Minimum Wage destroys jobs--again!

[Tony]

Gee, it's just amazing how the predictions of economics just keep coming true, despite the claims of many on this board to the contrary. Like, the claim that the Minimum Wage doesn't destroy the jobs of the very people it's purporting to guarantee higher wages for.

New Study Reveals Minimum Wage Hikes Lead to Job Loss for Minorities and High School Drop-Outs

The study:

Minimum Wage Effects in the Post-welfare Reform Era

This just in, laws against slavery, high-tech machinery, automation, the cotton gin, the spinning loom all destroy jobs. The solution is clear, we need a return to slavery and we need to revert to a 17th century economy.

 

[Tony]

The problem with this claim, as the example illustrates, is that the minimum wage law is in there no to maximize employment per se, but to prevent exploitation of the poor. The idea is, it is sometimes better to be unemployed than to be exploited.

Are you trying to make me love you?

 

[Tony]

In many situations, yes, of course it's right. If you answer this with a categorical no, then you're basically demanding total wealth redistribution (because anything short of that is at the expense of the poor). And we've seen how well that works out.

Quite well actually. If great inequities in wealth distribution are a good thing, I take it you think countries like Mexico, Saudi Arabia, Jordan, and North Korea are examples of economic utopias? It's odd that such countries are generally regarded as ****-holes while countries like the USA, UK, France and Sweden, with our evil middle-classes, are regarded as well-off. Odd.

 

[Ziggurat]

Quite well actually.

Maybe you didn't understand what I meant, but I said total wealth redistribution, not just some wealth redistribution. We can manage fine with a certain amount of wealth redistribution, but EVERY time it's been tried totally (meaning, try to make everyone have the same amount of wealth) on any significant scale, it's been a disaster.

If great inequities in wealth distribution are a good thing, I take it you think countries like Mexico, Saudi Arabia, Jordan, and North Korea are examples of economic utopias?

Strawman. It is not wealth inequality which is desirable, it's economic freedom (which has, as ONE of its outcomes, wealth inequality). And the countries you list, while they certainly have wealth inequalities, do not have nearly the amount of economic freedom that the United States does (though Mexico probably comes closest on your list).

 

[Snide]

Well, please don't tell me that forcing people into unemployment to suit your Socialist agenda is helping others.

Now I have a Socialist agenda. Quite amusing, especially coming from someone who throws around the word "liar" so freely.

And there are plenty of people who disagree. 116 House members voted against the MW increase.

Yep. Plenty of the House members. But not most of the people. I am right again.

eta: Furthering my analogy, plenty disagreed with the revolution too.

 

[Tony]

Maybe you didn't understand what I meant, but I said total wealth redistribution, not just some wealth redistribution. We can manage fine with a certain amount of wealth redistribution, but EVERY time it's been tried totally (meaning, try to make everyone have the same amount of wealth) on any significant scale, it's been a disaster.

Of course. I don't advocate TOTAL wealth re-distrubution. But I recognize that it's not a good thing to have great wealth inequalities.

It is not wealth inequality which is desirable, it's economic freedom (which has, as ONE of its outcomes, wealth inequality).

If there is wealth inequality, there isn't total economic freedom.

 

[Snide]

Regardless = without regard to. Exactly the same thing. And it's not true; I gave an example where the job replacement would absolutely happen with regards to the MW.

From m-w.com:

Main Entry: regardless of
Function: preposition
Date: 1784
: without taking into account

Without taking into account whether any MW laws were passed, technology replaces jobs.

 

[Ziggurat]

If there is wealth inequality, there isn't total economic freedom.

You and I must have different definitions of economic freedom, then, because I don't see how wealth inequality is avoidable unless you restrict economic freedom. Nor is wealth inequality in and of itself a problem. Supposing you and I had equal opportunities and skills, for example, but you choose to work 50 hour weeks and I choose to work 30 hour weeks. You SHOULD end up with more wealth than me in such a situation, and the only way to prevent that is to restrict your economic freedom.

 

[Merko]

That's true, Skeptic. but Shanek's post was merely to respond to only one, apparently erroneous, defense of minimum wage: that it doesn't affect unemployment.

I got the feeling that he is referring to this thread, where shanek was ridiculing me for not agreeing:

No, you're lying again, and anyone who read the chapter can see that. Minimum wages hurt the very people they're purported to help. It's not even a controversial stand in economics anymore! They'll teach it to you in a beginning economics course!

The problem is of course that shanek is making the leap-of-faith between "MW reduces employment [in the short run in theoretical models]" to "MW hurts the poor". And I'm not even sure if shanek notices this himself.

