missouri passes state law forcing cities to lower their minimum wage

[Jason Harvestdancer]

Actually, fuck you. You were the one who implored the left to try to understand the right wing/libertarian position. Why don't you explain (finally) why those in Missouri helped by a move from $10 MW to $7.50 outweigh those hurt by it? - other than you're just being an asshole about it.

No, I questioned automatically assuming a sinister motive. I didn't even get as far as asking people to understand the other side.

I suppose even that is too much for some people. If someone disagrees with you it is because they are cackling evilly while twirling the ends of their mustache.

 

[PyramidHead]

How did you get that from any of what I wrote? I'm saying wages should be treated like any other expense. Just because a company decides to invest in a bunch of new equipment doesn't mean there is no possible harm in spending too much money on equipment. But that fact does not mean that any increase in equipment expenses will thus be harmful. You keep trying to catch people with your reductio nonsense, but this is just another version of the Laffer curve. One side says we're already over the edge, the other says we're not. There is no deeper disagreement at play than this; some people think the minimum wage is already at the point where raising it will be bad, some people think that point is further away and some benefits can be gained by raising it from where it currently stands. I happen to think that the working poor could stand to have some more money and that it would be good for us all if they did, because I don't think we are as near to the point of harming the economy with wage increases as some do. If I thought we were nearer to it, I might be singing a different tune.

The problem is your side simply assumes that companies can absorb the costs without passing them on. It's just as much an article of faith as the GOP's defense of the Laffer curve.

He keeps proposing an extreme value to show the problem with your position, I point out that it's yet another manifestation of your hidden assumption that there is an infinite pool of profit to fund whatever you want. (If the pool weren't infinite the question of whether something was too big would be an issue. Since you refuse to even check I can only conclude you consider it infinite, or that you flunked basic mathematics.)

Don't talk to me if you are going to lump whatever I say into your image of my "side".

 

[Loren Pechtel]

The force is the transfer from those who spend everything to those who save.

Nope. Its the pay rate that make the difference. It being relatively easier ( a monumental understatement) to get by on a salary package of five million per annum with bonuses, save money, buy property, invest in business, etc, than for someone who earns twenty thousand a year with no bonuses or benefits.

It's all about income. Which is not to say that there aren't bad money managers at every pay scale, but that's not the point.

The pay rate makes it easier to save but I've known savers with moderate incomes and spenders with very large incomes.

- - - Updated - - -

The problem is your side simply assumes that companies can absorb the costs without passing them on. It's just as much an article of faith as the GOP's defense of the Laffer curve.

He keeps proposing an extreme value to show the problem with your position, I point out that it's yet another manifestation of your hidden assumption that there is an infinite pool of profit to fund whatever you want. (If the pool weren't infinite the question of whether something was too big would be an issue. Since you refuse to even check I can only conclude you consider it infinite, or that you flunked basic mathematics.)

Don't talk to me if you are going to lump whatever I say into your image of my "side".

You are making the same mistakes the rest of them are.

 

[PyramidHead]

You are making the same mistakes the rest of them are.

No, I'm not. I never said profits were infinite; in fact, I specifically said that there is a point above which the minimum wage would be detrimental to the economy as a whole. In a later reply, I said that $1000 is obviously above this point, but $15 is not.

 

[prideandfall]

The problem is your side simply assumes that companies can absorb the costs without passing them on. It's just as much an article of faith as the GOP's defense of the Laffer curve.

this is an incorrect assertion, and it is predicated on what may be the most fundamental schism between "left" and "right" opinions on the issue of wages and companies in general:
we don't assume that companies can absorb them without passing them on, we assume that many (or most, or all) companies can absorb them without needing to pass them on by simply eating into their profit margins, and we're fine with that proposition.

"the left" is OK with a company not making ALL THE MONEY, as a general rule "maximize profit above all else at the expense of everything" isn't built into their moral compass.
this is diametrically opposed to "the right" which seem to view it as companies having a transcendent spiritual requirement to make ALL THE PROFIT, many to the extent that their rhetoric indicates there should be some kind of law requiring that if a company exists, everyone has to buy from them so they get all the monies.

the other big difference seems to be that "the left" is perfectly OK with saying "if you can't afford to have your business be solvent while paying minimal standard of living wages to your employees, then you don't get to have a business" - which to us is no different from saying "if you can't afford to have your business be solvent while paying for the cost of physical materials required for your output, then you get to have a business", which i'm sure is a statement even the most die hard right winger around here would have no trouble agreeing with.

if you want to open a burger joint but you can't afford to buy beef, you don't get to have a burger joint - that seems pretty simple.
if you want to open a burger joint but you can't afford to pay your employees, you don't get to have a burger joint - also seems pretty simple.

 

[dismal]

You are making the same mistakes the rest of them are.

