opebo was right about a $15/hour minimum wage
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  opebo was right about a $15/hour minimum wage
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Author Topic: opebo was right about a $15/hour minimum wage  (Read 6494 times)
AggregateDemand
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« Reply #25 on: September 28, 2014, 03:34:22 PM »

I was refuting AD's preposterous claim and accompanying graph that the current minimum wage has led to unemployment. Raising the wage to a reasonable extent would almost certainly decrease churn, but also stimulate demand to a sufficient degree that unemployment would remain negligible for the lowest paying jobs. It's important to remember that low wage earners are also customers at supermarkets and fast food shacks. McDonalds would see an enormous rise in demand if poors could afford to eat there more often.

The economics of price floors are not absurd nor politically-motivated. Installing a price floor and then arguing that price-floor economics don't apply is absurd and political.

Furthermore, frictional unemployment is not a macroeconomic problem. On the contrary, the valid underlying assumption is that people leave their job because they have something better or they want something better. Job-lock is the macroeconomic problem, which is something Democrats cited to justify public options, universal care, or regulatory-definition for health insurance policies.
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Gustaf
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« Reply #26 on: September 28, 2014, 06:22:02 PM »


I have known economics long enough to know the futility of trying to explain it to anyone who isn't interested in learning. And most people here aren't. This is a thread started by BRTD, referencing Opebo and based on an Upworthy video. What is the point of engaging with it?
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politicus
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« Reply #27 on: September 28, 2014, 06:23:45 PM »
« Edited: September 28, 2014, 06:45:30 PM by politicus »


I have known economics long enough to know the futility of trying to explain it to anyone who isn't interested in learning. And most people here aren't. This is a thread started by BRTD, referencing Opebo and based on an Upworthy video. What is the point of engaging with it?

Nothing, but why comment if you think its pointless?
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Gustaf
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« Reply #28 on: September 28, 2014, 06:29:14 PM »


I have known economics long enough to know the futility of trying to explain it to anyone who isn't interested in learning. And most people here aren't. This is a thread started by BRTD, referencing Opebo and based on an Upworthy video. What is the point of engaging with it?

Nothing, but why comment if you think its piointless?

Because people should be made aware that they are wrong. Otherwise innocent third parties stumbling upon the thread might think that this is a reasoned discussion based on knowledge or something like that. Tongue

I don't have the time or energy to fight every fruitless battle that falls in my path. I do one every know and then and usually not on economics.
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DC Al Fine
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« Reply #29 on: September 28, 2014, 07:49:48 PM »

Something else I noticed. Reich says that the 1968 minimum wage adjusted for inflation would be "well above $10/hr", but a quick google shows that the real minimum wage peaked at just over $10 in '68. Where is he getting that data from?
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Starbucks Union Thug HokeyPuck
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« Reply #30 on: September 28, 2014, 10:49:33 PM »


Why?  No mention yet of how hot and sexy min. wage babes are. 

More on point, those who have mentioned the low-skill turnstyle are absolutely right.  These places churn and burn because the low wages and serfish atmosphere create toxicity in the workplace.  Not to mention a McSlave can be fired for pretty much any reason their equally miserable boss decides.  Stable people with stable income pump stable spending money back into the economy.  The world is complicated, but some things just make sense.





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Deus Naturae
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« Reply #31 on: September 28, 2014, 11:16:41 PM »


Why?  No mention yet of how hot and sexy min. wage babes are. 

More on point, those who have mentioned the low-skill turnstyle are absolutely right.  These places churn and burn because the low wages and serfish atmosphere create toxicity in the workplace.  Not to mention a McSlave can be fired for pretty much any reason their equally miserable boss decides.  Stable people with stable income pump stable spending money back into the economy.  The world is complicated, but some things just make sense.
You're ignoring the arguments that Nix has made throughout this thread. Even assuming that a minimum increase would improve "the economy" by stimulating demand, that still doesn't refute the argument that such an increase would hurt lower-skilled workers by making them less/unemployable.
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AggregateDemand
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« Reply #32 on: September 28, 2014, 11:37:00 PM »

Something else I noticed. Reich says that the 1968 minimum wage adjusted for inflation would be "well above $10/hr", but a quick google shows that the real minimum wage peaked at just over $10 in '68. Where is he getting that data from?

