I get food stamps, and I’m not ashamed — I’m angry

[RavenSky]

Hey mods, can we get this derail split out?

Done

/removes mod hat

 

[ksen]

 

[Bomb#20]

Obviously, paying someone can cause them economic pain if the payment does not fully compensate them for their efforts and/or what they gave up in order to do the work.

Obviously not. It's obviously someone's efforts and/or what he gave up in order to do the work that can cause him economic pain. Paying somebody relieves his economic pain. (Sorry to be pedantic, but you have a history of slipping fallacies in when you speak loosely.)

And if the amount of economic pain the payment relieves is less than the amount of economic pain caused by someone's decision to make that effort and give up what he gave up, then why would he have sought out the opportunity to make that effort and give up what he gave up in exchange for the payment? It's not as though employers are getting employees with press-gangs.

If I pay somebody $14 and he experiences pain, am I supposed to just take your word for it that my act caused his pain?

I would expect you to take his word for it.

Why would I take his word for that any more than your word? If you had gay sex with your neighbor, and a Katrina survivor experienced pain, would you take the survivor's word for it that your gay sex caused Hurricane Katrina? If I pay somebody $14 and he experiences pain, I'll certainly take his word that he's in pain; but his privileged perception of his own pain gives him no privileged insight into the cause and effect structure of the universe. Whoever claims X causes Y has burden of proof.

Furthermore, you are using a double standard, you expect me to accept your word that a measurement of harm must be made in comparison to doing nothing.

I was kind of hoping you'd accept it because it's sensible. But we can argue the point if you prefer.

The criterion I exhibited is to compare something with doing nothing. When the criterion you use is to compare something with shooting someone in the head, you're applying different reasoning.

No, I am not using different reasoning. In both cases, there is a comparison with an alternative outcome. We simply disagree on that standard for the comparison.

It appears then that the root of our disagreement is over whether zero action is as arbitrary an origin for the harm axis as shooting someone in the head is. So what exactly are you arguing for? Are you arguing

(1) that all possible origins are equally arbitrary? That would imply that all claims of a person being harmed by an action are purely subjective. Or, contrariwise, are you arguing

(2) that the harm axis has a non-arbitrary origin somewhere other than zero action? That would make objective harm possible. If that's what you're getting at, where do you set the origin of the harm axis, and why there?

By that reasoning, a person is better off if you pay him nothing rather than paying him with a bullet to the head, therefore being paid $0 isn't hurting him.

People volunteer to work for $0 all the time. I cleaned out my invalid father-in-law's rain gutters. He didn't offer to pay me; I didn't ask him to. By what stretch of the imagination do you figure he hurt me?

If he didn't offer to pay you, then there were no wages. But what stretch of imagination is your example relevant?

You made it relevant. You attempted to refute me with a reductio ad absurdum argument, relying on the assumption that it's absurd for someone being paid $0 not to be hurting him. So I exhibited a counterexample to your assumption, thereby demonstrating that there's nothing absurd about paying someone $0 not hurting him.

You now appear to be trying to rescue your reductio by proposing that although being paid $0 may not be hurting someone, being paid a wage of $0 would be hurting him. So please clarify. Is it economic pain or physical pain that you're suggesting is determined by whether we call the $0 a "wage"?

 

[SimpleDon]

I would caution all here on both sides of the argument that it is not so much an discussion of the impact on individuals as it is a discussion of the impact on the economy as a whole. Macroeconomic policy changes act slowly over years.

Trying to understand the changes by imagining the short term impact on individual people or businesses isn't going to help, the changes won't have much impact in the short term.

While we must raise the share of the GDP going to the poor and the middle class in order to have the best economy that we can have, the required changes will act slowly only in the mid- and long term, years and decades. It will not be noticeable to individuals.

When we decided in the 1970's and 1980's to suppress the labor share to increase the capital share, to suppress the wages of the 90% to increase the incomes of the 10% and especially the 1% and the 0.1%, it happened slowly and was not noticeable to individuals. It is only by looking back that we can see the policy changes destructive impact on the economy of these changes known collectively as supply side economics, Reaganomics or neoliberal economics.

No one who profited from these changes, the rich, believe that it was nothing but their own increased value to the economy that is behind their increased income. Certainly they don't recognize that the evil and incompetent government intentionally raised their incomes in misplaced fealty to failed economic policies.

