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  1. #21
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    I am arguing that by changing the price of labor you make hiring of some portion of the labor no longer profitable. Take the video offered as an example. In the video someone is hired to sweep the floors at a factory. They contribute something like $5/hour towards the revenue of the owner and he pays them $4/hour.

    But if we mandated a $7/hour wage, why would the employer continue to hire this guy to only contribute $5/hour? Why not simply discontinue the sweeping and cut your loss?
    Okay, I get it. Thanks.

    Is there any estimate of the total income lost to those people left unemployed as a result of having a minimum wage?
    "If we lose freedom here, there is no place to escape to. This is the last stand on Earth." - Ronald Reagan

  2. #22
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Well, jobs are a great thing," Microsoft founder and philanthropist Bill Gates told MSNBC's "Morning Joe" on Tuesday. "So you have to be a bit careful: If you raise the minimum wage, you're encouraging labor substitution, and you're going to go buy machines and automate things -- or cause jobs to appear outside of that jurisdiction. And so within certain limits, you know, it does cause job destruction. If you really start pushing it, then you're just making a huge tradeoff."

    http://www.cnsnews.com/news/article/...ob-destruction

    Bill Gates is no conservative.

  3. #23
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by JimJones8934 View Post
    It makes no difference how that minimum came about
    Really? So two people agreeing to a wage rate is no different than a government mandated wage?

    Quote Originally Posted by JJ
    I didn't say it did; I'm saying it is restricting wages.
    Yes you did, you said: "Otherwise, I would have assumed that those nine countries have a zero lower limit on wages and it was a free market system."

    IE because they had a mutually agreed upon CB, that this was not a free market system. That point has not been supported.





    I would highlight that you've ignored the explanations offered and the other supporting data. Will you be addressing that data?

    Will you address the limited nature of the CB in these examples? Its apples and oranges nature given the non-low skilled nature of the labor it covers? The micro-economic argument? The other summation of data?

    Will you be addressing the bulk of this argument?


    Quote Originally Posted by evensaul View Post
    Okay, I get it. Thanks.

    Is there any estimate of the total income lost to those people left unemployed as a result of having a minimum wage?
    I did some back of the napkin math in my OP. It is generally accepted that a 10% increase in minimum wage leads to a 1% increase in unemployment. I estimated roughly a total net loss of the policy is $6,794,072 per hour worked.

    Do you need me to find something a bit more rigorous?
    "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.


  4. #24
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    Do you need me to find something a bit more rigorous?
    Not necessary.

    I'd like to add some of the things I experienced today: Driving to work this morning, I travelled a toll highway and the toll was automatically debited from my account. A few years ago, there would have been multiple people working at toll booths. I stopped near work and got a fill-up, at an unmanned gas station. I remember the days when a gas station attendant would greet me by name as I rolled down my window, would fill my tank with gas, clean my windshield, and check my oil level. I left work early today because I'm coming down with a cold or flu. I stopped by Walmart to buy some medicine, and checked out in one of half a dozen busy self-service lanes, with just one employee nearby to help customers if they needed assistance. Because I didn't really feel like going home to be miserable and fall asleep, I stopped in a new movie theater (I figured to fall asleep in a plush seat) to see the new Jack Ryan movie. It's a huge theater. It's got everything. 22 screens, 16 bowling lanes, and several restaurants. What it does not have are ticket sellers. There were about twenty computerized ticket kiosks instead of the six or ten ticket cashiers I would have expected. The concession stand seemed very understaffed, until I realized that no employees were tasked with filling drinks or buttering popcorn. Customers did those tasks themselves at self service areas to the side of the refreshment stand. The day just half over, I drove home thinking about your op, and how so very many businesses are replacing living employees with automated systems, and wondering how many jobs have been lost due to minimum wage requirements pushing more companies towards automation and self-service.
    "If we lose freedom here, there is no place to escape to. This is the last stand on Earth." - Ronald Reagan

  5. Likes Squatch347, MindTrap028 liked this post
  6. #25
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    JJ: It makes no difference how that minimum came about

    Really? So two people agreeing to a wage rate is no different than a government mandated wage?
    Only in the mechanics, which is where you are forgetting your own argument. Both "restrict wages"; i.e. the very thing you are arguing against! Recall you said - "The argument is clearly an argument against wage restrictions and the implications arising from arbitrarily boosting wages. ".

    That's why it is so confusing - you are offering one method of wage restriction as proof a zero wage restriction argument. So either you withdraw the statement above or withdraw the evidence. Which is it?

    You are also confusing that those CBs are government mandated CBs so pretending that they are between 'two people' is again misrepresenting how CBs work; there are laws that define how they work. For example in Austria: "By law collective agreements cover all the employees of the employers, who belong to the signatory organisations, whether or not the employees are members of the signatory unions."

    Finally, in describing it as an agreement between two 'people' is completely false - it is not that at all; the employer and the employee have no leeway regarding the these salaries regarding the minimum. In the example above, employers are bound by the agreements even to employees that are not members of the unions that negotiated the minimum.

    Trying to distort CBs in order to (badly) align them to your argument does you no favors here. You have made two contradictory statements, one of which needs to be dropped. Which is it?

    S: Please support that a mutually agreed to collective bargaining arrangement is incompatible with a free market system.
    JJ:I didn't say it did; I'm saying it is restricting wages.
    Yes you did, you said: "Otherwise, I would have assumed that those nine countries have a zero lower limit on wages and it was a free market system."

    IE because they had a mutually agreed upon CB, that this was not a free market system. That point has not been supported.
    If I have written a contradiction, then it is yours because all I am trying to do is to understand your argument because it seems to be contradictory. If it is your claim that CBs are part of a free market system then you need to withdraw that you are arguing against ALL wage restrictions. If they are not then part of the free market system then you need to explain why they are part of your evidence to support it.





    I would highlight that you've ignored the explanations offered and the other supporting data. Will you be addressing that data?
    There's no point pursuing additional avenues - that's how threads get off track. You made a statement as to what your argument is and then you give evidence that doesn't support that argument. Nothing else is important until those two are reconciled, or one or the other is dropped.


    Will you address the limited nature of the CB in these examples? Its apples and oranges nature given the non-low skilled nature of the labor it covers? The micro-economic argument? The other summation of data?

    Will you be addressing the bulk of this argument?
    Once I understand what your argument is then it will be addressed. At the moment, I can't tell whether you are arguing for:

    a) zero-MW (which would be in line to right-wing thinking)
    b) CB-agreements (as surprising as a libertarian supporting unions is, it is definitely possible, but I don't think that's what you are doing)
    c) government set MWs that should be lower, but they should nevertheless, exist.
    Last edited by JimJones8934; January 22nd, 2014 at 06:53 PM.

