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  1. #521
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Sharmak
    The answer to 1) is no - MW doesn’t make those decisions. Show me a law that says that companies must fire poor people or otherwise marginalize them!
    You answered a different question than I asked. I didn't ask "does the MW require them to be fired?" I asked "does the MW hurt them?" IE are their conditions better or worse after the MW is raised?

    Can you answer that?



    Quote Originally Posted by Sharmak
    The answer to 2) is that I’m not clear where you get the breakdowns for these numbers and even if they’re applicable outside of the specific study you got them from. It’s also distracting, I concede that you have disputed studies to back your case.
    This isn't quite correct. I don't have a couple of disputed studies. I have 85% of all studies and 90% of all labor economists supporting the numbers I've offered here to create the table.


    Quote Originally Posted by Sharmak
    Your suggestion to roll things back does nothing to fix the reason for MW.
    That is correct...and irrelevant. This is like arguing that my decision to not stab a person does nothing to fix their cancer. Sure, so what? The question is, are they better off, in total, in a situation where they've been stabbed or in a situation where they are not?

    To be utterly pedantic about this to avoid the expected rebuttal, which situation is better given the data:

    a) Per month, per 100 people, there were $704,000 wages paid and $80,000 in benefits paid.


    b) Per month, per 100 people, they were $675,385 wages paid and $117,135 in benefits paid.



    A or B Sharmak?


    Quote Originally Posted by Sharmak
    So you’re saying that MW *only* benefits those families that don’t really need the job in the first place...
    No. I'm saying that group of people who get a wage boost in the table are over represented by people from middle class families. IE that people from middle class families are more likely than people from low income families to get the increased wage or to keep their job.

    I'm sure you realize your small sliver of observations isn't a good scientific sample right? Why don't we stick with the peer-reviewed work of actual scientists;


    Blacks suffer the most (-2.8%) and especially black teenagers (-8.4%)...

    I would specifically point you to table 5 on page 28...In turn, you'll notice that older, non-minority groups have a positive elasticity, meaning they do get jobs when the minimum wage increases.

    So to re-emphasize my conclusion. Increases to the minimum wage (or whatever wage mandating solution you are discussing) benefits older, whiter people at the expense of younger minorities.
    ...
    The minimum wage reduces employment most among black teenage males.
    Al-Salam, Quester, and Welch (1981), Iden (1980), Mincer (1976), Moore (1971), Ragan (1977), Williams (1977a, 1977b).

    The minimum wage helped South African whites at the expense of blacks.
    Bauer (1959).

    The minimum wage hurts blacks generally.
    Behrman, Sickles and Taubman (1983); Linneman (1982).
    ...
    The minimum wage increases the number of people on welfare.
    Brandon (1995), Leffler (1978).

    The minimum wage hurts the poor generally.
    Stigler (1946).

    The minimum wage helps upper income families.
    Bell (1981), Datcher and Loury (1981), Johnson and Browning (1981), Kohen and Gilroy (1981).

    OPII


    Specifically, the vast majority of minimum wage earners are not sole income providers (meaning they live with someone who also makes a wage). And two thirds of those people live in a household with 2-3 times the federal poverty limit (if we include anyone more than two times the poverty limit it is even higher). So the vast majority of minimum wage earners affected by the increased wages will come from non-poor households. What is another characteristic associated with those households? Higher skill levels. IE the kid from an upper middle class family has a higher skill level than the same kid coming from an urban ghetto or poverty line family.
    http://www.onlinedebate.net/forums/s...l=1#post533551


    Quote Originally Posted by Sharmak
    A company needs to hire a minimum number of people to operate efficiently so increasing MW just makes it more expensive to maintain their hires... And what is “additional excess supply”’anyway?
    Or it can substitute those workers with machines, or go out of business, or stop offering the service or product those workers create, right? All of which would cause job losses.

    "Additional excess supply" are the people who lose their job when you increase the minimum wage.


    Quote Originally Posted by Sharmak
    In the cases I have shown, it was explicitly stated that over supply caused lower wages.
    Huh? I think you might be imagining that. Can you point out a single source I've offered that has said that was the starting condition? If not, could you retract that claim?


    And, to help you step out of this error, I'll offer a hint: wages are determined by the marginal contribution of the job. IE, the upper limit an employer would rationally pay an employee is the amount of revenue they contribute to the company right? Any number above that would force bankruptcy, right?


    Quote Originally Posted by Sharmak
    But there are also people who dispute your case and they hold more sway for some reason.
    There are a tiny minority who say that there is no observable effect (ie the effect is too small to measure). No economist that I can find says that it has no effect. And perhaps the reason they hold more sway for you is that they confirming your opinion before entering the thread?

    If I pointed out that 85% of climate scientists agreed that man was causing a majority of observed warming, would you find that number persuasive? I think you would (given that you've made that argument in the past). Thus this isn't about data or studies, or consensus, its about cognitive dissonance.


    Quote Originally Posted by Sharmak
    Your lack of an alternative solution and your lack of admission that people ought to have low wages speaks volumes. You keep side stepping these questions and I wonder why?
    Let's try an analogy to clarify this issue. You go to the doctor tomorrow and he says, "Sharmak, you have an extremely high cholesterol level that puts you at risk of a heart attack."

    You ask him what can be done.

    He reponds, "I'd like to prescribe e-coli. Now, 85% of studies and 90% of doctors say the e-coli will make you incredibly sick. The rest haven't shown that it will or weren't sure."

    You gasp, "how many found it would help?"

    "Oh, none, at least none that were able to get published in a journal."

    Sharmak: "I don't know doc, this doesn't sound like a good idea, I think I might not take the e-coli."

    He throws down his clipboard in frustration, "Look, you haven't addressed why not taking the e-coli would make your cholesterol better, are you crazy!"


    If I were to offer a course of treatment that wasn't shown to make your illness better and was usually shown to make it worse, wouldn't not taking it be a sufficient deduction? Why would I then need to propose an anti-lipid treatment to rule out taking e-coli in the above scenario?





    Unrelated to my response to Sharmak above, a new working paper by Neumark and Shupe has been released that has some very interesting findings.

    From the abstract (emphasis mine):

    We explore the decline in teen employment in the United States since 2000, which was sharpest for those age 16–17. We consider three explanatory factors: a rising minimum wage that could reduce employment opportunities for teens and potentially increase the value of investing in schooling; rising returns to schooling; and increasing competition from immigrants that, like the minimum
    wage, could reduce employment opportunities and raise the returns to human capital investment. We find that higher minimum wages are the predominant factor explaining changes in the schooling and workforce behavior of those age 16–17 since 2000. We also consider implications for human capital. Higher minimum wages have led both to fewer teens in school and employed at the same time, and to more teens in school but not employed, which is potentially consistent with a greater focus on schooling. We find no evidence that higher minimum wages have led to greater human capital investment. If anything, the evidence points to adverse effects on longer-run earnings for those exposed to these higher minimum wages as teenagers.
    https://www.mercatus.org/system/file...g-paper-v1.pdf
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton
    Also, if you think I've overlooked your post please shoot me a PM, I'm not intentionally ignoring you.


  2. #522
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    Increasing the Minimum Wage hurts those most vulnerable in our society.

    Introduction

    I fear we may be going around in circles a bit. There's really nothing more than you can say to persuade me that:

    1. Free market economics works. Certainly every government doesn't think so, which is why every one of your arguments fail.
    2. Doing nothing and leaving things as they are, as you're suggesting, is a good thing. Which is another reason why every one of your arguments fail - your alternative is unacceptable.
    3. That your studies are anything more than helping to promote bad economics that no-one (other than other cultists) have paid attention to, and for decades mind. Understanding your failures to persuade the very people that can affect change speaks volumes (as does your calling of government interference “artificial”).
    4. That the studies reflect the full picture: they are simply looking at the surface effects without understanding why. Which again, is why no-one pays them any attention - they’re not that helpful other than prompting further studies.
    5. Any of your analogies aren't just merely an insight into how narrow and blinkered your view point is: they don't look at the full picture and don't try to understand the whys.

    You appear to think that these points are irrelevant but they're wholly relevant because you're promoting no-MW as a 'solution' and free market ideas as being the right way to go and that no ‘artificial’ interference should be allowed. None of your ideas are useful in solving problems and they require an alternative world, one that has no 'artificial' effects from government or unions or any kind of organizing beyond the individual. No-one takes seriously and I fear that you may be confusing modeling convenience and academic simplicity from your Economics 101 class for solutions in a very complicated world; most of whom only care about themselves. Your argument is literally for a world that governments should not do anything to affect the economy from working naturally: it is little wonder governments ignore your viewpoints.