There's no doubt that as an immediate consequence of a rise in minimum wages, employment will decrease somewhat. Some employments will become marginally unprofitable. However, enacting a ban on employers requiring sexual services by employees will of course have the same negative effect. Additionally, it is certainly a question for much serious debate whether an increase in minimum wages may have positive effects on the economy in the long run, for example by stimulating consumption, or by shifting employment towards more productive jobs, or by reducing employers' stakes to work politically in order to keep a large number of people unable to qualify for more productive jobs to keep up competition in the rock-bottom labour market.

Anyway, I doubt minimum wage laws per se have that much of an effect either for good or bad, the issue should rather be de-facto minimum wages. Here in Sweden we have no minimum wage law at all, however we do have a high de-facto minimum wage for a number of rather complex reasons, but it's related to having very strong unions.

 

[Snide]

If a business could sell a loaf of bread for $1.50 to a poor person and make a $0.50 profit, then not selling the bread to that person at $1.00 and no profit is taking a profit at the expense of that poor person. That is the way I read E.J.'s question, though he's free to correct me about what he meant. I suppose it's possible to read it instead as benefiting the poor person if he's still willing to pay the $1.50 (since he wants the bread more than the $1.50 he's paying), but if you read "at the expense of the poor" that way, then there are damned few cases where companies do increase profits at the expense of the poor, and pretty much no market mechanism for doing so.

I read it as more like the latter, but it's too vague a term to have a meaningful debate around.

The high-level question seems to be, "Of all the profit being made, how much should the low-end workers be sharing?" MW law proponents say "more than they are," while MW law opponents say "whatever the market will bear." Or something like that.

 

[shanek]

Of course. I don't advocate TOTAL wealth re-distrubution. But I recognize that it's not a good thing to have great wealth inequalities.

Oh? Without "wealth inequalities," what incentive do people have to improve themselves? What incentive to people have to work and go to school to work at jobs requiring more skills if they're not going to get paid for it?

If there is wealth inequality, there isn't total economic freedom.

Ridiculous; exactly the opposite is true. The more "equal," the more "fair" you try to make things, the less free you make them.

The high-level question seems to be, "Of all the profit being made, how much should the low-end workers be sharing?" MW law proponents say "more than they are," while MW law opponents say "whatever the market will bear." Or something like that.

No, we say that all prices--including wages (a wage is just the price of labor)--operate at equilibrium, and trying to set it above (price supports, like MW) or below (price caps) only causes problems.

 

[Tony]

You and I must have different definitions of economic freedom, then

I think you're looking more at the collective scale and I'm looking more at the individual scale.

Nor is wealth inequality in and of itself a problem.

I think the historical record shows otherwise. A small, wealthy and powerful upperclass in contrast to a large poor underclass has been that cause of many atrocious problems throughout history.

Supposing you and I had equal opportunities and skills, for example, but you choose to work 50 hour weeks and I choose to work 30 hour weeks. You SHOULD end up with more wealth than me in such a situation.

I'd end up with more $$, but not neccessarily more wealth. That 20 hours of free-time to pursue what ever you want could be worth more to you than any dollar amount your skills could provide working at your job.

 

[Tony]

Oh? Without "wealth inequalities," what incentive do people have to improve themselves?

Are you a whore? Is money the only thing that motivates you to do anything to improve yourself? Personally, love and respect for myself is a greater motivation to improve myself than any dollar amount.

What incentive to people have to work and go to school to work at jobs requiring more skills if they're not going to get paid for it?

Love for self, personal enjoyment, intellectual enlightenment, pursuit of happiness. I can think of many reasons, it's telling that you can't. I don't consider it a virtue to elevate venality to an ideology, you obviously do.

Ridiculous; exactly the opposite is true. The more "equal," the more "fair" you try to make things, the less free you make them.

Yet, you've never tried to provide evidence for this assertion in contrast to the vast amounts of evidence that have been presented to debunk it.

 

[Ziggurat]

I think you're looking more at the collective scale and I'm looking more at the individual scale.

I don't see how.

I think the historical record shows otherwise. A small, wealthy and powerful upperclass in contrast to a large poor underclass has been that cause of many atrocious problems throughout history.

Name such a case, and I bet you I'll be able to show you how the economic freedoms of those poor underclasses were restricted by government force. Certainly serfdom, for example, isn't merely a problem of wealth disparity: the nobility had the force of law (and the force of arms to back it up) to subjugate serfs, and did not do so merely by being so much wealthier. And right now, Bill Gates has vastly more money than I do, but he can't subjugate me because his economic power doesn't permit him to infringe upon my own freedoms, including my economic freedom.

I'd end up with more $$, but not neccessarily more wealth.

Unless that money happens to devalue into nothing, then yes, you'll have more wealth.

That 20 hours of free-time to pursue what ever you want could be worth more to you than any dollar amount your skills could provide working at your job.

That may be preferable to me, but that's still not wealth. Which is why nobody talks about all the wealth that unemployed people have in the form of free time.

 

[CFLarsen]

Oh? Without "wealth inequalities," what incentive do people have to improve themselves? What incentive to people have to work and go to school to work at jobs requiring more skills if they're not going to get paid for it?

