There's a reason why Social Security isn't a college grant and a gym membership. Trump is promising their old lives back, which isn't possible, but that fantasy is much stronger than the crumbs we offer now.

*Alternately, send them off to the middle of nowhere. Firefighting in the West, anti-poaching patrols in African Sanctuaries etc etc. LIke Peace Corps/Americorp, but more dangerous. Not a lot of academic learning needed, and it'll give them a purpose in life. Either way, you need $$$.

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Re: 2016 US Presidential Election

Postby jseah » Tue Jun 28, 2016 1:29 am UTC

Thesh wrote: This is simply Baumol's cost disease.

If the equilibrium wage is less than minimum wage, and there are ways to get around the minimum, raising the minimum wage will increase the proportion using the workaround.

The cost disease refers to a rise in the equilibrium wage.
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Re: 2016 US Presidential Election

Postby morriswalters » Tue Jun 28, 2016 1:49 am UTC

sardia wrote:*Alternately, send them off to the middle of nowhere. Firefighting in the West, anti-poaching patrols in African Sanctuaries etc etc. LIke Peace Corps/Americorp, but more dangerous. Not a lot of academic learning needed, and it'll give them a purpose in life. Either way, you need $$$.
This is an amusing idea. We call it the all volunteer Army. We used to call it the draft. There was also a thing called mandatory National Service.

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Re: 2016 US Presidential Election

Postby Thesh » Tue Jun 28, 2016 1:53 am UTC

jseah wrote:
Thesh wrote: This is simply Baumol's cost disease.

If the equilibrium wage is less than minimum wage, and there are ways to get around the minimum, raising the minimum wage will increase the proportion using the workaround.

The cost disease refers to a rise in the equilibrium wage.


Equilibrium wage is about the current market; minimum wage changes the markets, making the entire concept useless at determining the long term effects of minimum wage. Baumol's cost disease simply states that wages for jobs will go up as long as there are higher paying alternatives.

There is simply no reason why you cannot achieve full employment, regardless of what the minimum wage is, provided you give the markets time to adjust.
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Re: 2016 US Presidential Election

Postby ucim » Tue Jun 28, 2016 2:34 am UTC

Thesh wrote:There is simply no reason why you cannot achieve full employment, regardless of what the minimum wage is, provided you give the markets time to adjust.
To me, this sounds like beef by-products of the highest quality.

Employment requires employers. It requires jobs-to-be-done. That requires things-people-want-that-aren't-automated.

I suspect this is diminishing. Especially as automation is being applied to stuff-that-used-to-require-smarts.

And I know that's the premise behind the "citizens' wage" (soon to be a presidential candidate platform) - whose problem is "where will the money come from?" which derives from "what is money anyway?" and leads way off topic.

But the idea that full employment is inevitable, even given time, is nonsense.

And some enlightenment about minimum wage is obtained by considering a minimum wage of $50/hour. Why won't that solve the problem? Why aren't those reasons the same as the reasons that $15/hr or $3/hr won't work?

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Re: 2016 US Presidential Election

Postby Thesh » Tue Jun 28, 2016 2:49 am UTC

If we get to the point where there actually aren't any more jobs due to automation, that's different, but that will take decades. At some point we can look to ending the global dependence on fossil fuels, cleaning up the oceans, making cities carfree, helping third world countries develop with a clean infrastructure, ending global poverty etc.

As for a $50 vs $15 vs $3 minimum wage, short term jumps can obviously have an effect on employment so you need to increase it gradually, and if you go beyond labor productivity, then it obviously must result in inflation (most likely, the point in which minimum wage increase is met by an equal increase in inflation is somewhere south of labor productivity). Beyond that, it can change markets and the higher it is the lower income inequality will be. But barring us actually running out of jobs to do because of automation, it will not lead to widespread unemployment. In that case, it's technology eliminating jobs, not minimum wage.
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Re: 2016 US Presidential Election

Postby ucim » Tue Jun 28, 2016 3:16 am UTC

We don't need to get to the point where there actually aren't any more jobs. We only need to get to the poing where there aren't enough jobs. Now "enough" is a judgment call, but it's nowhere near 100%.

And while making a minimum wage change gradual does give the market a chance to adjust, this adjustment comes in three forms:

1: the employer "adjusts" (reduces) the need for the employee by restructuring the business in one way or another
2: the (ex-)employee has a chance to find and train for another job
3: inflation

(1) is clearly bad for the employee, who is now out of a job.
(2) depends on there being enough other jobs available, and the employee being suited for those other jobs. While this does happen, it is not a gain for the employee either, who now has to find and train for another job.
(3) is just an accounting trick which totally erases the gains that were made. It's thus bad for the employee. What's the use of a $50/hr job when phone calls cost $140/minute and eggs are $500/dozen.

