Minimum Wage Study - MW Does Not Kill Jobs

[Worldtraveller]

The minimum to live on is welfare--the government's job, not businesses job.

Exactly.

So I presume that you favour massive increases in welfare, paid for through highly progressive taxation?

No, because I believe this will be counterproductive.

I mean, that's the logical conclusion of your position here.

And it renders minimum wages moot - a person who is provided with a basic income that's adequate for the provision of food, shelter, healthcare, and other essentials, doesn't need a minimum wage.

All that's required is to make that basic income easy to collect, and available to anyone - ideally, it could be paid universally and automatically to everyone.

Eventually that will be the case, but I do not believe we are to that point. And I don't think it should be enough to be comfortable--you still need an incentive to better yourself.

Why? What percentage of people do you think would NOT work if we had a function UBI with universal health insurance? I'm guessing that number would be VERY low. And IMO, worth it, for all the people that would otherwise suffer and 'fail' for lack of financial support.

 

[laughing dog]

Price fixing always harms the economy. (And minimum wage is a form of price fixing.)

That is wrong. Basic economics shows that price fixing does no harm to an economy if the fixed price is ineffective and that it improves the economy if it is done to incorporate the effects of external effects.

Of course it does nothing if it does nothing. That's irrelevant nonsense.

No, it is not. It gives an example that illustrates you claim is false.

And how does price fixing incorporate external effects???

By incorporating external costs.

 

[laughing dog]

Do you have any empirical evidence to support your claim?

Your assumption of a completely pass through to inflation is unreasonable for a number of reasons. Here are just 2 of them.
First, since labor is not the entire cost of production, there is no reason to think that the cost of production would go up by x%. Using GDP data (which excludes intermediate product production), labor compensation bounces around 60% of GDP and minimum wage workers are 1% of workers, which suggests prices rise 0.6% of x%. Gross output (which includes the production of intermediate goods), is output double GDP, which suggests 0.3% of x%. Even if every worker in the US gets the same x% raise (a very dubious behavioral result), that gives a range of 30% to 60% of x%.

As an aside, please don't trot out your Marxist dogma that all production costs are either labor or taxes. Capital has an opportunity cost of non-use which does not depend on labor.

Capital is simply stored labor--and since you can't actually store labor it's just a matter of directing labor to various objectives.

Non-responsive. Assuming capital is stored labor, it is stored past labor which is unaffected by current wage increases.

In the long run that's what will happen--it percolates through the whole economy. It's never going to actually reach a stable point because the market keeps changing.

Explain how demand moves exactly enough to drive inflation to equal a wage increase to 1% of the labor force because no else appears to share your faith based analysis.

 

[bilby]

This comes back to the fundamental problem I've been pointing out--bad jobs exist. Good jobs drive out bad jobs, thus it's clear that there are not enough good jobs to go around. Minimum wage laws can't create good jobs, they'll just convert bad jobs into unemployment.

Perhaps, if you think that this problem is fundamental, you might:

A) Define what makes a job "good" or "bad" in this argument, as it is very unclear indeed what the fuck you mean here; and

B) Explain why unemployment is necessarily and/or obviously worse than "bad" jobs, and for whom.

I've explained it before. Bad jobs are the jobs you're complaining about.

And how can producing nothing be superior to producing something?

See, there's another falsehood upon which your argument depends: The idea that unemployment implies producing nothing.

Unemployed people produce loads of things; They just don't get paid to do it.

 

[bilby]

Then there's no incentive to get the skills to be productive.

Of course there is. Living on a pittance sucks. Having enough to feed, clothe, and house yourself, but nothing else, is no fun at all, and most people will be more than happy to learn skills so that they can take work to earn a little extra money.

Your poor opinion of people who aren't you is not justified.

 

[bilby]

No, because I believe this will be counterproductive.

Reality doesn't care what anyone believes.

Can you prove it, or is it nonsense?

 

[Loren Pechtel]

Do you have any empirical evidence to support your claim?