  7. #26
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by evensaul View Post
    The day just half over, I drove home thinking about your op, and how so very many businesses are replacing living employees with automated systems, and wondering how many jobs have been lost due to minimum wage requirements pushing more companies towards automation and self-service.
    I generally agree with this. Each of these services mentioned have a marginal utility that is relatively low. What is the value of having an attendant pump your gas vs you do it yourself? Once the mandated cost of the service rises above the marginal utility provided by the person it becomes cost efficient to purchase a machine. This is known as the Ricardo Effect.

    Mises explains that machinery replaces men only when the market is driving the cost of labor higher. Labor costs are rising because capital investment is making labor more productive. To remain in business, the businessman must invest in capital goods to boost the productivity of labor in his industry, too. He will do that when capital is sufficiently available....

    However, the Ricardo effect turns malignant when the cost of labor is rising, not due to improved labor productivity, but due to nonmarket forces. Government regulations such as minimum-wage laws, workers'-compensation insurance, matching social-security taxes, family-leave benefits, etc., are driving costs higher. Union-inspired labor unrest has the same malignant effect.


    From a business owner's perspective it doesn't matter why labor costs are higher, in fact remove the labor idea from the concept completely. Lets say paper was becoming more expensive. It could be more expensive because trees are in short supply or because the government has instituted a price control. In both cases we see that companies would move towards using less paper. No surprise right?

    It is a bit mysterious why others here maintain that labor is magically different from any other cost a businessman would make.



    Quote Originally Posted by JimJones8934 View Post
    Both "restrict wages"; i.e. the very thing you are arguing against!
    Which is, of course, not an accurate statement of my position. My point was that restriction of wages outside the market process is what causes artificially higher unemployment. Voluntary agreement and negotiation are not outside the market process.

    Quote Originally Posted by JJ
    You are also confusing that those CBs are government mandated CBs so pretending that they are between 'two people' is again misrepresenting how CBs work;
    Which was obviously a simplification for the sake of argument. Obviously the C in CB is collective, meaning it can't be just two people. Be it three people or three thousand, nothing about that at all relates to the argument made here. These are voluntary negotiations on behalf of both parties, that individually affect small segments of the market and generally are not present in low skilled industries.

    Quote Originally Posted by JJ
    If I have written a contradiction, then it is yours because all I am trying to do is to understand your argument because it seems to be contradictory.
    This is an inappropriate shift in the burden of proof. You made the statement that: ""[Without the CB explanation], I would have assumed that those nine countries have a zero lower limit on wages and it was a free market system."

    Challenge to support a claim. Either support or retract this statement that a collective bargaining agreement implies that it is not a free market system for labor.

    Quote Originally Posted by JJ
    You made a statement as to what your argument is and then you give evidence that doesn't support that argument. Nothing else is important until those two are reconciled, or one or the other is dropped.
    The points already have been reconciled and as such your objection has been rebutted.

    There is of course no requirement for you to acknowledge the European data or not. You could simply argue that it isn't persuasive and move on the next point I've made. Yet you haven't done that.

    Quote Originally Posted by JJ
    Once I understand what your argument is then it will be addressed. At the moment, I can't tell whether you are arguing for:

    a) zero-MW (which would be in line to right-wing thinking)
    b) CB-agreements (as surprising as a libertarian supporting unions is, it is definitely possible, but I don't think that's what you are doing)
    c) government set MWs that should be lower, but they should nevertheless, exist.
    I think to pose this question is intellectually dishonest. I have stated what I am arguing several times by now and you seem intent on ignoring that.

    My argument is: "the minimum wage negatively affects employment for those workers most vulnerable to economic fluctuations, low skilled workers."
    "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. #27
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post

    Which is, of course, not an accurate statement of my position. My point was that restriction of wages outside the market process is what causes artificially higher unemployment. Voluntary agreement and negotiation are not outside the market process.
    So if the government imposes and requires these negotiations, as in the Norway example, then that is 'within the market process'?

  9. #28
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by JimJones8934 View Post
    So if the government imposes and requires these negotiations, as in the Norway example, then that is 'within the market process'?
    If it requires that they be collective to an industry, and that no company or employee can be hired outside of that agreement, then it would be outside the market process.

    If by "Norway" you mean "Austria" then that would not be an analogous response, because Austria's law only requires that if a CB exists, it applies to all employees, not that a CB must exist.
    "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.


  10. #29
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    If it requires that they be collective to an industry, and that no company or employee can be hired outside of that agreement, then it would be outside the market process.
    That pretty much describes what these agreements are -- they are indeed collective to an entire industry. In fact, the Norwegians have several hierarchies of negotiation such that the lower levels cannot make worse agreements (source).

    If by "Norway" you mean "Austria" then that would not be an analogous response, because Austria's law only requires that if a CB exists, it applies to all employees, not that a CB must exist.
    Yes, sorry. But in Austria, you don't even have to belong to a union "By law collective agreements cover all the employees of the employers, who belong to the signatory organisations, whether or not the employees are members of the signatory unions.". Note, this is a restriction by law, and external to the agreement between the employer and unions.

    So can we remove those two from the list of countries that you quoted earlier?



  11. #30
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by JimJones8934 View Post
    That pretty much describes what these agreements are -- they are indeed collective to an entire industry. In fact, the Norwegians have several hierarchies of negotiation such that the lower levels cannot make worse agreements (source).
    Except that none of this is a legally mandated collectivized process. What you are pointing to is collective bargaining as a concept, even a widely spread concept as somehow being a violation of free market labor negotiations. Take a look at the first sentence of your link: "Agreements reached at national level provide much of the industrial relations framework that in other countries would be provided by legislation." IE, these frameworks are economic based, not legal based.

    Because people and companies band together for negotiating power is not a fundamental breakdown in market processes, it is part of the market process.

    Quote Originally Posted by JJ
    Yes, sorry. But in Austria, you don't even have to belong to a union "By law collective agreements cover all the employees of the employers, who belong to the signatory organisations, whether or not the employees are members of the signatory unions.". Note, this is a restriction by law, and external to the agreement between the employer and unions.

    So can we remove those two from the list of countries that you quoted earlier?


    Only if you can show that these agreements cover low skilled workers. In neither nation does the collective bargaining provision extend to low skill workers, who are the only ones covered by a minimum wage in the other countries noted. IE you need to show that the type of employees covered in the CB agreements are the same types of employees covered by a minimum wage, IE not an apples and oranges fallacy.




    You have another option as well that I have already alluded to. You can simply continue to maintain that this data is not convincing to you personally and we can move on to any other section of the argument. Your reluctance to do so seems to imply that you recognize the weakness of the opposing argument and are unwilling to confront the majority of the argument presented by me.
    "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.


