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  1. #121
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Mdougie View Post
    The question is not realistic. Demand for labor is determined by demand for the product or service the labor produces.

    If the cashier at BP makes $15 an hour vs 5 it does not change my new need for gas. Nor should such a raise cause a need to raise prices.
    So the price of labor has no role in the amount purchased? That is a pretty radical statement.

    Let's use a simple example that hopefully you will find realistic.

    Mdougie has a company that makes widgets.

    It costs him $.50 per widget in materials.

    Each widget takes 1 hour to make.

    Minimum wage currently is $7.25/hour.

    So each widget costs Mdougie in total: $7.75 to produce.

    The market price for widgets is $8.00.

    Congress increases minimum wage to $10.10/hour.

    Widgets now cost him $10.60 each.

    You think the price will hold steady.


    So the big question is, will Mdougie produce widgets then? And if so, where does the extra $2.60 per widget come from?
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton
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  2. #122
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Interesting follow up to this debate, an analysis done by National Center for Policy Analysis further supports the OP here.

    http://www.ncpa.org/pub/ba792

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

    So, even if we ignore job loses (more on that in a minute), the majority of income benefit will go to non-poverty line families. IE you are disproportionately benefiting non-minority, non-poor earners.

    And that is why we see relatively conclusive evidence from every single minimum wage hike studied. Raising the minimum wage does not reduce poverty.


    San Diego State University economics professor Joseph J. Sabia and Cornell University economics professor Richard V. Burkhauser examined the effects of these increases and reported their results in the prestigious Southern Economic Journal.1 They “find no evidence that minimum wage increases between 2003 and 2007 lowered state poverty rates.”



    But what about job loses?


    Another reasonable estimate from earlier studies is that a 10 percent increase in the minimum wage would destroy 3 percent of low-wage jobs, an elasticity of 0.3. If that estimate is correct, increasing the minimum wage to $9.50 per hour would destroy 1.4 million jobs.


    So this peer-reviewed study concludes that an increase in the minimum wage will primarily benefit non-poverty level earners at the expense of poverty level earners.

    Which is another way of rephrasing my OP. If you support the minimum wage, it needs to be clear, the data shows you are improving the lives of middle class workers at the expense of those on the poverty line.
    "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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  4. #123
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Another great article from an economist on the effects of the minimum wage, and importantly on the President's justification for needing an increase, income mobility.

    I've made the argument on this forum several times that income mobility and income inequality are largely artifacts of a growing economy. Prof. Powell agrees with me in a very convincing post:

    Income mobility can be measured over the course of an individual’s life or by the mobility between generations in the same family. Most people start their adult lives with relatively low earnings, because they have few job skills, little work experience, and incomplete education. As they build skills, gain experience, and complete their education, their earnings rise through their 20s, 30s, and 40s, and they typically achieve their maximum earnings in their 50s or 60s before they retire.

    Historically, this “lifecycle” of earnings has created a great deal of income mobility. Data from the University of Michigan Panel Survey on Income Dynamics show that, of people who were in the lowest fifth of income earners in 1975, only 5.1 percent of them were still in the lowest fifth 16 years later and 29 percent had actually risen all the way to the top fifth of income earners.

    Mobility between generations is less dramatic. A recent study from the National Bureau of Economic Research examined how children born in the 1980s did relative to their peers compared to how their parents did relative to their peers. It found that 8 percent of children born into families in the bottom fifth of income earners made it to the top fifth of income earners of their own age by the time they were 30. For children born in the middle fifth, 20 percent made the top by age 30.

    Contrary to the claims of the President, the study also found that the rate of intergenerational mobility was largely unchanged over the last 50 years. Yet, this does not mean that there are not barriers to upward mobility. The study found significant local and regional variations in mobility across the country. Neighborhoods with large densities of African-American populations tended to demonstrate lower relative income mobility.

    Unfortunately, President Obama’s proposals are unlikely to help increase income mobility in the lower-mobility segments of the U.S. population. The greatest barrier to income mobility for some workers is their ability to get up onto the first rung or two of the economic ladder that will allow them to build the skills in order to achieve a normal lifecycle of earnings.

    The minimum wage is one policy that prevents workers from stepping onto the first rung of the ladder. Some workers’ hourly productivity is below the federal minimum of $7.25 per hour. These workers are prevented from getting their first job and beginning the process of acquiring the skills that would lead to higher incomes in the future. Young African-Americans are disproportionately harmed. Nearly half of the workers earning the minimum wage are under 25, and unemployment among 16 to 24 year old African Americans remains at more than 23 percent. It is likely that an increase in the federal minimum wage would prevent even more workers from getting their first job that allows them to start climbing the economic ladder.

    http://www.independent.org/newsroom/article.asp?id=4939
    "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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  6. #124
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Another great work concerning states and relative unemployment levels out this week. http://americanactionforum.org/resea...eation-in-2013

    They found that for recent minimum wage increases for every dollar of increase, you got an additional 1.5% unemployment rate, which is pretty massive in impact.




    Even more importantly, they estimated not only the net short term impact but the compounding impact on job growth over time:



    Just to put that number in perspective. After 10 years, a state that raised its wage by $1/hour would have 33% fewer jobs created for youth than a state that didn't.

    More to my point above, there was a directly correlation between unemployment increases and education such that they were inversely related. The lower average education in the state the more harmful the impact of increasing the minimum wage. That sounds a lot like the conclusion of the OP, for those most vulnerable in our society (in this case those with the lowest human capital) the minimum wage disproportionately impact and harms them.

    Still feel good about the minimum wage?
    "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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  8. #125
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Let me step away from the economic view.

    Minimum wage is one of the reasons capitalism does not work.
    Government is the reason capitalism does not work.
    Without government, capitalism is the natural occuring market and it's solely based on what both parties deem fair.

    Who is the government to force me, as an employer, to pay a certain wage?
    The employee deems his wage is fair, otherwise he wouldn't work for that amount.

    This is what capitalism is. This is fair trade.
    When the government gets involved, controlling the market, it is no longer capitalism.

    Therefore, minimum wage itself is wrong. It's the government, once again, using force to gain control of the people.

    No one has the right to force me to pay anyone anything, only the employee.
    What's the employee's leverage? Their skills.
    If the employer still refuses to pay what they want, then the employee has the choice to find a different employer and in turn the employer must find a different employee that will be willing to work for the wage he has set.