    Even if your thesis that "Increasing the Minimum Wage hurts the most vulnerable in our society" may be true (in some limited scenarios), you ignore that it actually helps some of them and more of them than otherwise would have happened (see below). You have only demonstrated the obvious point that employers choose how they respond to market changes without explaining why. Without understanding the full picture, you are ending up advocating to do nothing or to roll back MW, the only lever that governments can implement easily. Most people like to move forward; you want to move back without offering an alternative path. So on top of being ignored, you’re offering a weak plan of action that is tantamount to doing nothing.

    If you can't offer realistic solutions that can be applied in the real world with real problems with real pay disparities of companies that have to be supported by the taxpayer then you must concede this argument. Your studies, as minimal as they are, are not useful and your world view is not implementable and your studies are ignored across the globe and throughout recent history. I'm still wondering what the point of your post actually is other than pointing out the obvious points that employers are usually only out for themselves (as they should)!




    MW is harmful and math!

    You answered a different question than I asked. I didn't ask "does the MW require them to be fired?" I asked "does the MW hurt them?" IE are their conditions better or worse after the MW is raised? Can you answer that?
    And I have to answer again, no: MW helps them directly and employers choose from a wide range of responses to that legislation. If they choose to hurt their own existing employees that is on them. MW just sets up new free market conditions and it is each employers responsibility to determine their own best path.

    This isn't quite correct. I don't have a couple of disputed studies. I have 85% of all studies and 90% of all labor economists supporting the numbers I've offered here to create the table.
    Let's put the table aside for the moment since the provenance of the numbers, how you're putting together the different papers are still under question (by at least 10% of economists and 15% of other studies). But it’s essentially irrelevant unfortunately because despite all the evidence you put forward, the crux of your argument, to rid ourselves of MW and not use it to solve existing pay disparities, has no support in the real world. After a few decades of studies to produce zero results is hardly the best endorsement of your view point. So either you don't understand the big picture or refuse to; and if the latter, how exactly are you going to implement it and persuade the world governments that the free market “knows best”?

    SharmaK:Your suggestion to roll things back does nothing to fix the reason for MW.

    That is correct...and irrelevant.




    It's entirely relevant. You're literally saying do nothing and literally saying you have no alternative solution. Further, you are suggesting that the argument ends with the studies you have already forwarded: that it's enough to know that because some employers choose to fire or reduce the hours and mainly keep the white people happy, these are reasons enough to not consider MW as a solution to low wages that have to be supplemented by the taxpayer.

    This is the kind of argument which looks extremely one sided; it is deliberately blinding oneself and taking the first initial negative result and then stopping because it supports one's own personal world view of free market economics with no "external" or "artificial" interference. Not only that but your studies seem American-focused and therefore, not really applicable in all situations around the world and they don't try to understand the reasons for the responses from employers. I personally think that more studies need to be done before we do away with MW altogether. Your surface presentation of the problem is insufficient to justify not applying the easiest lever that the government has to resolve the issue.

    The only thing irrelevant, are

    1. your studies since they're not generally applicable anyway (or at least you haven't demonstrated that)
    2. your free market view of the world, since, well, they actually are irrelevant to decisions made by most governments - international or local - in solving wage issues.
    3. your solutions to the problem since, frankly, you have none.

    Until these change, it doesn't matter what your argument is, they have already failed by being ignored by people whose mission is actually to help low income workers. I suggest you concede your thesis as irrelevant to our readers as it is to the rest of the world!


    This is like arguing that my decision to not stab a person does nothing to fix their cancer. Sure, so what? The question is, are they better off, in total, in a situation where they've been stabbed or in a situation where they are not?

    Sure, with your Chicken Little approach. But the reality is that sometimes you have to stab them (carefully of course) in order to remove cancerous growths.

    Even here your analogy reveals a blinkered tunnel vision understanding of all the possible scenarios; using a seemingly bad action (cutting/MW) to mask that something good might be done (excising cancer/paying people more money) because there may be no other choice (cancer needs to be removed to prevent harm/forcing employers to pay fair wages is the simplest legislative action).

    To turn your own scenario directly against you, you are suggesting that nothing should be done and that the free market requires unfettered interruption of the cancer’s growth. The “artificial” actions of surgery should not be allowed and the patient has all the power he needs to defeat the disease himself with no external help. In other words, my way provides solutions (even though sometimes people die in surgery) and yours does nothing to help.

    To be utterly pedantic about this to avoid the expected rebuttal, which situation is better given the data:
    a) Per month, per 100 people, there were $704,000 wages paid and $80,000 in benefits paid.
    b) Per month, per 100 people, they were $675,385 wages paid and $117,135 in benefits paid.
    A or B Sharmak?
    Again, this is an incomplete scenario. Since you're actually offering zero MW, then it's possible that it could be $100,000 wages paid and $800,000 of benefits paid. So I think your scenario is could actually be choosing between two bad scenarios whilst possibly hiding an even worse scenario.

    Your table is definitely incomplete per your own scenarios - so what are the inflation-adjusted numbers WITHOUT MW? Let’s see what your actual solution really holds. Please accept this as a formal challenge or never discuss this table again.

    So on top of not really supporting numbers that you admit are disputed (and likely by economists who see the larger picture), you certainly haven't supported your very general OP that ALL MW in the entire world in every economic scenario is a bad thing (which should be obvious given your numbers). In fact, I'd like you point out the 15% of studies by 10% economists so that we can read what they have to say.

    I have serious problems with all your following responses that you have narrowed the discussion to only your side of the argument and only your solution (which is to do nothing). We will address these problems next.

    MW helps some LIF but MIF are better off
    No. I'm saying that group of people who get a wage boost in the table are over represented by people from middle class families. IE that people from middle class families are more likely than people from low income families to get the increased wage or to keep their job.
    Remember the point that you keep avoiding, is that it is the employers making 100% of these decisions. Such disparities, which are inherent in the limited society of your study (i.e. not globally applicable) may well be exacerbated by MW, such that when push comes to the shove, low income families are going to made to suffer by their employers more than middle income families. But that's reality that MW has no control over and to not do something because not everyone can be helped is frankly ridiculous.

    Your argument here appears to be that those LIF will only get paid at all if there were no minimum wage. But this salary would be lower than the MW (since by your argument, a high salary doesn't get paid to LIF). In which case, without MW, all LIF would end up worse off, rather than at least some of them might do better. So your scenario actually supports MW because at least some LIF are being helped (even though it helps MIF more).

    That MIF do better than LIF is hardly a surprise anyway, for the reasons you have already pointed out. So it's a red herring that just because MIF would do better than LIF under MW, we shouldn't do it. It literally makes no sense!

    In summary, you're admitting here that at least some LIF are better off.


    MW forces businesses to operate more efficiently

    Or it can substitute those workers with machines, or go out of business, or stop offering the service or product those workers create, right? All of which would cause job losses.

    "Additional excess supply" are the people who lose their job when you increase the minimum wage.
    Again, I have to point out that it is businesses that make these decisions:
    1. If they choose automation, then that's good anyway. Don’t forget such machines take a great deal of lead-up time so it's not as if the companies aren't already considering and preparing for this avenue anyway. If MW ends up accelerating their already existing plans and machinery then it's clear that it was only a matter of time anyway.
    2. If they go out of business, then they are literally being propped up by the taxpayer. Good riddance.
    3. If they stop offering their service or product then that too is obviously a bad service or product that survives only by taxpayers supplementing their businesses. Again, good riddance.

    And those lost jobs are hardly secure positions to begin with; nor really ones essential to the business, if they are so easily shed.

    MW forces employers to pay a fair wage
    SharmaK: In the cases I have shown, it was explicitly stated that over supply caused lower wages.





    Huh? I think you might be imagining that. Can you point out a single source I've offered that has said that was the starting condition? If not, could you retract that claim?

    And, to help you step out of this error, I'll offer a hint: wages are determined by the marginal contribution of the job. IE, the upper limit an employer would rationally pay an employee is the amount of revenue they contribute to the company right? Any number above that would force bankruptcy, right?
    In the cases of migrant workers, the Singapore scenario, and any other low skill job - there is already an oversupply and employers are taking advantage of it. Employers of course take into account what each role contributes but assuming it is 'rational' does not mean that it is 'fair' is a stretch. And by fair, I also mean that the taxpayers shouldn't have to supplement their full time income.