Similarly none of the poor and the middle class understand that these policies are responsible for their reduced incomes, including nearly everyone here. This is because it wasn't income taken away from them, it was income that they would have earned under the pre-Reaganomics regime of economic policies.

 

[coloradoatheist]

Speaking of things like food stamps and other programs, here is an article and after government transfers the poor are at some of their highest levels of after tax, after program incomes.


http://www.aei.org/publication/have-us-living-standards-gone-nowhere-since-1999-does-that-really-seem-right/?utm_source=paramount&utm_medium=email&utm_content=AEITODAY&utm_campaign=091815


We also need to realize that the last 20 or 30 years has made it very hard to actually compare to different generations.

 

[arkirk]

Speaking of things like food stamps and other programs, here is an article and after government transfers the poor are at some of their highest levels of after tax, after program incomes.


http://www.aei.org/publication/have-us-living-standards-gone-nowhere-since-1999-does-that-really-seem-right/?utm_source=paramount&utm_medium=email&utm_content=AEITODAY&utm_campaign=091815


We also need to realize that the last 20 or 30 years has made it very hard to actually compare to different generations.

Your source is a well known right wing megaphone, hardly trustworthy. It is one of the right wing think tanks that manufactures political propaganda.

 

[angelo]

Arkik, are you saying those figures are just plucked out of thin air by the right?

 

[arkirk]

Arkik, are you saying those figures are just plucked out of thin air by the right?

A good think tank very carefully considers just which statistics displayed in just which order will serve their purposes. They assign the parameters and meaning to those parameters and produce charts that are accurate in that they meet the specified criteria of their makers. If a racial minority is discriminated against regularly, it becomes easy to chart their low income. Any moron ought to be able to see that...but to AI the low income is not a product of discrimination but one of the laziness of a certain color of people in our society. It is really awfully simple. The condemn a fraction of society on the basis of it having already been condemned. Come down off your high horse.

 

[coloradoatheist]

Arkik, are you saying those figures are just plucked out of thin air by the right?

A good think tank very carefully considers just which statistics displayed in just which order will serve their purposes. They assign the parameters and meaning to those parameters and produce charts that are accurate in that they meet the specified criteria of their makers. If a racial minority is discriminated against regularly, it becomes easy to chart their low income. Any moron ought to be able to see that...but to AI the low income is not a product of discrimination but one of the laziness of a certain color of people in our society. It is really awfully simple. The condemn a fraction of society on the basis of it having already been condemned. Come down off your high horse.

Actually the irony is that it's a right wing tank saying that the left wing programs work. Or else we have to saw that the war on poverty that we've fought for 40 is a waste and needs to be abandoned.

 

[bilby]

Wars on concepts are fucking stupid no matter how well intentioned.

Let's not have a war on anything - lets just give money to poor people, so they are not poor anymore.

 

[fast]

Wars on concepts are fucking stupid no matter how well intentioned.

Let's not have a war on anything - lets just give money to poor people, so they are not poor anymore.

Hahahahahaha.

 

[angelo]

Idealistic!

 

[Bomb#20]

Exactly. You need no fewer than n employees to maximise profit.

Yes. And also no more than n.

The demand is determined by burger price offset against local wage levels, the going rate for employees is determined by the labour market, and the marginal value of the last employee I need is an irrelevant abstraction.

Well, it's an irrelevant abstraction if you aren't trying to maximize your profit.

Opinion noted but I've just said why I disagree.

I don't understand your explanation for why you disagree -- what I'm saying doesn't conflict with what you're saying. The price isn't a fixed boundary condition; it's something you set at whatever level maximizes your profit; i.e., if you lower the price you can sell more burgers but you'll make less money per burger. It does you no good to make more burgers than people will buy, so as you keep adding employees you'll have to keep reducing prices to make demand go up enough to consume your increased supply. When you get to the point that adding employees no longer adds more income than the going rate for labor you stop adding employees; which is to say, that's what determines n.

More like : I'm paid so little I need two jobs, don't get home in time to help my kid with her homework and am tired and irritable in what little time I have with her mom/dad. You're not harming me so much as the rules we're playing by are.

