Oh, that’s rich. Batista was a democrat. Yeah, sure.
Guinistasia: You better read that again. He said that Cuba once had a democracy, which was overthrown by a dictator. That dictator was Batista. Castro came to power because he promised to restore democracy.
Cuba had a democratic government and a constitution in 1901. They had free elections until 1952. Batista himself was elected democratically in 1940 and served as President until 1944. He then went to the United States, and returned in 1952 to run as president again. When his election campaign failed, he organized a bloodless coup and took over.
One could argue over how democratic Cuba really was, because the U.S. had tremendous influence in the economy and support of various political parties. There was widespread corruption in most governments. However, it doesn’t change the fact that those governments WERE elected by the people in regular elections based on the U.S. model, until 1952.
**Sam Tsone: 
** Free markets and free trade are responsible for the enormous gains in wealth and productivity that we have seen in the last 200 years.
Not false, but pretty sweeping and oversimplified, IMHO: I’d say that most of those “enormous gains” came more directly from rapid technological/industrial development, and were achieved in many cases despite, or even partly because of, heavy protectionism.
Cuba had the benefit of large amounts of foreign aid from the USSR as well as trade with many countries. Nevertheless, 25% of the populace fled to other countries, the government promotes child prostitution as a source of hard currency, and common people are impoverished. (However, Comrade Fidel lives like a billionaire.)
US sanctions are a feeble excuse for communism’s economic disaster in Cuba.
Kimstu,
I guess your arguments get back to the issue of who pays for the increase in minimum wages. As I indicated earlier there are some reasons for believing that a fair portion of the cost is borne by other poor people through lower employment, higher prices etc. Conversely some of the benefits of eliminating the minimum wage will go to them.
Also I don’t think it’s correct to say that firms are exploiting workers if they don’t have market power and are just paying the going rate in a competitive labour market. You might feel that the competitive wage is too low but that doesn’t make it “exploitation”. Low-skill labour by its nature tends to be mobile, eg the same person who is bagging groceries can easily flip hamburgers instead. If lots of firms are competing for the same unskilled workers that means that no one firm is setting the going wage.
Now there might be pockets of labour where for some reason the workers have very little bargaining power but I really wonder how signficant they are in the current US economy.
Having said this I don’t necessarily advocate abolishing the minumum wage; not until I see evidence that this would bring significant benefits anyhow. There might be some justification for a lowish minimum wage which is roughly equal to or only a little above the competitive wage rate which therefore doesn’t affect competitive labour markets much but which might help those workers who for whatever reason aren’t operating in competitive labour markets.
Of course that doesn’t mean that we have to accept the competitive wage as somehow sacrosanct. Government can seek to improve the productivity of low-skilled workers or it can seek to supplement their income through programmes like EITC.
What I am skeptical of is the idea of large direct interference with labour markets as an effective tool for helping large numbers of the working poor.
December,
I agree that the Cuba is a basket-case primarily because of its system. However we should note that it has some impressive achievements in education and basic health. According to World Bank statistics it is better than countries like Brazil and Mexico in things like literacy and life expectancy even though those countries are much richer. To me at least this suggests that more free-market oriented developing economies might benefit from more agressive efforts on the part of government in areas like primary education and primary health care.
CP: Also I don’t think it’s correct to say that firms are exploiting workers if they don’t have market power and are just paying the going rate in a competitive labour market.
I agree, but I don’t think that that’s what I claimed. I said that some employers will be severely exploiting workers when they can, but I didn’t intend that to imply that every wage in a truly competitive labor market that I might personally feel is “too low” is therefore exploitative.
Now there might be pockets of labour where for some reason the workers have very little bargaining power but I really wonder how signficant they are in the current US economy.
Pretty significant, actually, as far as I can tell. Our federal labor law tends to be somewhat weaker than that of EU countries, and is much less aggressively enforced. Only about 13% of American workers belong to a union (even among government employees it’s only about 30%), and employers are often extremely successful at intimidating unionization efforts, especially in low-paying service jobs. I don’t think that this means that most people’s wages would sink like a rock in the absence of a minimum wage—there would probably still be enough demand for workers to keep the lowest typical market wage within a couple dollars of the current minimum—but I do think there would be many workers, particularly recent immigrants, who would be very vulnerable to severe wage-grinding.
Thanks for the points about Cuba, to which I’d just like to add that although AFAIK december is correct that the U.S. sanctions in themselves didn’t have that much of a direct impact on the Cuban economy, they certainly strongly influenced the unwise decision to lean so heavily for support on the Soviet Union, which had such negative consequences when the USSR fell.
Kimtsu: <<<WHAT THE SUBLIME FUCK ARE YOU THINKING?>>>
I’m thinking you should try the decaf.
Now…onto the business at hand:
THIS was the entirety of your original quote that started this subthread:
"Do Minimum Wages Reduce Employment Opportunities?
