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  1. #561
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    I don't think you are using tautology correctly in that sentence. A tautology is a statement that is self-referentially true. Something like "all bachelors are not married." Did you mean something else with that objection?
    No, I'm pretty sure I am using the word correctly. You are saying that MW causes harm and you have papers proving it to be the case. So you're literally parroting back the results of the paper. I thought the papers were a starting point and that you wanted to discuss the next step: what should we now do with MW. But you've put all those discussions off limits, which basically means you want me to argue the veracity of your evidence; i.e. do I believe your papers are accurate and confirm your OP, which merely restates the results of said papers.

    Seems kinda pointless if you ask me.

    Additionally, I think you misunderstood the claim I'll defend. It isn't that some people are harmed, it is that the population of economically vulnerable are, on net harmed. IE that the total harm done by raising the minimum wage out weighs the total benefits accrued from raising the minimum wage.
    So what part of this is your original thought, your synthesis of what the papers have said? Or did you merely summarize what the papers said to 'draw' your conclusions?


    Sure, makes sense. I am open to an alternative definition of who should be included, if you have one that makes more sense to you.

    Narrow Definition: Those people whose household income is in the lowest half of the lowest quintile and who are in the workforce.

    Broad Definition: Any individual currently earning minimum wage.
    Sure, but are those really the MOST VULERABLE in our society (these are the words you use in the OP)? People earning MW are certainly better off than those that have no jobs. And what about those immigrants or migrant works (who are also part of our society) that earn even less and have to work harder whilst being under the threat of deportation? Surely they're even more vulnerable than the MW worker?

    And what about those people that don't have jobs? Aren't they even more vulnerable than those that have MW jobs?


    How so? Wouldn't your other defenses be considered "benefits" to that population and need to be weighed? I'm happy to include other objectively verifiable criteria in the thread.
    I don't know - seems to me that you don't really want to discuss MW in a larger context and such a debate is pointless without putting everything that you've said in some kinda of context: specifically, in the context of the decision making process. I'm not sure if it's worth my trouble sifting through everything I've said and ask permission to include it in the argument!


    If you wish to concede the thread that is your affair, rationalize it however you like.
    Of course not, there are papers that counter your specific point but even they're kinda pointless because I think that MW is implemented with more considerations than you're willing to allow for discussion. Just because (for the sake of argument only), your evidence is true, then it still remains the fact that it is wholly ignored. And not just by 'politicians' but those economists and government decision makers that provide input into them. So there's really nothing for me to concede - I'm just trying to understand what your argument actually is: it's not about policy at all and it seems to me you're just parroting back some papers and what do you expect me to do?

    ---------- Post added at 09:43 PM ---------- Previous post was at 07:49 PM ----------

    Quote Originally Posted by Squatch347 View Post
    Just an evidence based side note, it looks as if US wage rates are increasing over the last two quarters in low income sectors. This undercuts the idea that employers are keeping wages down with their monopsony power as we should only see wage rate increases in higher income sectors in that case. That lower income sectors are growing faster indicates a more competitive employment field for employers and less bargaining power. http://www.aei.org/publication/so-wh...FIWmFqVlRxRCJ9
    When your source's source starts off:

    https://www.economy.com/dismal/analysis/datapoints/296127/There-Is-No-US-Wage-Growth-Mystery/

    Economists are puzzled over U.S. wage growth, wondering why it has been so slow despite a labor market that is allegedly back to or close to full employment. However, if you look at the right wage growth and the right measure of employment slack there is no mystery: Wage gains are right where they should be. And it indicates the labor market has room to improve.


    it explains to me how 'economists' just make stuff up as they go along. That they're easily surprised, as they nearly always are when something out of the ordinary happens, tells me whatever model they have just isn't good enough. It's easy to see why because the 'economists' that are puzzled clearly have the wrong model and the blogger suggests a different one that magically explains everything. Yet this guy may later be proven wrong because of something he didn't consider and so on ad-nauseum.

    I don't know if this 2-3% growth is meaningful in terms of our debate anyway: is it more or less the MW of $15 or not? The article goes on to say "But not terribly good news for those saying the US labor markets are meaningfully dysfunctional and thus require government action, without which wage growth will stay stuck", which seems like a bit of straw man - no one is saying that wage growth will stay stuck, the argument is for a living wage, and that appears to require government action to achieve.

    Seems to me that saying there's decent growth after the government has already made a decision to force wage rises is trying to close the door after the horse has bolted and is the article truly taking the MW raises out of the equation here in calculating this 'natural' growth?

    And ending with "being perceived as the Party of Impeachment may have limited political power for Democrats. " pretty much tells me to ignore this guy whose obviously biased and on a political blog cherry picking or being ordered to promote anti-MW propaganda rather than being a serious economist.

  2. #562
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by SharmaK View Post
    No, I'm pretty sure I am using the word correctly. You are saying that MW causes harm and you have papers proving it to be the case. So you're literally parroting back the results of the paper. I thought the papers were a starting point and that you wanted to discuss the next step: what should we now do with MW. But you've put all those discussions off limits, which basically means you want me to argue the veracity of your evidence; i.e. do I believe your papers are accurate and confirm your OP, which merely restates the results of said papers.
    What you are describing here is not a tautology. Asking a question, then answering it with data doesn't make something a tautology.

    What you seem to be describing is a misaprehension on your part. I started the thread to discuss the economic and personal impacts of a harmful public policy prescription. You, initially, wanted to debate just that, does the minimum wage create a net worse outcome? When it was clear the answer was "yes," you wanted instead to discuss policy prescriptions for how how the MW could be salvaged. While pointing out that that was outside of the scope of this thread, I asked you what policies you would propose. You've never answered that question.


    Quote Originally Posted by Sharmak
    So what part of this is your original thought, your synthesis of what the papers have said? Or did you merely summarize what the papers said to 'draw' your conclusions?
    Red Herring. Let's say I verbatim copied the argument (without plagerizing of course) from a Cafe Hayek post or Mises.org article, or from Paul Krugman's textbook? Who cares. Where I get the argument and how I understand it are irrelevant to the question at hand;

    Yes or no, increasing the minimum wage, on net, harms the population of economically vulnerable people. IE that the total harm done by raising the minimum wage out weighs the total benefits accrued from raising the minimum wage.


    Quote Originally Posted by Sharmak
    Sure, but are those really the MOST VULERABLE in our society (these are the words you use in the OP)? People earning MW are certainly better off than those that have no jobs. And what about those immigrants or migrant works (who are also part of our society) that earn even less and have to work harder whilst being under the threat of deportation? Surely they're even more vulnerable than the MW worker?

    And what about those people that don't have jobs? Aren't they even more vulnerable than those that have MW jobs?
    Ok, so then you would accept definition 1 I proposed with one small edit? Those people whose household income is in the lowest half of the lowest quintile regardless of workforce status?


    Quote Originally Posted by Sharmak
    I don't know - seems to me that you don't really want to discuss MW in a larger contex
    Again, as I've said throughout the thread, to the extent that that context is relevant to the actual lives of the people in question, of course it is relevant. If that context means nothing to them and doesn't affect their wellbeing, it is simply noise.


    Quote Originally Posted by Sharmak
    Of course not...
    That is, literally, what retracting every claim posted in thread means. That is the definition of conceding the thread.


