Tax me to help people who can’t get by on what they’re able to make on their own.
I paid taxes for 30 years before I needed help - what’s wrong with that? I paid into the system, I should be able to make use of it when I need it without people implying (or outright saying) I’m lazy scum or whatever.
Now that I’m back on my feet I’m back to paying taxes again.
Some of us actually thing a social safety net is a good thing.
It was aimed that the “wait to have kids” part - what if you were doing fine and disaster struck? You DID wait to have kids, you COULD support them… then your house burned down or a volcano erupted or a hurricane washed away your town. But now there are scolds saying “you should have waited to have kids!” Not everyone poor today was poor yesterday or will be poor tomorrow.
Why should you care about your neighbors’ kids? Because one day they’ll be supporting your pension payments.
Nobody in this thread has argued against a social safety net. What we have said is that it shouldn’t be funded solely by businesses whether large or small, rich or poor themselves, and shouldn’t be handed out to employees whether they need the help or not. The minimum wage is a very poor vehicle for channeling money as part of a social safety net.
When did the minimum wage become part of the social safety net?
And why is it bad to prevent a race to the bottom and/or exploitation of employees?
As am I. Perhaps your were responding to someone else.
This isn’t happening.
Paying market wage isn’t exploitation.
Also, this isn’t a quiz show, in case you’d like to make your own arguments instead of Just Asking Questions.
I’m sorry about your situation. But I don’t think that paying teenagers that live with their parents enough money to buy their own house is the best solution to situations like yours. Unemployment insurance, TANF, etc. is for things like that.
IOW, not the lowest common denominator, but not the highest either.
Establishing a minimum wage at a level such that an adult single full-time worker in normal circumstances is earning above the poverty line is meant to prevent the use of the social safety net. Why do you think businesses pay the minimum wage? It’s because they have to. Set a minimum wage at 50% of the poverty level where there’s a large market of unskilled workers and you’re forcing the minimum wage workers into the safety net. The social safety net should be for people who’ve fallen on hard times, not part of the normal baseline.
You’ve never heard of sweat shops?
I cannot shake the feeling that a whole bunch of people in this thread are badly misapplying econ 101 when deeper analysis might give us a slightly less completely batty picture.
People have been saying that the minimum wage obviously significantly decreases employment - the world bank does not seem to agree. Quoting from page 20 of the PDF (listed as page 11 in the document):
That’s really weird, right? The idea that there would be no change, or somehow even more jobs if there was a floor on how little you could pay people, or if you raise that floor? That doesn’t fit with econ 101 at all! Weird how if you only follow the absolute most basic, simplistic rules of economics, you end up with results that don’t actually match what happen in reality?
:rolleyes:
Funnily enough, this economics blog has a great example of exactly this sort of thinking in action. Here’s the “econ 101” approach (y’know, what you might expect from various right-wingers arguing against raising the minimum wage):
…And immediately following, here’s what actually happens:
Looking back through this thread, there’s a whole lot of this. “I learned what a demand curve was in high school, therefore I can say that the minimum wage will have this effect”.
Let’s take a look at some of them, shall we? 
cracks knuckles
Note the lack of actual citation. What’s this based on? Gut feelings and poorly-remembered econ 101 would be my guess. It’s all theorycrafting, with no actual data behind it. Raising the price of basic goods is not a trivial thing. It’s not a natural or obvious response to rising wages. It may ultimately even out, but people notice when the price of what they’re buying creeps up. It shouldn’t be hard to check this - is there any noticeable correlation between inflation and the minimum wage? Not really. The article that graph comes from goes over a lot of myths surrounding the minimum wage, and does actually say that there is short-lived mild inflation when the minimum wage is raised, but this is a far cry from what Flik is describing here.
Ha ha, it’s funny because the idea of a higher minimum wage (something already instituted successfully in many places!) is a magical left-wing dream-world idea that couldn’t possibly work. Meanwhile, in New York:
After NYC raised its minimum wage from $7.25/h to $15/h this year – the largest pay hike for low-waged workers in half a century – the city’s restaurants boomed, posting the highest growth levels in the country.
The findings come from a study undertaken by the Center for New York City Affairs at The New School and the National Employment Law Project.
The study found no negative effects on city business attributable to the pay rise, though they also note that the city is experiencing strong cross-sectoral growth overall that makes it hard to attribute the restaurant industry’s incredible showing to any single factor (though the outer boroughs experienced growth comparable to Manhattan, despite overall cooler economies).
It seems like the idea here is that without the minimum wage, there are whole classes of jobs that would open up that pay basically starvation wages. Is there any information on this counterfactual? The effects it might have? Any data whatsoever on knock-on effects? Certainly nothing cited. And, indeed, as this slate article kindly points out, “But when it comes to the labor market, Econ 101 is almost never the whole story.”
