Is calling the police to report that your car has been stolen theft? You’re availing yourself of a service without paying for it, after all. To avoid theft, shouldn’t you simply hire a private investigator to find your car for you?
There’s that word again. Ain’t no "should’, ain’t no “shouldn’t”. Anyone in the labor market is competing with everyone else in that market.
In which case, the demand for teenagers willing to work 30 hours a week has gone up, and the demand for those who must be paid more by statute has gone down. Businesses then fire more full-timers and hire more part-timers. Full-timers affected by living wage legislation have now gone from earning less than they want to earning nothing.
The last and greatest failure of the form of economic thought that leads to proposals like ‘living wage’ - that there exists some person or class of persons who know better than the market.
Ain’t no such.
You’re just transferring costs. I am not a strict libertarian, and I think our society can survive a certain amount of that, thru welfare and other transfer payments, but the government needs both to realize that this is what is going to happen, and to be up front that this is what is being done. Ideas like a living wage that doesn’t hurt anyone, or that magically makes poverty go away with no cost to others, are demonstrably false. The whole history of the USSR, East Germany, North Korea, and others, show that government cannot and should not try to outsmart the market.
Obviously there are multiple factors that go into how the Law of Supply and Demand determines the equilibrium price of anything. It is not a simple process. But it exists, in every market, and cannot be rescinded by legislative fiat.
What makes an airplane fly? It is a complex process, involving many factors, and the explanation of “lift + thrust GT load + drag” is an over-simplification. But we cannot stop airplanes from falling by passing a law against it. Same as the LoSaD.
Regards,
Shodan
Shodan, it may be true that the market is the best way of allocating resources efficiently (although even that is arguable). However, efficiency is not the only measure of goodness that should be applied to an economy. An economy can be very efficient, and yet create much misery. Many people would hold that an inefficient market in which everyone had their basic needs met is better than an efficient one in which 10% of the population is starving.
Procacious: "I do believe in compassion, but only at the individual level. The government should be a cold, calculating machine.
No Procacious, capitalism, in precisely the unflattering way that you yourself have just described it, is what should be (or often is) “a cold, calculating machine.” Government is meant to be both a complement and a counterforce to capitalism, depending on what’s required. Compassion at the individual level also requires the agency of government because, so long as you accept capitalism, you don’t have equally empowered individuals. In a democracy people make their compassion as individuals work at the collective level by expressing it through government policy. Where the market expresses people’s economic will–based on highly varied levels of economic power, democracy expresses people’s political will–and there the playing field is, or should be, much more equal.
These are very basic concepts about a democracy and capitalism and you don’t seem to have a sure grasp of them. Although your anti-government sentiments might place you in the libertarian camp, I doubt very much that the libertarians on this board would appreciate your garbled presentation of their ideas. It’s very tiresome–for them and for others–to have to explain very rudimentary concepts to a poster in a forum such as this one.
Might it be possible for you to hold off for a while, Procacious and/or take a look at the archives of other threads on government, economy and so forth? I don’t mean to be unkind: but you are so far out of your depth that without necessarily intending it your posts come across as trollish.
Shodan, just saw you on preview. I disagree that teenagers can be used in the way you suggest. There are a lot of low-paying jobs that teenagers don’t do because it isn’t practicable for them. I think it would be possible to have a special teenage minimum; though I agree it could be tricky. In any case, this is not the big picture.
Cut to the big picture.
Let me repeat. Wages have not kept up with rises in inflation or productivity gains.. That’s the level wages should be at. Anything less than that is excess profit being made at workers expense b/c, in the current environment, the political process that should help workers to get their fair share has been corrupted in favor of (short-term) employer interests.
Note that this has nothing to do with humanitarianism either–much though I believe in the value of humanitarian feeling. This is sound economics.
Wages should rise to reflect a fair share of workers’ productivity gains, and workers certainly shouldn’t take a paycut vis-a-vis inflation. If workers had the fair level of wages they would be able to spend more and that would be good for the economy. In conjunction with payroll taxcuts for the lowest-paid workers, and some other kinds of needed subsidies (e.g., daycare), ours would be a much healthier economy than we now have.