    Now let's look at what this does to the market.
    Where we have multiple employee's working, the employer will cut jobs to make up for the extra cost of being forced to pay a higher wage.
    This is common sense.

    That fiat money? Since we're paying everyone more, where's it coming from?

    Keep printing.

  9. #126
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    A. Capitalism works pretty well actually. Really it has been about the only economic system that works well. And it has worked well along side regulations and limitations. I don't see much indicating that overall capitalism has failed in any significant way. Nearly all developed nations are runing largely capitalist economies and nearly all parts of the world continue to experience some economic growth.

    B. Without any government the natural state is generally more like subsistence living and banditry. Trade nearly grinds to a hault due to a lack of secured currencies and property belongs to whomever has the strength to take it. Not just a percentage of your income but all of it, and your life too if you protest too much.

    Now on the minimum wage, I mostly agree that its not the most useful of manipulations. On the other hand I see a lot of corporate decisions that I think are ultimately foolish when it comes to wage gouging. Then again I think there are a lot of very foolish employees who sell themselves short.

    Then again, when you live in a society you really should consider how you keep the bottom from falling out and simply wishing for the magic of the invisible hand to make it all fine is not real planning or thinking. You might as well just be praying for rain. You need a way to ensure too many people don't end up in desperate conditions or your whole system will come down on you. Minimum wage, welfare and other manipulations are an effort to do that. Capitalism is great for wealth generation, but its not good at everything people want in society.

    Like many things, I believe the best choices lie in good balance. Use capitalism for all its great benefits, and temper its weaknesses with appropriate counter measures. Keep looking at what actually works and what actually doesn't rather than theorizing on some perfect ideal.

    ---------- Post added at 05:24 PM ---------- Previous post was at 05:03 PM ----------

    Quote Originally Posted by Squatch347 View Post
    Another great work concerning states and relative unemployment levels out this week. http://americanactionforum.org/resea...eation-in-2013
    Logic tends to poo poo these numbers. For instance, in my state they say taking the min wage down to the national level will result in 11% drop in unemployment for teens. That would take it to 17.6, lower than any state in the union including all of those at the federal level except those in the current oil boom. And this for a state they say would be the least impacted due to our very high education rate.

    Its a nice stab at things but I think their model is just too simplistic and only accounts for one other factor.

    My city just voted in $15 an hour by 2016, should be fascinating to see what a huge hike like that does. By their math we should hit double digits unemployment, I suspect that it will go up but not by that much. Like a lot of complex systems economies tend to have a lot of compensating factors that kick in and the impact of any one change tends to be distributed around in various ways.

    Of course personally, I'm well above the fray but I wouldn't have voted for it had I the chance. I don't think its a good idea especially, though happy for folks that do get a raise and can keep their jobs.
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  10. #127
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Sigfried View Post
    A. Capitalism works pretty well actually. Really it has been about the only economic system that works well. And it has worked well along side regulations and limitations
    To be fair, I think PatriotDani meant to imply that Capitalism isn't operating optimally because of those restrictions, and that the interferences are the cause of many of the events people have termed "failures" of capitalism.

    Quote Originally Posted by Sig
    Trade nearly grinds to a hault due to a lack of secured currencies and property belongs to whomever has the strength to take it.
    I agree with the latter point, property rights are a legitimate and beneficial role government can play. However the former assertion is not necessarily the case. Why is a government mandated currency required rather than a market generated currency?

    Quote Originally Posted by Sig
    On the other hand I see a lot of corporate decisions that I think are ultimately foolish when it comes to wage gouging. Then again I think there are a lot of very foolish employees who sell themselves short.
    But you would concede that this is your view right of their decisions right? And if so, is there a moral justification for your view trumping their's as arises in MW situations?

    Quote Originally Posted by Sig
    Then again, when you live in a society you really should consider how you keep the bottom from falling out and simply wishing for the magic of the invisible hand to make it all fine is not real planning or thinking
    As highlighted in the OPs though, MW doesn't do this, it exacerbates the problem. MW keeps those at the lowest end of the economic ladder down at the bottom. It reduces economic mobility for the lowest earners and disproportionately affects those on the margins of society.

    Given your goal here, wouldn't it be far more sensible to remove the obstacles to their competition?

    Quote Originally Posted by Sig
    Logic tends to poo poo these numbers. For instance, in my state they say taking the min wage down to the national level will result in 11% drop in unemployment for teens. That would take it to 17.6, lower than any state in the union including all of those at the federal level except those in the current oil boom.
    Technically that is an intuition objection, not a logic objection. Also, I believe your math was incorrect. Washington's minimum wage is $9.32, the federal minimum wage is $7.25. Decreasing the MW to the federal level would decrease it by $2.07. Their increase/unemployment ration was for $1, a 4.67% increase. So decreasing the MW by $2.07, would, according to their model decrease the rate by 9.67%.

    Washington State's Teen Unemployment rate is 28.6%. Reducing the MW would make it 18.93%, making it behind Alabama, Iowa, Minnesota, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Vermont, West Virginia and Wyoming (ibid). Many of those states are not experiencing the oil boom, and most of them also are on the Federal minimum wage (bolded, http://www.dol.gov/whd/minwage/america.htm).

    So given that I'm not sure their prediction is an untenable as you initially assumed.


    Quote Originally Posted by Sig
    My city just voted in $15 an hour by 2016, should be fascinating to see what a huge hike like that does.
    And the city to your south did just a little while ago and we are already seeing the effects there. Parking sites for the airport (a large source of revenue for a town that is virtually only an airport and its surrounding business) have already added a "living wage fee" that increases the bill (including the increased taxes) by around 8-10% depending on the site. Hiring has slowed, and for those in the work, benefits have generally been cut. For example, it is customary when working in a hotel to get a meal from the hotel kitchen, that benefit has been eliminated.
    "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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  12. #128
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Boy, what a mess we have gotten ourselves into, eh? Capitalism, left unfettered, largely distributes income according to demand and supply. We don't have anything close to capitalism unfettered. We have corporations receiving public assistance via tax loopholes, tax funded bailouts, punitive regulations which limit competition, and an archaic patent process which further limits competition. What this means is that the largest companies can afford the best talent and they can afford to pay rather modest wages in relation to that company's bottom line. On the other hand, smaller companies must make due with substandard talent and are forced to overpay initially, but underpay over the long haul and this talent, once consumed finds very little mobility in a workplace which is highly specialized and where mobility is only available to the uber talented and the young, fresh out of school. Without competition and mobility, then wages stagnate.

