# The Dems: Simply saying you're better for the working poor don't make it so. **URL:** \ **Category:** Great Debates\ **Created:** [January 5, 2005, 8:40am UTC](https://boards.straightdope.com/t/the-dems-simply-saying-youre-better-for-the-working-poor-dont-make-it-so/283178 "2005-01-05T08:40:38Z")\ **Posts on this page:** 11\ **Page:** 5
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [January 7, 2005, 1:53pm UTC](https://boards.straightdope.com/t/the-dems-simply-saying-youre-better-for-the-working-poor-dont-make-it-so/283178/81 "2005-01-07T13:53:43Z")
I’m sorry I don’t have time for a proper answer right now. I need to earn a living. But, a few thoughts - > [@eponymous](#): > > I’m not sure what you mean by “the laws of economics”. As I understand it, the discipline of economics can be defined as the study of the allocation of scarce resources. In simpler terms, economics is about choices. What I mean by “laws of economics” was not only that we have to make choices, but the constraints on those choices and the unavoidable consequences of those choices. The first law of ecology is “You cannot do just one thing”. Every action has a reaction. In a universe of limited resources, cost-benefit analyses are always necessary. > [@eponymous](#): > > Humans are forced to make choices - an existential fact. This is also an amoral proposition. But _what_ choice I decide is made in the context of foregoing other choices I could have made. Right, I agree with that. You are making a moral choice. But the constraints on that choice, and the consequences of it, both desired and undesired, are going to be subjected to the same forces as an amoral choice like a plant wanting to reproduce. > [@eponymous](#): > > In addition, we have the mental capacity/conscious ability to weigh the pros and cons of a choice before we make our final decision (Should I choose X over Y? And if I do, what do I gain/lose by choosing X over Y? And vice versa?) Likewise, humans have the mental capacity/conscious ability to evaluate our decisions after the fact (Did I make the right decision? Was I choice I made a good one?). You are correct, of course, that the “economic analyses” of humans are much more consciously made than for animals or plants. But I would argue that something very much like “natural selection” operates both on human economics and in the biological world. This is one of the constraints I mentioned earlier. > [@eponymous](#): > > The biology analogy would be a good _if_ it could be demostrated that the choices that plants and animals make are the volitional equivalent of those made by agents in a market economy. In other words, the choices that humans make is no different from those made by plants and animals (no qualitative difference). In this sense, then I would agree that there would be an equivalent amorally - biological evolution and a market economy). > > However, I can’t accept this for the fact that the choices faced by plants and animals is not volitionally equivalent (no qualitative difference) to the choices faced by human beings. I don’t think the motives matter. Whether you consciously decide you want to gain market share for your business, or you are a species “wanting” to exploit a previously untouched ecological niche, you are subject to the same sort of opportunity cost considerations, balancing the risks of innovation against the risks of stagnation, etc. The reason I stress the point is that a common error is the belief that good intentions can change the laws of economics. The example of the minimum wage is a good one. Many argue in favor of raising the wage in terms that deny that it would have costs - only benefits. > [@eponymous](#): > > And I would agree that the law of supply and the law of demand would generally apply in a market economy. But that’s only _if a market economy already exists_ (or something that could be considered approximately a market economy). After all, humans have lived in socieities with quite different economic systems. It’s just that, so far, _given the current conditions_, a market economy is the most “ecological viable/robust” economy to occur (to use your evolutionary schema). True, but I think what I described as “the laws of economics” apply just as much to other kinds of economies as market ones. A socialist economy is like a sub-species of bird in the Galapagos Islands. It is trying something new. Whether or not it succeeds depends on how well it faces the same kinds of challenges that a market economy or a established breed of finch faces. More later if I get a chance. Thanks for your thoughts. Regards, Shodan ---
**Author:** ![eponymous](https://avatars.discourse-cdn.com/v4/letter/e/e0b2c6/32.png) [@eponymous](https://boards.straightdope.com/u/eponymous)\ **Post date:** [January 7, 2005, 5:44pm UTC](https://boards.straightdope.com/t/the-dems-simply-saying-youre-better-for-the-working-poor-dont-make-it-so/283178/82 "2005-01-07T17:44:17Z")
> [@Shodan](#): > > The reason I stress the point is that a common error is the belief that good intentions can change the laws of economics. The example of the minimum wage is a good one. Many argue in favor of raising the wage in terms that deny that it would have costs - only benefits. OK - I think we’re on the same page, so to speak. You are correct in that good intentions alone cannot change the laws of economics. However, I think that some economists would argue that the cost of raising the minimum wage would be offset by the benefits incurred. In other words, the benefits outweigh the costs. I think where the economists differ is in how one defines the costs and benefits involved, as well as 1) whether it applies to specific industries/business and 2) the time frame involved. Raising the minimum wage for certain industries would obviously tip the scale towards the costs outweighing the benefits. However, from a macro-perspective (and over time), the benefits could outweigh the costs. At one time, I would venture that people were arguing that the costs in reducing the work day to 8 hours outweighed the benefits. However, I think most people today would state the benefits incurred in reducing the work day to 8 hours outweighed the initial costs. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [January 7, 2005, 6:48pm UTC](https://boards.straightdope.com/t/the-dems-simply-saying-youre-better-for-the-working-poor-dont-make-it-so/283178/83 "2005-01-07T18:48:35Z")