    Quote Originally Posted by Sharmak
    It's easy to see why because the 'economists' that are puzzled clearly have the wrong model and the blogger suggests a different one that magically explains everything. Yet this guy may later be proven wrong because of something he didn't consider and so on ad-nauseum.
    You realize you are literally describing the scientific process here, right?

    I'm sure you don't realize that this isn't some "new" model, we've been talking about monopsony effects in this thread alone for months, and the concept of its affect on wages goes back to the 1920s.
    I realize that it is "new to you" but that doesn't mean it is a new model.

    [side note: the author isn't even proposing a model, you are using that term incorrectly. He is referencing how the additional data from the last few years is being applied to labor markets.]


    Quote Originally Posted by Sharmak
    I don't know if this 2-3% growth is meaningful in terms of our debate anyway
    That seems somewhat apparent from the question you ask after this quote. The increase isn't being compared to MW rates. It is highlighting an additional piece of evidence that there is no monopsony power in US labor markets. Increases in wages absent productivity growth is, by definition, indication that there is no monopsony power.

    To rephrase this a bit, the wages increasing absent them being able to produce more, is driven by competition amongst employers to attract workers. That is the exact opposite of a scenario were companies have negotiating power over labor.


    Quote Originally Posted by Shramak
    Seems to me that saying there's decent growth after the government has already made a decision to force wage rises
    This comment seems to indicate that you think the minimum wage increases we've been discussing are occuring at the national level. Is that your perception? Because so far, the larger ones we've discussed, and all of the ones in the time period of the article, are at City level, not even state increases.
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.Ē -G.K. Chesterton
    Also, if you think I've overlooked your post please shoot me a PM, I'm not intentionally ignoring you.


  3. #563
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    What you are describing here is not a tautology. Asking a question, then answering it with data doesn't make something a tautology.

    What you seem to be describing is a misaprehension on your part. I started the thread to discuss the economic and personal impacts of a harmful public policy prescription. You, initially, wanted to debate just that, does the minimum wage create a net worse outcome? When it was clear the answer was "yes," you wanted instead to discuss policy prescriptions for how how the MW could be salvaged. While pointing out that that was outside of the scope of this thread, I asked you what policies you would propose. You've never answered that question.
    I'm not sure if it really is a clear yes and certainly not a yes in ALL circumstances in ALL economies. I only have some papers that are disputed by people you claim are not economists and merely bloggers; while recently quoting one yourself.

    And if policy prescriptions are out of scope then let's not discuss them. I already know the real-world outcome so there's little you can say to convince me that we should not continue raising MW or introducing it where needed.



    Red Herring. Let's say I verbatim copied the argument (without plagerizing of course) from a Cafe Hayek post or Mises.org article, or from Paul Krugman's textbook? Who cares. Where I get the argument and how I understand it are irrelevant to the question at hand;
    Well, it kinda does - you're just parroting back what the papers have already concluded. You haven't synthesized a new argument and not said anything new. You're not really asking a question and then presenting evidence: you have evidence and reverse engineered a position that those papers purport to support.

    Yes or no, increasing the minimum wage, on net, harms the population of economically vulnerable people. IE that the total harm done by raising the minimum wage out weighs the total benefits accrued from raising the minimum wage.
    I think it has been shown in a limited sense that this could be true but I think there needs to be more follow up studies and broader examinations of policy in order to properly determine a long term effect. One of the 'total benefits' is getting rid of bad companies and also ensuring that companies don't rely on the government. BUT you have put those kinds of argument out of scope so I withdraw it.

    I have to remain skeptical of your claims since they are limited in time and geography and duration.


    Ok, so then you would accept definition 1 I proposed with one small edit? Those people whose household income is in the lowest half of the lowest quintile regardless of workforce status?
    Sure.


    Again, as I've said throughout the thread, to the extent that that context is relevant to the actual lives of the people in question, of course it is relevant. If that context means nothing to them and doesn't affect their wellbeing, it is simply noise.
    Not really since these changes take time to institute and new business ideas to come to the fore, or profiteers taking less profit and choosing to pay more rather than forcing their workers to take multiple jobs or government handouts to survive. But again, these are arguments that you're deeming out of scope. So I withdraw them and continue the point that your points have no prescriptive worth.


    That is, literally, what retracting every claim posted in thread means. That is the definition of conceding the thread.
    Well, no, I have new claims that would fall within your limited scope of discussion.


    You realize you are literally describing the scientific process here, right?

    I'm sure you don't realize that this isn't some "new" model, we've been talking about monopsony effects in this thread alone for months, and the concept of its affect on wages goes back to the 1920s.
    I realize that it is "new to you" but that doesn't mean it is a new model.

    [side note: the author isn't even proposing a model, you are using that term incorrectly. He is referencing how the additional data from the last few years is being applied to labor markets.]
    Um, so a blogger somehow has better insights than these economists he claims are constantly wrong. And yes, it seem 'scientific' to you but to be so drastically wrong about all the major events just kinda tells me that this is at best an early science. Hence no reason to pay too much attention yet.


    That seems somewhat apparent from the question you ask after this quote. The increase isn't being compared to MW rates. It is highlighting an additional piece of evidence that there is no monopsony power in US labor markets. Increases in wages absent productivity growth is, by definition, indication that there is no monopsony power.

    To rephrase this a bit, the wages increasing absent them being able to produce more, is driven by competition amongst employers to attract workers. That is the exact opposite of a scenario were companies have negotiating power over labor.
    And are these wages living wages or not? That's the only goal for MW to achieve.

    This comment seems to indicate that you think the minimum wage increases we've been discussing are occuring at the national level. Is that your perception? Because so far, the larger ones we've discussed, and all of the ones in the time period of the article, are at City level, not even state increases.
    No, I understand how limited in scope some of your studies are. I read a bunch remember and challenged you specifically on the point that your studies are too limited to be of real use. Which is why they are nearly universally ignored, because for each economic argument you provide, there are counterarguments (that are beyond the scope of your too-narrow OP) that appear to be swaying the decision making. But since you refuse to allow discussion of those counter-arguments, there's little point going down that path.

  4. #564
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by SharmaK View Post
    I'm not sure if it really is a clear yes and certainly not a yes in ALL circumstances in ALL economies. I only have some papers that are disputed by people you claim are not economists and merely bloggers; while recently quoting one yourself.
    It certainly isn't applicable to all markets (economies is a bit overbroad for what you mean). Markets with monopsony power would not have these findings. That is, quite literally, the only time when it wouldn't apply.

    If we want to talk about instituting minimum wage legislation in those markets (professional sports) that would make sense and wouldn't necessarily make people's lives worse. If you want to apply your minimum wage policy to any other market, then you are going to be, on net, making the problem worse.


    [Side note: I've never criticized you for citing a blogger. I criticized you for citing a blogger who didn't rely on any evidence. The article I cited is quoting specific works and data sets and, importantly, economists. It is one thing to cite a blog written with quotes from MDs about heart health. It is another to cite a blog written by someone with a masters in history on heart health with no citations.]


    Quote Originally Posted by Sharmak
    Well, it kinda does - you're just parroting back what the papers have already concluded.
    And? If I simply parrot back what papers are saying about climate change, does that make the point invalid about how CO2 is affecting the climate? Of if I quote a large series of papers about sugar intake leading to obesity, does that make an argument about providing sugar to people invalid?