    I see no problems with employees getting together, unionizing or having the government step in to change the employer’s perception of a job’s contribution and put a floor on that value.

    Employers will pay as little as they possibly can get away with since that too is a rational, indeed the most rational, response to salaries and that's were the disparity of power comes in. With employees easily replaced and with little power individually, employers have an unfair advantage. MW is merely the government stepping in and saying rather than the taxpayer support your business, how about employers support their own business? Unions have been successful in getting better wages and better working conditions too.

    Your point that this forces a bankruptcy makes zero sense in general: no one is saying that MW should suck out all the profits of the company. And other than some small businesses, which are operating on tiny profit margins any, your point is overstated and doesn’t apply to multinational chains. You need to stop exaggerating or over applying some small corner cases (where businesses are close to failure anyway) and applying it every scenario. It's why I can't take your arguments seriously - I have to make sure you’re not slipping in some fake facts to support your already poorly accepted solutions.


    Why do all governments ignore economists on this issue?

    There are a tiny minority who say that there is no observable effect (ie the effect is too small to measure). No economist that I can find says that it has no effect. And perhaps the reason they hold more sway for you is that they confirming your opinion before entering the thread?
    Perhaps but on the flip side, even though you have the majority of the studies supporting your point of view, no actual government really follows your recommendations of doing nothing. You offer no alternatives to MW, and indeed, are suggesting that the low wages are an acceptable reality. You also ignore that MW is fixing a reality that is already the free market; it’s a little weird to offer as a solution, the same thing that got us into the mess in the first place.

    If you're suggesting there should no MW and no government interference nor unions and that things should be left alone, then you're not really part of the solution, nor helping. You’re literally part of the problem because you’re suggesting to leave poor wages as they are (as well as getting rid of MW and Unions!)

    The arguments that vulnerable people are being hurt by MW is merely a front to allow the free market to continue paying those same people low salaries, i.e. the condition that caused MW in the first place. So the entire point of your thread is specious and dishonest.

    So not only are you telling the people whose job it is to represent the people, not to do their one job, but also that that we should continue spending taxpayer money to prop up businesses that cause the problem of low wages in the first place. If you want to talk about who holds more sway, it is certainly not economists but the actual governments that they despise.

    If I pointed out that 85% of climate scientists agreed that man was causing a majority of observed warming, would you find that number persuasive? I think you would (given that you've made that argument in the past). Thus this isn't about data or studies, or consensus, its about cognitive dissonance.
    On global warming, many governments and indeed nearly all of them recognize that even if man isn't the cause, we can produce legislation, world wide agreements and programs that would slow down its effects.

    It is even at the stage where pro-fossil-fuel governments, such as the USA now, have to impose tarrifs on more efficient and more profitable technologies such as solar, in order to help their friends. These actions aren't even about being anti-global-warming but more about supporting an industry that should be dying.

    In short, GW holds a lot of sway based on science and your MW holds zero sway because it is basically saying people should be paid poorly. Your responses thus far have confirmed my suspicions that free-market economists have no leg to stand on: they don't like government interference or any kind of collective bargaining because they want to keep their model of the world simple and simplified. The world, which is complex and complicated and contradictory disagrees. It's why you have lost the argument: you offer literally nothing to help the situation.

    The only cognitive dissonance is your own in that you're trying to 'help' the poor by saying their low salaries are an expected outcome of free market economies and that any 'artificial' interference between the single mother and the factory they work for is the cause of their woes. That fact is, that you don't have solutions to the problem and that you don't see that there is a problem at all, and ideally, that there should be no unions and no governments and things will work out. Your entire post is a contradiction: pretending to be helpful by pointing out that MW doesn't help at the same time holding that low wages are the way things 'should' be anyway.

    Another Bad Analogy To Deal With And Why Free Market Economists are really a pushing a religion
    Let's try an analogy to clarify this issue. You go to the doctor tomorrow and he says, "Sharmak, you have an extremely high cholesterol level that puts you at risk of a heart attack."

    You ask him what can be done.

    He reponds, "I'd like to prescribe e-coli. Now, 85% of studies and 90% of doctors say the e-coli will make you incredibly sick. The rest haven't shown that it will or weren't sure."

    You gasp, "how many found it would help?"

    "Oh, none, at least none that were able to get published in a journal."

    Sharmak: "I don't know doc, this doesn't sound like a good idea, I think I might not take the e-coli."

    He throws down his clipboard in frustration, "Look, you haven't addressed why not taking the e-coli would make your cholesterol better, are you crazy!"

    If I were to offer a course of treatment that wasn't shown to make your illness better and was usually shown to make it worse, wouldn't not taking it be a sufficient deduction? Why would I then need to propose an anti-lipid treatment to rule out taking e-coli in the above scenario?
    This scenario is simple. Again, your blinkered and highly narrowly focused and limited and biased scenarios offer a wholly unrealistic view of the world that offers scenarios are over applied (much like all of your limited studies that have had zero legislative support around the world under many scenarios).

    In this case, there are better solutions than pills and medicine: it's simply to change one's diet and exercise more. There's no need to for e-coli or any other solution. And that is all I have asked of you: what is your alternative? You don't offer one, instead you say, do nothing! Your extremely high cholesterol is a natural consequence of your life style and is to be expected and no 'artificial' remedies should be applied so that 'nature' can take its course. That’s clearly not a “solution” but being OK with high cholesterol!

    You may well be pointing out that e-coli has bad side effects, as does MW, but rather than figuring out if the e-coli's side effect could be mitigated or even to try to understand why e-coli is bad, your you're literally saying, do nothing because your high cholesterol is expected and warranted and deserved. And that’s assuming that e-coil is the best approach anyway, which by your own account it isn’t so I don’t even understand the reason why you bring it up. MW remains the best tool and the side effects just have to be mitigated through some other means.

    Besides, you're confusing hard science in the e-coli case, as if your studies are hard-science. Your free-market view point isn't really science, it is at best a limited study of a narrow view of how the world should be that has little effect on the actual world because it offers no solutions that are applicable or any solutions at all frankly.

    It's basically bad politics with basic math. At worse, it is a religion that requires no government interference, nor collective bargaining and refuses to fix bad situations because of some unsupported notion that doing nothing is better than doing something.

    The sooner you admit that your solutions will never be implemented the better!
    Last edited by SharmaK; February 10th, 2018 at 06:28 AM.

  3. #523
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Sharmak
    3. That your studies are anything more than helping to promote bad economics that no-one (other than other cultists) have paid attention to, and for decades mind. Understanding your failures to persuade the very people that can affect change speaks volumes (as does your calling of government interference “artificial”).
    Of the five points, this is the only one that related to the thread. So when you say "no-one" you mean no-one aside from the 90% of economists that agree with the stated position, as supported in the OP?

    Your position seems to rest on the decisions and beliefs of non-economists. IE an anti-science position. Do you accept the consensus of 90% of scientists polled and 85% of peer-reviewed work, or do you accept the position of people with no training in the area?


    Quote Originally Posted by Sharmak
    Your argument is literally for a world that governments should not do anything to affect the economy from working naturally: it is little wonder governments ignore your viewpoints.
    I don't disagree, why would we expect a government to endorse a position that decreases its own power?

    Can you show where, in this thread I've made an anarcho-capitalist argument? (It would be a surprise to me since I'm not an anarcho-capitalist). Plese support or retract that this is my argument.


    Hint: The actual argument in this thread is: "the minimum wage has, when all factors are considered, a negative impact on those it is targeted at helping. It specifically has a disproportionately large negative impact (again, all other factors incorporated) on the poor and minorities."


    Quote Originally Posted by Sharmak
    And I have to answer again, no: MW helps them directly
    You evaded the question for obvious reasons, but it isn't that easy.

    Question: At six months post MW enactment, which word describes poor people's monthly take home pay:

    More

    Less


    Quote Originally Posted by Sharmak
    MW just sets up new free market conditions and it is each employers responsibility to determine their own best path.
    This is up there for one of the most bizarre sentences I've read here. Can you support (or retract) that a market that has a price floor (such as a minimum wage) is a "free market."

    Challenge to support a claim.


    Quote Originally Posted by Sharmak
    But it’s essentially irrelevant unfortunately because despite all the evidence you put forward, the crux of your argument, to rid ourselves of MW and not use it to solve existing pay disparities, has no support in the real world. After a few decades of studies to produce zero results is hardly the best endorsement of your view point.
    You misunderstand the evidence presented. Again, 85% of all studies and 90% of economists agree that the data of the real world shows that people are better off when you don't impose a minimum wage.