> [@RTFirefly](#): > > The rest of that post still stands, then: the benefits to workers of a relatively small increase in the minimum wage, at current levels, far outweigh the costs in terms of increased unemployment. > That’s a _terrific_ example! Yes, the minimum wage was increased under Reich. And the effects on employment were…well, employment was increasing so fast in the late 1990s that any countervailing effect caused by the min-wage hike was hardly noticed. My simple rule is: when there’s a lot of money sloshing around at the top, and workers don’t have much leverage relative to employers (kinda the normal state of affairs these days), (a) employers tend to pay workers less than they’re worth to the employer simply because they _can_, and (b) if the minimum wage goes up, most employers can afford it. IANAE, but the logic’s pretty obvious. [/QUOTE] My point was that the Card/Kreuger study was flawed, and any conclusion based on that study is also flawed. It is not an arguable position that the “benefits to workers of a relatively small increase in the minimum wage, at current levels, far outweigh the costs” since those things are not measurable. Card and Kreuger suggested that minor increases in minimum wage could lead to increased employment. They were wrong. The Reich example is not a good one, IMO. The effects of rising minimum wage on employment levels over various demographics was obfuscated by other economic activity. The effect, or not effect of the minimum wage increase therefore gets skewed. This is not an informative example. > [@](#): > > My simple rule is: when there’s a lot of money sloshing around at the top, and workers don’t have much leverage relative to employers (kinda the normal state of affairs these days), (a) employers tend to pay workers less than they’re worth to the employer simply because they _can_, and (b) if the minimum wage goes up, most employers can afford it. IANAE, but the logic’s pretty obvious. I fundamentally disagree with you that is possible to pay a worker less than they are “worth”. Worth is determined by what individuals agree to. Unless there is some form of coersion going on, by definition, a person’s labor is worth what is paid for it. I am one who would argue for the abolition of the minimum wage in all forms in this country. This is based on the pragmatic effects of the minimum wage, and the fact that they are antiethical to my belief system. ---
**Author:** ![Homebrew](https://avatars.discourse-cdn.com/v4/letter/h/c89c15/32.png) [@Homebrew](https://boards.straightdope.com/u/Homebrew)\ **Post date:** [January 7, 2005, 7:21pm UTC](https://boards.straightdope.com/t/the-dems-simply-saying-youre-better-for-the-working-poor-dont-make-it-so/283178/84 "2005-01-07T19:21:01Z")
> [@Bone](#): > > Worth is determined by what individuals agree to. Unless there is some form of coersion going on, by definition, a person’s labor is worth what is paid for it. Does desperation count as coersion? ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [January 7, 2005, 7:47pm UTC](https://boards.straightdope.com/t/the-dems-simply-saying-youre-better-for-the-working-poor-dont-make-it-so/283178/85 "2005-01-07T19:47:59Z")
> [@eponymous](#): > > OK - I think we’re on the same page, so to speak. You are correct in that good intentions alone cannot change the laws of economics. However, I think that some economists would argue that the cost of raising the minimum wage would be offset by the benefits incurred. In other words, the benefits outweigh the costs. > > I think where the economists differ is in how one defines the costs and benefits involved, as well as 1) whether it applies to specific industries/business and 2) the time frame involved. All true. Another issue clouding discussions of the minimum wage is that so few workers actually make that little per hour - less than 3%, IIRC. But of course you are entirely correct that economists, and people in general, disagree on what the costs are and if they outweigh the benefits. My objection was largely to those who argue that we can get the benefits and entirely avoid the costs by some kind of radical re-structuring of society. (Not that you made such an argument.) But the complexity of the issue is not simple disagreement, at least not entirely. That is why I find the notion of evolution as economics so interesting. There we have a very simple and universally “agreed on” notion of what constitutes a benefit - surviving long enough to produce viable offspring. And yet the simplicity of the “end” does not preclude the incredible diversity of differing strategies to reach it. Even with a “consensus” on cost (anything at all) vs. benefit (survival to reproduce), the systems that develop rival any economy on earth. > [@eponymous](#): > > At one