... But I can't see how you and another guy both hiring me for $9 apiece, which you do because I'm willing to do two jobs, which I need because nobody's income will go up $15 as a result of hiring me so nobody has a reason to hire me for $15, could plausibly be the cause of nobody's income going up $15 as a result of hiring me.

And I can't see what this has to do with the comment you're ostensibly addressing, which makes no such claim.

The comment I'm addressing is l.d.'s claim, "Paying someone less than $15 may cause them economic or physical pain.". I didn't see a physical mechanism connecting his asserted cause to his asserted effect; I took you to be attempting to remedy this deficiency in his argument, by proposing that it's not the act of paying $9 but the rule that we're allowed to trade for $9 that causes the pain. So I was challenging the physicality of that proposed cause too. If that's not the rule you had in mind, sorry to misunderstand. What rule are you suggesting is harming the tired guy?

The underlying reason for my tiredness/irritability/homework problem is my not knowing how to make other people's income go up $15. The legality of hiring me for $9 didn't make me not know that. Banning people from hiring me for less than $15 won't fix that. Since I can't increase anybody's income $15, all it will do is make sure that anybody who hires me would lose money on the deal. So they won't hire me. That would be a rule we could play by that would hurt me.

Not if marginalism is an ideologically motivated crock ...and employers simply pay as little as the rules allow them to - i.e what's under dispute here.

If you're trying to convince me employers simply pay as little as the rules allow them to, good luck with that. I already know for a fact that it isn't true, since the rules where I live allow employers to pay $9/hour and my employer pays me more than that. If you have a theory of pay that's wildly different from the marginalist theory, one that "employers simply pay as little as the rules allow them to" is an apt if inaccurate metaphor for, can you explain it without the metaphor?

As for marginalism, I'm not sure what I've said in my arguments that rises to the level of an "ism". As far as I can see, my analysis relies only on the premise that employers are trying to maximize profit and the premise that there are diminishing returns from adding inputs to a production process. Do you reject either of those? It's not as though I've claimed people have quantifiable utility functions. What's your beef with marginalism, and what did I say that makes you think I'm relying on whatever aspect of marginalism you disagree with?

Other economies play by different rules to mutual benefit.

No doubt. By all means, identify some rules from another economy that would be mutually beneficial for us to adopt and let's talk about passing them.

Higher MW, stronger employee protections, collective bargaining, shorter work hours, generous enough welfare that unemployment isn't a disaster for a family, big powerful unions represented, by law, on firms' boards.

Sorry, I'm not seeing how playing to those rules would be mutually beneficial. It looks to me like every one of those rules has winners and losers. That we would have no trouble coming up with potential rules that would "rob Peter to pay Paul" isn't a news flash.

Let's say the market rate for some work you know how to do is $12. That happens because at the current level of production of the good in question, adding a worker to a typical factory will increase production enough to increase income by $12.

Well no, revenue would have to increase by more than $12 for the employer to profit.

I'm not sure what you're getting at here. If you only mean there are other expenses besides labor, I was subtracting those from revenue to get what I was calling "income" -- i.e., I was speaking loosely in order to not get bogged down in detail. Sorry if that was confusing.

If what you mean is that adding a worker increases income by, say, $13, and the $13 - $12 = $1 is where the profit comes from, you're failing to take into account the law of diminishing returns. The return from adding the workers the employer already hired, back when production was lower, was greater than $12 each; but it was diminishing toward $12 as more were added. If it were still $13 at the current level of production, why wouldn't the employer have hired another worker and gotten an extra $1? It's rational for the employer to stop hiring when she's hired so many workers that adding another one only increases income by $12.

But one employer calculates that at her factory income will increase $13 -- she's operating at too small a scale so the returns on adding employees have not yet diminished to $12 for her, as they have for her competitors.

Nah, you're assuming what I'm disputing. It just doesn't work like that in any firm I've seen, and I used to draw up manning schedules for some big contracts. Marginalism at firm level is - as a prominent industrialist described it when first expounded - "the product of the itching imaginations of uninformed and inexperienced armchair theorizers."

Yes, and Rutherford said it was "moonshine" to think energy could be extracted from atomic nuclei. No doubt your prominent industrialist grew up being taught the classical economics that was conventional wisdom in the late 1800s; and no doubt when Adam Smith et al. were inventing classical economics in the late 1700s, there were prominent industrialists who thought that was the product of the itching imaginations of uninformed and inexperienced armchair theorizers, because it conflicted with the mercantilism they'd grown up being exposed to.