Note also that I’m not talking about interfering with the market. I’m talking about allowing workers to get their fare share out of what they’ve put into the market. Because the political process has been corrupted the market’s functions have been skewed to favor short-term employer interest. This is a large problem and doesn’t concern workers alone.
Just as workers’ wages are being stinted, so there isn’t enough money being put into training or research and development. As the present climate teaches us, what has mattered most to large corporations is looking good on paper so that executives and other big players can do well with their options. That’s not the free market; that’s just a big charade.
Just as investors want and deserve reforms to preserve their confidence in the system, so do workers.
Got it?
If both supply and demand are dynamic, how is an equilibrium therefore achievable?
Actually, I think demand is far less dynamic than you give it credit for. It’s not that people who eat Dinty Moore, for the most part, do not want corned beef, it’s that they can’t afford it (excluding those who actually like Dinty Moore, of course). The demand for corned beef is always there, it just can’t be satisfied at the current prices. There’s a sharp difference between actual creation of demand and increasing the potential for demand to be satisfied.
Only if their calculations show that the amount of demand they can satisfy at the new price will remain largely unchanged. They also run the risk of raising their prices while their competitors keep their prices the same, thereby undercutting their own share of the market. All in all, unless they’re the only game in the field, they’re going to try to keep prices down.
I agree with the last two sentences, but not the first. Demand is not price dependent - how often have you heard “I’d really like Product X, but I just can’t afford it”? Demand exists independently of price; the only connection they have is how many people can afford Product X at a given price.
We’re saying the same thing here, you’re just attaching more importance to demand than I am.
It seems to me you’re putting the cart before the horse. Open markets existed before Adam Smith laid down the “supply and demand” theory of value. The latter was created to explain the former; Smith didn’t sit up one day and say “Hey, let’s build an actual economic model on this theory I thought up!”
True, the value of the existing supply went up, but how quickly did the supply increase? I suppose it depends on how long it takes to get a CS degree - two to four years, I presume - which means that most of the people who got degrees in response to the boom got into the job market just in time for the bubble to burst. To me, that points more to how supply and demand constantly trail one another, and that an equilibrium point is chimerical at best, a complete fantasy at worst.
At the heart of it, salaries are set by looking at the costs of production and the profit taken in. For instance, over the past four years I’ve had two jobs - one only lasted a couple of months - but I did the same exact thing I’m doing here. (Minus the goofing off on SDMB - they had a very strict Internet policy.) But at that job, which was a private company and therefore had a smaller budget, I made less than half per hour than I’m making now. There was no way they could have afforded to pay me $20 an hour for what I was doing - that kind of salary (and larger, of course) was reserved for the bigger fish who did the company’s business with clients out in the field.
I believe the “political process” you are referring to should be worker organization. That represents workers bargaining with employers. No other process that I know of would possibly represent that.
KellyM
:rolleyes: Yeah, better to not pay taxes and go to jail? Oh, wait, that’d be one of your choices like “work for scraps or starve” and be unacceptable… so now how do we get out of this quandry? I know! I know! Sing the mantra: “The government is inherently benevolent”. That way, it’s no problem that you don’t pay taxes, we’ll just have to send you to jail. That’s a fair choice, isn’t it? But wait, haven’t we encountered it somewhere before?
I agree, although I don’t think that inefficiency is automatically implied by setting the goal of meeting total human need. Not that I think you’re saying that either, KellyM.
I agree, although I don’t think that inefficiency is automatically implied by setting the goal of meeting total human need. Not that I think you’re saying that either, KellyM.
My feeling is since you have no choice but to pay the taxes, you might as well take the goddamn benefits as well, since you’ve either paid for them already, or will be paying for them later. When you look at it that way, they’re not charity, just the fruits of a deal you didn’t have any real choice not to accept. (Or perhaps you did, given that you do get to vote…)
Hmm. So then it makes sense to have the choice: work or starve. since you have to work anyway, at least you get a little bit of food from it.