    This is a condition of the current system which is only a very rough version of capitalism. So, if the government is protecting corporate profits, then it is justified in boosting employee compensation. Now, ideally, the government would stop providing welfare for corporations. But, if you view the government as a basic brothel and the politicians as common whores, then you'd quickly realize there is no point in expecting they'd cut the dicks off of the Johns that feed them. So, the best you can hope for is some sloppy seconds.

    While I don't support a minimum wage in any form, I don't find a reasonable alternative. I really don't find it significant in boosting the pay of the unskilled. They'll always be at the bottom of the economic ladder. It is a means of boosting the pay of the middle class in relation to the high paying Johns and their whores.
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Ibelsd View Post
    While I don't support a minimum wage in any form, I don't find a reasonable alternative. I really don't find it significant in boosting the pay of the unskilled. They'll always be at the bottom of the economic ladder. It is a means of boosting the pay of the middle class in relation to the high paying Johns and their whores.
    While I agree with about 99% of this, I would also point out that MW disadvantages small firms in that they are generally not able to effectively compete at that wage level, creating a barrier to entry and reducing competition. Additionally, MW tends to price out those who need human capital development via experience the most by eliminating those roles in favor of jobs from more experienced young people from middle to upper income areas.
    "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. #130
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    While I agree with about 99% of this, I would also point out that MW disadvantages small firms in that they are generally not able to effectively compete at that wage level, creating a barrier to entry and reducing competition. Additionally, MW tends to price out those who need human capital development via experience the most by eliminating those roles in favor of jobs from more experienced young people from middle to upper income areas.
    There is no doubt this is true for companies subject to global and non-local competition. Those companies are largely doomed anyhow. But the larger companies who face such competition enjoy the benefits of tariffs and restrictive regulations. If you have a realistic alternative, then I am all ears. Otherwise, I am all for increasing minimum wage to 20 or even 30 dollars an hour.
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  15. #131
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Ibelsd View Post
    Otherwise, I am all for increasing minimum wage to 20 or even 30 dollars an hour.
    I'm not sure what that would achieve. Most low level service jobs would cease to exist in that range somewhere, prices for goods and services would increase (disproportionately affecting the lowest quintiles) and a large segment of low skilled workers would be priced out of work, preventing them from developing their earnings potential.

    While I certainly don't disagree that the barriers to entry and protectionism is rampant in this country, I'm not sure how making voluntary exchange of labor illegal solves that problem.
    "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.


  16. #132
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    To be fair, I think PatriotDani meant to imply that Capitalism isn't operating optimally because of those restrictions, and that the interferences are the cause of many of the events people have termed "failures" of capitalism.
    Quite possible, I just have a thing for hyperbole and tend to jump on it like a deranged mangy tiger.

    I agree with the latter point, property rights are a legitimate and beneficial role government can play. However the former assertion is not necessarily the case. Why is a government mandated currency required rather than a market generated currency?
    Well, you don't have to have a government mandated currency but so far we don't have a lot of good alternatives. What a good currency needs is some backing agency with the clout and power to ensure it has value. Weaker states often don't have that power and their currencies go berserk. So its not that it is government per say, its just governments are about the only organizations with that kind of heft in most of history. There are exceptions of course. I find the e-currencies really interesting. They have their own weaknesses but they are making a go of it these days and I could see a day when we could have a state neutral currency or currencies.

    But you would concede that this is your view right of their decisions right? And if so, is there a moral justification for your view trumping their's as arises in MW situations?
    I think your reading into what I said more than I meant. I'm just saying that many employers and employees are both short sighted. That's not an incitement of capitalism except to say not all the actors in a market really know their best interest all that well due to poor information or poor strategy. Just armchair critique, not some call to action or claim of divine truth.

    As highlighted in the OPs though, MW doesn't do this, it exacerbates the problem. MW keeps those at the lowest end of the economic ladder down at the bottom. It reduces economic mobility for the lowest earners and disproportionately affects those on the margins of society.
    Yes and no. When you have a given cost of living, having a sup cost of living wage doesn't really do you much good. If anything it says that there is a greater opportunity cost to your labor that the value paid for the labor. To keep you alive costs $20 an hour and you can only earn $10 (prospectively). Pure math says we should just kill you. Ultimately you have to subsidise them somehow. Be that in a wage support or welfare or high prices on luxury goods or whatever. If you want to support people that can't meet the standard costs then you have issues.

    I think its far better to scrap minimum wage and just have direct cost of living subsidies in the form of some kind of welfare. That and efforts to try and train up the population to a productive level that meets standard cost of living. It is far less distorting.

    Technically that is an intuition objection, not a logic objection. Also, I believe your math was incorrect. Washington's minimum wage is $9.32, the federal minimum wage is $7.25. Decreasing the MW to the federal level would decrease it by $2.07. Their increase/unemployment ration was for $1, a 4.67% increase. So decreasing the MW by $2.07, would, according to their model decrease the rate by 9.67%.
    Sorry I had the wrong column in their table 4. 9.06 rather than 11. I was using that rather than doing the math. Their model is a bit more complicated that the flat rate, it has education levels baked in and as they note Washington is unusual in that regard. We be edumacated here.
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    I'm not sure what that would achieve. Most low level service jobs would cease to exist in that range somewhere, prices for goods and services would increase (disproportionately affecting the lowest quintiles) and a large segment of low skilled workers would be priced out of work, preventing them from developing their earnings potential.

    While I certainly don't disagree that the barriers to entry and protectionism is rampant in this country, I'm not sure how making voluntary exchange of labor illegal solves that problem.
    Wouldn't you say, people generally adapt to their environment? Wouldn't you agree that cutting off people from food stamps makes people more willing to work and more motivated? Also, I never heard your alternative.