No, I'm not. I never said profits were infinite; in fact, I specifically said that there is a point above which the minimum wage would be detrimental to the economy as a whole. In a later reply, I said that $1000 is obviously above this point, but $15 is not.

You may be right that it is not obviously above the point where we can tell it is doing harm due to the challenges of measuring such things, but fortunately we still have economic theory to tell us it is.

The only minimum wage that does not do harm is one set below the point where anyone would voluntarily accept it.

 

[Crazy Eddie]

Versus what?

Verses "Anything other than $0"

Full question: would reducing the minimum wage to $0/hour cause anyone harm?

The only minimum wage that does not do harm is one set below the point where anyone would voluntarily accept it.

If this were true -- given the existence of unpaid internships -- then the only minimum wage that does not do harm would be a negative value.

 

[PyramidHead]

No, I'm not. I never said profits were infinite; in fact, I specifically said that there is a point above which the minimum wage would be detrimental to the economy as a whole. In a later reply, I said that $1000 is obviously above this point, but $15 is not.

You may be right that it is not obviously above the point where we can tell it is doing harm due to the challenges of measuring such things, but fortunately we still have economic theory to tell us it is.

I don't trust theory as a replacement for empiricism.

The only minimum wage that does not do harm is one set below the point where anyone would voluntarily accept it.

Can you prove that, or is it just something you derived from economic theory?

 

[dismal]

You may be right that it is not obviously above the point where we can tell it is doing harm due to the challenges of measuring such things, but fortunately we still have economic theory to tell us it is.

I don't trust theory as a replacement for empiricism.

The only minimum wage that does not do harm is one set below the point where anyone would voluntarily accept it.

Can you prove that, or is it just something you derived from economic theory?

If you want to do economics based on empiricism you're going to need an alternate universe.

But what do you think is so wrong about the theory?

Let's say ex ante carrots commonly sold for $1. What do you think would happen if the government set a minimum carrot price of $2?

The theory says (ignoring black markets) carrots would be priced out of their lower value uses as people did without or used substitutes. Resources used to grow carrots would be diverted to producing other things. There would be an overall loss of value to society because absent the minimum carrot price people would have preferred carrots to those other things.

The economy uses price to allocate resources. You monkey with price, you monkey with allocation.

 

[Crazy Eddie]

I don't trust theory as a replacement for empiricism.

The only minimum wage that does not do harm is one set below the point where anyone would voluntarily accept it.

Can you prove that, or is it just something you derived from economic theory?

If you want to do economics based on empiricism you're going to need an alternate universe.

But what do you think is so wrong about the theory?

Let's say ex ante carrots commonly sold for $1. What do you think would happen if the government set a minimum carrot price of $2?

The theory says (ignoring black markets) carrots would be priced out of their lower value uses as people did without or used substitutes. Resources used to grow carrots would be diverted to producing other things. There would be an overall loss of value to society because absent the minimum carrot price people would have preferred carrots to those other things.

The economy uses price to allocate resources. You monkey with price, you monkey with allocation.

So what is the overall loss of value to society due to our not being able to pay workers $0 an hour?

 

[dismal]

I don't trust theory as a replacement for empiricism.

The only minimum wage that does not do harm is one set below the point where anyone would voluntarily accept it.

Can you prove that, or is it just something you derived from economic theory?

If you want to do economics based on empiricism you're going to need an alternate universe.

But what do you think is so wrong about the theory?

Let's say ex ante carrots commonly sold for $1. What do you think would happen if the government set a minimum carrot price of $2?

The theory says (ignoring black markets) carrots would be priced out of their lower value uses as people did without or used substitutes. Resources used to grow carrots would be diverted to producing other things. There would be an overall loss of value to society because absent the minimum carrot price people would have preferred carrots to those other things.

The economy uses price to allocate resources. You monkey with price, you monkey with allocation.

So what is the overall loss of value to society due to our not being able to pay workers $0 an hour?

Do you seriously think a government ban is all that stops people from paying workers $0 per hour?

 

[PyramidHead]

I don't trust theory as a replacement for empiricism.

The only minimum wage that does not do harm is one set below the point where anyone would voluntarily accept it.

Can you prove that, or is it just something you derived from economic theory?

If you want to do economics based on empiricism you're going to need an alternate universe.

But what do you think is so wrong about the theory?

Let's say ex ante carrots commonly sold for $1. What do you think would happen if the government set a minimum carrot price of $2?

The theory says (ignoring black markets) carrots would be priced out of their lower value uses as people did without or used substitutes. Resources used to grow carrots would be diverted to producing other things. There would be an overall loss of value to society because absent the minimum carrot price people would have preferred carrots to those other things.

The economy uses price to allocate resources. You monkey with price, you monkey with allocation.