Your assumption of a completely pass through to inflation is unreasonable for a number of reasons. Here are just 2 of them.
First, since labor is not the entire cost of production, there is no reason to think that the cost of production would go up by x%. Using GDP data (which excludes intermediate product production), labor compensation bounces around 60% of GDP and minimum wage workers are 1% of workers, which suggests prices rise 0.6% of x%. Gross output (which includes the production of intermediate goods), is output double GDP, which suggests 0.3% of x%. Even if every worker in the US gets the same x% raise (a very dubious behavioral result), that gives a range of 30% to 60% of x%.

As an aside, please don't trot out your Marxist dogma that all production costs are either labor or taxes. Capital has an opportunity cost of non-use which does not depend on labor.

Capital is simply stored labor--and since you can't actually store labor it's just a matter of directing labor to various objectives.

Non-responsive. Assuming capital is stored labor, it is stored past labor which is unaffected by current wage increases.

But it can't actually be stored--you can't make an hour of labor and put it on a shelf. Thus it really just shifts that labor around.

In the long run that's what will happen--it percolates through the whole economy. It's never going to actually reach a stable point because the market keeps changing.

Explain how demand moves exactly enough to drive inflation to equal a wage increase to 1% of the labor force because no else appears to share your faith based analysis.

The existing wage structure exists because that's where demand puts it. The demand is independent of the unit of measure and thus will tend to return to that ratio regardless of it's value in absolute units.

 

[Loren Pechtel]

Then there's no incentive to get the skills to be productive.

Of course there is. Living on a pittance sucks. Having enough to feed, clothe, and house yourself, but nothing else, is no fun at all, and most people will be more than happy to learn skills so that they can take work to earn a little extra money.

Your poor opinion of people who aren't you is not justified.

Which is why I think a UBI scheme should only provide such a minimum, at least until we reach the point where many workers simply have no ability to contribute to society.

 

[laughing dog]

Do you have any empirical evidence to support your claim?

Your assumption of a completely pass through to inflation is unreasonable for a number of reasons. Here are just 2 of them.
First, since labor is not the entire cost of production, there is no reason to think that the cost of production would go up by x%. Using GDP data (which excludes intermediate product production), labor compensation bounces around 60% of GDP and minimum wage workers are 1% of workers, which suggests prices rise 0.6% of x%. Gross output (which includes the production of intermediate goods), is output double GDP, which suggests 0.3% of x%. Even if every worker in the US gets the same x% raise (a very dubious behavioral result), that gives a range of 30% to 60% of x%.

As an aside, please don't trot out your Marxist dogma that all production costs are either labor or taxes. Capital has an opportunity cost of non-use which does not depend on labor.

Capital is simply stored labor--and since you can't actually store labor it's just a matter of directing labor to various objectives.

Non-responsive. Assuming capital is stored labor, it is stored past labor which is unaffected by current wage increases.

But it can't actually be stored--you can't make an hour of labor and put it on a shelf. Thus it really just shifts that labor around.

pure gobbledygook.

In the long run that's what will happen--it percolates through the whole economy. It's never going to actually reach a stable point because the market keeps changing.

Explain how demand moves exactly enough to drive inflation to equal a wage increase to 1% of the labor force because no else appears to share your faith based analysis.

The existing wage structure exists because that's where demand puts it. The demand is independent of the unit of measure and thus will tend to return to that ratio regardless of it's value in absolute units.

More hand waving .How does demand “put it “ to some undefined “ratio”?

 

[bilby]

Capital is simply stored labor--and since you can't actually store labor it's just a matter of directing labor to various objectives.

But it can't actually be stored--you can't make an hour of labor and put it on a shelf.

If you can store capital (and you certainly can - either as cash or commodities in a vault, or (more commonly) as mothballed machinery and vacant real estate, then your positions here are contradictory.

You hire a bunch of people to build a warehouse. The warehouse sits empty for a few years, and then you decide to start using it. In the meantime, labour costs have increased; But you are able to use the stored labour in the building itself to avoid paying for new labour in building a warehouse. Voila - stored labour is being taken off the shelf and used.

 

[bilby]

pure gobbledygook.
...
The existing wage structure exists because that's where demand puts it. The demand is independent of the unit of measure and thus will tend to return to that ratio regardless of it's value in absolute units.