time, I would venture that people were arguing that the costs in reducing the work day to 8 hours outweighed the benefits. However, I think most people today would state the benefits incurred in reducing the work day to 8 hours outweighed the initial costs. Probably true. I wonder how much of that is a genuine decision in favor of the benefits of 40 hours a week vs. the costs of the mandated work week being drowned out by the benefits of improved efficiency and productivity of the Western economies - and I don’t believe those benefits are a result of reduced hours. Of course, I am finishing my third consecutive 70 hour work week, so maybe my perspective is skewed. (Darn Sarbanes-Oxley, anyway.) Regards, Shodan ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [January 7, 2005, 8:15pm UTC](https://boards.straightdope.com/t/the-dems-simply-saying-youre-better-for-the-working-poor-dont-make-it-so/283178/86 "2005-01-07T20:15:19Z")
This thread is turning into a debate over minimum-wage laws, which, if not a hijack, is IMO too much narrowing of the focus WRT to OP. So I started a new thread: “How do minimum-wage and living-wage laws affect the job market?” – [http://boards.straightdope.com/sdmb/showthread.php?t=295733](http://boards.straightdope.com/sdmb/showthread.php?t=295733) Let’s take it over there! ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [January 7, 2005, 8:43pm UTC](https://boards.straightdope.com/t/the-dems-simply-saying-youre-better-for-the-working-poor-dont-make-it-so/283178/87 "2005-01-07T20:43:07Z")
> [@Bone](#): > > My point was that the Card/Kreuger study was flawed, and any conclusion based on that study is also flawed. OK, and the relevance of the part after the ‘and’ is…? > [@](#): > > It is not an arguable position that the “benefits to workers of a relatively small increase in the minimum wage, at current levels, far outweigh the costs” since those things are not measurable. Huh?? You mean amounts of money aren’t measurable??? I was under the distinct impression to the contrary. > [@](#): > > Card and Kreuger suggested that minor increases in minimum wage could lead to increased employment. They were wrong. If your first sentence accurately summarizes their claims, then your second sentence is in error. > [@](#): > > The Reich example is not a good one, IMO. The effects of rising minimum wage on employment levels over various demographics was obfuscated by other economic activity. The effect, or not effect of the minimum wage increase therefore gets skewed. This is not an informative example. Hey, it was your example. Sorry if it didn’t make your point. > [@](#): > > I fundamentally disagree with you that is possible to pay a worker less than they are “worth”. Worth is determined by what individuals agree to. Unless there is some form of coersion going on, by definition, a person’s labor is worth what is paid for it. That’s _your_ definition of ‘worth’. Are you claiming it’s the only one? Not only would you be wrong, but your definition sucks. Did you know that there’s a word in the English language called ‘bargain’? Good. You know what one is? It’s when someone’s able to buy something for less than it is _worth_ to them. You’ve just defined bargains out of existence. But bargains are real, so like I said, your definition sucks. ‘Bargains’ can include bargains in the labor market: if employers can find people who are willing to work for less money than they _would_ be willing to pay, it’s a bargain. The employer is getting work done for less money than the work is _worth_ to them. You’ve got some other fallacies rolling around there, but that’s plenty for one post. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [January 7, 2005, 9:06pm UTC](https://boards.straightdope.com/t/the-dems-simply-saying-youre-better-for-the-working-poor-dont-make-it-so/283178/88 "2005-01-07T21:06:06Z")
First, sorry about the previous mess up of the HTML, and this one, I’ll respond in order. > [@RTFirefly](#): > > OK, and the relevance of the part after the ‘and’ is…? > > Huh?? You mean amounts of money aren’t measurable??? I was under the distinct impression to the contrary. > If your first sentence accurately summarizes their claims, then your second sentence is in error. > Hey, it was your example. Sorry if it didn’t make your point. > That’s _your_ definition of ‘worth’. Are you claiming it’s the only one? > > Not only would you be wrong, but your definition sucks. Did you know that there’s a word in the English language called ‘bargain’? Good. You know what one is? It’s when someone’s able to buy something for less than it is _worth_ to them. You’ve just defined bargains out of existence. But bargains are real, so like I said, your definition sucks. > > ‘Bargains’ can include bargains in the labor market: if employers can find people who are willing to work for less money than they _would_ be willing to pay, it’s a bargain. The employer is getting work done for less money than the work is _worth_ to them. > > You’ve got some other fallacies rolling around there, but that’s plenty for one post. The “and” was a device of my writing style. If you restrict the “benefits” to monetary benefits, those are measurable. I was not clear on your meaning by the way you phrased your statement. If you want to restrict the discussion to monetary amounts, then yes it would be measurable, however I believe that would be uninformative as it ignores other important aspects of the cost/benefit equation. Card and Kreuger summarized that small increases in minimum wage could cause increases in employment. That is an incorrect conclusion because