Please refer to my post where I pointed out several important differences between raising the price of bananas and raising the minimum price of labor. The same reasoning works for carrots too.

TL;DR

1. Raising the price of carrots means people can just buy them from somewhere else or not buy carrots, but a society-wide increase in the minimum price of labor will not allow employers to get it cheaper anywhere else, and they can't just not buy labor
2. More expensive carrots means more disposable income in the hands of carrot growers/sellers, which is not likely to have much of a stimulative effect on the economy as a whole. More disposable income in the hands of all minimum wage workers is likely to have a large enough stimulative effect that it can offset the negative impact on employers
3. From #2, the employers that are benefited by the stimulative effect of more disposable income in the hands of minimum wage workers are very often the same employers that hire minimum wage workers. So, if Walmart has to pay more for labor, it will very likely receive a part of that cost back in the form of increased sales (due to Walmart employees having more money to buy things at, among other places, Walmart). Carrot growers/sellers do not shop at the same supermarkets that raise the price of carrots enough for this to be a factor worth considering in that scenario

Etc. etc. It's not as simple as you make it out to be because of the added stimulative element. You can't discount the effect of every business in the jurisdiction where MW is raised (even those not directly affected by the law because they don't hire MW labor) immediately having more customers with more money to spend on their products and services, to offset the effect of increased costs on the businesses themselves.

 

[Crazy Eddie]

I don't trust theory as a replacement for empiricism.

The only minimum wage that does not do harm is one set below the point where anyone would voluntarily accept it.

Can you prove that, or is it just something you derived from economic theory?

If you want to do economics based on empiricism you're going to need an alternate universe.

But what do you think is so wrong about the theory?

Let's say ex ante carrots commonly sold for $1. What do you think would happen if the government set a minimum carrot price of $2?

The theory says (ignoring black markets) carrots would be priced out of their lower value uses as people did without or used substitutes. Resources used to grow carrots would be diverted to producing other things. There would be an overall loss of value to society because absent the minimum carrot price people would have preferred carrots to those other things.

The economy uses price to allocate resources. You monkey with price, you monkey with allocation.

So what is the overall loss of value to society due to our not being able to pay workers $0 an hour?

Do you seriously think a government ban is all that stops people from paying workers $0 per hour?

No I do not.

Please answer the question. What is the overall loss of value to society due to our not being able to pay workers $0 an hour?

 

[coloradoatheist]

As a side note. Here is a study that is saying there is an increase in number of health code violates as minimum wage increases.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2992783

 

[dismal]

I don't trust theory as a replacement for empiricism.

The only minimum wage that does not do harm is one set below the point where anyone would voluntarily accept it.

Can you prove that, or is it just something you derived from economic theory?

If you want to do economics based on empiricism you're going to need an alternate universe.

But what do you think is so wrong about the theory?

Let's say ex ante carrots commonly sold for $1. What do you think would happen if the government set a minimum carrot price of $2?

The theory says (ignoring black markets) carrots would be priced out of their lower value uses as people did without or used substitutes. Resources used to grow carrots would be diverted to producing other things. There would be an overall loss of value to society because absent the minimum carrot price people would have preferred carrots to those other things.

The economy uses price to allocate resources. You monkey with price, you monkey with allocation.

So what is the overall loss of value to society due to our not being able to pay workers $0 an hour?

Do you seriously think a government ban is all that stops people from paying workers $0 per hour?

No I do not.

Please answer the question. What is the overall loss of value to society due to our not being able to pay workers $0 an hour?

If you set the minimum wage above a price people would be wiling to take a job you are thwarting a voluntary transaction. Someone is worse off by definition.

When you increase the price for unskilled labor people choose to do with less or use substitutes. This could mean more automation. This could mean fewer cashiers at the front of the store. Restrooms cleaned less often. Things that were worth doing at prices people were willing to accept will now no longer get done. Automation that was not worth doing before will be worth doing now. Society loses.

In addition, some of the cost will be passed on to consumers. They will pay more for goods and services that contain unskilled labor than they would have before. They demand less of them. They will have have less money to spend on all other goods. They will receive a less optimal basket of goods and services than they did before. Society loses.

 

[Crazy Eddie]

As a side note. Here is a study that is saying there is an increase in number of health code violates as minimum wage increases.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2992783

This is a really strange study, but I think I managed to find a parse point:

Food establishments are business that sell food products but also offer amenities, including general cleanliness and hygiene. A restaurant with perceptibly poor hygiene may realize a decline in the sales. Therefore, while a restaurant may be tempted to cut back on amenities when wage increase, the firm also recognizes that this could negatively impact sales and have a dampening effect on profits. A firm would, therefore, carefully calibrate its changes in output and other amenities to balance the negative impact on revenue resulting from lower hygiene and the desire to cut costs.

