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Around the Internet => Mustachianism Around the Web => Topic started by: PoppyOC on June 28, 2017, 11:28:54 AM

Title: Thoughts on Minimum Wage?
Post by: PoppyOC on June 28, 2017, 11:28:54 AM
Most of us are not dependent on minimum wage in MMM, but I was curious to see if anyone in the community had any thoughts on the minimum wage increase pros and cons that has been in the news lately.  I feel that mustachians tend to feel a social responsibility that factors into our opinions, which I like, but at the same time many of us are not in the demographic where minimum wage positions are our only job prospects, making us potentially out of touch.
Title: Re: Thoughts on Minimum Wage?
Post by: dividendman on June 28, 2017, 01:32:57 PM
I think it's a bad idea for many of the reasons that are talked about (results in job losses, creates artificial behavior in markets, etc.).

I think that having Universal Basic Income (UBI) and eliminating the minimum wage would result in a more efficient use of human resources.

I think that without UBI a minimum wage is a necessary evil to avoid (further) worker exploitation.
Title: Re: Thoughts on Minimum Wage?
Post by: Ocinfo on June 28, 2017, 01:55:07 PM
It needs to be raised but to nowhere near the $15 range that is commonly pushed. It just isn't possible to raise the minimum to a "living" wage. Whatever it is raised to, hopefully they index it to inflation so the debate doesn't go on and on.

The real issue is that people get stuck in low wage jobs without enough savings buffer to get training to move up. This is a personal and societal issue that needs addressed but paying people significantly more money to work as a cashier at Chipotle isn't the answer.


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Title: Re: Thoughts on Minimum Wage?
Post by: omachi on June 28, 2017, 02:54:35 PM
I've thought a bit on the topic but I'm not sure there are easy answers. It feels to me like there's a short term period where things are better, followed by an increased drive to automate minimum wage jobs out of existence. I think we need something different.

It's clear that plenty of large companies could pay their employees a better wage. McDonalds employs 375,000. For the sake of argument, let's assume they're all full time workers making minimum wage. They aren't, but that's the worst possible case in this scenario. For a couple days yet, that's $8.75 at the federal level. Some states are higher, but again, let's go worst case. At full time, they'd earn roughly 150% of the poverty line for a household of one. Let's say we're happy with a wage of 200% of the poverty level full time, about $24k. That would require a bump to $11.60 per hour. That's a raise of $2.85. Under our assumptions that all employees are full time and minimum wage, that's a cost of almost $6k per employee, or $2.2B total.

Thing is, McDonalds made about $12.5k net profit per employee in 2016, about $4.7B total. Worst case is profits aren't quite halved. And since many of those workers are part time and they aren't all sitting exactly at the minimum wage right now, the real impact would be less than that. That's a bunch of pissed off investors, but at the end of the day it's also more money in the hands of consumers, more tax revenue, and fewer subsidies to give out. Large companies have some wiggle room to pay more and it would be better for everybody that isn't a shareholder.

But large public companies in this country are trying to maximize profit for their shareholders. For the large companies that would see significant impacts from higher minimum wages, that's a target for them to reduce. For companies like McDonalds, that may mean ordering from kiosks or an app instead of from a worker at the counter. CaliBurger is investing in a robot to flip burgers. People will be automated out of jobs when they get expensive.

So maybe increasing the minimum wage means that the per employee wage goes up but the number of employees goes down, so profits remain stable. Is that helpful? It seems to make some people slightly better off while others lose entirely. There's not likely to ever be a law stating you can't automate work, so there's no protection that way.

But does that future come eventually anyway, even without raising the minimum wage? At some point it is simply cheaper to have a couple employees to maintain some computers than to worry about a larger staff. Raising the minimum wage isn't going to prevent that. Hence, something else needs to happen, possibly in addition rising wages.
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on June 28, 2017, 03:37:45 PM
I guess, to put it succinctly, the law of supply and demand applies just as strongly to employment as it does to anything else, and those who work to subvert it do so at their own peril.  In other words, if you raise the price of something (for example, an employee who mops floors at a fast food joint), you get fewer buyers (people who will hire floor moppers).