    Consider:
    1. We offer huge subsidies to corporations.
    http://thinkbynumbers.org/government...re-statistics/
    "About $59 billion is spent on traditional social welfare programs. $92 billion is spent on corporate subsidies. So, the government spent 50% more on corporate welfare than it did on food stamps and housing assistance in 2006."

    2. CEO's take home huge bonuses, in part, from these subsidies plus the other types of government assistance which are not subsidies, but similarly act to pay CEO's and board members of influential political supporters.

    3. This money, paid for by tax payers is intended to trickle down back to the, uh, tax payers.

    4. Since corporate profits, rest significantly on corporate welfare, political pandering, and favors, then shouldn't the average employee take home some of that too?

    Hell, a $30 minimum wage isn't just a good idea, it is an ethical idea. It is stealing back money from the people who are stealing it in the first place.

    Now, if our elected whores wish to close up shop on the brothel and end these types of programs, then I am 100% in favor of eliminating any minimum wage law. Otherwise, let's just stop pretending we live in some capitalist society where the free market rules. The only invisible hand is the fist of Uncle Sam and he's ramming it up our collective asses.
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Sigfried View Post
    What a good currency needs is some backing agency with the clout and power to ensure it has value.
    Not according to any theory of money I am aware of. What something needs to be considered a currency is that it is divisible, transferable, limited and mutually agreed upon. It's value is generally a function of its limited nature in relation to the total value of the economy. You don't necessarily need an agency to ensure it is limited, other factors can do so. Commodities that are expensive to produce can serve as backers of or currencies themselves because they remain relatively fixed in amount.

    Quote Originally Posted by Sig
    I think your reading into what I said more than I meant. I'm just saying that many employers and employees are both short sighted. That's not an incitement of capitalism except to say not all the actors in a market really know their best interest all that well due to poor information or poor strategy. Just armchair critique, not some call to action or claim of divine truth.
    Sorry, didn't mean to over analyze. I would offer though that the only agent more short sighted to their best interest is the third party agent however.

    Quote Originally Posted by Sig
    Yes and no. When you have a given cost of living, having a sup cost of living wage doesn't really do you much good. If anything it says that there is a greater opportunity cost to your labor that the value paid for the labor. To keep you alive costs $20 an hour and you can only earn $10 (prospectively). Pure math says we should just kill you.
    Technically I think you mean cost of subsistence here. IE the physical necessities of your life take more resources than you can contribute. The only examples we have of that virtually anywhere are the indigent, addicts, those who are mentally ill, etc. They generally are not effected by the minimum wage because of the facts you put forward, they don't contribute economically to almost any extent and as such are more or less "unemployable." MW though certainly doesn't help these people though since employers will certainly decline to hire them at $7/hour if they were unwilling to higher them at $3/hour. How to support that category of people I would table for another thread since MW would likely not affect them either way.

    Cost of living is a more nebulous term, I have a higher cost of living than a teenager because I have nicer things. When people say they are fighting for a "living" wage they are making a relatively vague argument. A person has a "living" wage at extremely low levels, it all depends on what we decide is "living." As I pointed out somewhere, probably this thread, many times that "minimum standard of living" includes a cable TV, cell phones and in a surprising number of cases, two cars.

    Assuming that an employ actually produces a net benefit for the employer it makes little sense for the employer to only pay him wages such that he will starve to death or go homeless, that means he is no longer producing for the employer. This kind of concern really only arises if we assume there aren't enough jobs out there that produce enough economic value such that it can be traded for a minimum subsistence of food, shelter, etc. Given the standard of living even the poorest Americans have we don't seem to be pushing the barrier on that role in the slightest.

    Also need to point out that very few people actually rely on MW jobs. Virtually all MW jobs go to non-head of households (IE dependents of someone else) so it isn't the case that MW jobs are supporting individuals let alone families.


    Quote Originally Posted by Sig
    Sorry I had the wrong column in their table 4. 9.06 rather than 11. I was using that rather than doing the math. Their model is a bit more complicated that the flat rate, it has education levels baked in and as they note Washington is unusual in that regard. We be edumacated here.
    Agreed, I think Seattle's change will be on the lower end of their prediction given its education rate and its status as a city only mandate. It is more likely that people will simply work outside the city in areas without that MW requirement. Which does nothing for Seattle's wonderful commuting issues.



    Quote Originally Posted by Ibelsd View Post
    Wouldn't you say, people generally adapt to their environment? Wouldn't you agree that cutting off people from food stamps makes people more willing to work and more motivated? Also, I never heard your alternative.
    My alternative on this issue was to have no MW and allow people to freely contract. I certainly am not defending corporate subsidies, regulations or any other artificial measures meant to protect existing companies, just to be clear.

    Quote Originally Posted by ibelsd
    4. Since corporate profits, rest significantly on corporate welfare, political pandering, and favors, then shouldn't the average employee take home some of that too?
    Presuming this argument is true, does MW do that? Not at all, unless you (and you do seem to be) presume that some level of employment is mandatory. But that doesn't seem to be the case. Most jobs in the US are not MW jobs, and most large companies (the benefits of these programs) are not majorly effected by these rate changes.

    Why wouldn't the company just cut back less profitable roles?
    "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.


  19. #135
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    My alternative on this issue was to have no MW and allow people to freely contract. I certainly am not defending corporate subsidies, regulations or any other artificial measures meant to protect existing companies, just to be clear.
    Yet, since you are not King, you cannot simply wave your wands and remove corporate welfare. As such, simply declaring people are free to contract labor is a fantasy. Hence doing away with MW does not seem like a very reasonable alternative. I understand you are not offering support for corporate welfare, but that does not mean we can pretend like it does not exist.

    Quote Originally Posted by Squatch347 View Post
    Presuming this argument is true, does MW do that? Not at all, unless you (and you do seem to be) presume that some level of employment is mandatory. But that doesn't seem to be the case. Most jobs in the US are not MW jobs, and most large companies (the benefits of these programs) are not majorly effected by these rate changes.

    Why wouldn't the company just cut back less profitable roles?
    All companies need employment and they will always seek the least expensive employment they can find. What a high minimum wage will do is
    1. It will mean almost all entry level jobs can sustain a middle class income.
    2. This ensures all employees have some mobility.
    3. This increases the competition for labor.
    4. This makes all labor more valuable.

    Most jobs are not minimum wage jobs, but if minimum wage is the floor, then all other jobs will be boosted.