This study never explains what "amenities" means, and it's clear we're not really supposed to ask, but it kind of sounds like this is an elaborate euphemism for "cleaning the bathrooms"
and/or "washing the dishes."

Basically, they don't clean the bathrooms as often or wash the dishes as thoroughly because the worker who does those two things is working fewer hours.

 

[Crazy Eddie]

When you increase the price for unskilled labor people choose to do with less or use substitutes. This could mean more automation. This could mean fewer cashiers at the front of the store. Restrooms cleaned less often. Things that were worth doing at prices people were willing to accept will now no longer get done. Automation that was not worth doing before will be worth doing now. Society loses.

So to recap: the ability to pay people $0 would mean
- Less automation
- More cashiers
- Clean restrooms
- Important tasks getting done.

Preve are the BENEFITS of reducing the minimum wage to $0

Now who would be HARMED by reducing the minimum wage to $0, and why is that harm less important to society than the benefits you mentioned?

In addition, some of the cost will be passed on to consumers. They will pay more for goods and services that contain unskilled labor than they would have before. They demand less of them. They will have have less money to spend on all other goods. They will receive a less optimal basket of goods and services than they did before. Society loses.

This is an interesting claim, but you seem unable to explain why this is a feature of MINIMUM wage and not a feature of rising wages in general. Why, for example, would the minimum wage cause all of these problems while a labor shortage -- e.g. high demand for workers with few candidates to fill them -- does not?

And if it's okay to have high wages in one market, why is it NOT okay to have high wages in the low-end, unskilled labor market? What makes unskilled labor so much more important to society than, say, software engineers or HVAC technicians?

 

[prideandfall]

If you set the minimum wage above a price people would be wiling to take a job you are thwarting a voluntary transaction. Someone is worse off by definition.

When you increase the price for unskilled labor people choose to do with less or use substitutes. This could mean more automation. This could mean fewer cashiers at the front of the store. Restrooms cleaned less often. Things that were worth doing at prices people were willing to accept will now no longer get done. Automation that was not worth doing before will be worth doing now. Society loses.

In addition, some of the cost will be passed on to consumers. They will pay more for goods and services that contain unskilled labor than they would have before. They demand less of them. They will have have less money to spend on all other goods. They will receive a less optimal basket of goods and services than they did before. Society loses.

agreed this is a problem, which is why i've always liked the idea of minimum wage being tied to some kind of minimum standard of output by the employer.
i know it's totally unrealistic and there would be no way to properly quantify this or enforce it, but it's a shame we can't do something like "min. wage is going up 2 dollars an hour and you can't cut back anyone's hours or slack on any of the services you provide"

 

[Loren Pechtel]

You are making the same mistakes the rest of them are.

No, I'm not. I never said profits were infinite; in fact, I specifically said that there is a point above which the minimum wage would be detrimental to the economy as a whole. In a later reply, I said that $1000 is obviously above this point, but $15 is not.

You are simply assuming businesses can fund the minimum wage you desire from profit. That only makes sense if the pool is infinite.

 

[Loren Pechtel]

The problem is your side simply assumes that companies can absorb the costs without passing them on. It's just as much an article of faith as the GOP's defense of the Laffer curve.

this is an incorrect assertion, and it is predicated on what may be the most fundamental schism between "left" and "right" opinions on the issue of wages and companies in general:
we don't assume that companies can absorb them without passing them on, we assume that many (or most, or all) companies can absorb them without needing to pass them on by simply eating into their profit margins, and we're fine with that proposition.

You're wiggling but fundamentally supporting my point--you figure companies can fund what you want out of profits.

"the left" is OK with a company not making ALL THE MONEY, as a general rule "maximize profit above all else at the expense of everything" isn't built into their moral compass.
this is diametrically opposed to "the right" which seem to view it as companies having a transcendent spiritual requirement to make ALL THE PROFIT, many to the extent that their rhetoric indicates there should be some kind of law requiring that if a company exists, everyone has to buy from them so they get all the monies.

Strawman, nobody is arguing for that.

the other big difference seems to be that "the left" is perfectly OK with saying "if you can't afford to have your business be solvent while paying minimal standard of living wages to your employees, then you don't get to have a business" - which to us is no different from saying "if you can't afford to have your business be solvent while paying for the cost of physical materials required for your output, then you get to have a business", which i'm sure is a statement even the most die hard right winger around here would have no trouble agreeing with.

Yup, you think business should be the welfare agency. Again, another manifestation of the infinite pool of profit to fund your dreams.

if you want to open a burger joint but you can't afford to buy beef, you don't get to have a burger joint - that seems pretty simple.
if you want to open a burger joint but you can't afford to pay your employees, you don't get to have a burger joint - also seems pretty simple.

And you continue to willfully ignore the fact that when you destroy bad jobs you don't get good jobs replacing them, you get unemployment.