  12. #31
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    Except that none of this is a legally mandated collectivized process. What you are pointing to is collective bargaining as a concept, even a widely spread concept as somehow being a violation of free market labor negotiations. Take a look at the first sentence of your link: "Agreements reached at national level provide much of the industrial relations framework that in other countries would be provided by legislation." IE, these frameworks are economic based, not legal based.

    Because people and companies band together for negotiating power is not a fundamental breakdown in market processes, it is part of the market process.
    Yes but my reference shows that they apply to other companies or employees within that sector by law. It's not voluntary at all


    Only if you can show that these agreements cover low skilled workers. In neither nation does the collective bargaining provision extend to low skill workers, who are the only ones covered by a minimum wage in the other countries noted. IE you need to show that the type of employees covered in the CB agreements are the same types of employees covered by a minimum wage, IE not an apples and oranges fallacy.
    Of course - I have already mentioned steel workers and restaurant workers.

    You have another option as well that I have already alluded to. You can simply continue to maintain that this data is not convincing to you personally and we can move on to any other section of the argument. Your reluctance to do so seems to imply that you recognize the weakness of the opposing argument and are unwilling to confront the majority of the argument presented by me.
    No, this is an important foundation to further arguments and also a fact check to ensure that the evidence you are proposing stands to up to scrutiny.

    I'm certainly glad that you support unions and collective bargaining. That is different from what I was expecting. But you are certainly not talking about not having a lower limit but rather how that lower limit is decided. Correct?

  13. #32
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by JimJones8934 View Post
    Yes but my reference shows that they apply to other companies or employees within that sector by law.
    Your link makes no such statement, please support.

    Quote Originally Posted by JJ
    Of course - I have already mentioned steel workers and restaurant workers.
    Where? Please support.

    Quote Originally Posted by JJ
    No, this is an important foundation to further arguments and also a fact check to ensure that the evidence you are proposing stands to up to scrutiny.
    No it isn't, it is a minor bit of support in a very long and large argument. At least have the courage to admit you are attempting to sharp shoot rather than debating the argument at large.

    Quote Originally Posted by JJ
    I'm certainly glad that you support unions and collective bargaining.
    I have no antipathy for voluntary unions and collective bargaining. I have no support for mandatory joining, dues collection or legal restrictions on working.
    "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.


  14. #33
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    JJ: Yes but my reference shows that they apply to other companies or employees within that sector by law.
    Your link makes no such statement, please support.
    I did in #29:
    That pretty much describes what these agreements are -- they are indeed collective to an entire industry. In fact, the Norwegians have several hierarchies of negotiation such that the lower levels cannot make worse agreements (source)

    At the top there are the basic agreements (hovedavtalene) between the union confederations and the national employers’ associations which set the framework for bargaining and regulate issues that in many other countries are dealt with through legislation.
    ...
    At the next level in the hierarchy there are the agreements for specific industries, although these agreements include the text of the basic agreements as their first section.

    This shows that these agreements are not between individual companies and unions but entire industries.

    Also in Austria:

    By law collective agreements cover all the employees of the employers, who belong to the signatory organisations, whether or not the employees are members of the signatory unions. (source)

    So here there are governmental forces at work to ensure how these agreements operate and who they must apply to.


    S:Only if you can show that these agreements cover low skilled workers. In neither nation does the collective bargaining provision extend to low skill workers, who are the only ones covered by a minimum wage in the other countries noted. IE you need to show that the type of employees covered in the CB agreements are the same types of employees covered by a minimum wage, IE not an apples and oranges fallacy.

    JJ:Of course - I have already mentioned steel workers and restaurant workers.
    Where? Please support.
    Ah, sorry about that, this was meant to appear in the previous post:

    Last year in Austria the trade unions in the metal industry (PRO-GE and GPA-djp) organised a strike movement which led to a significant pay rise of over 4%. In reaction to this the capitalists announced that they were no longer prepared to sign a collective bargaining agreement for the whole metal industry. They demanded separate negotiations for the six different sectors in the industry (steel, vehicles, engineering, foundries, etc.). With this move they want to weaken the position of the unions, to cut wages and worsen the conditions of 180,000 workers in the coming period. (source)

    fellesforbundet is the union representing construction, farming, hotels and restaurant sectors. So I believe we are comparing apples to apples.


    JJ:No, this is an important foundation to further arguments and also a fact check to ensure that the evidence you are proposing stands to up to scrutiny.
    No it isn't, it is a minor bit of support in a very long and large argument. At least have the courage to admit you are attempting to sharp shoot rather than debating the argument at large.
    Yes, but your argument is unimportant if the evidence you purport to support it fails because it is not representative. There is no sharpshooting if you have not withdrawn your original statement of your own argument "the minimum wage negatively affects employment for those workers most vulnerable to economic fluctuations, low skilled workers."

    You need to properly qualify what you mean "minimum wage" since CBs do specify a minimum wage under the influence of the law in some cases and certainly across entire industries in others. Neither of which are wholly within the market nor voluntary within the industry.

    It is also not a 'minor bit of support' since you introduced it as "Scott Sumner has done some excellent work on the data coming out of Europe, where minimum wage laws vary significantly, and data is relatively reliable." under Macroeconomic Evidence. I'm assuming you used the evidence to draw your conclusions rather than finding evidence to support your argument so working backwards if the evidence fails then so must the argument.

    I have also addressed the point that a wage lower than what a person gets under the social safety net makes no sense so there will always be some kind of "minimum wage" so I have addressed the argument fairly directly.



    I have no antipathy for voluntary unions and collective bargaining. I have no support for mandatory joining, dues collection or legal restrictions on working.
    Then it appears that the Austria and Norway examples (and likely the other European ones) fall under mandatory joining (for both employers within an industry and employees) and legal restrictions (certainly on slavery, child-labor and health & safety laws).

    So is this turning into another argument that only works in a totally different universe which doesn't have any of these common-sense laws or are you positing that we need to go back to the 1800's where such restrictions aren't in place? In which case, the African examples should prove your point.

    Also, do you support the Obama raising the minimum wage for Federal workers? Is that 'within the industry' of government workers and acceptable?

  15. #34
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by JimJones8934 View Post
    This shows that these agreements are not between individual companies and unions but entire industries.
    I think you might have misunderstood my challenge. Where in your link does it show that this process is mandated by law? Perhaps you are laboring under the common misunderstanding that all collective bargaining is a legally mandated process?

    In Austria they have something similar to what Non-Right to Work States in the US have where they legally mandate that employers cannot negotiate with any party outside of a Union agreement.

    However, your claim was about the link you offered, which makes no such statement and in Austria that law is confined to the signatory organizations (union/company) not to companies that do not take part in such agreements.