One objection is this: you're transferring wealth from one person/group to another without receiving any benefit in exchange.  Pretty much any time you do that, you lose economic value.  Using static analysis (i.e. assuming the business doesn't adapt), the employee gains, but some combination of customers, other employees, or investors lose out.  It's a zero-sum situation.  At best.

A second major objection is that it removes a couple rungs from the ladder to success.  It makes it harder for people with fewer skills and less work experience to get a job.  At $15/hour, that floor-mopping job is going to attract not just the teenagers looking for a first job, but also college students, retirees looking for some side income, and other folks who would not have applied if the job paid $7.25/hour.  Out of all those applicants, the teenager is probably going to lose out.

Here's a third objection:  it creates an even greater incentive for under-the-table jobs.  That means lost tax revenue, less safe working conditions, etc.

And one final objection: it removes an incentive to climb the economic ladder.  If I can only make $15k/year mopping floors, I'm more likely to invest the time/money to learn a trade that will pay me $35k/year.  On the other hand, if I can make $30k/year mopping floors, trade school becomes a lot less enticing.

But does that future come eventually anyway, even without raising the minimum wage? At some point it is simply cheaper to have a couple employees to maintain some computers than to worry about a larger staff. Raising the minimum wage isn't going to prevent that. Hence, something else needs to happen, possibly in addition rising wages.
I think you're on to something there--raising the minimum wage provides a tremendous incentive for companies to automate jobs.  Yes, I think that automation is inevitable, but hiking the minimum wage accelerates that transition, rather than allowing it to happen more gradually and naturally.  McDonald's isn't the first in the food service industry to do this.  I've seen plenty of casual dining places with tablets at each table where customers can review their bill, pick a tip, and swipe their card.  Voila, you can now let 30% (or something like that) of your waitstaff go, because they can each wait more tables.
Title: Re: Thoughts on Minimum Wage?
Post by: WhiteTrashCash on June 29, 2017, 05:22:12 AM
Having tried to live on minimum wage, I am sympathetic to the idea of raising it to a level that would meet people's basic needs. Currently, in the USA, we all have to pay extra in taxes for welfare programs to make up the difference for people on poverty wages, while the Waltons rake in billions in profits. I don't like subsidizing other people's retail businesses that way.
Title: Re: Thoughts on Minimum Wage?
Post by: A Definite Beta Guy on June 29, 2017, 07:46:34 AM
I would support expansion of EITC and other welfare programs to cover the gap between what unskilled labor is worth and the cost of living.

This, I think the minimum wage is a bad alternative.
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on June 29, 2017, 09:43:55 AM
I would support expansion of EITC and other welfare programs to cover the gap between what unskilled labor is worth and the cost of living.

This, I think the minimum wage is a bad alternative.
I wasn't very well acquainted with EITC, so I went off and did some research.  It seems like both programs have the same effect from the worker's point of view, but MW puts the burden directly on the employer (and customers, investors, other employees), while EITC puts the burden on taxpayers in general.  Why do you feel like EITC is the better of the two?
Title: Re: Thoughts on Minimum Wage?
Post by: fattest_foot on June 29, 2017, 10:01:15 AM
I think you're on to something there--raising the minimum wage provides a tremendous incentive for companies to automate jobs.  Yes, I think that automation is inevitable, but hiking the minimum wage accelerates that transition, rather than allowing it to happen more gradually and naturally.  McDonald's isn't the first in the food service industry to do this.  I've seen plenty of casual dining places with tablets at each table where customers can review their bill, pick a tip, and swipe their card.  Voila, you can now let 30% (or something like that) of your waitstaff go, because they can each wait more tables.

Which is great for a large multinational corporation that can afford to automate.

What about the thousands of smaller businesses whose margins are slim enough that they can't afford a 150% increase in labor expenses? They either cut the hours of their employees, or outright eliminate positions. That's assuming they can even remain in business.