    We aren't looking here for points on creativity, we are looking about how the minimum wage affects peoples' lives.


    Quote Originally Posted by Sharmak
    I think it has been shown in a limited sense that this could be true but I think there needs to be more follow up studies and broader examinations of policy in order to properly determine a long term effect.
    So yes then.

    If you had read the OP you would see that some of the studies mentioned cover periods lasting up to 25 years post MW implemmentation. How many studies exactly would you need to see in order for this to be, in your mind, an inescapable conclusion?

    What would the scientific consensus rate need to be?

    What specific examinations are required? What specifically do they need to look at or do?


    I'm asking these because to the extent you've hinted about them here, I've pointed out that those have already been done.


    Quote Originally Posted by Sharmak
    I have to remain skeptical of your claims since they are limited in time and geography and duration.
    They are? How so? Why would studies conducted over the last 100 years across the world be limited in geography or duration?


    Quote Originally Posted by Sharmak
    Sure.
    Great, were there any other definitional concerns you had?


    Quote Originally Posted by Sharmak
    Not really since these changes take time to institute
    Ok, what is the relevant timeline in your opinion?


    Quote Originally Posted by Sharmak
    Well, no, I have new claims that would fall within your limited scope of discussion.
    If you do, I don't think you've presented them. What are they? Or would you rather hold those to a formal debate?


    Quote Originally Posted by Sharmak
    Um, so a blogger somehow has better insights than these economists he claims are constantly wrong.
    I'm not relying on his insights. I'm relying on his quotations of economists and references to economics publications. You'll also notice, if you actually read the article, that he isn't saying any economist is "wrong." He is saying that the additional data answered a predictive question levelled by economists.

    Being "puzzled" by why labor markets haven't tightened is no different than physicists being puzzled as to why they hadn't found the Higgs Boson yet in 2009.


    Quote Originally Posted by Sharmak
    And are these wages living wages or not? That's the only goal for MW to achieve.
    1) Can you precisely define a living wage? I can't answer that question unless you can define your term.

    2) Interesting that you say that a living wage is the only goal for a minimum wage. Given that virtually all the evidence shows that wages do not increase, but decrease (sometimes to 0), then would you say the minimum wage has failed?

    3) This all misses the point. The point is that the only legitimate use of a minimum wage is in a market where employers have monopsony power (the power to push down wages). Since we don't have that, we know that the minimum wage will cause, on net, harm, not benefit.


    Quote Originally Posted by Sharmak
    No, I understand how limited in scope some of your studies are.
    Hard for the studies to be broader if the policies are limited, right? Are you saying they should survey national unemployment when Seattle raises its MW?


    Quote Originally Posted by Sharmak
    I read a bunch remember and challenged you specifically on the point that your studies are too limited to be of real use.
    Indeed. And if you remember correctly, I answered your challenge showing that the studies covered the last century of changes and covered vastly different economies both in the US and in Europe. I asked you then, what additional data would you need. A question you never answered.
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.Ē -G.K. Chesterton
    Also, if you think I've overlooked your post please shoot me a PM, I'm not intentionally ignoring you.


  5. #565
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    This is related to an aspect of the harm minimum wage laws cause that I dealt with in the OP and later. I was specifically addressing the MW increase in SEATAC (Seattle-Tacoma, which is not the same increase we've discussed in Seattle more recently, but about 4 years older). One of the things that immediately came out after Seatac increased its minimum wage rate was that "non-pecuniary benefits" (IE things your job gives you that aren't wages) were dramatically cut. From eliminating on shift free meals, to employee discounts, to work safety conditions.

    A new study has found this effect to be more broadly supported in the evidence, applying to minimum wage increases over multiple states and decades.

    This factor matters because it shows that even unemployment rates don't tell the full story of harm caused by MW laws. Even for those who keep their jobs, other benefits are cut. And since those former benefits were often not-taxed, but the new wages are, it is a worse than one for one trade off for employees. What is interesting is that not only does the evidence show that significant parts of the wage gain are undermined by this benefit loss, but that the effect spills over into jobs earning above minimum wage as well.

    As economist Art Carden succinctly put it:

    Of course, there’s a lot more to a job than wages. People want work that is meaningful or enjoyable. They might especially value safety, comfort, or flexibility. People can also get a lot of non-wage benefits like health coverage, scholarship opportunities, and paid vacation. Workers can (and do) “buy” these perks by accepting lower wages than they would require if the job weren’t as pleasant, meaningful, or safe or if the fringe benefits weren’t as good.


    In short, workers don’t live on wages alone, and minimum wages might not change what workers get paid but rather how they get paid. Minimum wages mandate that cash wages take up a bigger part of employee compensation.

    https://www.forbes.com/sites/artcard.../#424a07d73b7b
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.Ē -G.K. Chesterton
    Also, if you think I've overlooked your post please shoot me a PM, I'm not intentionally ignoring you.


  6. #566
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Iím surprised you didnít update this with Amazonís reaction to raising the minimum wage: they ended up making things much worse by removing other financial benefits. But I guess that means that itís making my point that corporations need to be reigned in using whatever mechanisms are available to create regulations to keep things fair for the worker.

    Itís a shame that ODN is going away and we canít continue this for another decade or so but your earlier attempt to restrict the debate to specifically the OP and not look at the larger picture makes the debate almost pointless.

    However, itís a good thread to pick up every few years to see where we stand. See you in another universe and thanks for being you.


    Sent from my iPad using Tapatalk Pro

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

    Quote Originally Posted by SharmaK View Post
    I’m surprised you didn’t update this with Amazon’s reaction to raising the minimum wage: they ended up making things much worse by removing other financial benefits. But I guess that means that it’s making my point that corporations need to be reigned in using whatever mechanisms are available to create regulations to keep things fair for the worker.

    It’s a shame that ODN is going away and we can’t continue this for another decade or so but your earlier attempt to restrict the debate to specifically the OP and not look at the larger picture makes the debate almost pointless.

    However, it’s a good thread to pick up every few years to see where we stand. See you in another universe and thanks for being you.
    Hi Sharmak, haven't seen you in a while! How are you?

    Its a good point, I honestly haven't followed Amazon's announcements as closely as would be necessary to really understand what the drivers are. I did see that they imposed a $15/hour MW across the entire company. Then two weeks later announced plans to automate something like 30% of their workforce. Hard to argue those aren't connected.

    I'm still open to whatever it is you are presenting as a feasible way to "keep things fair for the worker." And I offered to discuss all those other "larger picture" items (which you never could quite elaborate on what they were) with you, as long as you could define them, or if you wanted to open another thread with that information.

    Still happy to have that discussion, I'm interested in what other items you might mean.

    Anyway, good to see you again, I hope you are doing well.
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.Ē -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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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Life is cool for me and I hope for you too. As ODN sunsets I just want to thank you for our honest and vigorous debates. I still donít get where youíre coming from with regard to Christianity and politics but thatís cool.

    On this point of MW it will always be a struggle to ensure that everyone is fairly treated and by fair, it means, for westerners at least that people should not have to work two jobs to support themselves and their family. itís a tough problem but it has be approached with an honest attempt to help them and not the corporations.