Minimum wage in the end does nothing good.

But full employment is still not guaranteed, no matter how long you take to make the adjustment, or even if you make no adjustment.

Perhaps what you mean to say is that "the employment level will be unaffected if the minimum wage is raised slowly enough", to which I'd respond "yes, but inflation will erase all the gains for the same reason".

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Re: 2016 US Presidential Election

Postby Thesh » Tue Jun 28, 2016 3:28 am UTC

Inflation does not eliminate gains from minimum wage until it is high enough that a minimum wage increase pushes up all wages equally. We are nowhere near that point. Most papers show less than a 1% incrwase in inflation for a 10% increase in minimum wage.

And you are missing a really huge part of the markets adjusting: price drops. In response to some prices going up, other prices come down as demand for that product drops. The higher the profit margin, the more prices can drop. If minimum wage increases equally to productivity, then there doesn't have to be any inflation at all. Although, more realistivally, maintaining a modest inflation rate makes that occur a bit more smoothly. A 5% annual minimum wage increase is going to have very little effect on unemployment, but over time it will cause prices to be different.
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Re: 2016 US Presidential Election

Postby jseah » Tue Jun 28, 2016 3:36 am UTC

Thesh wrote:There is simply no reason why you cannot achieve full employment, regardless of what the minimum wage is, provided you give the markets time to adjust.

Given that the alternative route is available to bypass minimum wage, raising minimum wage will lead to it being used more. I should just say, ceteris paribus.

The reason why Baumol's Cost doesn't apply here is because available positions at the higher minimum wage rate get replaced by the lower alternative.

Raising minimum wage above the equilibrium when there exists a way to employ below minimum, means that a new equilibrium will not form at the higher minimum wage. It may raise the lower alternative when additional jobs that have higher costs in employing the alternative join the alternative market, but this will not match the minimum wage (obviously).
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Re: 2016 US Presidential Election

Postby Thesh » Tue Jun 28, 2016 3:42 am UTC

What alternative? Independent contractors? Jobs that can fit the criteria of independent contractor are pretty slim; not enough to prevent the minimum wage from taking effect. Sure, someone can hire all their employees as independent contractors, and then they will get sued, have to pay their employees in damages and court costs.
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Re: 2016 US Presidential Election

Postby sardia » Tue Jun 28, 2016 4:47 am UTC

Thesh wrote:What alternative? Independent contractors? Jobs that can fit the criteria of independent contractor are pretty slim; not enough to prevent the minimum wage from taking effect. Sure, someone can hire all their employees as independent contractors, and then they will get sued, have to pay their employees in damages and court costs.

All of these are just workarounds trying to solve a problem that people don't have the political balls to actually solve. You raise taxes, and you pay for a solution. That money either comes from other priorities*, or it comes from the ones who have the money. But you already knew this, which is why minimum wage hikes are in vogue now. Not because it works the best, but because it's easy.

*Technically we could cheat and pay for it with more debt. I'm sure the whores in the Milton school of economics would gladly write papers that show the economic growth from debt fueled spending on white males( without a college degree ) to be equal or greater to the debt taken on. But good luck convincing the GOP to spend money on poor people.

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Re: 2016 US Presidential Election

Postby Thesh » Tue Jun 28, 2016 5:54 am UTC

The problem is a lack of bargaining power for labor. If labor had sufficient bargaining power, there wouldn't be a need for minimum wage in the first place. Technically an unconditional basic income could increase the bargaining power of labor by allowing people to choose not to work if the pay is not worth it to them, but that's not going to happen any time soon. Then there are unions. Well, they are considered to be second to ISIS in public perception of threats to the American way of life. So what's left? Workers cooperatives? That would be great if there was any sign that they were taking over the market. Minimum wage is what we have left: collective bargaining with public officials instead of employers.

I mean, there is welfare, but it's better to have the markets pay people a proper wage than to essentially subsidize cheap labor.
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Re: 2016 US Presidential Election

Postby KnightExemplar » Tue Jun 28, 2016 5:58 am UTC

Thesh wrote:What alternative? Independent contractors? Jobs that can fit the criteria of independent contractor are pretty slim; not enough to prevent the minimum wage from taking effect. Sure, someone can hire all their employees as independent contractors, and then they will get sued, have to pay their employees in damages and court costs.


Hey, Cashiers. We train you, and you get to come and go as you please. For every 100 items that you checkout, you are paid $X. Peak hours are 12 to 6, where cashiers are paid double.