    All of those studies (well over two hundred in this thread alone) are reflecting data from the real world Sharmak. They aren't just blackboard theories, they are showing the impact of actual minimum wage increases on actual people.

    And, to be perfectly pedantic, because you seem to have a habit here of ignoring the obvious: 85% of all peer reviewed studies, and 90% of all economists agree that people are better off when you don't impose a minimum wage.


    Quote Originally Posted by Sharmak
    It's entirely relevant. You're literally saying do nothing and literally saying you have no alternative solution.
    Challenge to support a claim. Support or retract where I've said either of these statements.

    Again, the thread's premise and scope is solely about the relatively undisputed fact that, "he minimum wage has, when all factors are considered, a negative impact on those it is targeted at helping. It specifically has a disproportionately large negative impact (again, all other factors incorporated) on the poor and minorities."


    Quote Originally Posted by Sharmak
    1. your studies since they're not generally applicable anyway
    Challenge to support a claim. Please support or retract that the studies presented in this thread are not applicable to the labor market.


    Quote Originally Posted by Sharmak
    To turn your own scenario directly against you, you are suggesting that nothing should be done and that the free market requires unfettered interruption of the cancer’s growth.
    Again, to reiterate, Challenge to support a claim. Please support or retract that I have said that.

    What I'm asking is, if we presume someone has cancer, do we adopt a procedure that 85% of medical studies and 90% of doctors agree will make it worse (And the remaining 15/10% say won't have any effect at all)?


    Quote Originally Posted by Sharmak
    Your table is definitely incomplete per your own scenarios - so what are the inflation-adjusted numbers WITHOUT MW? Let’s see what your actual solution really holds. Please accept this as a formal challenge or never discuss this table again.
    You'll have to explain your bizarre need for this in inflation adjusted terms. Since we aren't talking about wages over a period of time, but in two different scenarios, there isn't an inflation adjustment required. I really don't mean to be a jerk about this, but you've added a term to your scenario that is meaningless to make it sound like you understand economics. Unless you can support why an inflation adjustment would apply across two scenarios that happen at the same time (or even how it would be possible to do an inflation adjustment) is necessary, please retract that as part of your request.

    As for the scenarios. I want to be perfectly clear that there is no need for me to "support" anything based on your request for additional criteria. If you feel a formal challenge still applies, please open up a thread in ask the staff for Mican to adjudicate. Improper use of formal challenges to goad an opponent into supporting a position they have not held is generally considered trolling. So please respond to this section with either an ask the staff thread or a retraction of your challenge.

    At that point, I'm happy to discuss what changes and updates you would like to see included in the table. I've literally been asking for you to define what you think has been left out for several pages now.

    Quote Originally Posted by Sharmak
    may well be exacerbated by MW, such that when push comes to the shove, low income families are going to made to suffer by their employers more than middle income families. But that's reality
    Yes, it is a reality that they have to live with Sharmak. You can simply ignore it in your quest for social progress, but they cannot. There is no "may" about it. There are hundreds of studies and volumes of data showing that they are, in fact, hurt by the MW enactment. You can blame employers, or systematic racism, or whatever other boogeyman you would like to assuage your feeling of guilt, but there is no rationalization that you've offered here that changes this simple fact; "in a world with a higher MW, more lower income families are in multi-generational poverty than in a world without that higher MW."


    Quote Originally Posted by Sharmak
    MW forces businesses to operate more efficiently
    You stated earlier that businesses are unrepetently greedy, right?

    So if those businesses could have operated more efficiently (which is what you are arguing) they would have gotten more profits (the definition of efficiency), right?

    So why didn't they do that without the minimum wage?

    Are they so dumb that they didn't understand their own business, but you, Sharmak, do?

    Or were they not greedy until you enacted the minium wage?


    Quote Originally Posted by Sharmak
    Employers will pay as little as they possibly can get away with
    I've now offered a half dozen studies showing that employers have to accept market wages, but to no avail. Now it is your turn. Challenge to support a claim. Support or retract that employers have monopsony power in the US.

    Quote Originally Posted by Sharmak
    On global warming, many governments and indeed nearly all of them recognize that even if man isn't the cause, we can produce legislation, world wide agreements and programs that would slow down its effects.
    And you realize that that is an appeal to authority fallacy right? Or are you seriously arguing that politicians know more than scientists on these issues?


    Quote Originally Posted by Sharmak
    MW holds zero sway because it is basically saying people should be paid poorly.
    You do realize that the science says the exact opposite of this right? That MW ensures they are paid more poorly?


    Quote Originally Posted by Sharmak
    In this case, there are better solutions than pills and medicine: it's simply to change one's diet and exercise more.
    Fair enough, I agree that there are other solutions. What I'm asking you, to deal with the actual thread at hand is the question here. Answer the question Sharmak;

    If I were to offer a course of treatment that 85% of medical journals and 90% of doctors said would make your illness worse (and the remaining said would have no effect) would you adopt that treatment or would you say "no, lets look for something else?"
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton
    Also, if you think I've overlooked your post please shoot me a PM, I'm not intentionally ignoring you.


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  5. #524
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    Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    Of the five points, this is the only one that related to the thread.
    All the points are related to this thread. Just because you have a narrowly defined argument, it doesn’t mean it isn’t incomplete and it doesn’t make it useful and it most certainly doesn’t make it believable.

    You have made some bold claims that continue to be ignored by the world at large and you’re promoting an unrealistic world view and recommending to do nothing about the low income issue. Practically everything you have put forward is irrelevant to solving the problem: your evidence is useless other than to point out that employers are making bad decisions but you don’t know why; your free market world view requires no government/union involvement in wage setting, which kinda defeats the purpose of a government or a union; and your ideas are resoundingly ignored by practically everyone that isn’t in the field.

    The uselessness of your argument can’t be overstated.

    Your constant failure to promote your world view of a ‘free market’ here mirrors that of the real world. You keep forgetting that it is the ‘free market’, incorrectly (IMHO) defined as absence government assistance or unions, is where we started. But your limited OP deliberately ignores that fact and that’s what makes your OP practically worthless.

    MW is a reaction against the free market. So going back to not doing anything or reducing MW, are not solutions that make sense: we’ve already done that and we ended up with low salaries. Pointing out issues with MW merely means that we need understand the effects better and mitigate them; they certainly don’t mean rolling back the clock to a time before MW.

    But we go yet another round going nowhere. I’m never going to admit that your studies are anything other than a starting point and you seem to be blind to the fact that even by your own math, some people will do better under MW than they otherwise would have.

    And you pretend as if MW is the starting point whereas your free market ideas were the real starting point.

    ————————————————————————————————————


    So when you say "no-one" you mean no-one aside from the 90% of economists that agree with the stated position, as supported in the OP?
    No one that is power to affect real change. That speaks volumes about your evidence and your argument. Being practically universally ignored, which is where your ideas currently stand, doesn’t really bode well for your arguments.

    Your position seems to rest on the decisions and beliefs of non-economists. IE an anti-science position. Do you accept the consensus of 90% of scientists polled and 85% of peer-reviewed work, or do you accept the position of people with no training in the area?
    Correct but I wouldn’t call them anti science - they just don’t believe your results are true or complete and they don’t find your alternatives useful.

    It’s also a stretch to call economists scientists to begin with; they’re religionists that do math to try and make the world fit into their simple models and whine about ‘artificial’ impacts when the world wants to do it’s own thing.

    That’s the same conclusion I’ve come to thus far because you have been somewhat evasive as to the alternatives you’re really proposing and too one sided in your conclusions. And you do appear to be overstating some of your conclusions.

    I don't disagree, why would we expect a government to endorse a position that decreases its own power?
    I would expect a government to do the best it can to balance the needs of the weakest amongst us and growing the economy. If the government is already supplementing businesses low wages then it has every right now and then to redress that balance.

    Can you show where, in this thread I've made an anarcho-capitalist argument? (It would be a surprise to me since I'm not an anarcho-capitalist). Plese support or retract that this is my argument.
    I haven’t but you have proposed no government intervention in wages and no unions or collective bargaining as a solution. You’ve called government involvement “artificial” as if they were a burden onto your simple model of the world. So you tell me what you’re really arguing for?

    Hint: The actual argument in this thread is: "the minimum wage has, when all factors are considered, a negative impact on those it is targeted at helping. It specifically has a disproportionately large negative impact (again, all other factors incorporated) on the poor and minorities."
    That may well be what you want to argue but it’s a pointless argument because it is too narrow and too incomplete and your alternatives make little sense.


    You evaded the question for obvious reasons, but it isn't that easy.