To start, it’s actually a bit of a leap to assume that just because existing businesses could hire cheap workers to do new jobs, they necessarily would. Economist Jared Bernstein, who also took part in the Intelligence Squared debate, pointed out last year that although the value of the minimum wage fell 32 percent during the 1980s thanks to inflation, teen employment actually dropped slightly.
“Now, this is nothing like careful analysis—it’s just broad trends,” he wrote. “But it makes the point, especially given the steep 1980s real decline in the wage floor, that you shouldn’t blithely assert without evidence that abolishing the minimum wage would automatically lead to a ‘sliding down the demand curve.’ ” (In this case, sliding down the demand curve is a fancy way of saying “more hiring.”)
The article discusses several plausible reasons why this is a bad idea. Is any data presented? Not much, but more than Hellestal offers. But hey, if you’re reading this, Hellestal, why would I hire more people than I need simply because wages dropped? I clearly don’t need any more employees, or else I would have already hired them. Wouldn’t it be smarter to fire the people I have and rehire the same number of people, but for a lower wage?
Boy, this all sounds super convincing and shit. I wonder if there’s any actual data to back it up? We’ll never know, because Sam Stone doesn’t actually provide any. I considered spending the time to fact-check this myself, but I couldn’t be fucked so here’s a Vox explainer on an actual expert on economics:
The “two-income trap,” as described by Warren, really consists of three partially separate phenomena that have arisen as families have come to rely on two working adults to make ends meet:
[ul]
[li]The addition of a second earner means, in practice, a big increase in household fixed expenses for things like child care and commuting.[/li][li]Much of the money that American second earners bring in has been gobbled up, in practice, by zero-sum competition for educational opportunities expressed as either skyrocketed prices for houses in good school districts or escalating tuition at public universities.[/li][li]Last, while the addition of the second earner has not brought in much gain, it has created an increase in downside risk by eliminating an implicit insurance policy that families used to rely on.[/li][/ul]
Bolding mine. A significant portion of the gains from two incomes goes not towards a more luxurious standard of living, but into zero-sum competition; “keeping up with the joneses” if you will. Except that in this case, it doesn’t mean “getting a jaccuzi to wow the neighbors” but “competing for spots in the neighborhood with the good school district”.
Is that a low-quality source? Arguably; the book, while written by an expert, is a decade and a half old, and this is a secondary source talking about it.
Is it better than no source, which is what Sam Stone offers? :rolleyes:
This is the level of argument we’re having here? Shit, I shouldn’t have bothered googling.
We’re about fighting ignorance here, and economics is an incredibly complex (and politically fraught!) field. If you’re going to throw out claims, you should damn well provide evidence. Econ 101 is not good enough. Hell, I’d say I’ve done better at citing decent sources in this post than damn near anyone in this thread, and even that isn’t anywhere near good enough! It’s just trying.
By the by, this is the exact same of “econ 101” bullshit you get from Republican politicians, or at least did when they pretended to care about this kind of shit:
Last I checked, that wage, in the United States, is $5.84/h
Again, this isn’t a quiz show
Well since it’s a Great Debate, do you mind an actual question? Do you believe that market forces do an adequate job of setting the baseline wage of typical unskilled workers? The question is, of course, open to everyone.
Also, I do realise that the subject of the debate is a US $15/hour minimum wage. I haven’t looked at the numbers, but that strikes me as high. I’m not arguing against that idea. I’m arguing against the idea proposed by Sam Stone:
Since it’s a Great Debate, you first; make your argument one way or another and I’ll tell you why I think you’re right or wrong instead of just peppering you with questions.
That depends, of course, on what you mean by “adequate”. Does it get them as much as they want? No, and that is not their purpose. Does it get them enough to support a family? No - also not their purpose. Does it get them as much as they “should” get? No, and that is also not their purpose.
What they “should” get is a moral question, and the market is not moral. Neither is it immoral. The market is amoral.
The market is information. It reflects the price point at which demand for a given resource, in this case labor and jobs, meets the opportunity cost of those willing to supply it, in a given market. The market does not care if that price point is ten cents an hour or a million dollars a year. Your labor is worth whatever you can convince someone else to pay.
If you impose a minimum wage (or a living wage), or even if you put a cap on salaries, again, the market does not care. The price point then adjusts to whatever employers are willing to pay, at or above that MW, to turn a profit, and employees are willing to forgo their leisure/unemployed state in order to earn that wage. If the MW is set high enough to reduce profits, employers don’t hire, or they hire less, or they automate, or they relocate somewhere else where the MW is lower. Or the capital flows to some other business with higher profits.
The Congressional Budget Office found that an increase in MW to $10.10 would increase income for many families, and would reduce job growth by about half a million jobs. Increasing it to $15 an hour would, presumably, have even stronger effects in both directions. “Is that worth it?” is a moral question, not a market one.