  9. Thanks Squatch347 thanked for this post
  10. #569
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by SharmaK View Post
    Life is cool for me and I hope for you too. As ODN sunsets I just want to thank you for our honest and vigorous debates. I still don’t get where you’re coming from with regard to Christianity and politics but that’s cool.

    On this point of MW it will always be a struggle to ensure that everyone is fairly treated and by fair, it means, for westerners at least that people should not have to work two jobs to support themselves and their family. it’s a tough problem but it has be approached with an honest attempt to help them and not the corporations.
    I appreciate the kind words and I'm glad to hear things are going well. I've always enjoyed the discussion and hopefully we can cross paths again.
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.Ē -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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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    It is, of course, long, but if you are seriously interested in the effects of the minimum wage and you want to go beyond partisan talking points I would recommend this podcast: http://www.econtalk.org/jacob-vigdor...-minimum-wage/

    In it two professional economists (one who was on the UW team that wrote the paper referenced here) talk about this issue. It is enlightening because you can see how real economists discuss issues rather than the normal bloviating (from both sides) we see on TV or in blogs.

    You'll also get a better sense of how seriously they take the claims made in the paper. Specifically, how precise they are in their language of what it shows and doesn't show. And, importantly, what other papers show and don't show. It's always a good rule of thumb that if you get someone making over the top claims with no subtlty there is probably something being left out.

    They also discuss the limitations of the data sets shown by other papers and the problems with popular press reporting that happen.

    Again, if you are seriously interested in the subject beyond it's existence in a party platform, it is worth the 1 hour.
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.Ē -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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    Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    It is, of course, long, but if you are seriously interested in the effects of the minimum wage and you want to go beyond partisan talking points I would recommend this podcast: http://www.econtalk.org/jacob-vigdor...-minimum-wage/

    In it two professional economists (one who was on the UW team that wrote the paper referenced here) talk about this issue. It is enlightening because you can see how real economists discuss issues rather than the normal bloviating (from both sides) we see on TV or in blogs.

    You'll also get a better sense of how seriously they take the claims made in the paper. Specifically, how precise they are in their language of what it shows and doesn't show. And, importantly, what other papers show and don't show. It's always a good rule of thumb that if you get someone making over the top claims with no subtlty there is probably something being left out.

    They also discuss the limitations of the data sets shown by other papers and the problems with popular press reporting that happen.

    Again, if you are seriously interested in the subject beyond it's existence in a party platform, it is worth the 1 hour.
    We are seeing this effect with Amazonís minimum wage hike that cause some people to have their hours reduced in their Whole Foods division. So I donít think thereís any dispute about how corporations *can* react when backed into a corner.

    I just donít buy that this net reduction is a given, or needs to be a given, or, where the discussion gets political, it is *allowed* to be a given.

    And thatís where we need to think outside the box and look at the larger picture: should huge corporations be allowed to not pay taxes or get great tax breaks whilst still relying on the government to partially provide a living wage for their employees? MW is a political and governance issue and must not been seen in isolation for academic convenience.

    I contend they shouldnít and all these arguments are ways for corporations to justify their mean-ness. We are enabling corporations to do this by having lax laws. And it is not in the best interest to play ball about minimum wage because then what happens with the next raise and the next one? So I suspect theyíre doing this to discourage further movements in that direction. As I said before it is a mistake to not include the government role in a ďfreeĒ market
    Last edited by SharmaK; March 9th, 2019 at 03:53 AM.

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  14. #572
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by SharmaK View Post
    I just donít buy that this net reduction is a given, or needs to be a given, or, where the discussion gets political, it is *allowed* to be a given.
    I think there are two points that are relevant here.

    1) It is the way they are reacting. So if our question is (as it actually is when we are facing policy decisions) should we enact/raise a minimum wage to help low income earners, the answer is unambigously, no.

    2) The question though is how could it not be the reaction? How could a company respond differently? Where would that additional funding come from? IE if workers are going to take hom a higher paycheck, where does that money come out of? It's fun to talk Amazon or GE who pay little to no federal taxes, but those aren't where minimum wage earners generally work. So for the vast, vast majority of minimum wage earners, where is their small business with little to no margin going to get that additional funding?
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.Ē -G.K. Chesterton
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    I think there are two points that are relevant here.

    1) It is the way they are reacting. So if our question is (as it actually is when we are facing policy decisions) should we enact/raise a minimum wage to help low income earners, the answer is unambigously, no.
    But they are only reacting this way because it is allowed. Perhaps we need better regulations to ensure that corporations donít undermine the general goal. In terms of policy, it is insufficient to just raise MW, we need to ALSO put other restrictions in place to close out the loopholes.


    2) The question though is how could it not be the reaction? How could a company respond differently? Where would that additional funding come from? IE if workers are going to take hom a higher paycheck, where does that money come out of? It's fun to talk Amazon or GE who pay little to no federal taxes, but those aren't where minimum wage earners generally work. So for the vast, vast majority of minimum wage earners, where is their small business with little to no margin going to get that additional funding?
    The money comes from either the business making less money or the cost is passed onto the consumer. I see no problem with the latter since thatís the cost of providing that good: I donít understand why the government needs to prop up businesses if weíre a true capitalistic society.

    Surely, it is more fair for the consumer to pay the true cost of their goods rather than having to have high taxes to support an overinflated safety net that does the same thing but in a less transparent manner.

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

    Quote Originally Posted by SharmaK View Post
    But they are only reacting this way because it is allowed. Perhaps we need better regulations to ensure that corporations don’t undermine the general goal. In terms of policy, it is insufficient to just raise MW, we need to ALSO put other restrictions in place to close out the loopholes.
    And, as I think we discussed earlier, I don't think this is the panacea you assume. All rules have consequences, intended and unintended. Rules to the effect you are advocating for have been tried in the past and generally to negative results. I think if we were seriously considering a MW+ (defined as MW plus other regulations) we would need to what those are and do a detailed discussion of how they would affect various stakeholders. My concern (because there is a general trend in the pro-regulation crowd to this end) is that "we just need to start somewhere and iterate" actually gets us to a much worse off place than not interfering. This is almost always the case historically, and comports with our understanding of the calculation problem and emergent systems.

    The TLDR version is, in economics there are no solutions, only tradeoffs. So what are the trade-offs of the additional rules?


    Quote Originally Posted by Sharmak
    The money comes from either the business making less money or the cost is passed onto the consumer.
    And, as I mentioned earlier, this seems like an odd position given that we know from the data that we are causing minority business owners to make less money so that middle-class teenagers from predominately middle to upper income homes can get a pay raise.

    It also seems an odd economic policy to increase the cost of living (by increasing the price of the good) when that will certainly impact thost at the bottom of the economic ladder.

    Quote Originally Posted by Sharmak
    I don’t understand why the government needs to prop up businesses if we’re a true capitalistic society.
    I don't understand how you see not imposing an artificial price floor as "propping up" that seems an incorrect conflating of concepts.

