So in your state run healthcare system, do the board of physicians decide for a terminally ill person only based on his needs, or do they have a budget they have to stay within? ...
... Yes, of course a "living wage" can be maintained by US employers. ... There's some a point on the chart where the employer is using so little unskilled labor that she's taking in $15 in increased sales per hour of unskilled labor she uses; that's what will determine how much unskilled labor she buys.
But that's not the question I asked. I'm asking you what becomes of the workers who don't know how to do anything in an hour that will increase anyone's sales by $15? ...
You say "End low wages and you end handouts." Why do you believe that's true? ...
In your healthcare scenario you assume an inadequate budget.
I do. If you're assuming an adequate budget, what do you base that assumption on? That expectation flies against the experience of government health systems.
Here's how it works in the British NHS.
"You said NICE decides which medicines should be offered by the NHS and which shouldn’t. But why wouldn’t they provide every treatment that makes people better?
Basically, because money. There are lots and lots of medical treatments out there, and some of them are really expensive - costing thousands or millions of pounds a pop. If the NHS offered all its patients all these super-expensive treatment option then it would quickly run over budget. ...
It can be hard to wrap our heads around the idea that as a society we would - or should - choose not to give a particular treatment to someone who is unwell and suffering. That’s especially the case when some people inevitably peddle theories about how economies could give everyone everything they wanted if we only did this or that or the other. But the reality is that we often have to trade one thing against another, and make hard choices that inevitably create both winners and losers."
We have plenty of data on how much is spent on end of life care now. Start with that. If a board of physicians instead of patients and family members make these decisions going forward, the costs will decrease.
https://www.smithsonianmag.com/smart-news/how-do-doctors-want-to-die-2187350/
Your link says, "They don’t want CPR or dialysis or chemotherapy or feeding tubes—treatments they themselves prescribe regularly." So when your kidneys are failing and you ask for dialysis, you don't get it, and you die, because these decisions are made by doctors instead of patients, and the doctors think 12 hours a week with your arteries hooked up to a machine is no kind of life? And this policy is called "Healthcare should be a fundamental right"?
I cannot answer your question in your $15 an hour scenario. As far as I can tell, it's drawn from a false premise. I'm to assume pushing up wages will result in people losing their jobs? I do not.
Can you explain why you think the market for unskilled labor might be infinitely inelastic? That's not a normal pattern for purchasing decisions. The only good or service I know of where raising prices doesn't cause the amount purchased to fall is heroin. Is unskilled labor something business managers have an addiction to?
There is little data on how a $15 minimum wage affects employment numbers save for a few cities which so far do not support your claim.
Here's how a $6/hour (in 2021 dollars) minimum wage affected employment.
https://www.ssc.wisc.edu/~gwallace/Papers/Ehrenberg and Smith (2011), Chapter 4.pdf
"The Employment Effects of the First Federal Minimum Wage
When the federal minimum wage first went into
effect, on October 24, 1938, it was expected to have
a substantial impact on the economy of the South,
where wages were much lower than in the rest of
the country. An examination of one of the largest
manufacturing industries in the South, seamless
hosiery, verifies these predictions.
It is readily apparent that the new minimum
wage was binding in the seamless hosiery industry.
By 1940, nearly one-third of the labor force earned
within 2.5 cents per hour of the minimum wage
(which was then 32.5 cents per hour). A longitudinal
survey of 87 firms shows that employment,
which had been rising, reversed course and started
to fall, even though overall demand for the product
and production levels were rising. Employment fell
by 5.5 percent in southern mills but rose by
4.9 percent in northern mills. Even more strikingly,
employment fell by 17 percent in mills that had
previously paid less than the new minimum wage,
while it stayed virtually the same at higher-wage
mills.
Before the passage of the minimum wage, there
had been a slow movement from the use of hand
transfer to converted-transfer knitting machines.
(A converted-transfer machine had an attachment
to enable automated production for certain types of
work.) The minimum wage seems to have accelerated
this trend. In the first two years of the law’s existence,
there was a 23 percent decrease in the number of
hand-transfer machines, a 69 percent increase in
converted-transfer machines, and a 10 percent
increase in fully automatic machines. In
addition, the machines were used more intensively
than before. A night shift was added at many mills,
and these workers did not receive extra pay for
working this undesirable shift. Finally, total imports
of seamless hosiery surged by about 27 percent
within two years of the minimum wage’s enactment."