    Quote Originally Posted by JJ
    Ah, sorry about that, this was meant to appear in the previous post:

    Last year in Austria the trade unions in the metal industry (PRO-GE and GPA-djp) organised a strike movement which led to a significant pay rise of over 4%. In reaction to this the capitalists announced that they were no longer prepared to sign a collective bargaining agreement for the whole metal industry. They demanded separate negotiations for the six different sectors in the industry (steel, vehicles, engineering, foundries, etc.). With this move they want to weaken the position of the unions, to cut wages and worsen the conditions of 180,000 workers in the coming period. (source)

    fellesforbundet is the union representing construction, farming, hotels and restaurant sectors. So I believe we are comparing apples to apples.

    First, for a guy who throws such a fit over Fox News and Brietbart links, you are throwing in a Marxist.com reference which strikes me as a bit hypocritical.

    Second, your link seems to support that there is no mandated law requiring industry wide collective bargaining (hence why they could demand separate negotiations).

    Third, the existence of a Union is not equivalent to the existence of a legally mandated agreement across an industry.


    Quote Originally Posted by JJ
    Yes, but your argument is unimportant if the evidence you purport to support it fails because it is not representative.
    And you realize that the single piece of evidence you have chosen to criticize is a small part of the evidence supporting that argument right? That is why it is sharpshooting.

    Lets use an example to see if we can clarify why your response is inadequate.


    Claim: The sky is blue.

    Support:

    1) Multiple peer-reviewed papers discussing the sky as blue.

    2) References to literature where the sky's color is compared to other blue things.

    3) A picture of the sky as blue.

    4) A detailed explanation of why, given the composition of the atmosphere the light being allowed through is blue.



    Response: "the picture could (no evidence) be Photoshopped therefore the entire argument is invalid.


    Do you see why that response is ridiculous? You have taken a single (less than a fifth of the entire argument) piece of support out of context then rejected the entire conclusion.

    Quote Originally Posted by JJ
    It is also not a 'minor bit of support' since you introduced it as "Scott Sumner[COLOR=#333333] has done some excellent work on the data coming out of Europe, where minimum wage laws vary significantly, and data is relatively reliable." under Macroeconomic Evidence. I'm assuming you used the evidence to draw your conclusions rather than finding evidence to support your argument so working backwards if the evidence fails then so must the argument.
    And you were able to read that sentence, but somehow missed this?

    This is a relatively rare phenomenon in economics, but agreement with the claim “Does minimum wage hurt employment of low skilled workers” is about as universal as we can find. Recently, David Neumark (UC Irvine) conducted an environmental scan of the current state of economic research on the minimum wage. He reviewed more than 100 major academic studies (since 1992) and found that 85% of them find a negative effect on employment of low skilled workers.

    And Prof. Neumark is not the only economist to have done an environmental scan (a review of all academic literature on a subject) in recent years. Congress did one back in 1995 as well and found that the effects go beyond simply not hiring or letting go. At the margin, where people are retained at the higher income, other pecuniary benefits such as training, time off and working conditions suffered as minimum wages increased.

    It will also indicate that the minimum wage has wide-ranging negative effects that go beyond unemployment. For example, higher minimum wages encourage employers to cut back on training, thus depriving low wage workers of an important means of long-term advancement, in return for a small increase in current income....

    First, Prof. David Neumark of UC Irvine did an environmental scan. This is a procedure where economists (it is also done in other fields like medicine) do a scan of all peer reviewed literature on a subject and attempt to see what the state of the discussion is. Sometimes these types of scans will also use the underlying data sets to do a meta study of the data presented. These types of meta-studies are often far more powerful (in the statistical sense) and accurate for underlying causation. Prof. Neumark did both types of scans during this study.

    He has two major findings:

    1) 85% of all economic studies find a strong negative correlation between minimum wage increases and minority employment rates.

    2) A 10% increase in minimum wage reduces minority employment by 3.9%. That number is composed primarily of teenagers (drop of 6.6%). Blacks suffer the most (-2.8%) and especially black teenagers (-8.4%).

    His full study was linked in my OP, but for convenience here it is again: http://www.epionline.org/studies/Neumark_2007.pdf

    I would specifically point you to table 5 on page 28. This table shows employment elasticity for different groups. You'll notice that those who are younger and a minority (or with low training like a High school drop out) have negative elasticity, meaning that they lose jobs as minimum wage increases. 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 second study I offered was conducted by Congress and studied older economic data (pre-Neumark study). These papers generally also support the notion that minimum wage increases negatively impact the ability of minorities and the young to get employment. They highlight exactly how unique are Card and Kreuger's findings. I would like to post the analysis of the major papers they used:

    • The minimum wage reduces employment.
    Currie and Fallick (1993), Gallasch (1975), Gardner (1981), Peterson (1957), Peterson and Stewart (1969).

    • The minimum wage reduces employment more among teenagers than adults.
    Adie (1973); Brown, Gilroy and Kohen (1981a, 1981b); Fleisher (1981); Hammermesh (1982); Meyer and Wise (1981, 1983a); Minimum Wage Study Commission (1981); Neumark and Wascher (1992); Ragan (1977); Vandenbrink (1987); Welch (1974, 1978); Welch and Cunningham (1978).

    • 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 hurts the unskilled.
    Krumm (1981).

    • The minimum wage hurts low wage workers.
    Brozen (1962), Cox and Oaxaca (1986), Gordon (1981).

    • The minimum wage hurts low wage workers particularly during cyclical downturns.
    Kosters and Welch (1972), Welch (1974).

    • The minimum wage increases job turnover.
    Hall (1982).

    • The minimum wage reduces average earnings of young workers.
    Meyer and Wise (1983b).

    • The minimum wage drives workers into uncovered jobs, thus lowering wages in those sectors.
    Brozen (1962), Tauchen (1981), Welch (1974).

    • The minimum wage reduces employment in low-wage industries, such as retailing.
    Cotterman (1981), Douty (1960), Fleisher (1981), Hammermesh (1981), Peterson (1981).

    • The minimum wage hurts small businesses generally.
    Kaun (1965).

    • The minimum wage causes employers to cut back on training.
    Hashimoto (1981, 1982), Leighton and Mincer (1981), Ragan (1981).

    • The minimum wage has long-term effects on skills and lifetime earnings.
    Brozen (1969), Feldstein (1973).

    • The minimum wage leads employers to cut back on fringe benefits.
    McKenzie (1980), Wessels (1980).

    • The minimum wage encourages employers to install labor-saving devices.
    Trapani and Moroney (1981).

    • The minimum wage hurts low-wage regions, such as the South and rural areas.
    Colberg (1960, 1981), Krumm (1981).