    Question: At six months post MW enactment, which word describes poor people's monthly take home pay:

    More

    Less
    And I answer again, that employers choose to pay less.


    This is up there for one of the most bizarre sentences I've read here. Can you support (or retract) that a market that has a price floor (such as a minimum wage) is a "free market."

    Challenge to support a claim.
    The course it’s still a free market. Only one small trigger is being pulled and one that the government, being not only a representative of the workers, but also an active participant in the overall wage bill anyway, has absolute right to pull.

    A government mandated floor is no different from an individual worker setting a floor on their services. That you choose to define free market as not involving government involvement in regulations makes no sense.


    And, to be perfectly pedantic, because you seem to have a habit here of ignoring the obvious: 85% of all peer reviewed studies, and 90% of all economists agree that people are better off when you don't impose a minimum wage.
    It’s irrelevant what the results are. If our starting point is low wages and we want to fix it then we apply MW and fix issues as they come up. It is the employers making all these decisions so we need to legislate more precisely so that the negative effects can be mitigated.

    Those are not reasons to use MW, those are reasons to do more research. Absent an alternative, which doing nothing is not an alternative, MW is the path to take.


    Challenge to support a claim. Support or retract where I've said either of these statements.

    Again, the thread's premise and scope is solely about the relatively undisputed fact that, "he minimum wage has, when all factors are considered, a negative impact on those it is targeted at helping. It specifically has a disproportionately large negative impact (again, all other factors incorporated) on the poor and minorities."
    And I am not denying that. I am denying this is a good reason not to do MW unless there is a better alternative. Which you don’t have.

    The thread is ridiculously limited to a single datapoint and it’s research is woefully incomplete. Brought into the real world, its isolated results have barely any impact on the actual challenges facing governments.

    Challenge to support a claim. Please support or retract that the studies presented in this thread are not applicable to the labor market.
    I didn’t say the “labor market” I said you haven’t shown that your results are universally applicable around the world in all societies and all economies.

    Again, to reiterate, Challenge to support a claim. Please support or retract that I have said that.
    Um, that’s kinda of your argument that we shouldn’t have minimum wage. That sounds like doing nothing to me. You have offered no realistic alternatives. And worse, you have failed to explain the failure of your own ideas in the free market of ideas!

    You are not offering solutions that have realistic impact so your net gain in mindshare is nothing.

    What I'm asking is, if we presume someone has cancer, do we adopt a procedure that 85% of medical studies and 90% of doctors agree will make it worse (And the remaining 15/10% say won't have any effect at all)?
    Your scenario is rubbish, your world view is no government intervention. This is the same as no medical intervention. You don’t have to say it because it is already part of your free market argument.

    And likening doctors, which actually have a real world track record of being right, the same cannot be said of your economists, who appear to be constantly surprised at the latest crash.

    And medical studies are based on actual physical sciences, yours relies on a simple model of two dimensions and calls other real word participants “artificial”.

    Please stop comparing economics to science and economists to scientists - the discipline hasn’t earned its trust yet.


    You'll have to explain your bizarre need for this in inflation adjusted terms. Since we aren't talking about wages over a period of time, but in two different scenarios, there isn't an inflation adjustment required. I really don't mean to be a jerk about this, but you've added a term to your scenario that is meaningless to make it sound like you understand economics. Unless you can support why an inflation adjustment would apply across two scenarios that happen at the same time (or even how it would be possible to do an inflation adjustment) is necessary, please retract that as part of your request.
    The reason why inflation is important is because MW hasn’t kept up with inflation. In real terms, it has reduced. So increasing MW is really getting back to where it should be relative to when MW was first introduced. You’ll have to go back to before MW, look at the job’s salary, and adjust it forward to show that your case has merit. And you also need to show that the salary would have been better without the MW to begin with.

    Until you have the whole scenario laid out with and without MW and inflation adjusted, you don’t really have a complete picture for us to determine whether MW is a good thing or not.

    As for the scenarios. I want to be perfectly clear that there is no need for me to "support" anything based on your request for additional criteria. If you feel a formal challenge still applies, please open up a thread in ask the staff for Mican to adjudicate. Improper use of formal challenges to goad an opponent into supporting a position they have not held is generally considered trolling. So please respond to this section with either an ask the staff thread or a retraction of your challenge.
    Do whatever you want - I disbelieve that any of your math or evidence is relevant to the situation as to whether MW is really doing a good thing or not. As I keep saying, it’s an incomplete picture that doesn’t include the scenario of no MW and it does examine the reasons why employers behave the way they do when MW is raised. It’s all useless.

    At that point, I'm happy to discuss what changes and updates you would like to see included in the table. I've literally been asking for you to define what you think has been left out for several pages now.
    I have already asked for this! Here in a simple list:

    1. What is the comparative scenario for when no MW was ever applied?
    2. What other legislation could the government apply to reduce these outcomes? And which would be more successful and non-circumventable?

    Yes, it is a reality that they have to live with Sharmak. You can simply ignore it in your quest for social progress, but they cannot. There is no "may" about it. There are hundreds of studies and volumes of data showing that they are, in fact, hurt by the MW enactment. You can blame employers, or systematic racism, or whatever other boogeyman you would like to assuage your feeling of guilt, but there is no rationalization that you've offered here that changes this simple fact; "in a world with a higher MW, more lower income families are in multi-generational poverty than in a world without that higher MW."
    I’m not ignoring reality: you are. I am saying given that these are the reactions to MW, we need to either find alternatives or prevent employers from behaving the way they do. You’re saying that this is sufficient of a reason not to raise MW or not even to have it.

    However, given the taxpayer is the ultimate backfiller of salaries, i.e. the taxpayer, it is incumbent upon the government to make sure businesses pay their rightful dues. If they cannot or will not then unfortunately, they just have to go out of business: we’re not here to enrich companies



    You stated earlier that businesses are unrepetently greedy, right?

    So if those businesses could have operated more efficiently (which is what you are arguing) they would have gotten more profits (the definition of efficiency), right?

    So why didn't they do that without the minimum wage?

    Are they so dumb that they didn't understand their own business, but you, Sharmak, do?

    Or were they not greedy until you enacted the minium wage?
    It’s not wholly about greed - it’s about the taxpayer supplementing low income workers’ salaries so that companies could afford to produce a good or service. If those goods/services are no longer profitable given a rise in MW, then it is wholly up them to make such a determination. But that just means that we as taxpayers are propping up these companies and encouraging them to take advantage of workers, knowing that the government will help them out.


    I've now offered a half dozen studies showing that employers have to accept market wages, but to no avail. Now it is your turn. Challenge to support a claim. Support or retract that employers have monopsony power in the US.
    I have done - in the migrant workers example, in the example from Singapore where employees in one sector had a wage disparity with the rest of the country. The success of governments and unions to force a fair wage beyond what employees pay clearly shows employers have monopsony power.

    In fact, your own examples of employers cutting hours (i.e. reducing salaries) or firing people (reducing to zero) shows precisely the powers you claim they don’t have.

    And you realize that that is an appeal to authority fallacy right? Or are you seriously arguing that politicians know more than scientists on these issues?
    It’s a little precious to call economists scientists in the first place, but even ignoring that, you’re appealing to ‘science’ as an authority yourself.

    Politicians aren’t scientists but they take into account many factors, including social and politics aspects to make a decision. And if economists are so lacking in advice on how to mitigate the low wage issue, it is little wonder they are ignored.

    You do realize that the science says the exact opposite of this right? That MW ensures they are paid more poorly?
    Well, they say that employers cause workers to be paid less, yes. So the next step, again, is to understand why this is so and make it less likely to happen.

    Fair enough, I agree that there are other solutions. What I'm asking you, to deal with the actual thread at hand is the question here. Answer the question Sharmak;

    If I were to offer a course of treatment that 85% of medical journals and 90% of doctors said would make your illness worse (and the remaining said would have no effect) would you adopt that treatment or would you say "no, lets look for something else?"
    Economists are in no way at the same level of trust as with other sciences. Your analogy fails, as do all the claims that economists have made in trying to make the world fit into their simplified models.

    The thread at hand here is to suggest that MW causes harm and we therefore shouldn’t have it. I may agree with the former (incomplete as it is) and disagree with the latter.

    My dialog with you has shown that you cannot argue beyond the narrow boundaries of your OP but it is beyond those boundaries where your tight fitting argument fails.