    Quote Originally Posted by Sharmak
    Surely, it is more fair for the consumer to pay the true cost of their goods
    This is an interesting statement. Why does labor at $15/hour represent the "true" cost of the goods? Why doesn't $20/hr? Or $2/hr? What theory of value did you use to determine that?
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.Ē -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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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    And, as I think we discussed earlier, I don't think this is the panacea you assume. All rules have consequences, intended and unintended. Rules to the effect you are advocating for have been tried in the past and generally to negative results. I think if we were seriously considering a MW+ (defined as MW plus other regulations) we would need to what those are and do a detailed discussion of how they would affect various stakeholders. My concern (because there is a general trend in the pro-regulation crowd to this end) is that "we just need to start somewhere and iterate" actually gets us to a much worse off place than not interfering. This is almost always the case historically, and comports with our understanding of the calculation problem and emergent systems.

    The TLDR version is, in economics there are no solutions, only tradeoffs. So what are the trade-offs of the additional rules?
    The trade-offs are that inefficient businesses will not be around any longer. It will hopefully mean that large companies that pay nothing into society will be forced to pay their fair share into society. The gain is that society will benefit because people will have jobs that pay well, or they people will retrain into other industries that pay well.

    I don't buy that iterating will necessarily puts us in a much worse place, and even if it does: that is literally the point of iterating - you just fix it.



    And, as I mentioned earlier, this seems like an odd position given that we know from the data that we are causing minority business owners to make less money so that middle-class teenagers from predominately middle to upper income homes can get a pay raise.

    It also seems an odd economic policy to increase the cost of living (by increasing the price of the good) when that will certainly impact thost at the bottom of the economic ladder.
    Well, big businesses such as Wal Mart coming into towns and shutting down those same small local businesses will do the same thing: are we to defend these businesses no matter what? And if it were such a burden on small businesses then we can easily add a clause so that any regulations affect businesses of a certain size. Problem solved.


    I don't understand how you see not imposing an artificial price floor as "propping up" that seems an incorrect conflating of concepts.
    I don't get this.

    This is an interesting statement. Why does labor at $15/hour represent the "true" cost of the goods? Why doesn't $20/hr? Or $2/hr? What theory of value did you use to determine that?
    I don't have a theory, I assume that those experts doing the calculation are doing so with a general idea of what it means. For me, I'm surprised there can ever be a national MW - it should be weighted and calculated by the location of business IMHO.

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

    Quote Originally Posted by SharmaK View Post
    The trade-offs are that inefficient businesses will not be around any longer.
    What do you mean by inefficient? That term has a very specific meaning in economics that I don't think you mean (since it would defeat your point because these businesses are making an economic profit (technical term)). My guess is that you mean they make less revenue than the arbitrary cost structure we are imposing on them.

    Quote Originally Posted by Sharmak
    It will hopefully mean that large companies that pay nothing into society will be forced to pay their fair share into society.
    I think this statement could do with a bit more specificity as well. How do you define "fair share?" IE how should a lawmaker look at a company and say, "oh that company isn't paying its fair share" some kind of objective argument?

    Who, specifically, is "society?" Given that companies are, generally, just vehicles for contracting, that don't really retain any of the money they make, they would seem to return all of their revenue to components of "society." It isn't as if they are taking some portion of that revenue and squirrling it away in a lock box somewhere, right? Every dollar that comes into a company goes out to someone for some purpose, right?


    Quote Originally Posted by Sharmak
    I don't buy that iterating will necessarily puts us in a much worse place, and even if it does: that is literally the point of iterating - you just fix it.
    I think you are right that it doesn't necessarily lead to a worse result, it is just far, far more likely to given historical evidence and the basic structures we are working with.

    You are using the term "just fix it" to do a lot of work for your position there. "Just fixing it" isn't as easy as it sounds. It would be like cutting into a person to remove their cancer and in response to accidentally removing a spleen as well, you say "just cut again, but better." Or even better, if you were offer someone peppermint oil to cure their cancer and found out it didn't work, would you just keep iterating with different essential oils, then different random chemicals until it got better? If you keep iterating without understanding the full complexity of a system you are more likely to "kill the patient" than make them better. There is a reason that the hypocratic oath is "First, do no harm."

    And, in the meantime, while we are desperately trying to figure out how to "just fix it" we've made people's lives worse. We've increased inequality, we've decreased social cohesion, and we've decreased the ability of the government to provide a social safety net. What we end up accomplishing with each iteration is far more important than our motives in trying each iteration.

    Quote Originally Posted by Sharmak
    Well, big businesses such as Wal Mart coming into towns and shutting down those same small local businesses will do the same thing: are we to defend these businesses no matter what?
    I"m not defending any business. I'm defending individual's right to choose. We know that Walmart doesn't do what you allege because it doesn't raise its prices after a year or two years, thus the same low cost of goods that allowed it to beat out local providers continue to the benefit of the community. I'm not saying there isn't value to local, small business. I'm pointing out that the people actually affected by the change from a local business to a walmart prefer the value walmart provides over the intangible good of supporting a small business. [I should also note that this isn't really what seems to happen. When Walmart comes into a town there is generally a disruption, not a decrease in small business. The small businesses walmart competes with generally (thought not always) go out of business, but others spring up in their place. Usually that means more businesses because there is now more free capital to start a business since people can spend less to acheive the standard of living than they did before.]

    Quote Originally Posted by Sharmak
    And if it were such a burden on small businesses then we can easily add a clause so that any regulations affect businesses of a certain size. Problem solved.
    Ok, let's think about how this would go about. Let's say we set the limit at $1M in revenue (a common local number for defining small business).

    Now, let's say you are a company that provides some kind of obvious good to a community, affordable housing or something. You are currently earning $995K a year. Do you provide that next affordable house? Your cost structure changes a lot in that case, so it likely isn't worth it to build that next house. Thus the community is (at least) one affordable house poorer due to this provision.

    There are, of course, other negative consequences that are quite common with this kind of proviso (inefficient company strucutres, elaborate contracting gigs with none of the benefits of full time labor, etc), but my point is that simply adding another rule doesn't necessarily solve the problem we want and adds other complexities.

    Quote Originally Posted by Sharmak
    I don't get this.
    In your last post you said that we were "artificially propping up" companies by not having a higher minimum wage. I asked how not imposing an artificial price floor (MW) is some kind of artificial prop. IE how does not doing something artificial produce an artificial result?

    Quote Originally Posted by Sharmak
    I don't have a theory, I assume that those experts doing the calculation are doing so with a general idea of what it means.
    But as pointed out in the OP, a majority of the experts don't favor a minimum wage. I think we need to be careful conflating a pro-minimum wage group with a set of economics professors.

    If you don't have a theory, then why make the statement that $15/hour represents the "true cost" of the goods. Experts aren't making that argument (the only place I've seen it is the old labor theory of value), so what do you mean by it?
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.Ē -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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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    What do you mean by inefficient? That term has a very specific meaning in economics that I don't think you mean (since it would defeat your point because these businesses are making an economic profit (technical term)). My guess is that you mean they make less revenue than the arbitrary cost structure we are imposing on them.
    Well, I'm not an economist so you'll have to translate for me, but I agree with your definition. Yes, it's arbitrary and yes, it is being imposed on them. I don't see a problem with that.

    I think this statement could do with a bit more specificity as well. How do you define "fair share?" IE how should a lawmaker look at a company and say, "oh that company isn't paying its fair share" some kind of objective argument?