I can only speculate that he's making some sort of adjustment for worker productivity. The % poverty numbers don't support his claim.
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Starbucks Union Thug HokeyPuck
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« Reply #33 on: September 29, 2014, 12:07:56 AM »


Why?  No mention yet of how hot and sexy min. wage babes are. 

More on point, those who have mentioned the low-skill turnstyle are absolutely right.  These places churn and burn because the low wages and serfish atmosphere create toxicity in the workplace.  Not to mention a McSlave can be fired for pretty much any reason their equally miserable boss decides.  Stable people with stable income pump stable spending money back into the economy.  The world is complicated, but some things just make sense.
You're ignoring the arguments that Nix has made throughout this thread. Even assuming that a minimum increase would improve "the economy" by stimulating demand, that still doesn't refute the argument that such an increase would hurt lower-skilled workers by making them less/unemployable.

How would they be less employable if no employer has any choice BUT to pay them more?  What, do you think McD's is going to sit there with their arms folded sternly over the chest as literally no one flips the patties?  Minimum wage laws are partially there for that very reason: oh, you think paying your employees that much would be bad for the bottom line?  Well, too bad, Moneybags, then fire everyone and see where business goes.  Do you think McDonald's hires even ONE more person than needed to run the restaurant?  McDonald's hires the people they need and then the sign comes down.  (Well, at a place like McD the turnover is constant, but we're just using them as an example here) If they gave a crap about what their employees make, we wouldn't have to force them to pay their employees more!
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King
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« Reply #34 on: September 29, 2014, 12:57:32 AM »

guyiz if in intrest rates so gud y not 100% intrust?
if lo taxes so gud y not 0% taxes?
if police so gud y not make evry1 police?

i skool u hehe
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DC Al Fine
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« Reply #35 on: September 29, 2014, 04:55:47 AM »


Why?  No mention yet of how hot and sexy min. wage babes are. 

More on point, those who have mentioned the low-skill turnstyle are absolutely right.  These places churn and burn because the low wages and serfish atmosphere create toxicity in the workplace.  Not to mention a McSlave can be fired for pretty much any reason their equally miserable boss decides.  Stable people with stable income pump stable spending money back into the economy.  The world is complicated, but some things just make sense.
You're ignoring the arguments that Nix has made throughout this thread. Even assuming that a minimum increase would improve "the economy" by stimulating demand, that still doesn't refute the argument that such an increase would hurt lower-skilled workers by making them less/unemployable.

How would they be less employable if no employer has any choice BUT to pay them more?  What, do you think McD's is going to sit there with their arms folded sternly over the chest as literally no one flips the patties?  Minimum wage laws are partially there for that very reason: oh, you think paying your employees that much would be bad for the bottom line?  Well, too bad, Moneybags, then fire everyone and see where business goes.  Do you think McDonald's hires even ONE more person than needed to run the restaurant?  McDonald's hires the people they need and then the sign comes down.  (Well, at a place like McD the turnover is constant, but we're just using them as an example here) If they gave a crap about what their employees make, we wouldn't have to force them to pay their employees more!

http://en.wikipedia.org/wiki/Outsourcing

http://en.wikipedia.org/wiki/Automation

Your argument assumes that low wage employers' only option is local labour. The grocery store can switch from 8 cashiers and 2 machines to 2 cashiers and 8 machines you know. High minimum wages are a poor policy to create a minimum standard of living, because large chunks of the American public just aren't worth $15/hr. There are better ways to help the poor like guaranteed incomes.
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memphis
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« Reply #36 on: September 29, 2014, 09:40:52 AM »
« Edited: September 29, 2014, 09:45:23 AM by memphis »

I was refuting AD's preposterous claim and accompanying graph that the current minimum wage has led to unemployment. Raising the wage to a reasonable extent would almost certainly decrease churn, but also stimulate demand to a sufficient degree that unemployment would remain negligible for the lowest paying jobs. It's important to remember that low wage earners are also customers at supermarkets and fast food shacks. McDonalds would see an enormous rise in demand if poors could afford to eat there more often.

I partially agree with you - and, more importantly, so does the CEO of McDonald's, which arguably stands to gain more than almost anyone else as a result of the multiplier effect.