    These studies are not new and the ideas are not new and one would think that the ideas you present would be tried but they haven’t been tried have they? That you ad-hom every economist that disagrees with you and claim that politicians are ‘anti-science’ and insist that I only answer your specific narrow questions pretty much explains why you have failed to persuade me and why economists have failed to persuade governments.

    Your constant failure to promote your world view of a ‘free market’ here mirrors that of the real world. You keep forgetting that it is the ‘free market’, absent government assistance or unions, is where we started began. MW is a reaction against the free market. So going back to not doing anything or reducing MW, are not solutions that make sense: we’ve already done that and we ended up with low salaries.
    Last edited by SharmaK; February 13th, 2018 at 05:47 AM.

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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    I've now offered a half dozen studies showing that employers have to accept market wages, but to no avail. Now it is your turn. Support or retract that employers have monopsony power in the US.
    Here's a little more about your claim that employers have to accept market wages. They cover the sports, teachers, professors, and minimum wage workers. Your general statement appears to be wholly incorrect. Even in the case of MW, it is still an open question whether your point is even true. So I have to say that either your claims are wholly false or there is enough doubt that can be cast on them.

    The fact of the contradictions and opposing studies and ideas pretty much tells me economics may need to do a bit more work in providing consistent results. Perhaps it may be due to political viewpoints but I suspect that it is also due to the fact that it's not really a reliable discipline. Anyway, there are plenty more articles so at best your position is questionable and most certainly as clear cut or proven as you keep claiming.

    https://open.lib.umn.edu/principlese...-of-monopsony/
    Monopsonies in Sports

    Professional sports provide a setting in which economists can test theories of wage determination in competitive versus monopsony labor markets. In their analyses, economists assume professional teams are profit-maximizing firms that hire labor (athletes and other workers) to produce a product: entertainment bought by the fans who watch their games and by other firms that sponsor the games. Fans influence revenues directly by purchasing tickets and indirectly by generating the ratings that determine television and radio advertising revenues from broadcasts of games.
    In a competitive system, a player should receive a wage equal to his or her MRP—the increase in team revenues the player is able to produce. As New York Yankees owner George Steinbrenner once put it, “You measure the value of a ballplayer by how many fannies he puts in the seats.”
    The monopsony model, however, predicts that players facing monopsony employers will receive wages that are less than their MRPs. A test of monopsony theory, then, would be to determine whether players in competitive markets receive wages equal to their MRPs and whether players in monopsony markets receive less.
    Since the late 1970s, there has been a major shift in the rules that govern relations between professional athletes and owners of sports teams. The shift has turned the once monopsonistic market for professional athletes into a competitive one. Before 1977, for example, professional baseball players in the United States played under the terms of the “reserve clause,” which specified that a player was “owned” by his team. Once a team had acquired a player’s contract, the team could sell, trade, retain, or dismiss the player. Unless the team dismissed him, the player was unable to offer his services for competitive bidding by other teams. Moreover, players entered major league baseball through a draft that was structured so that only one team had the right to bid for any one player. Throughout a player’s career, then, there was always only one team that could bid on him—each player faced a monopsony purchaser for his services to major league baseball.
    Conditions were similar in other professional sports. Many studies have shown that the salaries of professional athletes in various team sports fell far short of their MRPs while monopsony prevailed.
    When the reserve clauses were abandoned, players’ salaries shot up—just as economic theory predicts. Because players could offer their services to other teams, owners began to bid for their services. Profit-maximizing owners were willing to pay athletes their MRPs. Average annual salaries for baseball players rose from about $50,000 in 1975 to nearly $1.4 million in 1997. Average annual player salaries in men’s basketball rose from $109,000 in 1976 to $2.24 million in 1998. Football players worked under an almost pure form of monopsony until 1989, when a few players were allowed free agency status each year. In 1993, when 484 players were released to the market as free agents, those players received pay increases averaging more than 100%. Under the NFL collective bargaining agreement in effect in 1998, players could become unrestricted free agents if they had been playing for four years. There were 305 unrestricted free agents (out of a total player pool of approximately 1,700) that year. About half signed new contracts with their old teams while the other half signed with new teams. Table 14.1 “The Impact of Free Agency” illustrates the impact of free agency in four professional sports.
    Table 14.1 The Impact of Free Agency
    Player Salaries As Percentage of Team Revenues
    MLB NBA NFL NHL
    1970–73 15.9 46.1 34.4 21.3
    1998 48.4 54.2 55.4 58.4
    Free agency has increased player share of total revenues in each of the major men’s team sports. Table 14.1 “The Impact of Free Agency” gives player salaries as a percentage of team revenues for major league baseball (MLB), the National Basketball Association (NBA), the National Football League (NFL) and the National Hockey League (NHL) during the 1970–1973 period that players in each league worked under monopsony conditions and in 1998, when players in each league had gained the right of free agency.

    Source: Gerald W. Scully, “Player Salary Share and the Distribution of Player Earnings,” Managerial and Decision Economics, 25 (2004): 77–86.


    Given the dramatic impact on player salaries of more competitive markets for athletes, events such as the 2004–2005 lockout in hockey came as no surprise. The agreement between the owners of hockey teams and the players in 2005 to limit the total payroll of each team reinstates some of the old monopsony power of the owners. Players had a huge financial stake in resisting such attempts.

    Monopsony in Other Labor Markets

    A firm that has a dominant position in a local labor market may have monopsony power in that market. Even if a firm does not dominate the total labor market, it may have monopsony power over certain types of labor. For example, a hospital may be the only large employer of nurses in a local market, and it may have monopsony power in employing them.
    Colleges and universities generally pay part-time instructors considerably less for teaching a particular course than they pay full-time instructors. In part, the difference reflects the fact that full-time faculty members are expected to have more training and are expected to contribute far more in other areas. But the monopsony model suggests an additional explanation.
    Part-time instructors are likely to have other regular employment. A university hiring a local accountant to teach a section of accounting does not have to worry that that person will go to another state to find a better offer as a part-time instructor. For part-time teaching, then, the university may be the only employer in town—and thus able to exert monopsony power to drive the part-time instructor’s wage below the instructor’s MRP.


    https://eh.net/encyclopedia/monopson...labor-markets/
    Athletes

    A striking example of monopsony in an American labor market is professional baseball. Until 1976, the “reserve clause” in player contracts bound each player to a single team, an extreme form of collusion. As a result, teams did not compete for players. Estimates by Scully (1974) and others indicate that rate of monopsonistic exploitation was very high during this era — players were paid less than half of the value of their contribution to output, and possibly as little as one-seventh. After the reserve clause was eliminated in 1976, players with at least six years’ experience became free to negotiate with other teams. Salaries subsequently soared. By 1989, the rate of exploitation was estimated to have fallen close to zero (Zimbalist, 1992).
    The early history of baseball, when rival leagues occasionally appeared, yields similar estimates of monopsony exploitation. Rival leagues undercut the reserve clause, which could only be enforced among teams in the same league. Thus the appearances of the American Association in 1882, the American League in 1901, and the Federal League in 1913 each prompted rapid increases in player salaries. But when the rival league was bought out or merged into the dominant league, salaries always dropped sharply — usually by about a half (Kahn, 2000). This history suggests that, in the absence of rival leagues, early professional baseball players were paid no more than half of the value of their contribution to output.
    While no serious rivals to Major League Baseball have appeared since the early twentieth century, rival leagues have frequently appeared in other professional sports. For example, the American Basketball Association challenged the National Basketball Association from 1967 to 1976, the World Hockey Association challenged the National Hockey League from 1971 to 1979, and the United States Football League challenged the National Football League from 1982 to 1985. The appearance of each of these rivals seems to have caused player salaries to increase substantially in their respective sports (Kahn, 2000).
    An even more striking example of monopsony is the market for college athletes. These players are clearly employees in all but name, but the National Collegiate Athletic Association strictly limits the amounts that athletes at member colleges and universities can receive. The value of the output of top college football players has been estimated at about $500,000 (Brown, 1993), many times more than such athletes are “paid.”
    Teachers and Nurses