    Look, there is absolutely no justification for corporate CEO's to be makiing 1000's of times more in salary than the average skilled worker at the same company when that CEO's salary is heavily subsidized by the taxes of those very same skilled workers. At some point companies must be forced with the decision to pay employees a value commensurate with the value they bring to the company. Let's look at this in real numbers:
    http://www.aflcio.org/Corporate-Watc...hest-Paid-CEOs
    At the top is Larry Elleson who makes 78 million per year. His high tech, skilled employees average about 100,000 per year. He makes 780 times more than his skilled labor. In a perfectly free market, I'd shrug my shoulders and suggests he gets what he's worth. This is not a free market. Not even close.
    http://pando.com/2014/03/22/revealed...ion-employees/
    Now, the employees directly involved will probably win their lawsuit. But how about all the other tech people whose wages have been artificially suppressed for years based on this? After all, if Apple, Google, et al. set the high bar for tech salaries and they were manipulating the market to reduce labor costs, then this trickles down to every single tech worker, not just those who were employed by one of the price-fixing companies. Their punishment? A slap on the wrist to stop the behavior. Remember Larry, at the top of our CEO compensation list? Well. Oracle was one of the companies involved in price-fixing. So, while Larry was keeping the wages of his tech people in check, he was earning more than any other CEO in America.


    How much do companies get from the taxpayers? Walmart may have received 1 billion dollars in government grants and subsidies
    http://money.cnn.com/2004/05/24/news...art_subsidies/

    Yet, it pays its employees too little to even be above the poverty line. Walmart's CEO, Michael Duke brought home 20 million last year. Something isn't right. I am just insisting, as a reasonable policy, that if companies are going to accept corporate welfare, then their employees should be well compensated. Not just to be above the poverty line, but to be middle class economic citizens.

    I'd love this to be a free market, capitalistic society. It just isn't and it simply won't return to being one. So, in the meantime, I am all for two things.
    1. Limit CEO and executive compensation to some percentage of profit and average employee income.
    2. Increase the minimum wage so anyone working will earn a middle class living.

    In other words, reduce the ceiling and raise the floor. I don't like it. But, theft is theft and there has to be punishment and accountability.
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  20. #136
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Ibelsd View Post
    Yet, since you are not King, you cannot simply wave your wands and remove corporate welfare. As such, simply declaring people are free to contract labor is a fantasy.
    Please refine how the existence of corporate welfare (which we both support removing) prevents individuals from freely contracting their labor out?

    Quote Originally Posted by Ibelsd
    All companies need employment and they will always seek the least expensive employment they can find. What a high minimum wage will do is
    1. It will mean almost all entry level jobs can sustain a middle class income.
    2. This ensures all employees have some mobility.
    3. This increases the competition for labor.
    4. This makes all labor more valuable.
    You seem to have put the cart before the horse here. Labor is not valuable because I am forced by a law to pay more for it, its value stems from its marginal contribution to my revenue. You ignore a possibility, that entry level jobs will simply be automated or companies will simply forgo producing whatever good or service required that labor.

    Let's say my company sands widgets. That process requires a person to sand it and that person's role contributes $4/hour to my profit. Now a law comes along saying all labor costs me $10/hour. I have two choices. If I have the capital (and the hourly cost is low enough) I will replace that person with a machine. If I don't have the capital (and small businesses are less likely to have it) or if the technology's upkeep is too expensive, I will simply not produce widgets.

    Maybe $3/hour of that profit is coming from a green energy welfare scheme, but that doesn't make my decision change in the slightest. I either produce the widget or I don't, and if the net change is that I can no longer afford to produce it, I won't.

    Quote Originally Posted by Ibelsd
    In a perfectly free market, I'd shrug my shoulders and suggests he gets what he's worth. This is not a free market. Not even close.
    Agreed, part of the salary for example, is a risk bonus tied to SOX regulations (along with a thousand other price distortions and benefits, etc, etc, etc). My question for you is, why does a CEO milking a political system mean that I should legally forbid a different person from accepting a job at a wage they find acceptable?

    Quote Originally Posted by Ibelsd
    I'd love this to be a free market, capitalistic society. It just isn't and it simply won't return to being one. So, in the meantime, I am all for two things.
    1. Limit CEO and executive compensation to some percentage of profit and average employee income.
    2. Increase the minimum wage so anyone working will earn a middle class living.
    I think we both agree on the optimal situation and recognize that this is not the optimal situation. Our solutions differ however, I would like to push the marker closer to free market principles, you would like to counteract the interference with rules you hope will mitigate the damage. But one thing we should clearly know is that the economy is an emergent system and putting rules forward rarely has the desired outcome, that was the whole point of Hayek's work, government intervention breeds more intervention. Let's do as Thomas Sowell has always suggested and think about stage two of your recommendations:

    1. Limit CEO and executive compensation to some percentage of profit and average employee income.

    We've actually seen an activist investor movement towards this principle. The result has been dramatic increases in non-pecuniary benefits. Nicer offices, cooler headquarters, personal projects, etc. Given that these firms are competing for what they at least perceive as a scarce commodity (a good CEO) they will find a way around income restrictions just as companies found ways around other regulatory requirements. For some of these companies, finding a good CEO has been problematic, generally for companies that don't seek to sidestep the concept with non-pecuniary inducements, they find that the lose out to other firms in their CEO and executive search. The extent to which a law would reduce this fact is related to the first point, how willing other firms are to sidestep that requirement.

    If I remember right, you agreed that assault weapons bans were ineffective because firms would simply modify their products to sidestep regulation right? Why wouldn't they do the same in compensation packages?

    2. Increase the minimum wage so anyone working will earn a middle class living.

    I actually think you could make this happen, and for probably a lot lower of a minimum wage than one might think. That is because there is an important hedge in there, "so anyone working." Increases to minimum wage (especially in the ranges you suggest) will cause a larger segment of the population to be out of work. Additionally (as we've seen in the studies I linked in OP 2 or OP 3) the remaining jobs will disproportionately go to those people who come from families in higher income quintiles. So this rule has two effects, it reduces employment for those who have lower incomes, essentially making the lower class larger, and increases income for those in higher incomes making making those that do make the cut automatically higher income.
    "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
    Please refine how the existence of corporate welfare (which we both support removing) prevents individuals from freely contracting their labor out?



