Minimum Wage and Unionization (split)

[TV and credit cards]

IIDB STAFF NOTE: this is a split from the Petroleum Reserve thread
HERE

Strategic Petroleum Reserve release

Seeing on the news that Biden plan to make a “massive release” from the SPR. It feels like this is short-sighted and pandering. My gut tells me to hang onto the petroleum reserve unless we need it dire crisis. To use it for price relief seems like it creates a risk against a true crisis. But...

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Yes, you can. You can raise the wages of the poor by raising the minimum wage, aggressively promoting unionization instead of aggressively fighting it, compressing the net income distribution by raising taxes on the high earners, and restricting the number of dollars that the fed will accept from overseas markets limiting the number of foreign trade deficits every year to say 150 billion dollars a year. These measures would go a long way to address the fifty-year-long conversion of the workers' wages into profits. Excessive profits are bad for the economy, wages stopped growing in the first quarter of this year meaning that all of the inflation that we are seeing now is caused by excessive profits.

Both minimum wage and unions are ways to make higher wages for fewer people, while making more people unemployed.

The award of this year’s Nobel Prize in economics has further exploded a decades-old myth that increasing minimum wages costs jobs.

 

[Loren Pechtel]

Yes, you can. You can raise the wages of the poor by raising the minimum wage, aggressively promoting unionization instead of aggressively fighting it, compressing the net income distribution by raising taxes on the high earners, and restricting the number of dollars that the fed will accept from overseas markets limiting the number of foreign trade deficits every year to say 150 billion dollars a year. These measures would go a long way to address the fifty-year-long conversion of the workers' wages into profits. Excessive profits are bad for the economy, wages stopped growing in the first quarter of this year meaning that all of the inflation that we are seeing now is caused by excessive profits.

Both minimum wage and unions are ways to make higher wages for fewer people, while making more people unemployed.

The award of this year’s Nobel Prize in economics has further exploded a decades-old myth that increasing minimum wages costs jobs.

Reality: A small enough proportion of the population works at minimum wage that even substantial changes in minimum wage employment will be lost in the noise. The Nobel prizes should stick to the hard sciences!

We have one data point from where a minimum wage change actually influenced the income of a decent chunk of the population--and we saw what standard logic says: Lots of unemployment. All other "data" points are cases where you would not expect to be able to observe a change. We shouldn't be awarding Nobels for finding that we can't detect a signal expected to be below the noise floor.

 

[ZiprHead]

Since Biden came into office, employee pay is up almost five percentage points. Unemployment is at the lowest it's been in many years.

 

[Bomb#20]

Since Biden came into office, employee pay is up almost five percentage points. Unemployment is at the lowest it's been in many years.

High demand for labor causes unemployment to fall and causes employee pay to rise.

 

[Bomb#20]

Both minimum wage and unions are ways to make higher wages for fewer people, while making more people unemployed.

The award of this year’s Nobel Prize in economics has further exploded a decades-old myth that increasing minimum wages costs jobs.

These economists have shown that when employers have to raise wages, they do not compensate by eliminating any of the jobs? So these economists have exploded the myth that low-wage workers need a minimum wage increase. If the workers want higher wages all they need to do to get them is unionize and strike, and they can all keep their jobs at the higher wage they demand. Good to know.

 

[laughing dog]

Sure you can. It makes strategic sense to deplete the reserves of OPEC countries before we deplete ours.

Doesn't really make much sense given that there is high demand for oil now, but the demand in 2050 is likely to be much less.

It does to those who can think strategically.

Yes, you can. You can raise the wages of the poor by raising the minimum wage, aggressively promoting unionization instead of aggressively fighting it, compressing the net income distribution by raising taxes on the high earners, and restricting the number of dollars that the fed will accept from overseas markets limiting the number of foreign trade deficits every year to say 150 billion dollars a year. These measures would go a long way to address the fifty-year-long conversion of the workers' wages into profits. Excessive profits are bad for the economy, wages stopped growing in the first quarter of this year meaning that all of the inflation that we are seeing now is caused by excessive profits.

Both minimum wage and unions are ways to make higher wages for fewer people, while making more people unemployed.