**Mandelstam **, taking your comments in reveres order:
Yes, some teen-age work is part time (e.g., newspaper delivery), but many summer jobs are full time. As a teen-ager, I worked full time as a postman, a cabana boy and as a chemist’s assistant’s assistant.
In principle, living wage proposals could exclude teen-agers or part-timers. In practice, it’s politically difficult to exclude them, because they unions who promote high minimum wages don’t want any exclusions.
Incidentally, race is not the only correlation. Teen-age male unemployment is also higher than teen-age female unemployment for both blacks and whites. Black: 36.5% vs. 28.5%. White 14.3% vs. 12.8%. http://faculty.maxwell.syr.edu/sinclair/Courses/Class%20Notes/Lecture%2014.pdf
These figures make it clear that for one reason or anther, employers consider black teen-agers to be less desirable employees, on average. Whether the cause is racism or some other factors, it is a truism that the least desirable employees will be the ones whose job opportunies are most reduced by minimum wage laws.
I don’t know how many people you’ve hired, **Mandelstam **. Would you not be more apt to hire the same person for $2/hour than for $8/hour? You might not be able to afford $8/hour. Or the job might not be worth $8/hour to you.
No, I’m not. What I’m commenting on is the ease with which some people put the means before the ends. Efficiency is a means. Meeting human need is an end. Seeking to optimize efficiency without regard to whether that increases the ability of the economy to meet human need is stupid. And yet that’s what I see so many free market libertarians calling for.
I generally believe that free markets are better than unfree markets, but only to a point. Free markets are also capable of doing harm, and when they do so they need to be made less free. This is especially evident in areas of essential services such as food, shelter, and medical care, where the operations of the free market are almost bound to force at least some consumers to be deprived of some service essential to life. Human compassion requires society to have some means to ensure that does not happen. Relying on spontaneous individual acts of compassion (as Procacious and others, including Dubya, advocate) to fill this societal need is, unfortunately, inadequate. This reliance is a major failing of Randism, and why a society based on her dribble is doomed to failure.
Sing it to the Amish, sister! Those dumb bastards help each other out! What pathetic Randistas, I tell you! (I am suddenly reminded of the claim that without god’s firm rule we’d all be wallowing in rape and murder).
Anecdotally, the reason I hear most people give for not performing charity work is that one, they don’t have to, and two, isn’t that what they pay taxes for already?
At any rate, perhaps if it takes the threat of imprisonment to get people to support your cause, your cause isn’t all that worthy. Just because I weight the costs and determine it is better to live under that cloud than in jail doesn’t make this “quest to satisfy human need” so holy.
I can’t say that I would help or pay taxes without the threat of jail and fines. I don’t know. I might. I have donated to causes I found worthy, at any rate. But I do know that the only reason I give now is because I don’t want to pay more money and/or go to jail if I don’t. If that makes you feel like you are helping satsify human need, then so be it. I disagree.
december, you are blowing smoke (for a change).
Your axiom about correlation applies as much to minimum wage as to race.
It comes as no surprise to me that one can find disparities between the employment of young black males and young black females. (I’m pleased, btw, to see that you understand how one must be careful to pay attention to gender when one looks at race and class issues. We’ll have the makings of a feminist academic in you in no time. 
).
All smoke aside <cough, cough, cough>, you have found no credible evidence that the minimum wage has been detrimental to the economy over the last several decades.
erislover: "I believe the “political process” you are referring to should be worker organization. That represents workers bargaining with employers. No other process that I know of would possibly represent that.
"
As to your first and second statements, I agree. Organization is the way in which workers most directly assert their collective power. But they can not do that independently of the larger political process.
Between the 1890s and the 1940s a number of important labor laws were enacted which codified the right to collectively bargain. For organized labor to be effective, those laws must be enforced. In the current climate they are very often ignored; and the governing body, the National Labor Relations Board, has become very weak. Unless one wants workers to return to a situation of frequent striking, and/or taking to the streets, their hard-fought-for rights have to be enshrined in enforced legislation.