    Who, specifically, is "society?" Given that companies are, generally, just vehicles for contracting, that don't really retain any of the money they make, they would seem to return all of their revenue to components of "society." It isn't as if they are taking some portion of that revenue and squirrling it away in a lock box somewhere, right? Every dollar that comes into a company goes out to someone for some purpose, right?
    By fair share, I would say that they if they're employing someone they need to pay a living wage. By society, I mean the local, state, national set of resources that the company relies on to keep running as a business.

    I think you are right that it doesn't necessarily lead to a worse result, it is just far, far more likely to given historical evidence and the basic structures we are working with.
    But that's only because it is not in the companies' best interest to cooperate; so given that, they need to be forced to or otherwise have their options limited.

    You are using the term "just fix it" to do a lot of work for your position there. "Just fixing it" isn't as easy as it sounds. It would be like cutting into a person to remove their cancer and in response to accidentally removing a spleen as well, you say "just cut again, but better." Or even better, if you were offer someone peppermint oil to cure their cancer and found out it didn't work, would you just keep iterating with different essential oils, then different random chemicals until it got better? If you keep iterating without understanding the full complexity of a system you are more likely to "kill the patient" than make them better. There is a reason that the hypocratic oath is "First, do no harm."

    And, in the meantime, while we are desperately trying to figure out how to "just fix it" we've made people's lives worse. We've increased inequality, we've decreased social cohesion, and we've decreased the ability of the government to provide a social safety net. What we end up accomplishing with each iteration is far more important than our motives in trying each iteration.
    Well, we know that not paying people well is a good thing, right? We don't want companies to pay them as little as possible with as few safety measures as possible, right? Because we've already seen how people die if we don't regulate and enforce good business standards. And if we're quoting they Hippocratic Oath, let's ensure that the companies are harmed before the workers, if we were to decide on the lesser of two evils.

    We can still protect small businesses by ensuring that they can survive so I really don't see any issues. Your analogies are nothing like the reality, which is where large companies can absorb the changes they should have absorbed in the first place.

    I"m not defending any business.
    Hmm - seems like you are! You're basically saying that it is better to harm workers by allowing low wages versus the alternative, which would be that they would lose their jobs. Those aren't the only two options: the companies can be forced to pay better. How about they pay 50% of the government's bill to support their own workers? That's fair.

    I'm defending individual's right to choose. We know that Walmart doesn't do what you allege because it doesn't raise its prices after a year or two years, thus the same low cost of goods that allowed it to beat out local providers continue to the benefit of the community. I'm not saying there isn't value to local, small business. I'm pointing out that the people actually affected by the change from a local business to a walmart prefer the value walmart provides over the intangible good of supporting a small business. [I should also note that this isn't really what seems to happen. When Walmart comes into a town there is generally a disruption, not a decrease in small business. The small businesses walmart competes with generally (thought not always) go out of business, but others spring up in their place. Usually that means more businesses because there is now more free capital to start a business since people can spend less to acheive the standard of living than they did before.]
    Sure but it's more business for Walmart that doesn't translate to better wages. Walmart destroys communities and when they fail, as they have, they run away and everyone loses their jobs anyway. So at least in the meantime if Walmart were forced to pay a decent wage, their employees might be better off

    Ok, let's think about how this would go about. Let's say we set the limit at $1M in revenue (a common local number for defining small business).

    Now, let's say you are a company that provides some kind of obvious good to a community, affordable housing or something. You are currently earning $995K a year. Do you provide that next affordable house? Your cost structure changes a lot in that case, so it likely isn't worth it to build that next house. Thus the community is (at least) one affordable house poorer due to this provision.

    There are, of course, other negative consequences that are quite common with this kind of proviso (inefficient company strucutres, elaborate contracting gigs with none of the benefits of full time labor, etc), but my point is that simply adding another rule doesn't necessarily solve the problem we want and adds other complexities.
    Well then the company needs to pass on those charges to the consumer. I don't see the problem: if it turns out that the only way we can have strawberries in the winter is to pay people nothing then maybe we shouldn't be eating strawberries! Certain businesses just aren't viable; or maybe if the government could set up a fund to prop up business that can't otherwise survive: let's do it in the open at least and not hidden as as freebie for companies.

    In your last post you said that we were "artificially propping up" companies by not having a higher minimum wage. I asked how not imposing an artificial price floor (MW) is some kind of artificial prop. IE how does not doing something artificial produce an artificial result?
    I don't understand the question: companies are currently not surviving on their own merits because they are being given free money in the form of the government supporting the workers they refuse to pay a living wage. There is no reason as taxpayers we should be doing this; the money we don't pay in taxes due to a smaller safety net, we can then use to pay for the goods we use.

    But as pointed out in the OP, a majority of the experts don't favor a minimum wage. I think we need to be careful conflating a pro-minimum wage group with a set of economics professors.
    I get that but but they'd have to come up with a better solution and justify corporate welfare.

    If you don't have a theory, then why make the statement that $15/hour represents the "true cost" of the goods. Experts aren't making that argument (the only place I've seen it is the old labor theory of value), so what do you mean by it?
    I personally couldn't live on $15 per hour anyway. I don't know what the right value is but $15 seems to be a good rallying point to start off with.

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

    Quote Originally Posted by SharmaK View Post
    Well, I'm not an economist so you'll have to translate for me, but I agree with your definition. Yes, it's arbitrary and yes, it is being imposed on them. I don't see a problem with that.
    Are you sure you mean it is arbitrary? That would mean you lack any real justification besides this being your personal whim. Why should your personal whim dictate what I freely choose with another person?

    Quote Originally Posted by Sharmak
    By fair share, I would say that they if they're employing someone they need to pay a living wage. By society, I mean the local, state, national set of resources that the company relies on to keep running as a business.
    But if I recal correctly we already went through a living wage exercise and you weren't able to define it with specificity. We couldn't really tell if $x/hour was a living wage or not.

    I'm not sure I would agree that the local, state, national resources are how we should define a society, since that seems to leave out the people, but let's operate off your definition for a second. Given that a business, by definition returns all resources it takes in (via revenue) to external actors in some form, how are they not paying back their fair share to society?

    Quote Originally Posted by Sharmak
    But that's only because it is not in the companies' best interest to cooperate; so given that, they need to be forced to or otherwise have their options limited.
    Well no, its because complex systems tend to break down when subjected to external shocks like price floors. That is a nature of systems, it has nothing to do with the actors within the system. For example, Amazon self-imposed a minimum wage of $15/hour. They were clearly incentivized and wanted to have that pay rate. And yet, they automated a large portion of their work force and decreased hours for other parts as a result.

    Intentions matter, but math also gets a vote.

    Quote Originally Posted by Sharmak
    Well, we know that not paying people well is a good thing, right? We don't want companies to pay them as little as possible with as few safety measures as possible, right?
    Come on Sharmak, don't try to villify me. You know full well that isn't the point I'm making. Implying that I'm ok with people dieing is just a cheap way to avoid the argument.

    The point is, that using your own rule, your own iteration I showed there would be additional negative consequences. You can't just blindly claim that we will "just fix it" unless you can articulate how we will fix it. My point here, more broadly is that if we are going to advocate for a policy we know, empirically, hurts the economically vulnerable more than not enacting the policy, we, as mature adults, need to talk through the consequences. We can't just blindly say "eh we'll worry about that later" when real people's livlihoods and economic welfare are on the line.