The award of this year’s Nobel Prize in economics has further exploded a decades-old myth that increasing minimum wages costs jobs.

Reality: A small enough proportion of the population works at minimum wage that even substantial changes in minimum wage employment will be lost in the noise. The Nobel prizes should stick to the hard sciences!

We have one data point from where a minimum wage change actually influenced the income of a decent chunk of the population--and we saw what standard logic says: Lots of unemployment. All other "data" points are cases where you would not expect to be able to observe a change. We shouldn't be awarding Nobels for finding that we can't detect a signal expected to be below the noise floor.

Ah the old cherry picking defense - my data point is valid and all others are not. Really, your argument is a case of ridiculous special pleading.

 

[Swammerdami]

(This thread is about the petroleum reserve. Do we need a split?)

Both minimum wage and unions are ways to make higher wages for fewer people, while making more people unemployed.

Reality: A small enough proportion of the population works at minimum wage that even substantial changes in minimum wage employment will be lost in the noise. The Nobel prizes should stick to the hard sciences!

We have one data point from where a minimum wage change actually influenced the income of a decent chunk of the population--and we saw what standard logic says: Lots of unemployment. All other "data" points are cases where you would not expect to be able to observe a change. We shouldn't be awarding Nobels for finding that we can't detect a signal expected to be below the noise floor.

Your posts seem to contradict each other. You may support the contradiction with anecdotal evidence, but worse than anecdotes are anecdotes you don't even link to!

Here's an anecdote I vaguely recall: Several years ago Seattle enacted a significant increase in its minimum wage and some predicted that would backfire. Instead the economy boomed.

These economists have shown that when employers have to raise wages, they do not compensate by eliminating any of the jobs? So these economists have exploded the myth that low-wage workers need a minimum wage increase. If the workers want higher wages all they need to do to get them is unionize and strike, and they can all keep their jobs at the higher wage they demand. Good to know.

Apparent tongue-in-cheekedness makes it hard to decipher your exact meaning. But the fact is that most Americans support unions. Many want to unionize but are prevented by legal obstacles. For example, 28 states (mostly Red with a few Purples) have "right-to-work" laws. ("Right-to-work" is, in practice, a euphemism for "forbidden-to-unionize.")

 

[Bomb#20]

These economists have shown that when employers have to raise wages, they do not compensate by eliminating any of the jobs? So these economists have exploded the myth that low-wage workers need a minimum wage increase. If the workers want higher wages all they need to do to get them is unionize and strike, and they can all keep their jobs at the higher wage they demand. Good to know.

Apparent tongue-in-cheekedness makes it hard to decipher your exact meaning.

Sorry; I'm a bit hampered by not having read the original research the Nobel committee awarded the prize for. I'm guessing that most likely what the economists actually showed was different from the quoted ITUC journalist's characterization of it as "exploded a decades-old myth that increasing minimum wages costs jobs"; and if the characterization is correct then most likely the research was flawed. But my exact meaning is that taking the report at face value for the sake of discussion, if that description of their conclusion is accurate and if their research is sound, it would prove minimum wage increases are unnecessary -- it would prove workers can get all the putative benefits of minimum wages on their own initiative, without any help from the government, the same way Exxon doesn't need government help to raise gas prices.

But the fact is that most Americans support unions. Many want to unionize but are prevented by legal obstacles. For example, 28 states (mostly Red with a few Purples) have "right-to-work" laws. ("Right-to-work" is, in practice, a euphemism for "forbidden-to-unionize.")

Not sure what your point is -- I didn't say anything against unions. Unions are a basic component of free market economies, same as corporations. But when you describe "right-to-work" as a euphemism for "forbidden-to-unionize", what are you basing that on? Because if we take the ITUC article at face value, and believe that Dr. Card et al. truly showed that when employers have to raise wages they do not compensate by eliminating any of the jobs, then how the heck would a right-to-work law stop anybody from unionizing?

 

[laughing dog]

These economists have shown that when employers have to raise wages, they do not compensate by eliminating any of the jobs? So these economists have exploded the myth that low-wage workers need a minimum wage increase. If the workers want higher wages all they need to do to get them is unionize and strike, and they can all keep their jobs at the higher wage they demand. Good to know.