    For the last few decades, researchers have investigated whether the markets for American school teachers and nurses are characterized by monopsony. Both professions may face a limited number of potential employers in any given geographical region. For teachers, employers are school districts, which are separated by political boundaries. For nurses, the dominant employers are hospitals, which are dispersed geographically except in large metropolitan areas. Moreover, teachers and nurses are (still) predominantly married women, who may find it difficult to move to a new geographic area if their husbands are employed. Researchers have considered both oligopsony and differentiation.
    Early investigations measured the relationship between employer concentration and wages. A negative relationship, holding everything else constant, would suggest oligopsony. Several early studies — for example, Luizer and Thornton (1986) for teachers and Link and Landon (1976) for nurses — did in fact find negative relationships. Yet it is unclear whether everything else was held constant in these studies. Highly concentrated markets with small numbers of employers for teachers or nurses tend to be rural areas and small cities. Less concentrated markets with many alternative employers tend to be large cities. But pay for most other occupations — even less specialized ones with many potential employers — is lower in rural areas and small cities, so it is not clear that monopsony is to blame. Indeed, studies by Adamache and Sloan (1982), Boal and Ransom (1999), Hirsch and Schumacher (1995), and others have shown that employer concentration has little effect on the wages of teachers and nurses after controlling for city size or the general wage level.
    A more recent investigation by Sullivan (1989) focused on differentiation among employers of nurses. Using data on hospitals, Sullivan estimated that if a hospital cut wages by one percent, it would lose only about 1.3 percent of its nurses immediately. This suggests that hospitals enjoy substantial power over wages. However, Sullivan also showed that a hospital would lose four percent of its nurses within three years and presumably even more in the long run. Sullivan’s estimates imply that if the hospital “considers the future,” it is unlikely to lower wages much more than about 10 percent below the contribution of the marginal nurse to hospital revenue.
    Another recent study by Boal (2001) estimated the effects of legal minimum salaries on employment of teachers in two states. That study found that increases in legal minimum salaries tended to decrease employment, suggesting that the market for teachers was more competitive than monopsonistic.
    University Professors

    Several researchers have suggested that moving costs give a university monopsony power over its existing workforce because professors face moving costs. This is because professors have highly specialized skills and their potential employers (universities) are widely dispersed geographically. Now the market for newly-hired professors is surely competitive, because new hires must pay moving costs no matter who hires them. But the market for existing professors is monopsonized because professors, once hired, may require a substantial wage increase to switch universities. Moreover, since pay is usually adjusted over time for performance, universities cannot promise future salary increases at the time of original hire, as school districts do. Assuming some professors have higher moving costs than others, a modest cut in wages for existing professors will not cause them all to leave.
    The model of moving costs predicts a negative relationship between wages and seniority (time spent at the same university). Ransom (1993) measured this relationship, after controlling for total teaching experience, education level, and other factors influencing professors’ productivity. He did find a negative relationship — the penalty for senior professors appeared to be roughly 5 to 15 percent. However, formal models of moving costs imply that newly-hired professors are paid more than the competitive salary level (in anticipation of later exploitation — see Black and Loewenstein, 1991) so not all of this penalty is exploitation.
    Miners in Company Towns

    Textbooks often cite company towns as classic examples of monopsony, especially towns in the late nineteenth and early twentieth centuries when transportation was expensive. A company town is a small town located in a remote area with only one employer. Company towns were most common in mining, where the town’s location was dictated by mineral deposits. Often the employer owned all the housing and operated all stores and other services in the town. This arrangement might seem to give the employer “control” over its workforce and monopsony power through severe differentiation of employers. However, Fishback (1992) has argued that this arrangement actually reduced living costs for employees by eliminating market imperfections in housing and retail markets. High turnover rates in company towns also cast doubt on the view that workers were “locked in” to their employers (see Boal, 1995).
    Company towns were especially widespread in Appalachian coal mining in the early twentieth century. In West Virginia, for example, 79 percent of coal miners lived in company-owned housing in the early 1920s. Nevertheless, Boal (1995) showed that coal mining companies were not very differentiated and enjoyed little power over wages, at least in the long run. A one-percent cut in wages would cause at least two percent of the workforce to be lost the same year, and most of it to be lost in the long run. Thus coal miners seemed to “move with ease.” Assuming employers “considered the future” with discount rates of no more than 10 percent, they would push wages down only about 5 percent, according to his estimates.
    Early Textile Mill Workers

    Several researchers have investigated whether America’s first factories — New England textile mills — enjoyed monopsony power. Some researchers believe that as these factories grew in size, they were forced to raise wages in order to attract workers from farther away, at least in the early nineteenth century (Lebergott, 1960). Other researchers find no relationship between firm size and wage, but find evidence of collusion by employers in setting wages (Ware, 1966).
    Still other researchers have tried to measure the rate of exploitation by comparing the value of the last mill worker’s contribution to output with her wage (most mill workers were women). Implied rates of exploitation range from 9% to over 100% for particular mills in particular years. However, most estimates of the last mill worker’s contribution to output are extremely imprecise, so most calculated rates of exploitation are not significantly different from zero (Vedder, Gallaway, and Klingaman, 1978). Moreover, the largest estimates are for the middle nineteenth century, not the early nineteenth century (Zevin, 1975).
    Low-wage Workers

    All monopsony models suggest that a modest increase in legal minimum wages should increase employment. In the United States, minimum wages affect only young and unskilled workers. Most studies of the effects of legal minimum wages in the 1970s and early 1980s found small decreases in employment for young unskilled workers, as predicted by the competitive model. However, later studies found almost no effect on employment (see Wellington, 1991) and a few studies found increases in employment as predicted by the monopsony model (see Card and Krueger, 1995). However, these latter studies are controversial (see exchange between Neumark and Wascher, 2000, and Card and Krueger, 2000) and have not convinced the majority of labor economists (see Whaples, 1996). In any case, the rate of exploitation, if positive, is probably small.
    http://www.tandfonline.com/doi/abs/1...6.2017.1302069

    Monopsonistic competition, low-wage labour markets, and minimum wages – An empirical analysis

    ABSTRACT

    This article investigates the degree of monopsony power of employers in different industries against the background of a statutory minimum wage introduction in Germany in January 2015. A semi-structural estimation approach is employed based on a dynamic model of monopsonistic competition. The empirical analysis relies on a linked employer–employee data set which allows to control for observed heterogeneity both on the worker and on the firm side. The results show important differences in monopsonistic competition among low-wage industries: While retailing, the hotel and restaurant industry as well as agriculture can be described as monopsonistic labour markets, this is not true for other services and manufacturing of food products. From a policy point of view, the introduction of a uniform minimum wage may therefore lead to different employment reactions in industries with a similar minimum wage bite.


  7. #526
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Sharmak
    All the points are related to this thread.
    No they weren't. Please see the title of the thread and the OP. This thread is solely about the impact of the minimum wage. If you want to discuss the underlying rationalizations for starting the minimum wage, that is fine, feel free to start another thread. But responses of that sort within this thread are spam.


    Quote Originally Posted by Sharmak
    No one that is power to affect real change.
    You are familiar with an appeal to authority fallacy right? Appealing to a politician's views to reject those of a trained economist on a matter of economic concern is clearly an appeal of that type.

    What's more, its a startlingly anti-science position. You are, quite literally, saying that we should reject the consensus finding of 85% of peer-reviewed research and 90% of economists in favor of your party's political position?


    Quote Originally Posted by Sharmak
    I haven’t but you have proposed no government intervention in wages and no unions or collective bargaining as a solution. You’ve called government involvement “artificial” as if they were a burden onto your simple model of the world. So you tell me what you’re really arguing for?
    So you are retracting that I've made that argument. Thank you. Please note that if you make that claim again without support it is a rule violation.

    I called government setting of price floors artificial because that is literally what that term means, a constraint placed from outside the system. It isn't a value judgement or moral condemnation, it is a simple objective fact that when government creates a law setting prices, those prices are artificial to the price system.


    Quote Originally Posted by Sharmak
    That may well be what you want to argue but it’s a pointless argument
    Perhaps, but it is the argument of this thread. If you want to have a different debate, start a different thread.


    Quote Originally Posted by Sharmak
    And I answer again, that employers choose to pay less.
    Thank you for conceding the thread. You agree, that poor people's monthly take home pay in the presence of minimum wage is less.


    Quote Originally Posted by Sharmak
    The course it’s still a free market. Only one small trigger is being pulled and one that the government
    Sharmak, this isn't a defense or support of your claim, it is simply a restatement of your claim in more verbose terms.

    Challenge to support a claim. Support or Retract that that a market that has a government set price floor is a "free market."


    Quote Originally Posted by Sharmak
    It’s irrelevant what the results are.
    Wow. So you are seriously maintaining that it doesn't matter if poor people are harmed by your policies?

    Quote Originally Posted by Sharmak
    And I am not denying that.
    Sharmak, you did not respond to the support challenge. Support or retract that I said the following statements as you claimed, "You're literally saying do nothing and literally saying you have no alternative solution."

    Challenge to support a claim.