    You seem to have put the cart before the horse here. Labor is not valuable because I am forced by a law to pay more for it, its value stems from its marginal contribution to my revenue. You ignore a possibility, that entry level jobs will simply be automated or companies will simply forgo producing whatever good or service required that labor.

    Let's say my company sands widgets. That process requires a person to sand it and that person's role contributes $4/hour to my profit. Now a law comes along saying all labor costs me $10/hour. I have two choices. If I have the capital (and the hourly cost is low enough) I will replace that person with a machine. If I don't have the capital (and small businesses are less likely to have it) or if the technology's upkeep is too expensive, I will simply not produce widgets.

    Maybe $3/hour of that profit is coming from a green energy welfare scheme, but that doesn't make my decision change in the slightest. I either produce the widget or I don't, and if the net change is that I can no longer afford to produce it, I won't.



    Agreed, part of the salary for example, is a risk bonus tied to SOX regulations (along with a thousand other price distortions and benefits, etc, etc, etc). My question for you is, why does a CEO milking a political system mean that I should legally forbid a different person from accepting a job at a wage they find acceptable?



    I think we both agree on the optimal situation and recognize that this is not the optimal situation. Our solutions differ however, I would like to push the marker closer to free market principles, you would like to counteract the interference with rules you hope will mitigate the damage. But one thing we should clearly know is that the economy is an emergent system and putting rules forward rarely has the desired outcome, that was the whole point of Hayek's work, government intervention breeds more intervention. Let's do as Thomas Sowell has always suggested and think about stage two of your recommendations:

    1. Limit CEO and executive compensation to some percentage of profit and average employee income.

    We've actually seen an activist investor movement towards this principle. The result has been dramatic increases in non-pecuniary benefits. Nicer offices, cooler headquarters, personal projects, etc. Given that these firms are competing for what they at least perceive as a scarce commodity (a good CEO) they will find a way around income restrictions just as companies found ways around other regulatory requirements. For some of these companies, finding a good CEO has been problematic, generally for companies that don't seek to sidestep the concept with non-pecuniary inducements, they find that the lose out to other firms in their CEO and executive search. The extent to which a law would reduce this fact is related to the first point, how willing other firms are to sidestep that requirement.

    If I remember right, you agreed that assault weapons bans were ineffective because firms would simply modify their products to sidestep regulation right? Why wouldn't they do the same in compensation packages?

    2. Increase the minimum wage so anyone working will earn a middle class living.

    I actually think you could make this happen, and for probably a lot lower of a minimum wage than one might think. That is because there is an important hedge in there, "so anyone working." Increases to minimum wage (especially in the ranges you suggest) will cause a larger segment of the population to be out of work. Additionally (as we've seen in the studies I linked in OP 2 or OP 3) the remaining jobs will disproportionately go to those people who come from families in higher income quintiles. So this rule has two effects, it reduces employment for those who have lower incomes, essentially making the lower class larger, and increases income for those in higher incomes making making those that do make the cut automatically higher income.
    You keep telling me what you'd like to do and have based your position on your fantasy of closing the whorehouse. Workers do not have the freedom of choice in the marketplace because, as I have demonstrated, the market has been/is manipulated by employers with the implicit cooperation of government. If we don't think the government is cooperating then please tell me how long a CEO has served in jail for this act of fraud and thievery which has taken millions, if not billions, out of the pockets of skilled laborers. Compare that to a sentence that would be handed down if you stole money from your company. We do not have a free market system. So, let's stop pretending free market theories apply. What we do have is an economic system heavily tied into political power. So, any changes to the market must be accompanied by some payoff to some politician or political party. Right now we have exactly one alternative. We can support the labor unions and Democrats who are are willing to increase the minimum wage.

    I understand this is an imperfect solution. Yet, to sit and pretend our economic system is something it is not is absolute insanity. IF we had a free market economy, then your economic principles would hold. We don't and your principles are meaningless. Yes, CEO's will consistently try to skirt the rules and avoid paying workers more. Yes, companies will try to reduce hiring or reduce payrolls if minimum wage is increased. That's why it is important to support a labor union resurgence so such market manipulations can be matched by an opposing force. I have absolutely no love for unions. Yet in our econo-politco system, if you wish to be a political winner, then you'll need the support of a political party. Individual workers cannot gain such support. Go ahead and try. Go walk into your Congressman's office and ask him to solve some particular problem on your behalf. If you have no money, no organization, you have no chance. Republicans, on this issue, are tied to corporations. Democrats are tied to the unions. You can pick a side, but don't argue some third option which does not exist. Don't dream up free market solutions without explaining how we get there. You may as well discuss how we should all settle on Saturn. It ain't gonna happen.
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Ibelsd View Post
    You keep telling me what you'd like to do and have based your position on your fantasy of closing the whorehouse.
    Nothing about my position is requisite on changing subsidy rates or shutting down government preferential treatment.

    Your argument seems to be that different jobs would exist absent government regulation so that means people don't have the freedom no to select those jobs. Fine, fair enough. Why then does that give you the moral right to ban them from selecting jobs that do currently exist? Why does the fact that the current market has distortions give you a seat at the table to their decision whether or not to accept a job?

    Quote Originally Posted by Ibelsd
    IF we had a free market economy, then your economic principles would hold. We don't and your principles are meaningless.
    There is only one economic principle I've appealed to Ibelsd, a downward sloping demand curve. Are you seriously maintaining that the labor market does not have a downward sloping demand curve any more?

    Quote Originally Posted by Ibelsd
    Republicans, on this issue, are tied to corporations. Democrats are tied to the unions.
    But of course this is actually incorrect. Both sides are tied to corporations (given donation rates) and corporations love the minimum wage. Higher minimum wages serve as a barrier to entry for small competitors by increasing the marginal cost of labor. Why do you think Panera supports the MW so much? Because it's CEO is just a really nice person? Or because he has a computer order taking system so MW increases hurt his competitors more than him?

    You can couch your motives in noble intents all you wish, but the fact is you are trying to use legislation to solve the problems caused by legislation. You are supporting the preferences of big bussinesses to harm the competitiveness of the market, you are preventing people from being hired. None of this is wild speculation on my part, Ibelsd, it is empirically observed as pointed out by more than 30 studies in earlier posts.