In this scenario, are we both assuming that profits are cut to the bone and the business owners can be bled no more? I'm not. Perhaps raising wages does little more than reduce profits, lowers the compensation of the CEO making 3-400 times more than their workers. Let's find out.
No, I'm not assuming profits are cut to the bone either. So let's agree to assume that business owners can be bled more, profits can be reduced, and CEO compensations can be lowered. Do you deduce from this premise that business owners and CEOs
will choose to keep all their current unskilled staff on, and hire as many as they otherwise would have? How do you get from "can" to "will"? In your view, are business owners and CEOs alien life-forms motivated only by unselfish devotion to the well-being of the working poor? What would you expect to happen if instead business owners and CEOs react to the new law
like normal people?
You're proposing to double what Congress requires employers to deliver to workers. So let's turn it around. Suppose Congress enacts a law saying workers have to double what they deliver to employers: they have to work 16-hour days. At 8 hours a day, workers aren't currently being worked to the bone -- they could be bled more. Perhaps raising work hours does little more than reduce leisure and sleep and lowers the happiness of workers. So do you think the workers will all just unselfishly do what's best for their employers, and double their delivery of labor? Or will a lot of them quit? Since the workers are normal people, don't you think they'll do what's best for themselves?
So if we assume business owners and CEOs are normal people who care more about themselves than about those they trade with, after the pay raise they will tend to employ whatever number of workers maximizes their take-home pay. How many workers is that? Is it the same number of workers they're currently employing? Well, how much effect does a worker have on the owner's profit? His impact on revenue, minus his wage. So when the owner has to either raise the worker's pay from $10 to $15, or else sack him, she'll probably keep him on only if he's having a $15 impact on revenue. At any rate, that's the way to decide that would be rational.
So please consider this question: Do you think each worker making $10/hour is generating at least $15/hour in extra revenue? Yes or no.
If no, then please explain what would motivate the employer to keep him in the company, when she has to pay $15 for less than $15 of revenue?
If yes, then please explain why the employer isn't on a mass hiring binge right now, hiring more and more unemployed people for $10 and making $15 off them, an extra $5/hour profit for the employer for every new worker she hires? Doesn't she like higher profits? And if $10/hour employees as a rule generate at least $15/hour in extra revenue for their employers en masse, why aren't the employers on a general hiring binge? Why does America still have an unemployment problem?
Low wage workers cannot "simply refuse to work" because they live paycheck to paycheck. Joining an existing union is not manna from heaven. It's not, join a union, get a raise.
No, of course not -- nobody said it was. They'd also
have to go on strike. But, don't you see,
that's exactly what you're calling for. A federal minimum wage hike is precisely a government-organized
strike -- all the workers
stop working until they get $15/hour. And whether it's the government calling the strike, or the workers doing it by self-help, the results are the same: it just means the company has a choice to make. It has to choose whether to knuckle under and give an employee the raise he demands, or else to say "No work, no pay".
You appear to be assuming that provided it's the government that calls the strike the choice will always go the same way, with the company always knuckling under. But why would you assume that? From the company's point of view, what particle of difference does it make who called the strike? Why wouldn't the choice be sometimes to knuckle under and sometimes to make do without the employee's labor, exactly as companies choose every day when faced with a regular union and a regular strike?
Yes, you are correct: low wage workers cannot "simply refuse to work".
That's the point! If it were true that "raising wages does little more than reduce profits, lowers the compensation of the CEO", then low wage workers really would be able to "simply refuse to work". But since they cannot, it follows that your hypothesis is incorrect. You say "Let's find out." We don't need to find out.
Economists already know.
If you raise the minimum wage to $15/hour, you will help some poor people. You will hurt some other poor people. Advocate it anyway if the well-being of the people you're helping is more important to you then the well-being of the people you're hurting; on its face it's a perfectly legitimate application of "greatest good of the greatest number", in case that's a principle that floats your boat. But do not kid yourself that the only people you're hurting are CEOs and business owners. That, in Thomas Sowell's immortal words, would be "Self-congratulation as social policy".