Personal satisfaction?

I don't get paid for my writing, yet I want to improve how I write. I like to see that my writing skills improve, simply because it enables me to communicate my thoughts, ideas and arguments better.

I also like to improve on other things, too, without getting paid for it. Money is a drive, but it isn't the only motivation I have for improving myself.

Frankly, I find those who are only driven by a need for money rather pathetic. Is that what they want to spend their lives on? A blind hunt for money, more money?

Don't you play the piano because you like it? Don't you ever practice, even though you don't get paid for it?

Ridiculous; exactly the opposite is true. The more "equal," the more "fair" you try to make things, the less free you make them.

You equate "free" with "strong". Those who are "free" are free to exploit those that are not strong, thereby taking their freedom away.

Are you "free" if you are exploited?

No, we say that all prices--including wages (a wage is just the price of labor)--operate at equilibrium, and trying to set it above (price supports, like MW) or below (price caps) only causes problems.

Nonsense.

 

[Tony]

Name such a case, and I bet you I'll be able to show you how the economic freedoms of those poor underclasses were restricted by government force. Certainly serfdom, for example, isn't merely a problem of wealth disparity: the nobility had the force of law (and the force of arms to back it up) to subjugate serfs, and did not do so merely by being so much wealthier.

Now you're getting dogmatic. The rich/powerful/nobility ALWAYS eventually get force of the law. To do otherwise would restrict their "economic freedom". Anytime you have great wealth inequalities, you have a restriction of economic and personal freedom because the wealthy use their power to solidify their position and work for their interests. This is why the "free-market", like communism, is totally bogus. It fails to account for human nature and the fact that power and wealth are absolute corrupting forces.

And right now, Bill Gates has vastly more money than I do, but he can't subjugate me because his economic power doesn't permit him to infringe upon my own freedoms, including my economic freedom.

Riiiiiiight. You use Windows because it's the best, most secure and easiest to use operating system and not because of it's dominance of the market. Keep living that fantasy.

That may be preferable to me, but that's still not wealth.

Yes, it is. Wealth is more than a dollar amount.

 

[shanek]

Are you a whore?

Like I keep saying...

Is money the only thing that motivates you to do anything to improve yourself?

No, but if I'm going to go tens of thousands of dollars in debt getting an education I need to be able to make that back with higher wages after I graduate.

Yet, you've never tried to provide evidence for this assertion in contrast to the vast amounts of evidence that have been presented to debunk it.

What vast amounts of evidence??? Your side has presented nothing!!! And I've had thread after thread after thread over several years of evidence showing that this is absolutely the case.

 

[Darth Rotor]

Oh? Without "wealth inequalities," what incentive do people have to improve themselves? What incentive to people have to work and go to school to work at jobs requiring more skills if they're not going to get paid for it?

Shane, it looks to me like you are conflating wealth inequality and wage inequality. Wealth and wages are non synonymous.

Ridiculous; exactly the opposite is true. The more "equal," the more "fair" you try to make things, the less free you make them.

The fair part is why we have laws, and contracts. (I appreciate how loaded a term "fair" is, as well as "equal.") They are the framework within which an economic system works. Are you advocating an anarchic labor market, or an anarchic market in the broader sense?

No, we say that all prices--including wages (a wage is just the price of labor)--operate at equilibrium, and trying to set it above (price supports, like MW) or below (price caps) only causes problems.

I disagree slightly. Prices and wages seek their own level, and sometimes achieve a temporary equilibrium. Any number of forces, be they market or social, can disturb that equilibrium and thus they seek the new level again. The market is dynamic, as are the two elements you have broken out to analyze separately in your observation.

ETA: "Only causes problems" isn't as accurate an effect as "induces a correction." Minor quibble.

DR

 

[Tony]

Like I keep saying...

I take that as a yes.

No, but if I'm going to go tens of thousands of dollars in debt getting an education I need to be able to make that back with higher wages after I graduate.

Fair enough.

What vast amounts of evidence??? Your side has presented nothing!!!

Umm, I was once on your side when it came to this subject Shane. It was your dearth of evidence, your failure to debunk opposing evidence and arguments, and your extreme dogmatism that led me to the conclusion that you're wrong.

And I've had thread after thread after thread over several years of evidence showing that this is absolutely the case.

I don't think you have. I think you let ideology and theory blind you to reality.

 

[Ziggurat]

Riiiiiiight. You use Windows because it's the best, most secure and easiest to use operating system and not because of it's dominance of the market. Keep living that fantasy.

I use a variety of operating systems, including windows. But I still choose to use Windows, and should I choose not to, NOTHING Gates could do could force me to use it.

Yes, it is. Wealth is more than a dollar amount.

Wealth is not ONLY dollars, yes. But damned straight if you've got a lot of dollars, you're wealthy.