If it doesn't work that way in any firm you've seen, how did it work in the firms you drew up manning schedules for? Who decided how many people to man a contract with and what did they base their decisions on?

So she offers you a $12/hour job. Dissatisfied with your current $9/hour job, you take her up on the deal. Your income goes up $3; hers goes up 1$. Your current employer goes off and hires an unemployed person who knows how to do your old $9 job but doesn't know how to do your new $12 job, which means he's less likely to quit his new $9 job than you were. Win-win-win-win.

So what is this advantage your new employer has over you, that she prefers, that you are being harmed by her preference for?

Her preference isn't stated in that anodyne little homily, so who knows? In the real world she'd offer slightly above $9 in order to maximise profits or she'd be replaced by someone who would. Unless, of course, there were rules mandating more equitable mutually beneficial deals.

But in the scenario, the market price for that sort of work is $12. (And yes, in the real world there are jobs that pay $12.) If you think that she'd offer slightly above $9 in the real world, would you take that job when others are paying $12? If you would -- which is to say, if it's feasible in the real world to offer slightly more than $9 for that sort of work and have people take you up on it -- then why is the market price $12? The rule only says you have to pay at least $9. What's your theory for why all the hiring managers paying $12 for that sort of work haven't been replaced?

 

[arkirk]

Idealistic!

You are using this word with a disgust that indicates you have contempt for people who attempt to improve the human condition FIRST. What comes before that, Angelo? Angelo?

 

[arkirk]

A good think tank very carefully considers just which statistics displayed in just which order will serve their purposes. They assign the parameters and meaning to those parameters and produce charts that are accurate in that they meet the specified criteria of their makers. If a racial minority is discriminated against regularly, it becomes easy to chart their low income. Any moron ought to be able to see that...but to AI the low income is not a product of discrimination but one of the laziness of a certain color of people in our society. It is really awfully simple. The condemn a fraction of society on the basis of it having already been condemned. Come down off your high horse.

Actually the irony is that it's a right wing tank saying that the left wing programs work. Or else we have to saw that the war on poverty that we've fought for 40 is a waste and needs to be abandoned.

Since Reagan let the air out of the tires on the "war on poverty" 30 of those forty years were used by those who did not want it to succeed to cut and destroy it piecemeal. What you are actually trying to say here is that THE POOR NEED TO BE ABANDONED, so what is left of society can get fantastically wealthy. That is only your pipe dream. We cannot abandon them without severe consequences. Poverty is NOT A CONCEPT. It is a reality and it exists because our economy is grossly bifurcated with most money changing hands being various forms of rent which do nothing to add value to our economy and sequester capital. This idea there are these nasty foreigners and black sitting on their asses doing nothing and it is all THEIR FAULT...now that is a CONCEPT that should be warred on.

 

[angelo]

There are many, in fact perhaps the majority who are poor through no fault of their own. In saying that, there are also many who just won't get off their arses to help themselves. You can lead a camel to water, but you can't make it drink.

 

[DBT]

A fair rate of pay for services rendered, time and effort, skill and perseverance. That shouldn't be too much for anyone to expect.

 

[AthenaAwakened]

There are many, in fact perhaps the majority who are poor through no fault of their own. In saying that, there are also many who just won't get off their arses to help themselves. You can lead a camel to water, but you can't make it drink.

How many?

And are these who won't help themselves a reason not to help the people out here hustling everyday?

 

[Canard DuJour]

Exactly. You need no fewer than n employees to maximise profit.

Yes. And also no more than n.

Exactly. To maximise profit, you need no fewer than n workers and you don't hire more just because they're cheap. It is not the case, as you claimed in the post with which I took issue, that revenue diminishes per each successive hire from the first. Rather, revenue is uniform or increasing up to an optimum - n - determined by consumer demand for the product of labour.

I don't understand your explanation for why you disagree -- what I'm saying doesn't conflict with what you're saying. The price isn't a fixed boundary condition; it's something you set at whatever level maximizes your profit; i.e., if you lower the price you can sell more burgers but you'll make less money per burger. It does you no good to make more burgers than people will buy, so as you keep adding employees you'll have to keep reducing prices to make demand go up enough to consume your increased supply. When you get to the point that adding employees no longer adds more income than the going rate for labor you stop adding employees; which is to say, that's what determines n.