However, the multiplier effect won't help anyone who simply isn't productive enough to create more value for his or her employer than the minimum wage + employer payroll taxes + fringe costs. Unless you believe that every single worker in the country will produce at above the level of the new minimum wage, you must concede that raising the minimum wage makes some people unemployable, absent other incentives.

Also, even if the multiplier effect results in a net benefit for society, it doesn't follow that it produces a net benefit when you consider only the poor.  If you support the minimum wage based on the argument that it reduces poverty - a claim that Reich's video makes - this is problematic.
I don't have to concede anything. Short of yeoman farmer fantasies, individual workers don't create monetary value all by themselves in any measurable way. They work as part of a group. How much "value" does the fry cook at McDonald's add? There's no real way to answer that question precisely because the value of his efforts are mixed in with the value of every other worker to such a severe degree that it cannot be teased out.
Yes, owners want the best people possible, no matter what the prevailing wage is, but jobs don't just vanish into thin air if workers are mediocre because the jobs exist because of consumer demand. Hotels aren't going to eliminate half the housekeeping jobs because wages increase. The beds still must get made, and the hotel owner will just have to accept it. The Moderate Hero shenanigans you're pulling are completely at odds with reality.
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RI
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« Reply #37 on: September 29, 2014, 10:36:32 AM »

Jesus Christ this thread
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memphis
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« Reply #38 on: September 29, 2014, 11:29:14 AM »

How exactly would you outsource or automate maid service at a hotel? Do you think that one superstar maid who "deserves" a living wage can service every room at the local Hilton? Or do you propose that hotel patrons will simply accept soiled sheets? Are you going to fry potatoes remotely from India? Your ideas, straight university orthodoxy though they may be, bear no relationship to reality. And you see this constantly on the Atlas Forum, where most posters have a lot of classroom education but very little experience with the outside world. Any suggestion that runs counter to what they heard from the man behind the podium, whether it was in Wowyns Studies 101 or Econ 101 yields an endless waterfall of "this thread gives me cancer" and gifs of middle aged men smoking cigarettes. Get over your cognitive dissonance already.
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Snowstalker Mk. II
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« Reply #39 on: September 29, 2014, 11:43:03 AM »

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ag
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« Reply #40 on: September 29, 2014, 12:14:58 PM »


Oh, yeah, Soviet Russia did it. It did set workers' incomes at just above starving and prohibited strikes under the penalty of death.
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King
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« Reply #41 on: September 29, 2014, 12:31:07 PM »

The point is we need to offer the people SOMETHING because more of these jobs are going to disappear than appear in the private sector over the long run no matter how pro-business the policies can be. They are unfeasible on the margins, which means no tax breaks to business can make them economical.

In the long run, it will be good for us but short term livelihoods are always hurt in transition. We recovered our GDP loss from the 2008 crash by 2010 but still haven't recovered our family income and employment loss.

The minimum wage is a good way to make sure people can find a way to make good money when the bottom falls out. I fully support it but can see why some don't, but inaction has a dire consequence. At the very least, we need a plan involving free education for these people to get moving up in some way.

The retail crash is coming and only the government can do something positive to save it.
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AggregateDemand
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« Reply #42 on: September 29, 2014, 12:39:20 PM »

How exactly would you outsource or automate maid service at a hotel? Do you think that one superstar maid who "deserves" a living wage can service every room at the local Hilton? Or do you propose that hotel patrons will simply accept soiled sheets? Are you going to fry potatoes remotely from India? Your ideas, straight university orthodoxy though they may be, bear no relationship to reality. And you see this constantly on the Atlas Forum, where most posters have a lot of classroom education but very little experience with the outside world. Any suggestion that runs counter to what they heard from the man behind the podium, whether it was in Wowyns Studies 101 or Econ 101 yields an endless waterfall of "this thread gives me cancer" and gifs of middle aged men smoking cigarettes. Get over your cognitive dissonance already.

The nature of the product and its intended demographic changes based upon input costs. If the cost of labor rises, companies may ultimately choose to offer a more upscale product at lower volumes with higher margins. Less labor would be required. Dining at restaurants or staying at hotels could become an activity for the upper middle class only or perhaps the current trend will continue, and the products on offer will descend further towards Soviet-quality.

McDonald's isn't worried because the CEO apparently thinks that single-store order will rise enough to offset the cost of labor. Perhaps, McDonald's economies of scale will increase their competitive advantage over smaller chains and smaller restaurants if labor prices rise.