Campaign finance has been at the heart of the disconnect between workers’ political/economic goals and the Democratic Party that ought presumably to represent them. That is not to say that Democrats should be pro-labor and anti-business, but neither should they be pro-business and anti-labor. And in all but rhetoric they have, for the most part, been just that.
Workers have gotten comparatively short shrift out of the boom economy, and now they’re bearing the brunt of the bust (as pension fund holders and small investors, as well as as wage earners). They must use their political voice to shore up existing labor legislation, to raise up the minimum wage to where it should be (though not necessarily in one fell swoop), to agitate for appropriate tax relief and subsidies. They must also be part of a broader based movement to refocus business on the long-term interests of investors, workers, and the economy as a whole; not the short-term interests of a handful of executives.
december, you are blowing smoke (for a change).
Your axiom about correlation applies as much to minimum wage as to race.
It comes as no surprise to me that one can find disparities between the employment of young black males and young black females. (I’m pleased, btw, to see that you understand how one must be careful to pay attention to gender when one looks at race and class issues. We’ll have the makings of a feminist academic in you in no time. ).
All smoke aside <cough, cough, cough>, you have found no credible evidence that the minimum wage has been detrimental to the economy over the last several decades.
erislover: "I believe the “political process” you are referring to should be worker organization. That represents workers bargaining with employers. No other process that I know of would possibly represent that.
"
As to your first and second statements, I agree. Organization is the way in which workers most directly assert their collective power. But they can not do that independently of the larger political process.
Between the 1890s and the 1940s a number of important labor laws were enacted which codified the right to collectively bargain. For organized labor to be effective, those laws must be enforced. In the current climate they are very often ignored; and the governing body, the National Labor Relations Board, has become very weak. Unless one wants workers to return to a situation of frequent striking, and/or taking to the streets, their hard-fought-for rights have to be enshrined in enforced legislation.
Campaign finance has been at the heart of the disconnect between workers’ political/economic goals and the Democratic Party that ought presumably to represent them. That is not to say that Democrats should be pro-labor and anti-business, but neither should they be pro-business and anti-labor. And in all but rhetoric they have, for the most part, been just that.
Workers have gotten comparatively short shrift out of the boom economy, and now they’re bearing the brunt of the bust (as pension fund holders and small investors, as well as as wage earners). They must use their political voice to shore up existing labor legislation, to raise up the minimum wage to where it should be (though not necessarily in one fell swoop), to agitate for appropriate tax relief and subsidies. They must also be part of a broader based movement to refocus business on the long-term interests of investors, workers, and the economy as a whole; not the short-term interests of a handful of executives.
Mandelstam, I wish they would take to the streets instead of writing it down on laws. You can leave the streets by going back to work or heading home. Laws are not so easy to take back.
I get the feeling you suspect that there is some algorithm we can apply to social existence that (apart from new concerns over technological and other growth) will more or less setlle all problems. I see no reason why that would be the case. I think that workers need to be as flexible in their demands as employers are flexible in what they may potentially offer. Someone making a good buck isn’t going to go out of their way to lessen that profit unless there are other concerns. Staying out of jail could be one, I agree. That’s why I pay taxes. But keeping your business afloat could be another. That’s why there was a labor movement in the first place: to present a compelling interest for companies to change their practices.
An employer should be able to fire his employees on a whim, or at least on a noticed whim (that is, without cause). Similarly, employees should be able to strike (and hence strike back) at such whimsical practices.
I would rather pay union fees than unemployment taxes. Specialization doesn’t just have to apply to economic systems, it seems to work well enough on democratic, decentrilized issues as well, like asjusting workers’ pay for the area in which they live. Local teamsters in SF bay area better make more than they make in Kansas, for instance, since the cost of living is so much higher.