Don't be so hard on yourself. Your claim isn't pure gobbledygook; Though it is only true if workers have perfect knowledge of wage availability from all employment for which they are qualified; And if there is zero inertia when workers consider moving to new jobs.

Neither is an attribute of reality. Or even particularly close to being an attribute of reality. So it's problematic, if not completely gobbledygook.

 

[bilby]

Then there's no incentive to get the skills to be productive.

Of course there is. Living on a pittance sucks. Having enough to feed, clothe, and house yourself, but nothing else, is no fun at all, and most people will be more than happy to learn skills so that they can take work to earn a little extra money.

Your poor opinion of people who aren't you is not justified.

Which is why I think a UBI scheme should only provide such a minimum, at least until we reach the point where many workers simply have no ability to contribute to society.

We're already at that point (depending on your definition of "many"); And I never suggested that a UBI scheme shouldn't only provide such a minimum.

Of course, I am very painfully aware that what you consider the "minimum" is likely to be punitive, and not quite sufficient to live on. But ultimately that question is a matter of pure opinion; There's no objective "minimum income" at which anyone and everyone can ensure sufficient food, clothing, and shelter to live indefinitely without suffering due to the absence of any of these three essentials. And obviously limiting the question to these three implies that emergency provision (healthcare, insurance against natural disasters, etc.,) is free at point of use.

 

[Elixir]

Then there's no incentive to get the skills to be productive.

Of course there is. Living on a pittance sucks. Having enough to feed, clothe, and house yourself, but nothing else, is no fun at all, and most people will be more than happy to learn skills so that they can take work to earn a little extra money.

Your poor opinion of people who aren't you is not justified.

This is very much akin to religious people contending that without constraints imposed by their own God, other people are incapable of acting morally or ethically.
Saying that given a minimum of food, clothing and shelter most people would never get out of their cushy beds, is not only wrong, I think it’s a terrible view of humanity.

 

[Loren Pechtel]

Capital is simply stored labor--and since you can't actually store labor it's just a matter of directing labor to various objectives.

But it can't actually be stored--you can't make an hour of labor and put it on a shelf.

If you can store capital (and you certainly can - either as cash or commodities in a vault, or (more commonly) as mothballed machinery and vacant real estate, then your positions here are contradictory.

You hire a bunch of people to build a warehouse. The warehouse sits empty for a few years, and then you decide to start using it. In the meantime, labour costs have increased; But you are able to use the stored labour in the building itself to avoid paying for new labour in building a warehouse. Voila - stored labour is being taken off the shelf and used.

Capital is the stored ability to direct labor, but you can't store labor itself. Same as the electric company can choose whether or not to send power to your house but has little ability to store that power, only the ability to route it from generator to customer.

The labor existed whether it was used to build the warehouse or not. If society didn't use it for anything it would simply disappear, not be stored for later use.

 

[Loren Pechtel]

pure gobbledygook.
...
The existing wage structure exists because that's where demand puts it. The demand is independent of the unit of measure and thus will tend to return to that ratio regardless of it's value in absolute units.

Don't be so hard on yourself. Your claim isn't pure gobbledygook; Though it is only true if workers have perfect knowledge of wage availability from all employment for which they are qualified; And if there is zero inertia when workers consider moving to new jobs.

Neither is an attribute of reality. Or even particularly close to being an attribute of reality. So it's problematic, if not completely gobbledygook.

If they had perfect knowledge and zero intertia the whole system would instantly shift to balance. It's that intertia and lack of knowledge that makes the process take time (actually, forever, as the pressures get less as it gets closer to balance.)

 

[Loren Pechtel]

Then there's no incentive to get the skills to be productive.

Of course there is. Living on a pittance sucks. Having enough to feed, clothe, and house yourself, but nothing else, is no fun at all, and most people will be more than happy to learn skills so that they can take work to earn a little extra money.

Your poor opinion of people who aren't you is not justified.

This is very much akin to religious people contending that without constraints imposed by their own God, other people are incapable of acting morally or ethically.
Saying that given a minimum of food, clothing and shelter most people would never get out of their cushy beds, is not only wrong, I think it’s a terrible view of humanity.