their study was flawed. How was my sentence in error? The Reich example was used because Reich cited the Card/Kreuger study as well. I used the example to further show an instance of someone drawing incorrect conclusions using the Card/Kreuger information. I believe you contiued the example in a way I did not intend, therefore I stated that your useage of it was not informative. If that got a muddled, I apologize. I retract that example. That is my definition of “worth” in the context that you used the term. I never claimed it was anything else. I can see that you don’t subscribe to my personal definition, would you care to offer a substitute in the context that you originally used the word? Perhaps it could be defined further from a relative perspective. IOW, my definition from one person’s point of view may be what they are worth, however another might view that as a bargain. Is that what you are getting at? If there are other fallacies, please point them out. I’d appreciate the perspective. Is there a reason you seem to be snarky? I could be interpreting you wrong, but that’s the impression you are giving me. **Homebrew** : No. Desparation does not count as coercion, in most cases, IMO. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [January 7, 2005, 9:33pm UTC](https://boards.straightdope.com/t/the-dems-simply-saying-youre-better-for-the-working-poor-dont-make-it-so/283178/89 "2005-01-07T21:33:26Z")
> [@Bone](#): > > … No. Desparation does not count as coercion, in most cases, IMO. Which illustrates the opinion of famed political scientist Will Rogers: “It ain’t a crime to be poor, but it might as well be.” ---
**Author:** ![JMS\_CCT](https://avatars.discourse-cdn.com/v4/letter/j/bbe5ce/32.png) [@JMS\_CCT](https://boards.straightdope.com/u/JMS_CCT)\ **Post date:** [January 9, 2005, 2:27am UTC](https://boards.straightdope.com/t/the-dems-simply-saying-youre-better-for-the-working-poor-dont-make-it-so/283178/90 "2005-01-09T02:27:30Z")
> [@RTFirefly](#): > > [The working poor have a pretty serious income instability problem](http://www.latimes.com/news/printedition/la-fi-poor12dec12,1,1520171.story): > > (Registration is required to read the story, but it’s free.) > > Among the working poor, there’s a lot of earning decent money on the upswings, then getting their cars repossessed on the downswings. Didn’t used to be so up-and-down, and even upper-middle-class people aren’t exactly adept at dealing with the much greater income instability of these times. Especially when the whole notion really hasn’t sunk in yet. I think the major reason behind the boom and bust cycles after 1970 was Nixon’s decision in 1971 to close the gold window and put the dollar completely on the float. If one looks at the graphs over the next 23 years, the national debt curve looks like an outline of the Mount Everest. During that period the debt (inflation) increased 2000 percent, with Income and Social Security taxes rising correspondingly. Of course, as everyone knows, those numbers have increased exponentially since then. What liberals (and a lot of so-called conservatives) have never understood is wealth cannot be created by government spending. Whenever the Federal government institutes a big give away–like an increase in minimum wages, or free health care, or free anything–the currency (money supply) is inflated, bidding up prices and interest rates, all of which more than negate the increase of money/services to the recipients of the give away. While thinking they’re richer, they are actually poorer. The only thing that creates lasting wealth is innovation and productivity, but inflation and draconian taxation–both of which are the results of government give aways–kill the incentive for both. ---
**Author:** ![Paladud](https://avatars.discourse-cdn.com/v4/letter/p/82dd89/32.png) [@Paladud](https://boards.straightdope.com/u/Paladud)\ **Post date:** [January 9, 2005, 2:45am UTC](https://boards.straightdope.com/t/the-dems-simply-saying-youre-better-for-the-working-poor-dont-make-it-so/283178/91 "2005-01-09T02:45:55Z")
> [@eponymous](#): > > Not quite sure what you mean the law of supply and demand. There is a law of supply and a law of demand. Together, these form the foundational basis for understanding how a market economy functions. But they aren’t iron-clad laws, only assumptions (granted, fairly logical ones based in part on empirical evidence). However, the assumptions underlying the law of supply and the law of demand can change depending on the context. > > For example, there are goods which do not adhere to the law of demand. That is, under normal assumptions, if the price/value of a good increases, then demand will decrease. However, with some goods (say fine artwork) if the price/value of the good increases, the demand may also increases as well (or, more likely, remain constant). > > Another example - the law of supply stipulates that with an increase in the price/value of something, the supply will correspondingly increase as well (under the assumption the suppliers are willing to provide more of the item to the market). However, if your market economy allows monopolies, than the increase in value/price of something could result in a reduction of its supply (or more likely, remain constant). There’s such a thing as [elasticities](http://en.wikipedia.org/wiki/Elasticity_%28economics%29) of supply and demand. This isn’t a violation of the laws of supply and demand, but a fundamental concept in economics. [Previous page](https://boards.straightdope.com/t/the-dems-simply-saying-youre-better-for-the-working-poor-dont-make-it-so/283178.md?page=4)