I don't disagree because that is NOT a determination of labour price by diminishing marginal utility of successive hires. It's a determination of some firm's optimum labour requirement by consumer demand (which Marx would have agreed with). It doesn't disagree with what I said, it disagrees with what you said.

More like : I'm paid so little I need two jobs, don't get home in time to help my kid with her homework and am tired and irritable in what little time I have with her mom/dad. You're not harming me so much as the rules we're playing by are.

... But I can't see how you and another guy both hiring me for $9 apiece, which you do because I'm willing to do two jobs, which I need because nobody's income will go up $15 as a result of hiring me so nobody has a reason to hire me for $15, could plausibly be the cause of nobody's income going up $15 as a result of hiring me.

And I can't see what this has to do with the comment you're ostensibly addressing, which makes no such claim.

The comment I'm addressing is l.d.'s claim, "Paying someone less than $15 may cause them economic or physical pain.". I didn't see a physical mechanism connecting his asserted cause to his asserted effect; I took you to be attempting to remedy this deficiency in his argument, by proposing that it's not the act of paying $9 but the rule that we're allowed to trade for $9 that causes the pain. So I was challenging the physicality of that proposed cause too. If that's not the rule you had in mind, sorry to misunderstand. What rule are you suggesting is harming the tired guy?

What do you mean by "physical mechanism"? If you're claiming that harm can only be caused by immediate physical interaction, that's what's under dispute so it's pointless asking disputants to identify an immediate physical interaction.

The underlying reason for my tiredness/irritability/homework problem is my not knowing how to make other people's income go up $15. The legality of hiring me for $9 didn't make me not know that. Banning people from hiring me for less than $15 won't fix that. Since I can't increase anybody's income $15, all it will do is make sure that anybody who hires me would lose money on the deal. So they won't hire me. That would be a rule we could play by that would hurt me.

Not if marginalism is an ideologically motivated crock ...and employers simply pay as little as the rules allow them to - i.e what's under dispute here.

If you're trying to convince me employers simply pay as little as the rules allow them to, good luck with that. I already know for a fact that it isn't true, since the rules where I live allow employers to pay $9/hour and my employer pays me more than that. If you have a theory of pay that's wildly different from the marginalist theory, one that "employers simply pay as little as the rules allow them to" is an apt if inaccurate metaphor for, can you explain it without the metaphor?

No metaphor. Employers pay as little as they can get away with in order to maximise profits. They don't pay you -Bomb#20- a statutory minimum because you're obviously a very smart guy who probably has scarce skills - i.e. they can't get away with it. If your labour generated $12 revenue but labour market conditions were such that others would do it for $9, a profit maximising firm would offer you about $9, not $12. Unless there were a statutory minimum above $9.

As for marginalism, I'm not sure what I've said in my arguments that rises to the level of an "ism". As far as I can see, my analysis relies only on the premise that employers are trying to maximize profit and the premise that there are diminishing returns from adding inputs to a production process. Do you reject either of those? It's not as though I've claimed people have quantifiable utility functions. What's your beef with marginalism, and what did I say that makes you think I'm relying on whatever aspect of marginalism you disagree with?

Other economies play by different rules to mutual benefit.

No doubt. By all means, identify some rules from another economy that would be mutually beneficial for us to adopt and let's talk about passing them.

Higher MW, stronger employee protections, collective bargaining, shorter work hours, generous enough welfare that unemployment isn't a disaster for a family, big powerful unions represented, by law, on firms' boards.

Sorry, I'm not seeing how playing to those rules would be mutually beneficial. It looks to me like every one of those rules has winners and losers. That we would have no trouble coming up with potential rules that would "rob Peter to pay Paul" isn't a news flash.

So do the alternatives. If rules which advantage Peter over Paul are nonetheless "mutually beneficial" since both Peter and Paul absolutely benefit, why aren't rules which advantage Paul rather than Peter?

Let's say the market rate for some work you know how to do is $12. That happens because at the current level of production of the good in question, adding a worker to a typical factory will increase production enough to increase income by $12.

Well no, revenue would have to increase by more than $12 for the employer to profit.

I'm not sure what you're getting at here. If you only mean there are other expenses besides labor, I was subtracting those from revenue to get what I was calling "income" -- i.e., I was speaking loosely in order to not get bogged down in detail. Sorry if that was confusing.