Come on man, it takes the barest amount of creativity to convert a job that was once "Employees" into "Independent Contractors". All you gotta do is give a certain amount of flexibility to your workers, then you stop giving them benefits or paying social security taxes.
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Re: 2016 US Presidential Election

Postby Thesh » Tue Jun 28, 2016 6:08 am UTC

Most grocery stores in the US are union, so no, that won't happen. If it really becomes a large enough problem, then you pass regulations to stop it. I see no reason to believe that it will happen to a large enough extent to matter.
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Re: 2016 US Presidential Election

Postby KnightExemplar » Tue Jun 28, 2016 7:36 am UTC

Thesh wrote:Most grocery stores in the US are union, so no, that won't happen. If it really becomes a large enough problem, then you pass regulations to stop it. I see no reason to believe that it will happen to a large enough extent to matter.


The problem is that there's nothing wrong or evil with independent contractor setups. I feel like you're taking this position simply because I've laid it out as a counter-argument, as opposed to you having problems with setups where people set their own hours, are their own bosses, and take care of their work on their own schedule.

Yeah, companies woo people into those positions so that they can pay them less. But sometimes, you do make more money on commission / as independent contractors. And the people who live that life prefer things to be that way.

I'm simply noting that there are plenty of ways to avoid minimum wage laws. I really don't see minimum wage increases as a serious solution to the fundamental problem of workers being unable to get jobs they want.
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Re: 2016 US Presidential Election

Postby Thesh » Tue Jun 28, 2016 7:47 am UTC

I am not arguing against the concept, I'm arguing against the idea that a minimum wage can't possibly help simply because independent contractors are a thing. For it to be the case, the bulk of workers would have to be 1099 contractors, and it is just not going to happen.
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Re: 2016 US Presidential Election

Postby Dauric » Tue Jun 28, 2016 8:00 am UTC

Thesh wrote:What alternative? Independent contractors? Jobs that can fit the criteria of independent contractor are pretty slim; not enough to prevent the minimum wage from taking effect. Sure, someone can hire all their employees as independent contractors, and then they will get sued, have to pay their employees in damages and court costs.


And after the lawsuit? The employee runs the risk of not being employed when the "contract" is no longer profitable for the employer, and the employer stops providing that service to their customer then restructures the service. The lawsuit is a short-term solution, but employment is a long-term issue.
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Re: 2016 US Presidential Election

Postby morriswalters » Tue Jun 28, 2016 10:37 am UTC

KnightExemplar wrote:Hey, Cashiers. We train you, and you get to come and go as you please. For every 100 items that you checkout, you are paid $X. Peak hours are 12 to 6, where cashiers are paid double.
Something like that is called piece work. And it turns out law has been written.
In the United States, the Fair Standard Labor Act requires that all employees, including piece work workers, earn at least the minimum wage. In calculating an appropriate piece work rate, employers must keep track of average productivity rates for specific activities and set a piece work rate that ensures that all workers are able to earn minimum wage.[13] If a worker earns less than the minimum wage, the employer has to pay the difference. Exceptions to this rule include instances where: (i) the worker is a family member of the employer; (ii) If in any calendar quarter of the preceding year there were fewer than 500 one-hour work days; (iii) In agricultural businesses, if a worker primarily takes care of livestock on the range; (iv) If non-local hand-harvesting workers are under 16, are employed on the same farm as their parent, and receive the piece work rate for those over 16.[14]
Of course you could use temps, provided by an agency. That's pretty common. Assuming that the temporary agency has workers with your particular skill set, such as bagging groceries and working with your POS systems and knowledge of your inventory. The point of the foregoing is to point out that if it were as simple as you think it is people would already be doing it. And a lot of law has been written because at one time or another they have tried and abused it.

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Re: 2016 US Presidential Election

Postby ucim » Tue Jun 28, 2016 12:38 pm UTC

Thesh wrote:Inflation does not eliminate gains from minimum wage until it is high enough that a minimum wage increase pushes up all wages equally.
...and this "induced inflation" isn't uniform in amount or effect either - it primarily affects the thing that low wage workers work on, and things connected to it. Which are the things that low wage workers buy.

In the long run (which is what you're interested in), it's an accounting trick that makes numbers look bigger but mean less.

Thesh wrote:And you are missing a really huge part of the markets adjusting: price drops. [...] If minimum wage increases equally to productivity, then there doesn't have to be any inflation at all.

Minimum wage does not increase productivity. It may induce companies to automate, which will increase productivity in the long term (after the robots are paid for), but this is little comfort to those now thrown back into the job market. Because that's where the increased productivity comes from.

Minimum wage is just a way to force companies to pay more than a job is worth irrespective of productivity. That's not self-sustainable; it's just welfare (and has all the built-in problems of welfare). But it's not called welfare, which makes it salable on a party platform. And a $15 minimum wage wasn't proposed because all of a sudden we were so much more productive. It was proposed because $15 is a nice big number.