    The data is clear, if you increase the minimum wage you get:

    Less minority employment.

    Less lower income employment.

    Lower income and wealth mobility.

    Higher incomes to median and upper income quintile families.

    Reduced benefits for lower income employees.

    Increased job turnover for lower income employees.
    "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.


  23. #139
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    Re: Increasing the Minimum Wage hurts those most vulnerable in our society.

    Quote Originally Posted by Squatch347 View Post
    Nothing about my position is requisite on changing subsidy rates or shutting down government preferential treatment.

    Your argument seems to be that different jobs would exist absent government regulation so that means people don't have the freedom no to select those jobs. Fine, fair enough. Why then does that give you the moral right to ban them from selecting jobs that do currently exist? Why does the fact that the current market has distortions give you a seat at the table to their decision whether or not to accept a job?



    There is only one economic principle I've appealed to Ibelsd, a downward sloping demand curve. Are you seriously maintaining that the labor market does not have a downward sloping demand curve any more?



    But of course this is actually incorrect. Both sides are tied to corporations (given donation rates) and corporations love the minimum wage. Higher minimum wages serve as a barrier to entry for small competitors by increasing the marginal cost of labor. Why do you think Panera supports the MW so much? Because it's CEO is just a really nice person? Or because he has a computer order taking system so MW increases hurt his competitors more than him?

    You can couch your motives in noble intents all you wish, but the fact is you are trying to use legislation to solve the problems caused by legislation. You are supporting the preferences of big bussinesses to harm the competitiveness of the market, you are preventing people from being hired. None of this is wild speculation on my part, Ibelsd, it is empirically observed as pointed out by more than 30 studies in earlier posts.

    The data is clear, if you increase the minimum wage you get:

    Less minority employment.

    Less lower income employment.

    Lower income and wealth mobility.

    Higher incomes to median and upper income quintile families.

    Reduced benefits for lower income employees.

    Increased job turnover for lower income employees.
    Ohhhh. I see. You think my intent is to be noble. No. My intent is to better my own position. Remember. I am a capitalist. Higher minimum wages will push the cost of skilled labor (like myself) so I will enjoy a much better income. Yet, as that goes, will it really hurt employment in the long run? I countered this point earlier, but I think it slipped through the cracks. Investing in the success of organized labor and their ties to a political party will ensure legislation will not be one-sided and will stem some (not all) of the natural inclinations of business.

    Furthermore, people are already being prevented from being hired. I sited the case were almost all of the top tech companies were working together to limit the mobility of their workers. These workers have been denied job opportunities for years. I am still waiting for you to tell me who has been sent to prison over this theft. Again, your economic models are meaningless because we do not have a free market economy by almost any definition you wish to use. The data on MW is clearly mixed. Why? On almost all studies of MW, the economists note that the actual outcomes do not match the expected outcomes. Why? Are all the economic models of capitalism flat out wrong?

    http://davidcard.berkeley.edu/papers/njmin-aer.pdf
    "We find no indication that the rise in the minimum wage reduced employment."

    http://www.businessforafairminimumwa...cause-job-loss
    "they conclude that "the minimum wage has little or no discernible effect on the employment"

    http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
    "The weight of that evidence points to little or no employment response to modest increases in the minimum wage."

    https://escholarship.org/uc/item/27z0006g
    This study finds employment flow decreases, but there is no immediate job loss effect. Additionally, stock prices increase.

    Now, most conservatives will point to the CBO report
    http://www.cbo.gov/sites/default/fil...inimumWage.pdf
    because it claims that 500,000 workers may lose their jobs. This, though, really does not fit with the most recent research on the MW and employment. They are using the same assumptive models you are using. Namely, they are fallaciously assuming a free market system. They are not predicting union intervention, political cronyism, or future legislation between those seeking economic and political power.

    The bottom line?
    http://www.thefiscaltimes.com/Articl...act-Employment
    As it turns out, numerous studies looking at “natural experiments” in minimum wage increases – meaning actual events rather than academic models – find that moderate increases have “no discernible effect” on employment. - See more at: http://www.thefiscaltimes.com/Articl....YKqu513e.dpuf

    The question one has to ask is why do the economic models differ from real world events so drastically? Are economic models just completely unable to relate to actual human behavior (which is the flawed hypothesis of the aforementioned article)? Is there something else going on? You and I are discussing it right now. The problem is that the models are based on an economic system which is not reflective of the economic system currently in place.

    You have read my posts for.. years??? and well, I am not into the whole collective thing. I despise it. I find it unethical, immoral, and corrupt. I am not, though, Jesus F'ing Christ. When someone punches me, I don't turn the other cheek. I seek to punch back twice as hard. Well, it is not just me, but just about every skilled laborer in America who has been getting kicked in the groin and the only way to fight it is to work the system. Be just as corrupt. So, if raising the MW forces employers to start paying their skilled labor accordingly, then so be it. Clearly, it isn't going to happen without fighting dirty.
    The U.S. is currently enduring a zombie apocalypse. However, in a strange twist, the zombie's are starving.

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

    Quote Originally Posted by Ibelsd View Post
    Higher minimum wages will push the cost of skilled labor (like myself) so I will enjoy a much better income.
    That is only true if you are currently working at a pay rate under the proposed minimum wage, but above the unemployment effect caused by that change in minimum wage. Potentially you could be positively effected by the change at the expense of those with a lower skill set than you. I don't think I've argued otherwise, only that it would be at the expense of those below you, which is clearly dictated by a downward sloping demand curve, which of course you don't think is violated here, do you?

    Quote Originally Posted by Ibelsd
    Investing in the success of organized labor
    Except organized labor tends to act a lot like a business by erecting barriers to entry for other employees that are not part of the union or to new entrants attempting to join the union. Licensing processes, seniority and retirement schemes are among the processes unions use to block new entrants to the labor market and decrease competing employment.

    Quote Originally Posted by Ibelsd
    I sited the case were almost all of the top tech companies were working together to limit the mobility of their workers. These workers have been denied job opportunities for years. I am still waiting for you to tell me who has been sent to prison over this theft.
    You realize that this is still in court right? That would be like saying that murder is sanctioned because the prosecution is still presenting evidence.