Apparent tongue-in-cheekedness makes it hard to decipher your exact meaning.

Sorry; I'm a bit hampered by not having read the original research the Nobel committee awarded the prize for. I'm guessing that most likely what the economists actually showed was different from the quoted ITUC journalist's characterization of it as "exploded a decades-old myth that increasing minimum wages costs jobs"; and if the characterization is correct then most likely the research was flawed. But my exact meaning is that taking the report at face value for the sake of discussion, if that description of their conclusion is accurate and if their research is sound, it would prove minimum wage increases are unnecessary -- it would prove workers can get all the putative benefits of minimum wages on their own initiative, without any help from the government, the same way Exxon doesn't need government help to raise gas prices.

If you consider that unionization requires effort and it is localized (i,e. per company) compared to more widely dispersed, then your conclusions seems a bit flawed.

But the fact is

 

[Loren Pechtel]

Sure you can. It makes strategic sense to deplete the reserves of OPEC countries before we deplete ours.

Doesn't really make much sense given that there is high demand for oil now, but the demand in 2050 is likely to be much less.

It does to those who can think strategically.

Yes, you can. You can raise the wages of the poor by raising the minimum wage, aggressively promoting unionization instead of aggressively fighting it, compressing the net income distribution by raising taxes on the high earners, and restricting the number of dollars that the fed will accept from overseas markets limiting the number of foreign trade deficits every year to say 150 billion dollars a year. These measures would go a long way to address the fifty-year-long conversion of the workers' wages into profits. Excessive profits are bad for the economy, wages stopped growing in the first quarter of this year meaning that all of the inflation that we are seeing now is caused by excessive profits.

Both minimum wage and unions are ways to make higher wages for fewer people, while making more people unemployed.

The award of this year’s Nobel Prize in economics has further exploded a decades-old myth that increasing minimum wages costs jobs.

Reality: A small enough proportion of the population works at minimum wage that even substantial changes in minimum wage employment will be lost in the noise. The Nobel prizes should stick to the hard sciences!

We have one data point from where a minimum wage change actually influenced the income of a decent chunk of the population--and we saw what standard logic says: Lots of unemployment. All other "data" points are cases where you would not expect to be able to observe a change. We shouldn't be awarding Nobels for finding that we can't detect a signal expected to be below the noise floor.

Ah the old cherry picking defense - my data point is valid and all others are not. Really, your argument is a case of ridiculous special pleading.

It's not cherry-picking. We have only one known case where there was a trigger big enough that we should expect to be able to observe an effect--and we got one. Since only about 1% of the population works for minimum wage (watch out for the misleading at-or-below figure that includes tipped workers) something that costs 10% of minimum wage workers their jobs causes only .1% change in unemployment--undetectable.

The problem is with the economists who pretend that a failure to observe a signal they shouldn't expect to be able to observe means something.

 

[laughing dog]

Sure you can. It makes strategic sense to deplete the reserves of OPEC countries before we deplete ours.

Doesn't really make much sense given that there is high demand for oil now, but the demand in 2050 is likely to be much less.

It does to those who can think strategically.

Yes, you can. You can raise the wages of the poor by raising the minimum wage, aggressively promoting unionization instead of aggressively fighting it, compressing the net income distribution by raising taxes on the high earners, and restricting the number of dollars that the fed will accept from overseas markets limiting the number of foreign trade deficits every year to say 150 billion dollars a year. These measures would go a long way to address the fifty-year-long conversion of the workers' wages into profits. Excessive profits are bad for the economy, wages stopped growing in the first quarter of this year meaning that all of the inflation that we are seeing now is caused by excessive profits.

Both minimum wage and unions are ways to make higher wages for fewer people, while making more people unemployed.

The award of this year’s Nobel Prize in economics has further exploded a decades-old myth that increasing minimum wages costs jobs.

Reality: A small enough proportion of the population works at minimum wage that even substantial changes in minimum wage employment will be lost in the noise. The Nobel prizes should stick to the hard sciences!