    • 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 does little to reduce poverty.
    Bonilla (1992), Brown (1988), Johnson and Browning (1983), Kohen and Gilroy (1981), Parsons (1980), Smith and Vavrichek (1987).

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

    • The minimum wage helps unions.
    Linneman (1982), Cox and Oaxaca (1982).

    • The minimum wage lowers the capital stock.
    McCulloch (1981).

    • The minimum wage increases inflationary pressure.
    Adams (1987), Brozen (1966), Gramlich (1976), Grossman (1983).

    • The minimum wage increases teenage crime rates.
    Hashimoto (1987), Phillips (1981).

    • The minimum wage encourages employers to hire illegal aliens.
    Beranek (1982).

    • Few workers are permanently stuck at the minimum wage.
    Brozen (1969), Smith and Vavrichek (1992).

    • The minimum wage has had a massive impact on unemployment in Puerto Rico.
    Freeman and Freeman (1991), Rottenberg (1981b).

    • The minimum wage has reduced employment in foreign countries.
    Canada: Forrest (1982); Chile: Corbo (1981); Costa Rica: Gregory (1981); France: Rosa (1981).

    • Characteristics of minimum wage workers
    Employment Policies Institute (1994), Haugen and Mellor (1990), Kniesner (1981), Mellor (1987), Mellor and Haugen (1986), Smith and Vavrichek (1987), Van Giezen (1994).



    So you were able to read the section about the blog response to European data that I mentioned, but miss the overwhelming peer-reviewed evidence I offered? The micro-economic argument? The rebuttal of minimum wage advocates? All of that?

    Quote Originally Posted by JJ
    Then it appears that the Austria and Norway examples (and likely the other European ones) fall under mandatory joining (for both employers within an industry and employees) and legal restrictions (certainly on slavery, child-labor and health & safety laws).
    I agree, and there is clearly some unemployment aspect to those restrictions.

    We certainly shouldn't forget that Unions (just like minimum wage) were originally organized to keep undesirable races from competing economically. They were designed to keep out other labor competition (scabs, etymology of that word is interesting by the way, it comes from the usage of the word to define a person who is outside the community, an outcast, someone exiled. It refers to those ethnic groups that were entering the scene in the early 1800s and were seen as competing labor. There are also some references, though probably not etymological of people using the term racially, the Italians and the Irish used it as a metaphor to their major competition, Blacks, in an obviously superficial comparison. So quite literally those "scabs" were the ethnic others who were competing for local work).

    But that discussion is outside the scope of this argument. The amount of additional unemployment created via Union affects is relatively minor all things considered. We can talk about all the different market and non-market factors that affect employment rates, but not in this thread. This thread is solely concerning the unemployment affect of minimum wage.

    You are free to argue that some of these small union effects mitigate the difference Prof. Sumner has pointed out in Europe. Fine, that is your opinion (though you offer no evidence to support that they actually do).

    But it does not follow that because there are possibly some mitigating effects to the differential noticed that therefore the entire argument and all other unrelated supporting data is invalid.


    Quote Originally Posted by JJ
    Also, do you support the Obama raising the minimum wage for Federal workers? Is that 'within the industry' of government workers and acceptable?
    Actually that is an interesting question. Will there be an unemployment effect given his increase in the minimum wage?

    I think we won't really get an opportunity to get data on this as the unilateral increase is almost certainly going to be shot down in court since it contradicts existing regulation and legislation on federal contracting.

    However, it is, praxeologically a good question. I think this example shows another difference between government and private sector. This will likely not cause unemployment because federal agencies will simply up their budgets to cover the increased labor cost, something a private company is unable to do. There are of course other issues with doing so (the increased revenue required removes capital development within the economy causing unemployment indirectly), but none of the same kind as discussed in the OP. The government is an odd duck in that manner because it doesn't have customers in the traditional sense. I can't stop paying taxes and use another government in the same way I could stop patronizing Costco if they increased prices.
    "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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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    Actually that is an interesting question. Will there be an unemployment effect given his increase in the minimum wage?

    I think we won't really get an opportunity to get data on this as the unilateral increase is almost certainly going to be shot down in court since it contradicts existing regulation and legislation on federal contracting.

    However, it is, praxeologically a good question. I think this example shows another difference between government and private sector. This will likely not cause unemployment because federal agencies will simply up their budgets to cover the increased labor cost, something a private company is unable to do. There are of course other issues with doing so (the increased revenue required removes capital development within the economy causing unemployment indirectly), but none of the same kind as discussed in the OP. The government is an odd duck in that manner because it doesn't have customers in the traditional sense. I can't stop paying taxes and use another government in the same way I could stop patronizing Costco if they increased prices.
    The first thing to note is that Obama's proposed increase in the minimum wage "for federal workers" only applies to those working for federal contractors, not to those working directly for the federal government.

    According to one estimate (as reported by Mark Trumbill over at DC Decoder) there are about 560,000 workers working for federal contractors now, who make less than $12/hr, and these workers won't see Obama's increase in the minimum wage until the federal contracts under which their employers work are renewed. This will take several years.

    But assuming the average worker making under $12/hr now is making $8/hr, and that all the federal contracts have been renewed and the $10.10 rate is now in effect, the amount of additional federal revenue needed to pay for the raise would be $1,176,000 per year, or significantly less than a rounding error in the federal budget for 2014.

    So I don't believe the action by Obama has any economic potential to increase taxes. The Washington Post reported that Congressman Issa claimed in a "February House committee meeting" that "The federal government lost $261 billion...in 2012". If true that would amount to about $715,068,493 a day. Reducing that number by only 0.15% each year would pay for Obama's minimum wage increase for federal workers gesture.

    I have to give him props where they're due. He's finally made a "grand gesture" that isn't necessarily going to cost my grand kids a sizable chunk of their lifetime earnings. That said, if his gesture succeeds as he hopes, all bets are off.

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

    Quote Originally Posted by cstamford View Post
    According to one estimate (as reported by Mark Trumbill over at DC Decoder) there are about 560,000 workers working for federal contractors now, who make less than $12/hr, and these workers won't see Obama's increase in the minimum wage until the federal contracts under which their employers work are renewed. This will take several years.
    There were some questions on this part specifically. Statements by the Administration said they would make these contract changes unilaterally (which is patently illegal). However, whether a contractor will sue or not is unclear since there are clear punitive repercussions in future contract awards to such an act.

    Quote Originally Posted by cstam
    So I don't believe the action by Obama has any economic potential to increase taxes.
    Perhaps not, it could come from any number of methods to pay for it. My point was simply that it must be paid for. Any change in expenditures, small or large, represent a capital cost to the economy. That might be covered by capital extraction (tax or debt issuance) or through reduced expenditure somewhere else. But the method of paying for a cost is irrelevant to whether or not it is a cost.