    Quote Originally Posted by Sharmak
    Well then the company needs to pass on those charges to the consumer. I don't see the problem:
    Ok, so let's say it does just that. It increases the prices on its homes to offset the labor cost increase. Since there is an increase in that cost to consumers, obviously less consumers can afford those homes now, right? And, given that those who will now not be able to afford it are probably those at the lower end of the economic scale, we've now priced the most economically vulnerable of that group out of the housing market.

    So again, we end up with less affordable housing than we had without a minimum wage law. And, interestingly, that impact is disproportionally on the poorest individuals.

    Quote Originally Posted by Sharmak
    There is no reason as taxpayers we should be doing this; the money we don't pay in taxes due to a smaller safety net, we can then use to pay for the goods we use.
    It's been a while, but don't you remember where we showed that increasing the minimum wage only exacerbates that effect? IE we pay more into a social saftey net than we did absent a minimum wage (since we now have a larger unemployed population and those who are now part-time rather than full time workers and who lose benefits).

    Quote Originally Posted by Sharmak
    I get that but but they'd have to come up with a better solution and justify corporate welfare.
    To my knowledge no one is advocating corporate welfare.

    I also disagree with this point. Imagine this scenario. I say, "Sharmak, you have a headache. I'm going to stab you in the leg to see if that makes it better." You, reasonably, reply "wait that won't make it better, and it will only make me worse off." Would it be reasonable for me to argue, "well I need to do this unless you come up with a better solution?"

    Of course not. We don't necessarily need to only compare one intervention with another. We also need to compare all interventions with the status quo. If the interventions proposed don't improve the status quo, we can reject them out of hand. It doesn't mean we don't do anything, it means we don't blindly do something for the sake of doing something.
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.Ē -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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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    Are you sure you mean it is arbitrary? That would mean you lack any real justification besides this being your personal whim. Why should your personal whim dictate what I freely choose with another person?
    Itís as arbitrary as any other moral system. Itís not objectively true that it is moral for companies to not pay their employees a full living wage whilst getting other tax benefits.


    But if I recal correctly we already went through a living wage exercise and you weren't able to define it with specificity. We couldn't really tell if $x/hour was a living wage or not.
    This is still true. I have to defer to the people who came up with that number. Iím sure itís not the final goal either but just a starting point.



    I'm not sure I would agree that the local, state, national resources are how we should define a society, since that seems to leave out the people, but let's operate off your definition for a second. Given that a business, by definition returns all resources it takes in (via revenue) to external actors in some form, how are they not paying back their fair share to society?
    I donít know why itís a big shock that governments local or otherwise make laws and decision!

    ALL resources? Are you saying companies donít make a profit? And even if that were true then the cost should be bourne by the customer.


    Well no, its because complex systems tend to break down when subjected to external shocks like price floors. That is a nature of systems, it has nothing to do with the actors within the system. For example, Amazon self-imposed a minimum wage of $15/hour. They were clearly incentivized and wanted to have that pay rate. And yet, they automated a large portion of their work force and decreased hours for other parts as a result.

    Intentions matter, but math also gets a vote.
    And if they didnít impose that $15/hr, are you saying they wouldnít have automated? Youíll have to support that they did that only because of the raise: automation is no panacea and expensive to implement and maintain.



    Come on Sharmak, don't try to villify me. You know full well that isn't the point I'm making. Implying that I'm ok with people dieing is just a cheap way to avoid the argument.

    The point is, that using your own rule, your own iteration I showed there would be additional negative consequences. You can't just blindly claim that we will "just fix it" unless you can articulate how we will fix it. My point here, more broadly is that if we are going to advocate for a policy we know, empirically, hurts the economically vulnerable more than not enacting the policy, we, as mature adults, need to talk through the consequences. We can't just blindly say "eh we'll worry about that later" when real people's livlihoods and economic welfare are on the line.
    Iím not trying to villify you at all; youíve been nothing but respectful and a very honest debater. My point is that unless there is a government telling companies to do things, they have no incentive to spend their resources to do so.

    The only things we can do is to either have a safety net and own the fact that we think itís ok to pay people poorly; or we fix the pay and take the consequences and adjust. What are the alternatives? Not doing anything doesnít help at all



    Ok, so let's say it does just that. It increases the prices on its homes to offset the labor cost increase. Since there is an increase in that cost to consumers, obviously less consumers can afford those homes now, right? And, given that those who will now not be able to afford it are probably those at the lower end of the economic scale, we've now priced the most economically vulnerable of that group out of the housing market.

    So again, we end up with less affordable housing than we had without a minimum wage law. And, interestingly, that impact is disproportionally on the poorest individuals.
    Housing is probably not a good example: I donít believe that poor people should be owning homes anyway given the massive costs in doing so - itís what caused an economic collapse after all.


    It's been a while, but don't you remember where we showed that increasing the minimum wage only exacerbates that effect? IE we pay more into a social saftey net than we did absent a minimum wage (since we now have a larger unemployed population and those who are now part-time rather than full time workers and who lose benefits).
    I do, but thatís not accounting for the fact that we have to prevent companies from making those cuts in the first place. Itís obvious that large companies are profiting greatly from cheap labor - itís why they do it after all, right?


    To my knowledge no one is advocating corporate welfare.
    Well, thatís whatís been happening!


    I also disagree with this point. Imagine this scenario. I say, "Sharmak, you have a headache. I'm going to stab you in the leg to see if that makes it better." You, reasonably, reply "wait that won't make it better, and it will only make me worse off." Would it be reasonable for me to argue, "well I need to do this unless you come up with a better solution?"
    These medical examples arenít good. Youíre suggesting it is a given that companies will cut hours due to raise in minimum wage. I counter that we can mitigate that risk to force companies not to be allowed to do that. Problem solved.

    Or we force companies to pay 50% of their employeeís welfare bill. I think thatís fair.


    Of course not. We don't necessarily need to only compare one intervention with another. We also need to compare all interventions with the status quo. If the interventions proposed don't improve the status quo, we can reject them out of hand. It doesn't mean we don't do anything, it means we don't blindly do something for the sake of doing something.
    But if we already know the status quo is bad: ie large companies with enormous profits not paying their employees a living wage, whilst the taxpayer make up the difference. So this is objectively bad unless you happen to profit from that two-way exploitation. The workers pay and the taxpayers pay towards a corporation which they might not even use the products of.

    So whilst I agree that we shouldnít go into it blindly, MW is at least one thing that needs to increase.

  22. #580
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by SharmaK View Post
    Itís as arbitrary as any other moral system.
    If your claim is that it is an arbitrary choice though, how do you argue that your, personal choice should be forced on others against their will? And why should it be your personal arbitrary choice and not theirs, or mine, or some random guy from the phonebook?

    Once you accept that that is the principle for your justification, the argument seems to lose all force. It certainly loses it's status as an argument. It now is just an opinion, or a matter of taste. Sharmak thinks it should be X. Ok, great, but that isn't an argument.

    Quote Originally Posted by Sharmak
    I donít know why itís a big shock that governments local or otherwise make laws and decision!