We have one data point from where a minimum wage change actually influenced the income of a decent chunk of the population--and we saw what standard logic says: Lots of unemployment. All other "data" points are cases where you would not expect to be able to observe a change. We shouldn't be awarding Nobels for finding that we can't detect a signal expected to be below the noise floor.

Ah the old cherry picking defense - my data point is valid and all others are not. Really, your argument is a case of ridiculous special pleading.

It's not cherry-picking. We have only one known case where there was a trigger big enough that we should expect to be able to observe an effect--and we got one.

OI course it is cherry-picking. You are arbitrarily throwing out all of the instances.

Since only about 1% of the population works for minimum wage (watch out for the misleading at-or-below figure that includes tipped workers) something that costs 10% of minimum wage workers their jobs causes only .1% change in unemployment--undetectable.

The problem is with the economists who pretend that a failure to observe a signal they shouldn't expect to be able to observe means something.

I point out that if one cannot notice an effect, one possible reason is that there is no effect.

The real problem is that you really have no clue what you are talking about. David Card's work used survey data from fast food restaurants in NJ and PA that were across the border from each other when NJ raised its minimum wage and PA did not.

Assessing the effect of a minimum wage requires careful attention to the actual situation. Most short-terms effects are going to be very small because most firms will not have time to make adjustments in schedules or how they do business. Over time, they do have time, but then there are many other confounding influences at play. Moreover, firms may reduce hours not jobs which may make using unemployment or employment figures a bit dicey. Finally, whether or not a minimum wage change has an effect on a labor market depends partly on whether it is effective (i.e. pushes the wage above the market-clearing level). For example, in Mn, raising the min. wage to $10 per hour now would have little effect because entry level jobs in fast food restaurants etc... are starting at $12 +.

 

[Bomb#20]

... But my exact meaning is that taking the report at face value for the sake of discussion, if that description of their conclusion is accurate and if their research is sound, it would prove minimum wage increases are unnecessary -- it would prove workers can get all the putative benefits of minimum wages on their own initiative, without any help from the government, the same way Exxon doesn't need government help to raise gas prices.

If you consider that unionization requires effort

Are you suggesting that increasing the minimum wage doesn't require effort?

and it is localized (i,e. per company) compared to more widely dispersed, then your conclusions seems a bit flawed.

A lot easier to change a company than change a country.

 

[Swammerdami]

. . . But the fact is that most Americans support unions. Many want to unionize but are prevented by legal obstacles. For example, 28 states (mostly Red with a few Purples) have "right-to-work" laws. ("Right-to-work" is, in practice, a euphemism for "forbidden-to-unionize.")

Not sure what your point is -- I didn't say anything against unions. Unions are a basic component of free market economies, same as corporations. But when you describe "right-to-work" as a euphemism for "forbidden-to-unionize", what are you basing that on? Because if we take the ITUC article at face value, and believe that Dr. Card et al. truly showed that when employers have to raise wages they do not compensate by eliminating any of the jobs, then how the heck would a right-to-work law stop anybody from unionizing?

I regard many conversations here as addressing the topic rather than the poster. I meandered along my own path without regard for whether you (the quotee) agreed or disagreed with me.

But right-to-work laws most assuredly DO discourage unionizing.

Wages are NOT determined by any trivial supply/demand trade-off. Unions provide workers with a form of oligopoly power to counter the implicit oligopoly power employers often have.

 

[laughing dog]

... But my exact meaning is that taking the report at face value for the sake of discussion, if that description of their conclusion is accurate and if their research is sound, it would prove minimum wage increases are unnecessary -- it would prove workers can get all the putative benefits of minimum wages on their own initiative, without any help from the government, the same way Exxon doesn't need government help to raise gas prices.

If you consider that unionization requires effort

Are you suggesting that increasing the minimum wage doesn't require effort?

Not much on the part of the workers.

and it is localized (i,e. per company) compared to more widely dispersed, then your conclusions seems a bit flawed.

A lot easier to change a company than change a country.

Really? If you think it is a lot easier for Amazon workers or McDonald's workers to unionize all their sites than it is to get a change in the minimum wage, we are not living in the same time-space continuum.