    And I think more to the point, there is still a notable difference between this kind of wage increase (where you customers are unable to switch) and one in the private sector where both supplier and level of consumption are variable.
    "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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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    There were some questions on this part specifically. Statements by the Administration said they would make these contract changes unilaterally (which is patently illegal).
    The article I cited claimed the Administration would make revisions to the contract renewals they offered the current crop of federal contractors to cover the increased minimum wage "for federal workers" (so misleadingly named). If this is illegal, I can't see how. What would be the grounds for a current contractor to sue?

    Quote Originally Posted by Squatch
    Perhaps not, it could come from any number of methods to pay for it. My point was simply that it must be paid for.
    I take it that by "must", you mean must according to sound economic principles, and not "must" according to the Administration's present fiscal policies. I mean, they've been adding to the M1 supply by about $80 billion a month (average) for years. It wouldn't be an exaggeration to liken the economic impact of an additional $1.1 million to that number to the impact a mosquito landing on the back of a bull elephant has to the pachyderm's life expectancy.

    Quote Originally Posted by Squatch
    Any change in expenditures, small or large, represent a capital cost to the economy.
    Not sure what you mean here. How does giving federal workers a wage increase become a capital cost to the economy? They're going to spend it or save it, right? And unless they save it under the mattress, how does it become a capital cost? Or am I just not understanding the term?

    Quote Originally Posted by Squatch
    That might be covered by capital extraction (tax or debt issuance) or through reduced expenditure somewhere else. But the method of paying for a cost is irrelevant to whether or not it is a cost.
    Well, sure, but a cost to whom? According to this publication by the Small Business Association, last modified January 8th of this year, there are about 27.9 million businesses in the US. This means that if the Administration were to decide to pay for the proposed increase in the minimum wage "for federal workers" by raising taxes on businesses, the average increase for each would be about four cents per year. But since this increase is going to people who either will spend this increase or save it in a bank or other investment, it goes right back into the economy, and theoretically would seem to eventually pay back to the private businesses the four cents additional tax they were charged. Right? I mean, minus administrative costs, which would include the "waste, fraud, and abuse" percentage?

    Now I don't know how to figure those administrative costs on $1.1 million a year, so I can't say what they might be, but they're certainly a good deal smaller than the already relatively insignificant $1.1 million a year in increased wages. So is it this administrative "shrinkage" you're referring to as the "capital cost"? Wouldn't even this relatively infinitesimal amount also end up circulating in the economy? I'm just not seeing what group pays this "capital cost" that isn't reimbursed for it eventually.

    Quote Originally Posted by Squatch
    And I think more to the point, there is still a notable difference between this kind of wage increase (where you customers are unable to switch) and one in the private sector where both supplier and level of consumption are variable.
    You'll have to explain this within the context of what we're talking about, I'm afraid, because within that context I just don't see what notable, in the sense of important in this instance, difference there is.

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

    Quote Originally Posted by cstam
    But since this increase is going to people who either will spend this increase or save it in a bank or other investment, it goes right back into the economy, and theoretically would seem to eventually pay back to the private businesses the four cents additional tax they were charged. Right? I mean, minus administrative costs, which would include the "waste, fraud, and abuse" percentage?
    I think the first thing to note that this argument is not a government specific argument, it is a general argument used by minimum wage supporters to minimize the economic effects caused by the labor price distortion (actually, it is very close to the same argument given for any stimulus spending). Generally, it is a method in concurrence with Neo-Keynesianism and its focus on the primacy of the velocity of money. I think that view suffers from some significant flaws.

    A small clarification, when I said that the capital was removed from the economy I didn’t mean that it was destroyed or lost, only that it was sequestered away from productive uses. In that light…

    First, it would seem to imply that any money spent by the government (or any company for that matter) on labor has no real effect (besides admin costs) to the economy. If that was the case, why not raise it to $100/hour? Why $10? After all, that would only represent about 40 cents a year, a paltry sum for a business and it might well increase their revenues after they money is saved/spent. Further, it would also imply that any money spent on anything represents no real cost to the economy. Why not spend money on digging and filling in holes, after all that money is spent in wages and in materials to other companies who use it, so there really isn’t a change there right? All that money ends up in the bank or spent at some point right?

    Obviously that isn’t the case. We need to consider the time value of money. Remember that this capital would have been engaged in other, productive prospects if it had not been tied up in this process. The return rate on this capital while it goes through the government system and into wages is not insignificant (usually about three years) and that represents three years of capital development that we are forgoing and then of course all the development that lost capital would have earned. You estimated something like $1.2M in increased wage costs per year. If we assume an 8% per year return on capital (average market return), that one time cost represents roughly a $95,000 of lost capital development per year, or $286K of lost capital development for each year of wages paid. Over twenty years that is something like $14.4M of lost development. Maybe that is a rounding error in the federal budget, but it represents $14.4M of well being permanently forgone for the sake of this program.

    Additionally, we need to remember that labor has a price and that the price system is more than just a convenient tool, it is a fundamental conduit of information in a modern economy. By distorting the price of labor you artificially emphasize it over other goods and services.


    Quote Originally Posted by cstamford View Post
    The article I cited claimed the Administration would make revisions to the contract renewals they offered the current crop of federal contractors to cover the increased minimum wage "for federal workers" (so misleadingly named). If this is illegal, I can't see how. What would be the grounds for a current contractor to sue?
    Well there could be several grounds.

    First, my point about contractors suing was related to the reports that the Administration would like to unilaterally mod the contracts to enforce this order. If rather, the Administration waits until contracts expire and puts these requirements in the new RFPs that would remove that specific ground for suit. Contractors could still sue under other clauses including:

    That this increase violates the Business Development Program regulations and executive order which requires contracting agencies to establish an environment promoting contracts to small and minority owned contractors, notably Alaskan 8As. This requirement would violate that guidance because it makes it proportionally harder for small businesses to compete, since they have less capital to higher people at the new, higher wage than their larger competitors. While I personally doubt this kind of suit would be successful, I think it is certainly bad press and it would almost certainly be heard in a court.


    However, discussing contract law and grounds for suit is a bit off topic.

    Quote Originally Posted by cstam
    I take it that by "must", you mean must according to sound economic principles, and not "must" according to the Administration's present fiscal policies.
    No, I mean must in the sense that reality requires a payment. Even with the Administration's current fiscal policies it is paying for the changes it has made, either with taxes or debt, both represent capital removal from the economy.

    The addition to M1 is not a method of "paying for" the programs, rather it is a method of reducing the relative size of current debt to future taxes through inflation (in the economic sense) sometimes refereed to as "monetization."