I agree that in any swing, the lowest sector gets screwed because they have relatively little (or no) power over economic decisions that affect them, so when the swing is up those above them take the biggest chink (or all of it) and when the swing is down those above try to pass the buck (downsizing, etc). In some respects I think we should expect layoffs and firing due to economic conditions. It is going to happen. In other respects, when the company profits its employees should all profit, too. I agree.
I hate laws, so my bias would be toward any solution which didn’t involve the threat of government action. And I think those solutions exist.
Now, it is also true that without the appropriate legal structure striking behavior could be seen as illegal. And of course there is the issue of police strikes, FAA strikes, and so on. It is a complicated business, in part because of its nature, but also in part because people are trying to get what they want by fiat or by hook or by crook, instead of just fucking working for it.
And if that means hitting the streets, then hit the streets.
IMO
erisolover: “I hate laws, so my bias would be toward any solution which didn’t involve the threat of government action.”
erislover, I think your hatred of laws is misplaced. The rule of law is probably the singlemost important feature of a civilization: it is necessary to economic and technological progress and to human wellbeing more generally. Laws are every bit as flexible as any other aspect of a society. They are enacted, reinterpreted, modified and repealed all of the time. There is no need to fear law on the grounds that it can’t be changed.
What you are wishing for, I believe, is a more active citizenship, a more representative and responsive democracy. Those are things that everybody wants. But it’s unrealistic to believe that less law and more taking to the streets would constitute a more powerful citizenry. Laws need to be responsive to citizen needs. Ours often are, but not always. That implies the need for better laws, not necessarily fewer. Think about the laws that govern this board. Would we be better off without them?
I’m not sure what laws you think prevent workers from getting fired in an economic downturn; and I’m not sure what “solutions” you have in mind that have no reliance on laws. It seems to be that your dislike of laws is reflexive and under-researched.
Empowered citizenship is indeed hard fucking work; but it would be four times harder if certain basic rights, and a framework of fairness were not codified (and codifiable) in law.
For myself, I am not against taking to the streets (in peaceful fashion). I was inspired by the WTO protests in Seattle. They were absolutely necessary IMO. But even if it were the only tactic available, it would have diminishing returns. The media is now mainly interested in focusing on the handful of non-peaceful protesters, aggressive police action makes peaceful protesters less likely to take part, and post-9/11 civil liberties have been reduced in ways that obstruct effective protest of this kind.
As to “algorithm” I can’t imagine what gave you that impression. I tend to think of the world in terms of complex and historical variables, not unchanging rules or formulae. I do, on the other hand, think that economists can measure productivity gains and/or the rate of inflation and determine how far short of that the current minimum wage stands. And I’m enough of a pro-capitalist and economic rationalist to believe that that would be a fair way of determining the minimum wage. Is that what you mean?
I wonder, erislover, if you’ve read any political philsophy. I know you like to read a lot of stuff, including philosophy, and there are some books I can recommend that I think you might find interesting. There’s a good introduction to political philosophy that explains different positions, from libertarianism, to liberalism, commmunitarianism, etc. etc. It helps, before hitting the streets, to know exactly what one is fighting for.
I really do not want to have to give a basic Macroeconomics lesson but imagine a graph with two lines. There is a downward sloping curve that represents Demand - price as a function of quantity demanded. There is also an upward sloping curve that represents Supply - price as a function of quantity firms want to produce. In other words the higher the price, the less people want to buy and the more firms want to sell. The point where the two curves intersect represent the equilibrium price in the market. This is the theoretical price where a company can maximize profit and there are no shortages or surpluses.
Externalities shift both of these curves to the right or left. resulting in fluctuations in the equilibrium price. You’ll notice that there is no set market price. For example, an advertising campaign can increase demand for a product and shift the demand curve it to the right. The equilibrium price shifts to a point to where companies can ask a higher price for more product.
There are diferent curves for monopolies or oligarchies and they are too complicated to explain here, but the theory still generally holds true. This curve works well for commodities like widgets or unskilled labor - many firms hiring, no one firm hires a signigicant portion of the labor market, not much variety between workers in terms of skills.