“While economic theory predicts that higher minimum wages will lead to lower employment, findings from recent studies seem to be mixed. Overall, recent studies have found that minimum wages have negative effects on employment but the magnitudes have varied across studies. At the lower end, researchers have found that a 10 percent minimum wage hike would reduce employment by only 1 percent. At the high end, other researchers have found that the same hike would reduce employment by 10 percent. Moreover, other studies have concluded that minimum wages have no effect or a positive effect on employment.”
Now, since I’m not a mind reader, I can only go by the plain meaning of the text. And in the text which you provide, there is no mention whatever of these effects being limited to “x percent of affected m-w jobs.” That’s entirely your own invention.
<<But the notion seems to me so evidently nutty on its face that I’m not going to bother refuting it until I get some explicit assurance that someone here is actually loony enough to believe it.>>>
Well, you were the one who introduced the source (in order to demonstrate somehow that “it is far from clear that the minimum wage law really does “throw many people out of work.”” Now, how it is you can come up with a website which says that employment rates actually decline in every single study they’ve seen (and further, concludes that increasing the minimum wage “will not reduce poverty rates,”) and somehow use it to support the notion that it’s not clear that the minimum wage law reduces employment is beyond me.
But if this cite you introduced is so absurdly nutty, well, methinks you should find some better sources, rather than invent words to put in their mouths to make them a little less inconvenient to your point of view.
Guinistasia: <<<Why do you think the people in Nicaragua and Cuba supported Ortega and Castro?>>>
Oh, well I’m more familiar with Cuban history than with Nicaraguan history, living in Miami and all. So, let me just take a guess about Cuba:
People “supported” Castro because if they DIDN’T toe the line Castro would have them imprisoned, tortured, or executed, maybe?
I can introduce you to some of the survivors if you like.
I think your professor needs to spend a little bit less time waxing romantic about brutal thugs and a little more time examining their methods.
Panzer, when you make a mistake it is best to admit it and move on rather than try to salvage your ‘correctness’. You aren’t enhancing your reputation with this.
Kimstu posted the link as well as the quote. But even if she hadn’t, your interpretation of the quote is clearly nonsensical. Just admit you made a mistake and/or drop it.
It’s only your interpretation of the quote that is nutty. The obvious interpretation is the one that Kimstu describes. The error here is yours.
december,
While I don’t think you will find anyone arguing that Cuba’s economy is anything but pathetic, I must also say that my impression in regards to literacy and health care (albeit with some rather severe shortages of medical supplies) accords with CyberPundit. In other words, while Cuba is clearly an economic failure and Castro a despot, there are despots out there who do quite a bit worse by their populace than he has. And, just out of curiosity, since I have not heard the claim made before, do you have evidence that Castro lives like a billionaire or was that hyperbole? I mean, I am sure that he is living quite comfortably, thank you…but I didn’t get the impression that he was robbing the country blind for personal gain like Marcos or someone of that ilk.
Sam Stone,
I didn’t mean to make you out to be zealots. [Well, okay, maybe a little bit! ] But, I do question your reading of history. I don’t doubt that countries with some sort of market systems have prospered and that modern centrally planned economies have not. But, as others point out, surely a wide range of market economies, with greater and lesser degrees of government regulation of the market / subsidization / protectionism have prosperred, ranging from the U.S. to the Scandinavian nations. And, it is by no means clear that those with less “interference” in the market do better.
And on the other side, surely, some of the nations which have tried market economies have collapsed into banditry and corruption, particularly when they have tolerated huge inequities of wealth. Although some of this banditry may have roots in government power and corruption, I think other of it has roots in economic power itself like the “robber barons” of a past era in our country. It seems to me that the excessive concentration of power is something that must be avoided regardless of whether this power is in the hands of the government or in the hands of an economic elite. Unfortunately, it does not appear that the market alone is very effective in guarding against such excessive concentrations of power; in fact, one might even argue that it is somewhat unstable to the development of such. One such example: Mega-media conglomerates do not “free minds” make!
jshore:
It would seem that the error would be either in Kimtsu’s interpretation of the cite, or the cite itself.
The text (s)he provides is quite plain: it refers to a drop in employment of x percent. There is nothing in the quoted passage which limits the sample to the m-w population.
Kimtstu “speculates” (his word) that this is the case. Well, maybe it is. But that is not what the text of the passage says. And going back to the Health and Human Services report itself, there is nothing whatever in the relevant passage that so limits the sample.
One thing Kimtsu DID leave out–inexplicably because it supports (insert-gender neutral possessive pronoun here) assertion that minimum wage laws may have a positive effect on employment, is that Card & Kreuger found just that (but ya gotta read the footnotes).
Further, the HHS report does state that the study that predicted a 10% decline in employment is at the high end of the spectrum. It may not even be typical. And nowhere does the HHS report imply that this is a government sponsored study. For all we know, it could have been a study sponsored by Citizens for the Exploitation of the Working Class. The report, unfortunately, doesn’t specify. So all the hair-tearing hysteria about this being “a government agency blah blah blah” strikes me as, well, pretty absurd.