 

[Bomb#20]

Not sure what your point is -- I didn't say anything against unions. Unions are a basic component of free market economies, same as corporations. But when you describe "right-to-work" as a euphemism for "forbidden-to-unionize", what are you basing that on? Because if we take the ITUC article at face value, and believe that Dr. Card et al. truly showed that when employers have to raise wages they do not compensate by eliminating any of the jobs, then how the heck would a right-to-work law stop anybody from unionizing?

I regard many conversations here as addressing the topic rather than the poster. I meandered along my own path without regard for whether you (the quotee) agreed or disagreed with me.

But right-to-work laws most assuredly DO discourage unionizing.

You misunderstand -- I wasn't asking for your assurance that there's an effect. I was asking for the mechanism by which the effect operates, so we can examine whether it still operates if ITUC is right that demand for low-skill labor is infinitely inelastic.

If I'm being paid $15/hour and you're trying to unionize my worksite so you can force wages up to $18/hour, and I expect when that happens the company will limit its damage by eliminating some positions, and I expect my position is probably one of the ones they'll eliminate, then I have a powerful incentive not to join your union. You need the threat of job loss if I don't join to counteract the threat of job loss if I do, and right-to-work laws deprive unions of that counterthreat. But if ITUC is right that increasing wages doesn't cost jobs, then I don't have reason to fear for my job if I join your union, so you don't need the counterthreat.

My point is, your confidence that right-to-work laws most assuredly DO discourage unionizing is a reason to think that ITUC is wrong -- that Dr. Card et al. didn't prove what ITUC thinks they proved.

Wages are NOT determined by any trivial supply/demand trade-off. Unions provide workers with a form of oligopoly power to counter the implicit oligopoly power employers often have.

But what is the source of the implicit oligopoly power employers often have, if not the elasticity in their demand for labor?

 

[Bomb#20]

A lot easier to change a company than change a country.

Really? If you think it is a lot easier for Amazon workers or McDonald's workers to unionize all their sites than it is to get a change in the minimum wage, we are not living in the same time-space continuum.

A couple of Amazon sites just voted to unionize. What they did, other Amazon sites can do too. Adjusted for inflation, the federal minimum wage is still where it was in the 1950s.

 

[Loren Pechtel]

It's not cherry-picking. We have only one known case where there was a trigger big enough that we should expect to be able to observe an effect--and we got one.

OI course it is cherry-picking. You are arbitrarily throwing out all of the instances.

No. I am grouping the data into two sets:

A) Cases where we should be able to detect a change in the unemployment rate.

B) Cases where we should not be able to detect a change in the unemployment rate.

Group A contains only one data point and the change was clearly detected. It is irrelevant how many data points are in B as the observed result should be nothing whether or not there actually is an effect.

Since only about 1% of the population works for minimum wage (watch out for the misleading at-or-below figure that includes tipped workers) something that costs 10% of minimum wage workers their jobs causes only .1% change in unemployment--undetectable.

The problem is with the economists who pretend that a failure to observe a signal they shouldn't expect to be able to observe means something.

I point out that if one cannot notice an effect, one possible reason is that there is no effect.

The real problem is that you really have no clue what you are talking about. David Card's work used survey data from fast food restaurants in NJ and PA that were across the border from each other when NJ raised its minimum wage and PA did not.

Assessing the effect of a minimum wage requires careful attention to the actual situation. Most short-terms effects are going to be very small because most firms will not have time to make adjustments in schedules or how they do business. Over time, they do have time, but then there are many other confounding influences at play. Moreover, firms may reduce hours not jobs which may make using unemployment or employment figures a bit dicey. Finally, whether or not a minimum wage change has an effect on a labor market depends partly on whether it is effective (i.e. pushes the wage above the market-clearing level). For example, in Mn, raising the min. wage to $10 per hour now would have little effect because entry level jobs in fast food restaurants etc... are starting at $12 +.

You're showing all sorts of things that will muddy the water, not make it easier to see.

 

[laughing dog]

A lot easier to change a company than change a country.