    ALL resources? Are you saying companies donít make a profit?
    Well they make legislation, generally in this context laws refer to how people self-organize. But we don't need to go down that rabbit hole. I'm not sure where you got the idea from my last response that I was surprised that governments pass legislation.

    My response was two fold: a) the use of resources for how we define society is incomplete for how that concept is generally understood and b) that even if we accept that definition, businesses pay back all resources they take in, so the argument that the don't pay back their "fair share" seems to fail. Profit is included in that latter concept. Profit isn't kept, however, in a box buried underground, it is returned to the owners. Who are, by your definition, part of society. Thus all resources taken in by the company are returned via wages, or procurement, or other costs, or profits to the society they operate in.

    So given that, how are they not returning their fair share? 100% would seem to be a pretty good share.

    Quote Originally Posted by Sharmak
    And if they didnít impose that $15/hr, are you saying they wouldnít have automated? Youíll have to support that they did that only because of the raise: automation is no panacea and expensive to implement and maintain.
    Generally, yes that is the case. This is a well known concept within economics and should be relatively intuitive if explained. Automation generally has a cost associated with it, a large initial investment and an on going service and maintenance cost. Likewise, retaining labor has a stream of ongoing costs (wages, training, government compliance costs, etc). If the Net Present Value of the former is lower than the net present value of the latter, a company will invest in automation. IE, if it costs less to buy and maintain a machine to do a job, companies will do it.

    No one really argues that point. The question you are raising is, does minimum wage alter that equilibrium? Given that not all jobs currently capable of being automated are, in fact, automated, we can agree that there is evidence that companies are considering cost and not just moving to automation because its automated. If you were to change one of the calculations above, in this case the cost of labor long term, that would (at the margin) change whether it is profitable to automate, right? That is all I'm pointing out here, that if you raise the costs of labor, some portion of the labor force will be automated where it is profitable to do so.

    For empirical evidence that this does, in fact, happen see below.


    This is a relatively easy read detailing some of the evidene with the journalists' predilection to include personal interest stories: https://www.wsj.com/articles/the-emp...035945?tesla=y

    If you are only going to read one paper, read this one. It specifically shows that companies are making cost reducing automation decisions contemporaneously with minimum wage hikes: https://www.nber.org/papers/w19262

    This paper goes more in depth to the causal mechanisms, showning that firms are specifically automating and laying off workers because of the minimum wage increase: http://ftp.iza.org/dp7674.pdf

    This paper shows a similar relationship, but only at the correlation level. I'm really only offering it because one of the authors is of Card and Krueger fame, and it is that author stating an opposing position to the earlier paper: https://www.nber.org/papers/w3997

    A great paper showing that automation specifically hurts teens from economically disadvantaged backgrounds: http://irle.berkeley.edu/files/2011/...Employment.pdf

    Quote Originally Posted by Sharmak
    My point is that unless there is a government telling companies to do things, they have no incentive to spend their resources to do so.
    The point that I was making above though is that by imposing those rules, you are also imposing unintended consequences. There are no solutions in life, only trade-offs. The government imposing a law to raise the minimum wage has a lot of unintended consequences. In this case, and from the evidence, consequences that outweigh the benefits. So the question is, if we are going to impose ourselves into the decisions made by individuals, are we going to make the world a net better place. It isn't clear at all that that is what is happening, and it isn't a good idea to impose negative consequences on people with the "we'll fix it later" mantra, because the fix also has negative consequences. Unless we can, at least, do a due dilligence on what those consequences are, it isn't the responsible thing to do to impose a policy that hurts those who are the most vulnerable.

    Quote Originally Posted by Sharmak
    Housing is probably not a good example
    Housing is a market like any other. Regardless, the point isn't industry specific. Let's change it to fresh vegetables, something we all agree the poor should still have access to (and by the way the largest single issue when creating the food deserts referenced by the former first lady). Let's say you are a company that provides some kind of obvious good to a community, fresh vegetables. You are currently earning $995K a year. Do you provide that next shipment of fresh vegetalbes? Your cost structure changes a lot in that case, so it likely isn't worth it to send them to that next market and make the additional $5K. Thus the community is (at least) worse off by one grocery store's access to vegetables due to this provision.

    Quote Originally Posted by Sharmak
    I do, but thatís not accounting for the fact that we have to prevent companies from making those cuts in the first place.
    Which we also talked about and which we also showed that you can't absent some kind of soviet style central planning board. Even if you could freeze labor before increasing prices, some companies would be bankrupt (and therefore there would be job loses) and, probably the larger effect, new companies wouldn't start up because labor costs are too expensive. Similarly, existing companies wouldn't expand or create new jobs as often because the costs of doing so were so high.

    That's the rub. We can easiliy say "lets stop them from firing" but the actual implementation isn't so clean and has problems of its own.

    Quote Originally Posted by Sharmak
    Well, thatís whatís been happening!
    Corporate welfare, or advocating for corporate wellfare? The former is undoubtedly true, but is a red herring to this debate. The latter is untrue here unles you can offer me a quote of me advocating it.

    What is probably more relevant to this point is exactly what I was saying earlier about each intervention leading to more intervention. The reason you are offering here for the government to get involved in wage rates is because the government got involved in corporate profits earlier. It seems an odd argument to say the government is the best solution to fix a problem the government creates. Why not advocate for just stoping the underlying problem created by government?

    Quote Originally Posted by Sharmak
    These medical examples arenít good.
    Why are they not good? How do they not apply?

    Quote Originally Posted by Sharmak
    Youíre suggesting it is a given that companies will cut hours due to raise in minimum wage. I counter that we can mitigate that risk to force companies not to be allowed to do that. Problem solved.
    I'm not just suggesting it, I've given you the evidence that they do, in fact, cut hours due to an increase in the minimum wage. It isn't a hypothetical.

    You are claiming that we can counter that. You haven't offered any evidence for that, much less any evidence that your solution wouldn't cause larger problems then it was trying to fix a la above.

    That is the fundamental difference between my argument and yours here. I am offering evidence that the effect is happening, you are appealing to an undefined solution with no details or supporting evidence. How would we force companies to not cut hours? Please be specific.

    Quote Originally Posted by Sharmak
    Or we force companies to pay 50% of their employeeís welfare bill.
    Ok, which would, from the company's point of view be an additional cost right? So why wouldn't the company then lay off that person? Or, specifically, not hire that person? And don't assume companies are evil here, this doesn't require them to be monsters to have a negative impact. If the cost means that the labor no longer is profitable eventually the company will have to fire them or go bankrupt.

    So it isn't clear at all that this, on net, helps the poor.

    Now, of course you will say it is better that those "unproductive" companies don't exist. Setting aside that the use of the term unproductive is meaningless here because the standard you are applying is arbitrary, the fact is, it still doesn't help the poor. They are net worse off, with lower pay, less future job opportunities, and less services and goods in their community. And it lowers the effective tax base (by decreasing profits and income which are taxed) meaning that governments have fewer resources to help the poor with.

    Quote Originally Posted by Sharmak
    But if we already know the status quo is bad
    Of course it is because all status quos are necessarily bad. We don't live in a perfect world so, by definition, the status quo is bad (not perfect). The only relevant question is, will a minimum wage increase make the world better or worse than the status quo. The evidence is unambigious that it makes it worse. So why advocate for it?
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.Ē -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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