Obviously it will operate at the margins mostly, as economic factors are wont to do. Regions and states with lower average income will be affected more than those with average incomes above the MW. (Cite.)
Market forces are efficient, in that they bring about the average greatest good for the average greatest number. It can be decided that efficiency is less desirable than greater good for some, which is why MW is a form of cost-shifting. Sometimes that can happen, but it is a mistake to believe that cost-shifting is the same as free money, for anyone.
Regards,
Shodan
CBO did release a report on $15 in July, predicting what you’d expect. Although certainly not everyone agrees with their methodology.
“Econ 101” can certainly be wrong.
But it’s also very often correct. Or more precisely, the main thrust of its arguments still apply forcefully and predictively even when more bells and whistles are added. I can write down an upward-sloping labor supply model which will, in certain strange circumstances, exhibit stronger labor demand at a higher price within a limited range of employment, at least if the conditions are aligned. That’s not “101” (rather, it’s intermediate or labor econ), but all of the ideas of 101 are still completely in place for that model. It’s a new twist on the same foundation of ideas. And if the wage goes even higher, past the narrow band of interest, then people lose their jobs, and for exactly the same reason that people lose their jobs in the intro model.
In my experience, people who sneer at the basics almost never have an understanding of those basics, let alone the more complicated arguments that are built squarely on top of the ideas taught in those basic classes. The point of a model is to reason consistently. People who can’t reason consistently about the intro stuff are never going to have a solid argument for the complex stuff.
My claim, which I’ve made in two separate posts, is that the empirical evidence is mixed.
Do you need a citation for that? Is that what you’re asking for here?
It’s not especially hard for an honest inquirer to find evidence of the empirical dispute in the academic literature – at least if they’re actively looking – but I can help you out on this if you are somehow mistaken in believing that all the evidence points in one direction. What I cannot provide on this topic is any kind of proof that one side or the other is definitively right. As I already said: “The empirical research tends to be split…” and “I personally think it’s a net negative, tho I could be wrong about that. I’d like to be wrong about that, because it seems like a politically popular policy.”
I can cite papers. I can talk about those papers’ methodologies, and the general problem of poor data in the social sciences. I can talk about the theoretical justifications they have for their findings. I can explain why I lean one way on this topic, rather than the other. I can give the single best argument I know in favor of the minimum wage, which as far as I know is discussed almost exclusively among economists and is never a popular political reason for its support. I can explain why I think that sophisticated argument is wrong. I can cite anything you need me to cite here within those guidelines. I just don’t know what it is that you want. I have already pointed out that the empirical evidence is mixed. That doesn’t seem to satisfy you, but it’s unclear what it is that you’re looking for.
If a person lands on one side or the other of a disputed literature, and is confident in their conclusion despite not knowing what the other side thinks, then it simply isn’t the available evidence that is driving their confidence in their beliefs. It’s something else. There are extremely smart, knowledgeable people on both sides of this. That’s not always the case in a highly disputed literature, but it is the case here.
This logic doesn’t necessarily follow.
I’m not trying to be snarky here, but it’s explained in “Econ 101” why your logic here does not have to obtain. You’re making the assumption that additional employees have the same marginal benefit to the firm, which is not a safe assumption even if you hire your workers from a homogeneous clone army.
Not necessarily, no.
It would depend on the cost structure of your firm. A firm definitely wouldn’t want to pay the same high cost workers if there were cheaper workers available (who could somehow produce the same value of output), but even if the firm “fired” its entire higher-cost workforce and rehired similarly qualified people at lower cost, it is plausible that they’d rehire more people than they had previously. It’s actually more than plausible, rather closer to inevitable, if they’re dealing with diminishing returns on their own production, and an extremely elastic labor supply. It would be more profitable for them to hire more people, rather than maintain their previous smaller workforce. These conditions would also very likely drop the final price of the good, making things cheaper for the people who needed that good.
Not every story can be right. This story could be wrong, as I’ve already said repeatedly. But the advantage of a model is that the consistency is strictly enforced. Most people who advocate a favored idea can and will change their assumptions on the fly, in order to preserve their favored conclusion. I’m sorry to say that this tendency is especially bad in the empirical research. But there it is.
This paragraph is full of so many asterisks that it looks like an extremely cheap digital fireworks show. “Whatever you can convince someone else to pay”? Go ahead, try to negotiate your salary for an entry-level minimum wage job, see how far you get. “It reflects the price point”? In a completely idealized system, yes, but the labor market looks absolutely nothing like that idealized system you learned in econ 101. “Meets the opportunity cost of those willing to supply it”? Marx is rolling in his grave right now, mate. Yeesh.
I don’t think anyone is saying that.