    Quote Originally Posted by cstam
    Well, sure, but a cost to whom?
    All monetary transactions are, by accounting definition a cost and a revenue (or more properly a debit and credit) to the two parties/accounts. In this case we are talking about a cost to the government and a revenue to the employee. There is then a cost to the taxpayer or bondholder and a revenue to the government.

    In economic terms, we should remember that all costs are, by definition, opportunity costs. This is no difference. Whether we pay for this expenditure through a tax to income or to businesses, that still represents an opportunity cost from wherever would have been invested in. That Opportunity Cost represents a permanent capital development loss to the economy.

    Quote Originally Posted by cstam
    You'll have to explain this within the context of what we're talking about, I'm afraid, because within that context I just don't see what notable, in the sense of important in this instance, difference there is.
    In addition to the points I’ve made above, my relevant point here was that the government is not yoked with the same incentives as a private company. For example, if McDonald’s is forced to increase wages for its employees it has two choices to account for that overall increase in labor cost. It can increase revenue to cover that cost or decrease labor supply so as to have the same total labor cost right?

    The problem is, for a private company, the former option doesn’t really exist. If they increase the price of their goods they will suffer a decrease in revenue because people will either forgo their purchase or purchase from a competitor. To argue that they could just increase their revenue to cover increased labor costs would be to implicitly assume that they aren’t currently maximizing their revenue, which is not only ridiculous, but seems to imply that we are ok with harming the consumer of the good in favor of the labor.

    So in reality, we are left with only one option, to decrease the total amount of labor consumed to account for the cost change. Hence, less jobs available.

    Taking this over to the government side of the house we see that the facts represented in the second paragraph don’t really apply. The government can just increase its revenue to account for an increased cost of labor by mandating that you “consume” their goods and services. There is no mandating limit on a government’s consumption of a good because it can force others to pay for that consumption.
    "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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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    @ Squatch

    I've only got a few minutes, which is not nearly enough time to respond to everything in your last post, so I thought I'd pick a part of it I consider low-hanging fruit, so to speak, and get to the balance later today or maybe over the weekend.

    Quote Originally Posted by Squatch
    That this increase violates the Business Development Program regulations and executive order which requires contracting agencies to establish an environment promoting contracts to small and minority owned contractors, notably Alaskan 8As. This requirement would violate that guidance because it makes it proportionally harder for small businesses to compete, since they have less capital to higher people at the new, higher wage than their larger competitors. While I personally doubt this kind of suit would be successful, I think it is certainly bad press and it would almost certainly be heard in a court.
    (emphasis added to highlight point to be addressed below)

    I think you're saying above that the Business Development Program (BDP) exists as it does, at least in part, according to at least one Executive Order. I can't imagine the federal court that would accept a challenge from a disgruntled contractor that the President can't, by Executive Order, make void a previous Executive Order. If you have a precedent in mind, I'd like to hear it. It would change a fundamental understanding I have of the nature of Executive Orders.

    Also, the regulations that cause the BDP to function as it does are, if it is like all other programs administered by the Executive, changed "unilaterally" multiple times over the years, and I've never heard of s suit being brought based solely on the fact the regulations changed. So as I understand what you're saying, any suit wouldn't be because the regs changed, but because they changed to adversely affect the environment promoting contracts to small and minority owned contractors.

    Too that point, you don't explain how increasing the federally mandated minimum wage for federal workers would diminish or destroy the present BDP environment. It seems to me you're thinking about the extra labor cost to federal contractors that would in some way diminish or destroy the environment, but how would it, or could it do that? Are you thinking that under this proposal the federal government will mandate the increased labor costs, but not simultaneous with that mandate, mandate an offsetting increase in the price it pays for those contracts? If so, why would you think that about this proposal?
    Last edited by cstamford; January 31st, 2014 at 06:05 PM.

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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 you might have misunderstood my challenge. Where in your link does it show that this process is mandated by law? Perhaps you are laboring under the common misunderstanding that all collective bargaining is a legally mandated process?
    No, I said that it was regulated and that those processes are directly influenced by the laws mentioned. That they are not just free agreements between a union and a company.

    In Austria they have something similar to what Non-Right to Work States in the US have where they legally mandate that employers cannot negotiate with any party outside of a Union agreement.
    So you have answered the question that there are laws that govern how these are these agreements apply. Also, the laws also state that they must apply across the entire industry.

    Both of these mean that you cannot support them since "I have no support for mandatory joining, dues collection or legal restrictions on working.". The latter also because even non-union members are covered -- so the employer is forced to pay even outside of the parties making the CB agreement.



    First, for a guy who throws such a fit over Fox News and Brietbart links, you are throwing in a Marxist.com reference which strikes me as a bit hypocritical.
    Three reasons:
    1. Fox & Brietbart have been proven time and again to be liars and truth stretchers. I have no idea what marxist.com is.
    2. I am using a source to report facts about a specific case, which Fox & even Breitbart are capable of.
    3. Using conspiracy sources seem to hold a higher standard for you (e.g. using a conspiracy theorists' lawsuit in supporting your IRS argument and also conspiracy theories of the zerohedge from the other thread). So I don't see why you're complaining about conspiracy sites, if that's what you're doing.

    Second, your link seems to support that there is no mandated law requiring industry wide collective bargaining (hence why they could demand separate negotiations).
    No, the link was to show that these agreements aren't always voluntary - that there are sectors within the agreement that don't want to fall under that banner.



    And you realize that the single piece of evidence you have chosen to criticize is a small part of the evidence supporting that argument right? That is why it is sharpshooting.
    Yes, but if you continue to support it as evidence then there are elements of the argument that are brought into play to explain its presence. Thus far, I have learned that your original statement "The argument is clearly an argument against wage restrictions and the implications arising from arbitrarily boosting wages. ".

    1. That it's not arbitrary if it's done between a union and an industry.
    2. Boosting wages is also fine and therefore some kind of minimum is fine. To you the source of it is important, to me not so much (we'll get to that later).
    3. You are not arguing "against wage restrictions" in toto but only those that don't involve the government.

    So I consider your original statement retracted. Right?

    The you changed the argument in #26 to
    My argument is: "the minimum wage negatively affects employment for those workers most vulnerable to economic fluctuations, low skilled workers."
    So you have to clarify what you mean by 'minimum wage' because you certainly don't mean a minimum wage that is agreed upon by two parties. So it's still incomplete and too broad. When you clarify then you may have a case (though really you don't).


    Lets use an example to see if we can clarify why your response is inadequate.


    Claim: The sky is blue.

    Support:

    1) Multiple peer-reviewed papers discussing the sky as blue.