    Quote Originally Posted by Ibelsd
    The data on MW is clearly mixed.
    Mixed only in the same sense that all gold is really an alloy too because there is a 0.0001% impurity. You presented at most 12 studies, 12 (all of which have problems as noted below). I listed nearly 50 (and offered links to a source for another 75).

    12 studies out of 125 is not nearly enough evidence to overturn a basic fundamental principle of economics (if things cost more, people buy less).

    Quote Originally Posted by Ibelsd
    http://davidcard.berkeley.edu/papers/njmin-aer.pdf
    "We find no indication that the rise in the minimum wage reduced employment."
    This is the famous Card and Kreuger paper I already rebutted above, but to re-iterate CK was massively, massively underpowered in a statistical sense. They excluded so much of their data set that what was left could not have found a correlation even if one existed. It is essentially like polling two people for a presidential election.

    Using the whole data set, two separate studies have found that there actually was an effect (and the results are generally inline with the studies listed above).

    Richard V. Burkhauser, Kenneth A. Couch, and David C. Wittenburg, “Who Minimum Wage Increases Bite: An Analysis Using Monthly Data from the SIPP and CPS,” Southern Economic Journal, Vol. 67, January 2000, pp. 16-40.

    Thomas Sowell, “Minimum Wage Laws,” in The Thomas Sowell Reader (New York: Basic Books, 2011), p. 112

    Quote Originally Posted by Ibelsd
    http://www.businessforafairminimumwa...cause-job-loss
    "they conclude that "the minimum wage has little or no discernible effect on the employment"



    Study 1, as noted in the paper, no large minimum wage changes were available for cross border contiguous counties that would have had an effect large enough to be statistically significant. This was exacerbated by the fact that they took overall employment rates rather than more specific age or skill set rates to measure an effect. Hence, given the data set for an effect to have been detected by this study, it would have needed to have a $1/37% increase ratio. Since no one predicts that, it isn't a very helpful study.

    Study 2, take a look at the areas located in the study, notice anything? They don't contain any urban centers or large poor populations. They were looking specifically at teens that commuted into their job from a residential area. Hence we should expect low unemployment effects and large wage increases because these are exactly the middle and upper class teens that benefit from a minimum wage increase at the expense of others. I would also draw your attention to the charts at the end of the study, you'll notice that they did get a negative effect in hours. So while earnings per hour went up for these kids, total hours went down.

    Study 3, found much the same as study 2 in that actual unemployment effects were low, but total hours worked dropped dramatically and turnover shot up (IE they working conditions got a lot worse). This study also had some difficulties in that its data was discontinuous, meaning they really only studies the changes for about three to six months before and after the change. That is hardly an appropriate amount of time to discover any even short term effects.





    Tellingly, this site's "selected research in chronological order" is made up of quite a few of the same paper published at a different venue. EG:

    Sylvia Allegretto, Arindrajit Dube and Michael Reich, Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data, Institute for Research on Labor and Employment, Univ. of CA, Berkeley, June 21, 2010.

    And

    Sylvia Allegretto, Arindrajit Dube and Michael Reich, Spacial Heterogeneity and Minimum Wages: Employment Estimates for Teens Using Cross-State Commuting Zones, Institute for Research on Labor and Employment, Univ. of CA, Berkeley, June 25, 2009.

    are the exact same study published for two different groups. That makes it look like they have a lot more research supporting them than they actually do and is pretty disengenous.

    Quote Originally Posted by Ibelsd
    Quote Originally Posted by Ibelsd
    http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
    "The weight of that evidence points to little or no employment response to modest increases in the minimum wage."
    This is what happens when you take a study out of context. He is talking about a specific set of studies from 2000 to about 2006 the period he was looking at (all the later stuff is environmental scans), not the total body of data. Further, most of his sources do in fact (as the authors note) have negative employment effects for minimum wage, which they choose to discount because of "strong publication selection pressure" (the term used to imply that only positive results get published). He offers it in several footnotes, but offers no empirical data to support it. You'll notice on page 7 the graph that discusses elasticity from a large body of studies. He dismisses it as "clustered around 0" when the actual number is -2.3, which is actually a pretty big number for elasticity, it means that for every 1% change in MW, there was a 2.3% negative effect on employment.

    Quote Originally Posted by Ibelsd
    https://escholarship.org/uc/item/27z0006g
    This study finds employment flow decreases, but there is no immediate job loss effect. Additionally, stock prices increase.
    Also already cited on your other link, this set of data is also the same data set, though a different analysis, as Study 1 above. It also finds pretty similar data, no real unemployment effect because the data set was so small. The total number of contiguous counties divided by a state line that saw minimum wage changes was incredibly small (88 counties, virtually all of which are rural, and of course farms, family work and in many states, small employer work is exempted from MW). The number that saw large MW changes was 0, so their data hopes to detect an effect from a tiny change rate within a tiny sample.


    Quote Originally Posted by Ibelsd
    This, though, really does not fit with the most recent research on the MW and employment. They are using the same assumptive models you are using.
    Actually, they used many of the same studies you have put forward here. The two of the first three studies listed in appendix B are ones you cited here. In total, they list 9 of the 12 separate studies you offered here in their bibliography.

    They used your "models' not mine and they still concluded an unemployment effect. What does that tell you about the reading of those studies' actual data?

    Quote Originally Posted by Ibelsd
    find that moderate increases have “no discernible effect” on employment.
    Really? So if I make the change in the variable small enough, I can't detect its impact? Tell me again about how you overturned the fundamental laws of supply and demand?


    Quote Originally Posted by Ibelsd
    The question one has to ask is why do the economic models differ from real world events so drastically?
    What model are you talking about here? The only thing I've put forward is a) microeconomic law and b) empirical evidence.

    Question to opponent. What model has been presented that differs from world events? Please be specific.



    Quote Originally Posted by Ibelsd
    So, if raising the MW forces employers to start paying their skilled labor accordingly, then so be it.
    And if it results in them simply firing most of them or automating away their jobs that is fine too? What about the decrease in economic production from that loss of productivity which would cause the cost of goods and services to increase, eroding away at your new income advantage?

    Why not fight more directly against those corporate largesse? Why cause additional price distortions that rob us of capital development, increased standard of living and all the things we both agree the market provides?
    "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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