If what you mean is that adding a worker increases income by, say, $13, and the $13 - $12 = $1 is where the profit comes from, you're failing to take into account the law of diminishing returns. The return from adding the workers the employer already hired, back when production was lower, was greater than $12 each; but it was diminishing toward $12 as more were added. If it were still $13 at the current level of production, why wouldn't the employer have hired another worker and gotten an extra $1? It's rational for the employer to stop hiring when she's hired so many workers that adding another one only increases income by $12.

Well I honestly think I said something pretty simple and you honestly lost me there. Could be my bad (and I do appreciate your thoughtful responses)..

But one employer calculates that at her factory income will increase $13 -- she's operating at too small a scale so the returns on adding employees have not yet diminished to $12 for her, as they have for her competitors.

Nah, you're assuming what I'm disputing. It just doesn't work like that in any firm I've seen, and I used to draw up manning schedules for some big contracts. Marginalism at firm level is - as a prominent industrialist described it when first expounded - "the product of the itching imaginations of uninformed and inexperienced armchair theorizers."

Yes, and Rutherford said it was "moonshine" to think energy could be extracted from atomic nuclei. No doubt your prominent industrialist grew up being taught the classical economics that was conventional wisdom in the late 1800s; and no doubt when Adam Smith et al. were inventing classical economics in the late 1700s, there were prominent industrialists who thought that was the product of the itching imaginations of uninformed and inexperienced armchair theorizers, because it conflicted with the mercantilism they'd grown up being exposed to.

No, it conflicted with the way he maximised profits from running factories.

If it doesn't work that way in any firm you've seen, how did it work in the firms you drew up manning schedules for? Who decided how many people to man a contract with and what did they base their decisions on?

No one. You need no fewer than n wokers to deliver on time and don't hire extraneous labour just because it's cheap. You have to bid based on going rates for the kinds of labour you need, not price negotiable depending on the marginal revenue generated by each successive hire. It just doesn't and can't work like that.

So she offers you a $12/hour job. Dissatisfied with your current $9/hour job, you take her up on the deal. Your income goes up $3; hers goes up 1$. Your current employer goes off and hires an unemployed person who knows how to do your old $9 job but doesn't know how to do your new $12 job, which means he's less likely to quit his new $9 job than you were. Win-win-win-win.

So what is this advantage your new employer has over you, that she prefers, that you are being harmed by her preference for?

Her preference isn't stated in that anodyne little homily, so who knows? In the real world she'd offer slightly above $9 in order to maximise profits or she'd be replaced by someone who would. Unless, of course, there were rules mandating more equitable mutually beneficial deals.

But in the scenario, the market price for that sort of work is $12. (And yes, in the real world there are jobs that pay $12.) If you think that she'd offer slightly above $9 in the real world, would you take that job when others are paying $12? If you would -- which is to say, if it's feasible in the real world to offer slightly more than $9 for that sort of work and have people take you up on it -- then why is the market price $12? The rule only says you have to pay at least $9. What's your theory for why all the hiring managers paying $12 for that sort of work haven't been replaced?

But the scenario is simply unrealistic. If people who "know how to do" work which generates $12 revenue already work for $9, profit maximising firms will offer them about $9, not $12.

Now, that's entirely different from the idea that the economy in aggregate prices labour by marginal revenue. But then the limiting factor is consumer demand with all the inconvenient implications in a world of wage labour.

 

[Loren Pechtel]

Yes. And also no more than n.

Exactly. To maximise profit, you need no fewer than n workers and you don't hire more just because they're cheap. It is not the case, as you claimed in the post with which I took issue, that revenue diminishes per each successive hire from the first. Rather, revenue is uniform or increasing up to an optimum - n - determined by consumer demand for the product of labour.

Continuing to state this doesn't make it true. The problem is that no business does only one thing. There are many tasks which a business accomplishes, some of which do not have a clear cut "job done" state. While you likely can define an ideal number of workers for their primary task you can't thus define them for every task. For example, how much time is to be spent on keeping the business premises clean? You're certainly going to spend more effort at cleaning in a 5-star hotel than a fleabag hotel--but just how much?? The more expensive labor is the less of it you will devote to such fuzzy objectives like "clean".