    2) References to literature where the sky's color is compared to other blue things.

    3) A picture of the sky as blue.

    4) A detailed explanation of why, given the composition of the atmosphere the light being allowed through is blue.

    Response: "the picture could (no evidence) be Photoshopped therefore the entire argument is invalid.
    This is a great example of why I think you're wrong:

    1. The sky actually isn't blue - it is night-time. So instantly you are wrong because you have made a blanket statement that doesn't cover all cases. This is why your only example of non-government-mandated-MW are CBs is such a surprise. I thought that you'd be arguing for zero MW.
    2. The sky also has no real 'color' but it is due to the scattering of light, which although produces blue most of the time sometimes produces red. So you are using just one case to make it seem as if it were always true whereas there are just as many cases where it isn't. This is like you arguing that CBs are the equivalent to no-minimum wage - they're not; they are still a minimum wage. Shifting goals to now say you're arguing for government-free agreements is different from your original statements, which now largely stands in tatters.
    3. Also, to say that there are no laws governing employment is completely false, there are the laws I mentioned that govern all employment so to view the free-market as being absent of government is completely unrealistic: hence the photoshopped picture could be a legitimate argument, especially since it is probably not even the perfect replica of the same blue but something that is blue enough.


    Do you see why that response is ridiculous? You have taken a single (less than a fifth of the entire argument) piece of support out of context then rejected the entire conclusion.
    Then you just need to accept that yes, the picture could be shopped, so I will remove it from my support. Instead, you are arguing that it couldn't have been shopped because the image was from 1960 when photoshop wasn't available (I'm then pointing out that other graphics programs were available at the time). You then switch the argument to image manipulation wasn't common in photography and that if it was done with film then that is not the same thing as manipulating the picture digitally. I then respond that, manipulation is still manipulation (MW is MW no matter who does it).


    JJ: It is also not a 'minor bit of support' since you introduced it as "Scott Sumner[COLOR=#333333] has done some excellent work on the data coming out of Europe, where minimum wage laws vary significantly, and data is relatively reliable." under Macroeconomic Evidence. I'm assuming you used the evidence to draw your conclusions rather than finding evidence to support your argument so working backwards if the evidence fails then so must the argument.
    And you were able to read that sentence, but somehow missed this?
    This is a relatively rare phenomenon in economics, but agreement with the claim “Does minimum wage hurt employment of low skilled workers” is about as universal as we can find. Recently, David Neumark (UC Irvine) conducted an environmental scan of the current state of economic research on the minimum wage. He reviewed more than 100 major academic studies (since 1992) and found that 85% of them find a negative effect on employment of low skilled workers.
    I didn't miss it but I wanted to remove that piece of support first. That's what we're still doing. Certainly your statements still doesn't really line up to the evidence proposed. So that's why we need to dig into more of the details of exactly what you mean when you say that CB is the same as not having a minimum wage.
    So you were able to read the section about the blog response to European data that I mentioned, but miss the overwhelming peer-reviewed evidence I offered? The micro-economic argument? The rebuttal of minimum wage advocates? All of that?
    No, it is being deliberately ignored as currently irrelevant to my point that the evidence doesn't line up with your several revisions of the argument. All too broad and assuming too much.

    JJ:Then it appears that the Austria and Norway examples (and likely the other European ones) fall under mandatory joining (for both employers within an industry and employees) and legal restrictions (certainly on slavery, child-labor and health & safety laws).
    I agree, and there is clearly some unemployment aspect to those restrictions.
    Strange way to phrase slavery and child-labor as being an 'unemployment aspect' - are you suggesting that these should not be the case, that there should be literally no minimum wage at all, including zero? Are you also arguing that H&S laws are also burdensome to the point that it is better to have people working in poor conditions than not at all?

    We certainly shouldn't forget that Unions (just like minimum wage) were originally organized to keep undesirable races from competing economically. They were designed to keep out other labor competition (scabs, etymology of that word is interesting by the way, it comes from the usage of the word to define a person who is outside the community, an outcast, someone exiled. It refers to those ethnic groups that were entering the scene in the early 1800s and were seen as competing labor. There are also some references, though probably not etymological of people using the term racially, the Italians and the Irish used it as a metaphor to their major competition, Blacks, in an obviously superficial comparison. So quite literally those "scabs" were the ethnic others who were competing for local work).
    But we're not in the 1800's! It doesn't matter how they were originally formed -- unless they are like that now, this has nothing to do with the current 2014 world we live in! And yes, unions, just like any other group have a right to protect their members' hard-fought rights. Being outside necessarily causes resentment. Please stick to at least the modern world in your arguments.

    But that discussion is outside the scope of this argument. The amount of additional unemployment created via Union affects is relatively minor all things considered. We can talk about all the different market and non-market factors that affect employment rates, but not in this thread. This thread is solely concerning the unemployment affect of minimum wage.
    Agreed but you haven't sufficiently defined what you mean by minimum wage at all - do you believe it should be zero? And if not zero, then what? And if less than what can be earned in a country with a decent social safety net, then what should it be?

    With all the arguments about not having a minimum wage, you neglected to say what the alternative is. Just saying that a minimum wage affects employment largely ignores that there already is are minimum wages set by CBs or social programs. So what do you do about those minimal wages?

    JJ: Also, do you support the Obama raising the minimum wage for Federal workers? Is that 'within the industry' of government workers and acceptable?
    Actually that is an interesting question. Will there be an unemployment effect given his increase in the minimum wage?
    Why would there be? I would imagine funding it would have been taken care of before announcing it to the world. Seems like shooting yourself in the foot if he had to fire 10,000 people to pay for a wage increase of the other several hundred thousand.

    I think we won't really get an opportunity to get data on this as the unilateral increase is almost certainly going to be shot down in court since it contradicts existing regulation and legislation on federal contracting.
    Why shouldn't it be unilateral? He's the CEO of all federal employees!

    However, it is, praxeologically a good question. I think this example shows another difference between government and private sector. This will likely not cause unemployment because federal agencies will simply up their budgets to cover the increased labor cost, something a private company is unable to do. There are of course other issues with doing so (the increased revenue required removes capital development within the economy causing unemployment indirectly), but none of the same kind as discussed in the OP. The government is an odd duck in that manner because it doesn't have customers in the traditional sense. I can't stop paying taxes and use another government in the same way I could stop patronizing Costco if they increased prices.
    A private company could totally up their budgets - it's called having less profits. That's the trade off! If people need to be paid more then shareholders will get less - that's the only change. So if the managers want to maintain their level of profits (i.e. pay themselves) over the needs of their employees then that is their decision. There is no reason why profits have to remain stable since raising prices will also lose custom so all that has to be weighed.

 

 
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