In reality, no company can really know what the equilibrium price is. Companies try to guess with marketing surveys, statistical trends, and so on. What this theory tells you is that if you are paying minimum wage and you are having trouble finding or keeping good help, you have to raise your wages.
No its pretty dynamic. It may seem relatively stable because there is only a certain range in price where companies can earn a profit and cover costs. Too high and they can’t sell enough units, too low and they cant earn a high enough revenue per unit.
Labor markets work in the same way. The laws of supply and demand do not distinguish between a person’s labor and a product.
Demand is essentially meaningless unless taken as a function of price. Without price, people would demand pretty much anything they could think of. That’s what economists mean when they talk about scarce resources. They mean that everyone can’t fulfill their infinite wants and needs, not that there is a shortage of DVDs at Circut City.
Please be careful, Mandelstam. This isn’t The Pit.
Note that my above cite includes a model showing that the minimum wage has been detrimental to black, teenage unemployment. So, there is evidence of causation for this group of workers, at least.
Oh, I’m more than familiar with the classical two-line graph (and several of its variants) illustrating the principle from my civics class in freshman year of high school. Sure, you can point to a theoretical equilibrium point on a graph, but I’m talking about real-world applications. That equilibrium price can never be reached, primarily because supply or demand will lag behind the other, but a number of other factors (like the cost of production) enter into that as well.
Economics is a science as much as physics and mathematics, models that cannot accurately reflect real-world phenomena should be cast off. If there is no such thing in the real world as an attainable equilibrium price, then the theory of supply and demand as a determinant of value has to be rejected.
Then they should laugh a model that purports to show what an equilibrium price is right out of the boardroom.
I think we’re arguing about two different terms of demand - something you and I have gone over before. When I say demand, I mean “unfulfilled need in general”, while you mean “need that can be met at a commodity’s given price”. While your definition of demand works perfectly within the model of Smith’s theory, it limits itself to an artificial concept of demand and is therefore insufficient to reflect the concept of demand in the real world.
I can’t resist the temptation at this point to say “Sure, the ‘supply and demand’ theory of value looks good on paper…”
Another failing of the market system. Labor (or labor power, to be more precise) is a unique commodity - it is the one thing that makes all other commodities possible. Labor power in turn is only possible if physical health is at an optimum, and improves with education.Additionally, it is the only commodity a worker can sell with any regularity, since all other commodities become the property of the manufacturer to sell.
Since capitalism treats labor power as a commodity which it purchases, it follows logically that it is in a capitalist’s interest to buy that commodity at the lowest price possible. Unfortunately, that is not the only thing about an employee’s working life the capitalist has control over. He has control over the conditions of work, the hours, and pretty much the behavior and actions of his employees. Therefore he can (and often does) actively make it difficult for employees to organize into a union, which would make it somewhat more of a level playing field as far as negotiating the price of wages is concerned.
Capitalists organize themselves, their companies, and their industries in order to secure the greater advantage against their competitors in the market. If one company managed to force another company to negotiate business on an individual basis, there would be a great hue and cry over restraint of free trade or some other such thing. Yet they have no problem compelling the majority of workers to do just that - negotiate as an individual with an organized corporate entity over wages, conditions, hours, and benefits.
All this comes from treating labor power as a commodity, as a means to further profit. Therefore the cost of labor power is a prime consideration in the cost of production, and it is in capitalism’s interest to keep that cost down, both through keeping wages limited and through limiting the numbers of actual employees, as well as ensuring that they retain a vastly superior advantage in negotiations. If labor power were treated as a means to meeting human need, on the other hand, then the logical conclusion would be that maximum use of labor power is required, necessitating full global employment and ensuring workers have ample opportunity to replenish their labor power.
Your narrower definition of “demand” certainly would be meaningless unless taken as a function of price, but the necessity of the fulfillment of needs certainly will not disappear if the market system does so. I feel pretty certain we’ve covered this territory in the “abolition of money” thread as well.