Really? If you think it is a lot easier for Amazon workers or McDonald's workers to unionize all their sites than it is to get a change in the minimum wage, we are not living in the same time-space continuum.

A couple of Amazon sites just voted to unionize. What they did, other Amazon sites can do too. Adjusted for inflation, the federal minimum wage is still where it was in the 1950s.

If you think you are somehow rebutting what I wrote, you are sadly mistaken.

It's not cherry-picking. We have only one known case where there was a trigger big enough that we should expect to be able to observe an effect--and we got one.

OI course it is cherry-picking. You are arbitrarily throwing out all of the instances.

No. I am grouping the data into two sets:

A) Cases where we should be able to detect a change in the unemployment rate.

B) Cases where we should not be able to detect a change in the unemployment rate.

Group A contains only one data point and the change was clearly detected. It is irrelevant how many data points are in B as the observed result should be nothing whether or not there actually is an effect.

You are cherry picking. You arbitrarily have divided the data into two sets: one point which you claim supports your view, and all the other where you hand -wave away the result that conflict with your view. You hand-waved the Card-Krueger results based on your ignorance about their methodology.

Furthermore, you keep mentioning this "Group A" point without any reference to the actual time frame and context or how it actually supports your position.

Since only about 1% of the population works for minimum wage (watch out for the misleading at-or-below figure that includes tipped workers) something that costs 10% of minimum wage workers their jobs causes only .1% change in unemployment--undetectable.

The problem is with the economists who pretend that a failure to observe a signal they shouldn't expect to be able to observe means something.

I point out that if one cannot notice an effect, one possible reason is that there is no effect.

The real problem is that you really have no clue what you are talking about. David Card's work used survey data from fast food restaurants in NJ and PA that were across the border from each other when NJ raised its minimum wage and PA did not.

Assessing the effect of a minimum wage requires careful attention to the actual situation. Most short-terms effects are going to be very small because most firms will not have time to make adjustments in schedules or how they do business. Over time, they do have time, but then there are many other confounding influences at play. Moreover, firms may reduce hours not jobs which may make using unemployment or employment figures a bit dicey. Finally, whether or not a minimum wage change has an effect on a labor market depends partly on whether it is effective (i.e. pushes the wage above the market-clearing level). For example, in Mn, raising the min. wage to $10 per hour now would have little effect because entry level jobs in fast food restaurants etc... are starting at $12 +.

You're showing all sorts of things that will muddy the water, not make it easier to see.

That is my point exactly. It is difficult to parse these things out. It really depends on the data and context. So, your cherry-picked (and undefined) one point really isn't much evidence of anything.

 

[Swammerdami]

. . . Wages are NOT determined by any trivial supply/demand trade-off. Unions provide workers with a form of oligopoly power to counter the implicit oligopoly power employers often have.

But what is the source of the implicit oligopoly power employers often have, if not the elasticity in their demand for labor?

I am not a professional economist, nor do I play one on TV!

But as one datapoint, Google informs me that, counting seasonal workers, Amazon employs 1.6 million people. That's 'Million' with an 'M.'

 

[Bomb#20]

. . . Wages are NOT determined by any trivial supply/demand trade-off. Unions provide workers with a form of oligopoly power to counter the implicit oligopoly power employers often have.

But what is the source of the implicit oligopoly power employers often have, if not the elasticity in their demand for labor?

I am not a professional economist, nor do I play one on TV!

But as one datapoint, Google informs me that, counting seasonal workers, Amazon employs 1.6 million people. That's 'Million' with an 'M.'

There are 3.2 billion people with jobs. An oligopoly is a state of limited competition, in which a market is shared by a small number of competitors. Having a two thousandth of a market doesn't give you oligopoly power.

What gives Amazon oligopoly power is that the typical Amazon worker needs Amazon a lot more than Amazon needs the worker. That's because Amazon can get along without the worker a lot more easily than the worker can get along without Amazon -- i.e., Amazon's demand for labor is elastic. But if ITUC were right that increasing wages doesn't cost jobs, that would imply that Amazon couldn't get along without the worker. So the observation that employers often have implicit oligopoly power workers need unions to counteract is evidence that ITUC is wrong.