Still, there is nothing whatever, either in Kimstu’s quote or in the HHS report itself, which would even imply that the findings in the studies cited, or the definition of “employment,” is limited to workers most directly affected by a minimum wage increase.
<< But even if she hadn’t, your interpretation of the quote is clearly nonsensical. Just admit you made a mistake and/or drop it.>>>
The plain text is quite clear. Most recent studies predict a drop in employment. The definition in the term “employment” is not restricted to the m-w crowd anywhere in the report. If you disagree with me, fine. Peruse the report and produce the language.
Otherwise, admit that you can’t, and move on.
Oops…that was supposed to be addressed to Tejota. Not jshore.
Perhaps today, but back when he was starting his revolution, Castro didn’t have that kind of power or the resources. From what I’ve heard, they had no freedom before, and no food. Then, they still don’t have any freedom, but they had food.
I am NOT defending Castro. I’m simply pointing out a basic fact that you seem to be ignoring.
Kimstu,
The absence of unions or non-enforcement of labour laws doesn’t necessarily mean that employers have monopoly power. This has more to do with the number of firms hiring low-skilled workers in a geographical area. So most examples would probably be in rural areas and very small towns and then only to the extent that workers find it difficult to move somewhere else. And note that the workers themselves can be disorganized and passive but so long as employers are competing for their work their wage will be competitive. The only requirement is that workers have the capacity to move to better-paying jobs if they see one.
On the interpretation of the minimum-wage report it’s true that a plain reading of the text suggests Pz-man’s interpretation. Only additional considerations about the economy and other similar studies would suggest the other interpretation. So I would blame it on the writers of the report for being confusing.
pzmpzm, you seem like an intelligent sort; your posts are well written and address specific arguments with a minimum of obfuscatory rhetoric. However, you seem to remain frighteningly oblivious to the point which Kimstu has been trying to make; the only reasonable interpretation of the “low end - high end” estimates in the HHS report she cited is that they deal with changes in employment among minimum wage workers. Your “plain reading” approach is just not adequate when interpreting analyses of this sort.
I refer you to footnote no. 8 in the report (which you must’ve skipped while you were perusing Card & Kreuger):
What does the term “unit elasticity” imply to you? (Hint: See MMI’s interpretation.)
See also the bullet point in Key Findings: “Negative employment effects, if any, appear to be slight and are difficult to detect.” indicating that the authors of the report do NOT expect high (i.e. 10% of total employment) fluctuation in employment due to moderate minimum wage increases.
Oh, and BTW, since you’re concerned that this gov’t agency report may not have been government sponsored, here is the HHS’ Office of Human Services Policy official mission statement for their Division of Data and Technical Analysis.
You’re welcome.
[QUOTE]
*Originally posted by xenophon41 *
**
This seems like an odd interpretation, because:
-
The words don’t say “MW workers.”
-
A change in the MW affects more than just the workers earning mw. E.g., a 10% mw increase directly affects all workers earning less than 110% of the mw. It also indirectly affects many other workers, since the rise in mw tends to cause a rise in other wages – those moderately above the mw. This impact was pointed out by Kimstu. in an earlier post. All these wage level increases will be accompanied by some reduction in employment.
In short, since an increase in mw affects many more workers than just those earning mw, it would be strange to express the impact as a % of mw employees. Furthermore, the number of workers impacted makes a total 10% employment reduction more plausible as the most extreme, high-end estimate.
P.S. If a 10% increase in mw causes a factory to shut down its operations or move them to another country, then there will be a reduction in managment employees, who would have been earning far more than mw. Changes in mw flow through the entire workforce. (Same thing if the higher mw discourages the factory from opening up to begin with.)
I don’t disagree that the explicit relationship being discussed was not defined by the report authors. However, while I find this omission in the report very odd indeed, I do not think my (and Kimstu’s, and jshore’s, and CyberPundit’s and MMI’s, and Tejota’s) interpretation is therefore odd as well. On the contrary, I think a literal interpretation of the text, without any attempt at interpretation informed by the context of the statement, is not only odd but intellectually lazy as well. Of course, IANAPA.
“Furthermore, the number of workers impacted makes a total
10% employment reduction more plausible as the most extreme, high-end
estimate.”
Um no. There is really no possibility of a 50 cent increase in the minimum wage producing what is basically a depression even under the most extreme assumptions.
There is no question that Pz-man’s interpretation is wrong; the only question is whether it was his fault or the writer’s and as I said earlier I would blame the writer for being confusing.
Also covered in the HHS report. And btw, has it completely escaped your attention that the title of the parent report is “The Low-Wage Labor Market:
Challenges and Opportunities for Economic Self-Sufficiency”?
That “low-wage labor market” reference may be a slight tipoff regarding the focus of the report as well, eh?