As DC Al Fine has pointed out, there are much better options. You should stop living in the 1960s.
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AggregateDemand
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« Reply #43 on: September 29, 2014, 01:29:36 PM »

The point is we need to offer the people SOMETHING because more of these jobs are going to disappear than appear in the private sector over the long run no matter how pro-business the policies can be. They are unfeasible on the margins, which means no tax breaks to business can make them economical.

In the long run, it will be good for us but short term livelihoods are always hurt in transition. We recovered our GDP loss from the 2008 crash by 2010 but still haven't recovered our family income and employment loss.

The minimum wage is a good way to make sure people can find a way to make good money when the bottom falls out. I fully support it but can see why some don't, but inaction has a dire consequence. At the very least, we need a plan involving free education for these people to get moving up in some way.

The retail crash is coming and only the government can do something positive to save it.

Automation and offshoring are heavily subsidized by the US tax burden and US regulatory burden (min wage, healthcare, etc). Regulatory reform could easily create more jobs than we have people to fill them. We could import more workers and/or export the jobs we couldn't fill. Consumer demand would surge with higher GDP and higher labor force participation. Strong USD deflates the price of imported goods and commodities, while suppressing the dollar value of the trade deficit. Unlike the dawn of the 21st century, suppressing tax/regulatory burden prevents the reckless outsourcing of labor as the USD rises against other currencies.

Min wage is a tool to prevent businesses from dumping their labor productivity costs on the public. We don't really have that problem, atm.

Min wage as a price-floor is politically-motivated brinksmanship, and a lazy solution for pols who'd rather shift more costs onto America's youth rather than unraveling the inexplicable things we've done to US workers. If min wage is raised to $10, it will have to accompany a comprehensive overhaul of the US tax code, including the addition of some sort of universal payment or refundable tax credit.
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King
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« Reply #44 on: September 29, 2014, 01:42:21 PM »

That's still just a temporary band aid. The jobs will stay here for 10 years before disappearing instead of going to China and disappearing from there in 10 years.
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All Along The Watchtower
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« Reply #45 on: September 29, 2014, 02:56:14 PM »

And here I thought it was the Right which was reflexively anti-intellectual, dismissive of whole fields of study, with contempt toward the "Ivory Tower" or whatever dumb epithet people have for it.

Not saying I disagree with the substance of what memphis is saying, though.
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AggregateDemand
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« Reply #46 on: September 29, 2014, 03:03:33 PM »
« Edited: September 29, 2014, 03:06:39 PM by AggregateDemand »

That's still just a temporary band aid. The jobs will stay here for 10 years before disappearing instead of going to China and disappearing from there in 10 years.

Global labor market is not a black hole for American workers. The long term trend is labor market equilibrium via rising wages in foreign countries. We're not prolonging the inevitable decline, we're accelerating the inevitable equilibrium, which will stop the net offshoring of American jobs.
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Gustaf
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« Reply #47 on: September 29, 2014, 03:49:14 PM »

Memphis feels threatened by groups like women and college students. Pretty classic white Southern male that way.

I especially like the idea that the world he inhabits is somehow more real than that of the educated. In reality, the difference between educated and non-educated isn't that the former somehow don't live real lives. They just, you know, got an education.
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Snowstalker Mk. II
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« Reply #48 on: September 29, 2014, 05:14:08 PM »


Oh, yeah, Soviet Russia did it. It did set workers' incomes at just above starving and prohibited strikes under the penalty of death.

The Soviet Union probably ceased to be a net progressive force fairly soon after Lenin's death, but I'm sure you understand the context of the times. Literally the entire world was waging war against a politically unstable and primarily agrarian state which had a clear choice between rapid industrialization and total collapse. And of course, even accounting for the USSR's habit of book-cooking, living standards markedly increased from the Tsarist era.
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ag
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« Reply #49 on: September 29, 2014, 10:01:05 PM »


Oh, yeah, Soviet Russia did it. It did set workers' incomes at just above starving and prohibited strikes under the penalty of death.

The Soviet Union probably ceased to be a net progressive force fairly soon after Lenin's death,

More like 20 minutes after the Bolshevik coup. Starvation, genocide, wholesale executions, concentration camps, repressing workers and peasants rights, etc. where all Lenin's favorites.
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