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Re: 2016 US Presidential Election

Postby sardia » Tue Jun 28, 2016 1:36 pm UTC

ucim wrote:
Thesh wrote:Inflation does not eliminate gains from minimum wage until it is high enough that a minimum wage increase pushes up all wages equally.
...and this "induced inflation" isn't uniform in amount or effect either - it primarily affects the thing that low wage workers work on, and things connected to it. Which are the things that low wage workers buy.

In the long run (which is what you're interested in), it's an accounting trick that makes numbers look bigger but mean less.

Thesh wrote:And you are missing a really huge part of the markets adjusting: price drops. [...] If minimum wage increases equally to productivity, then there doesn't have to be any inflation at all.

Minimum wage does not increase productivity. It may induce companies to automate, which will increase productivity in the long term (after the robots are paid for), but this is little comfort to those now thrown back into the job market. Because that's where the increased productivity comes from.

Minimum wage is just a way to force companies to pay more than a job is worth irrespective of productivity. That's not self-sustainable; it's just welfare (and has all the built-in problems of welfare). But it's not called welfare, which makes it salable on a party platform. And a $15 minimum wage wasn't proposed because all of a sudden we were so much more productive. It was proposed because $15 is a nice big number.

Jose

What's wrong with welfare and do you have any citations for it?

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Re: 2016 US Presidential Election

Postby morriswalters » Tue Jun 28, 2016 2:08 pm UTC

ucim wrote:Minimum wage does not increase productivity. It may induce companies to automate, which will increase productivity in the long term (after the robots are paid for), but this is little comfort to those now thrown back into the job market. Because that's where the increased productivity comes from.
I was going to attack this, but the basic humor in this discussion was revealed to me in something I found in the Wikipedia. Industry's way of coping with a labor shortage.
Modern minimum wage laws trace their origin to the Ordinance of Labourers (1349), which was a decree by King Edward III that set a maximum wage for laborers in medieval England.[5][6] King Edward III, who was a wealthy landowner, was dependent, like his lords, on serfs to work the land. In the autumn of 1348, the Black Plague reached England and decimated the population.[7] The severe shortage of labor caused wages to soar and encouraged King Edward III to set a wage ceiling. Subsequent amendments to the ordinance, such as the Statute of Labourers (1351), increased the penalties for paying a wage above the set rates.[5]
Now that's the way to increase productivity.

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Re: 2016 US Presidential Election

Postby Zamfir » Tue Jun 28, 2016 2:16 pm UTC

That's not self-sustainable; it's just welfare (and has all the built-in problems of welfare).

If you mean that it's redistribution mechanism, then sure. A minimum wage is intended to increase the income of low-paid workers, while spreading the cost over the entire population through higher prices. If you oppose such redistribution already as a goal, then there's not much to talk about. It's like complaining that a truck only moves stuff around without creating more of it.

But beyond that, the whole point is exactly that a minimum wage is not welfare. It's a different policy lever with different characteristics, which makes it a useful addition to the toolbox.

In particular, at moderate levels it appears to be pretty efficient (compared to other redistribution mechanisms). Despite what idealized theory says, in practice you can set a significant minimum wage with limited measurable effect on unemployment. The main reason for that is fairly obvious: most low-wage employees have a bad bargaining position, which means that their employers can leverage flexibility in the market to their advantage. Competition amongst employers might or might not force them to pass on that cost benefit to their customers, but a minimum wage works well in either case. Idealized theory doesn't contain bargaining power or flexibility in market prices, so it cannot capture this effect.

This advantage diminishes at higher levels of the minimum wage, as it starts to affect labour relationships with more strongly positioned workers. So it's not a cure-all, it's a tool with limited but useful contribution to redistribution. For further effects, you have to look elsewhere. Welfare, progressive taxation, social insurance, industrial policy, etc. Each with their own characteristics, and a good total policy tries to balances those.

I

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Re: 2016 US Presidential Election

Postby Diadem » Tue Jun 28, 2016 2:18 pm UTC

One thing I never understood about this minimum wage discussion.

Coming from The Netherlands, I have to say that 15 dollars an hour just seems like a very high minimum wage. That works out to about $2600 a month. That's roughly the average starting salary for someone with a master's degree here in The Netherlands. Dutch minimum wage is only €1,524.60 per month, which works out as 9.74 dollars per hour. You won't be living a life of luxury with such an income, but you won't have trouble making ends meet either. Yet consensus seems to be that you can't live of 8 dollars an hour in the US.

Our differences between the US and The Netherlands truly that great? They don't seem to be. The US is slightly richer than The Netherlands, but only slightly (GPD per capita seems to be 54K vs. 52K). Prices for most basic goods are roughly equal, with a few important areas where the US is actually significantly cheaper (housing, transportation). I guess in the US fewer things are paid for you by the government, and insurance will be a significant extra burden, but you also pay lower taxes, so that should cancel out.

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