    Quote Originally Posted by Sharmak
    I didn’t say the “labor market” I said you haven’t shown that your results are universally applicable around the world in all societies and all economies.
    You mean, to the entire body of people seeking employment and seeking labor? IE, the labor market?

    Regardless, you cannot shift the burden here. You made the following claim: "your studies since they're not generally applicable anyway" You need to either support or retract that claim. Challenge to support a claim.

    Quote Originally Posted by Sharmak
    Um, that’s kinda of your argument that we shouldn’t have minimum wage. That sounds like doing nothing to me.
    What a spectacular lack of imagination then. Are you seriously maintaining that the only concievable action we could do is a MW? There is literally no other policy, social, or economic option?

    Regardless, it is your claim to support. Please support or retract that I have argued that we should "do nothing." Challenge to support a claim.

    Quote Originally Posted by Sharmak
    Your scenario is rubbish, your world view is no government intervention. This is the same as no medical intervention.
    Let's presume that that was my argument here for a moment (it isn't, but lets presume). Let's also agree that we can equate the medical intervention to MW for a moment.

    Here are the two options. Pick one:

    Scenario 1: With Medical Intervention you take the option that 85% of studies and 90% of doctors agree will kill you (and the remaining 15/10% say won't have any effect at all) and you still have cancer.

    Scnario 2: Without Medical Intervention you just have cancer.

    Which option is better?

    Quote Originally Posted by Sharmak
    Please stop comparing economics to science and economists to scientists
    Challenge to support a claim. Support or retract that economics is not a science.


    Quote Originally Posted by Sharmak
    The reason why inflation is important is because MW hasn’t kept up with inflation.
    Apparently you completely misunderstand what it means to account for inflation, or you misunderstand the scenario, or both. I agree that MW is not inflation adjusted, who cares? We aren't arguing whether scenario A in 1996 is better than Scenario B in 1943. We are arging both of them at the same point in time. Both are in 2017 dollars. If we were to add in a column with no minimum wage at all, that would also be in 2017 dollars. Thus, even if we were to design some kind of inflation adjustment it would apply equally to all three scenarios.


    If you are, instead, asking for the MW increase section to be recalculated as if MW had been inflation adjusted, I'm happy to do that, but of course that would also affect the number of people unemployed right (since they are a factor of the percent increase in MW)? Is that what you are asking?

    [I should note that this really doesn't affect the table much, if we take the MW when originally passed and inflation adjust it to 2015 dollars it is about $4.60. If we take the 1968 peak, it is about $10.80 in 2015 dollars].


    Quote Originally Posted by Sharmak
    Do whatever you want -
    I appreciate the retraction.

    Quote Originally Posted by Sharmak
    1. What is the comparative scenario for when no MW was ever applied?
    2. What other legislation could the government apply to reduce these outcomes? And which would be more successful and non-circumventable?
    1) I'm concerned with your use of the word "ever" in the above. I'll assume it means "no minimum wage applied." I'll insert the table below with that added.

    2) Outside the scope of this thread. I'm happy to consider other policy positions, but we need to fully assess the negative impacts of this one first.

    Table No MW (6.75/hr vs $15/hr Proposal

    From $2400 to $0 (40 hrs @ 6.75/hr to 0 hrs @$0/hr) 31% (utilizing established 3.9% increase for 10% MW increase)
    From $1080 to $1310 (40 hrs @ $6.75/hr to 21.8 hrs @$15/hr, representing the 230/month increase from the data) 33.81% (49% of the remaining)
    From $1080 to $794 (40 hrs @ $11/hr to 13.2 hrs @$15/hr, representing the 286/month decrease from the data) 35.19% (51% of remaining)


    So for every 100 people we saw:

    Employment Effect Total Wage Effect Total Benefits paid/week
    31 people lost their jobs -$33,480 $58,280 (31 people, 200 per week +1760 lost wages)
    34 people took home more pay +$7,820 $-32,800 (These 34 people no longer need benefits)
    35 people took home less pay -$5,375 $55,790 (35 people, 200 per week +$794 lost wages
    Total A loss of -$31,035 in wages Increase of $81,270 benefits paid)


    Quote Originally Posted by Sharmak
    It’s not wholly about greed - it’s about the taxpayer supplementing low income workers’ salaries
    Red Herring Fallacy. You ignored the point offered with an irrelevant discussion about corporate subsidies.

    You argued in your last post that a business would "find ways to operate more efficiently," so why wouldn't they do that absent a minimum wage? Why wouldn't they follow their greed towards higher profits? Is it that they are so dumb they can only see it if forced to by your benevolent hand?

    Quote Originally Posted by Sharmak
    I have done - in the migrant workers example, in the example from Singapore where employees in one sector had a wage disparity with the rest of the country.
    Migrant workers were just a hypothetical you invented, you presented no evidence on monopsony power in that industry. Likewise, you can't offer Singapore data as an example of US monopsony power, especially when that study specifcially argues that there was no observable monopsony power in the US.


    Quote Originally Posted by Sharmak
    In fact, your own examples of employers cutting hours (i.e. reducing salaries) or firing people (reducing to zero) shows precisely the powers you claim they don’t have.
    You do realize that none of these are monopsony power right?


    Quote Originally Posted by Sharmak
    you’re appealing to ‘science’ as an authority yourself.
    Sharmak, it isn't an appeal to authority fallacy to appeal to an expert versed in the topic. It is only a fallacy when you appeal to an expert not versed in the topic. Like appealing to a doctor to explain quantum mechanics. Appealing to economists to explain economics is clearly not a fallacy. Appealing to politicians, as you have done, is.

    Quote Originally Posted by Sharmak
    So the next step, again, is to understand why this is so and make it less likely to happen.
    As already shown in thread, the majority of employment loss is due to closing down of businesses, especially businesses owned by lower income owners in lower income neighborhoods.

    Quote Originally Posted by Sharmak
    Here's a little more about your claim that employers have to accept market wages.
    You do realize that I already noted that there are monopsonistic forces in professional sports about a half dozen pages ago, right? Are you seriously arguing that the minimum wage would apply to professional sports players? Or that professional sports players meet the definition of low skilled labor?


    Did you simply copy my second link and pretend it was your own evidence? Sorry Sharmak, that doesn't quite cut it here. Especially when the summary of that article is:

    Monopsony does not appear to have been important in company mining towns, a standard textbook example, or in markets for teachers and nurses, early suspects. In fact, the largest plausible estimates of monopsony exploitation to date are not for blue-collar workers but rather for professional athletes and possibly college professors.


    Your third link relates to Germany, not the US, so it doesn't count as support for monopsony power in low skilled US labor markets. Please try again.

    Challenge to support a claim. Support or retract that employers have monopsony power in the US over low skilled labor.
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton
    Also, if you think I've overlooked your post please shoot me a PM, I'm not intentionally ignoring you.


  8. #527
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    Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    No they weren't. Please see the title of the thread and the OP. This thread is solely about the impact of the minimum wage. If you want to discuss the underlying rationalizations for starting the minimum wage, that is fine, feel free to start another thread. But responses of that sort within this thread are spam.
    If you are recommending, as you have done several times, to not have MM then the scope is already expanded. You have also suggested the same problems for unions so the scope is beyond even MM.

    Besides, if all you are doing is discussing a bunch of studies that have been ignored in a discipline that is also ignored and limiting all discussion to those people and ideas limited to those supporting your case then it’s not really much of a debate is it?

    Your entire OP is essentially saying, look at my decades worth of studies (that people outside of the discipline have ignored) from a discipline (that governments have ignored) and agree with me that the studies studies say what they say. And if there is disagreement, it can only be on the specific matters only of your own choosing, that the relevance of the studies is outside of the scope, as is examining the truth of them. Further, that the influence of the studies (which take into account other matters) is irrelevant in the discussion of them!

    Is that seriously how you want to take this now? That I am only limited to comment on the scope of the discussion about MW when your own OP is talking about removing it? It’s kinda ridiculous not to discuss how we’re in the situation in the first place especially since it’s your own recommendation!

    I haven’t gone much further into your post but I can’t help your last challenge appears to now limit the scope of the OP to just the US? Correct? Are you seriously turning this into a tautology of self-affirmation or are we supposed to be discussing the real world (which is more than the US and which also ignores all your studies)?

    I have to say a couple of us have had a nice little chuckle at this one - it’s typical cultish behavior when faced with the failures of your studies to affect the world and shows a very suspicious lack of understanding of the real world, particularly when it doesn’t quite go your way.
    Last edited by SharmaK; February 15th, 2018 at 11:42 PM.

 

 
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