We see people in Europe trying to stay on benefits forever.

 

[ZiprHead]

Then there's no incentive to get the skills to be productive.

Of course there is. Living on a pittance sucks. Having enough to feed, clothe, and house yourself, but nothing else, is no fun at all, and most people will be more than happy to learn skills so that they can take work to earn a little extra money.

Your poor opinion of people who aren't you is not justified.

This is very much akin to religious people contending that without constraints imposed by their own God, other people are incapable of acting morally or ethically.
Saying that given a minimum of food, clothing and shelter most people would never get out of their cushy beds, is not only wrong, I think it’s a terrible view of humanity.

We see people in Europe trying to stay on benefits forever.

 

[laughing dog]

Then there's no incentive to get the skills to be productive.

Of course there is. Living on a pittance sucks. Having enough to feed, clothe, and house yourself, but nothing else, is no fun at all, and most people will be more than happy to learn skills so that they can take work to earn a little extra money.

Your poor opinion of people who aren't you is not justified.

This is very much akin to religious people contending that without constraints imposed by their own God, other people are incapable of acting morally or ethically.
Saying that given a minimum of food, clothing and shelter most people would never get out of their cushy beds, is not only wrong, I think it’s a terrible view of humanity.

We see people in Europe trying to stay on benefits forever.

So effing what!!!

You are using the perfect (no shirkers) the enemy of the good (UBI)

 

[Elixir]

Then there's no incentive to get the skills to be productive.

Of course there is. Living on a pittance sucks. Having enough to feed, clothe, and house yourself, but nothing else, is no fun at all, and most people will be more than happy to learn skills so that they can take work to earn a little extra money.

Your poor opinion of people who aren't you is not justified.

This is very much akin to religious people contending that without constraints imposed by their own God, other people are incapable of acting morally or ethically.
Saying that given a minimum of food, clothing and shelter most people would never get out of their cushy beds, is not only wrong, I think it’s a terrible view of humanity.

We see people in Europe trying to stay on benefits forever.

"We" do?
I don't. But then, it has been a bunch of years since I was in Europe. How many do you figure are "trying to stay on benefits forever"?
FWIW, the same people who complain about that don't seem to have a problem with MY intent to "stay on benefits forever" (Medicare Social Security etc).
There will certainly be a faction that doesn't want work or do anything that looks or feels like work. When that kind of people get hungry enough, they're known as criminals. Why do you want to cultivate criminality, Loren?

One source I looked at said it costs an average of over $45,000/yr to house and feed a criminal. Another says:

"How much does it cost to imprison someone in the US?
According to the Comptroller's FY 2021 Department of Correction analysis: The full annual cost of incarceration grew to $556,539 per person in FY 2021."

I think UBI would be considerably less expensive at the end of the day.

 

[bilby]

Then there's no incentive to get the skills to be productive.

Of course there is. Living on a pittance sucks. Having enough to feed, clothe, and house yourself, but nothing else, is no fun at all, and most people will be more than happy to learn skills so that they can take work to earn a little extra money.

Your poor opinion of people who aren't you is not justified.

This is very much akin to religious people contending that without constraints imposed by their own God, other people are incapable of acting morally or ethically.
Saying that given a minimum of food, clothing and shelter most people would never get out of their cushy beds, is not only wrong, I think it’s a terrible view of humanity.

We see people in Europe trying to stay on benefits forever.

Do we?

Who is we? Who do "we" see? Where in Europe?

And how important and significant are the numbers of such people? If these people do, in fact, exist, are they having a detrimental impact on the economy? They are effectively early retirees; Are they any more damaging to society than the masses of elderly people who are unable to work, and who depend on benefits?

If you managed to push such people into work, how much actual productivity would you expect to get from them? A workplace where four people are trying to get a set of tasks done is likely more productive than the same workplace where six people are employed, but two of them are actively trying to avoid doing anything other than the absolute bare minimum to avoid getting fired.

Society is probably better off if it allows a small number of total slobs to just freeload on everyone else; They will anyway, so why not formalise their lack of productivity?