That's exactly what is happening in Seattle. Yeah, McDonald's is rolling out kiosks everywhere this year, but for the smaller players, they're much more limited (at least until kiosks come down in price and can be rolled out to small businesses).
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on June 29, 2017, 10:12:33 AM
Yeah, LA Times had an article (http://www.latimes.com/business/la-fi-seattle-minimum-wage-20170626-story.html) a while back about a study showing that hours and jobs had dropped off since Seattle passed their $15/hour minimum wage.

I'm curious about how many people are actually working in minimum wage jobs, and what the statistical wage distribution in the US looks like.  The CBO has a report on the topic (https://www.cbo.gov/sites/default/files/112th-congress-2011-2012/reports/02-16-wagedispersion.pdf), but it only breaks it down to 10th/50th/90th percentile. 

EDIT: Looks like NYC is also feeling the effects (http://nypost.com/2017/06/22/restaurant-workers-feeling-the-pinch-in-new-york/).
Title: Re: Thoughts on Minimum Wage?
Post by: omachi on June 29, 2017, 12:02:16 PM
One objection is this: you're transferring wealth from one person/group to another without receiving any benefit in exchange.  Pretty much any time you do that, you lose economic value.  Using static analysis (i.e. assuming the business doesn't adapt), the employee gains, but some combination of customers, other employees, or investors lose out.  It's a zero-sum situation.  At best.

I don't think that's a completely valid objection because there is a benefit in keeping money/wealth circulating. Putting more money in the hands of people that are going to spend it and less in the hands of those that won't spend it means there's more spending being done on the same amount of money supply. That's more taxes to collect, more services provided, and more goods needed. The people hoarding wealth are not circulating it. The benefit of the transfer is circulation without having to inflate the money supply.
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on June 29, 2017, 03:18:41 PM
One objection is this: you're transferring wealth from one person/group to another without receiving any benefit in exchange.  Pretty much any time you do that, you lose economic value.  Using static analysis (i.e. assuming the business doesn't adapt), the employee gains, but some combination of customers, other employees, or investors lose out.  It's a zero-sum situation.  At best.

I don't think that's a completely valid objection because there is a benefit in keeping money/wealth circulating. Putting more money in the hands of people that are going to spend it and less in the hands of those that won't spend it means there's more spending being done on the same amount of money supply. That's more taxes to collect, more services provided, and more goods needed. The people hoarding wealth are not circulating it. The benefit of the transfer is circulation without having to inflate the money supply.
I've heard that argument made before, but I'm not convinced it holds water, because it assumes that: 1) investors will take the hit, 2) investors won't spend it.  Here's why I have trouble agreeing with it:
1) if profits are down, investors will sell, and the stock price will drop until P/E (or expected P/E) makes more sense.  Also, businesses like to keep their profits high, so they're more likely to cut costs in order to preserve the profits.  Automation is probably the most apparent symptom of that.
2) even if #1 were true, you've just destroyed an awful lot of wealth, and therefore future spending power, by driving the stock price lower.  All those investors now have less wealth that they can spend.
Title: Re: Thoughts on Minimum Wage?
Post by: A Definite Beta Guy on June 30, 2017, 10:44:38 AM
I would support expansion of EITC and other welfare programs to cover the gap between what unskilled labor is worth and the cost of living.

This, I think the minimum wage is a bad alternative.
I wasn't very well acquainted with EITC, so I went off and did some research.  It seems like both programs have the same effect from the worker's point of view, but MW puts the burden directly on the employer (and customers, investors, other employees), while EITC puts the burden on taxpayers in general.  Why do you feel like EITC is the better of the two?

A few reasons. The general reason is that the minimum wage is a direct market intervention and I don't think direct market interventions are ever the best option when there are other, more direct options to accomplish the same objective. If you want to decrease poverty, the best option is sending money to poor people.

Some more specifics:
1. The burden should be on the taxpayers. Businesses do not have an ethical obligation to provide a standard of living. If society decides a minimum standard of living is required, it's up to society to make up the difference (through taxes, generally).
2. The burden should be on taxpayers to make the costs transparent. Politicians prefer to obfuscate costs so no one gets a picture of the real bill. For instance, how much does minimum wage cost you? Kind of tough to tell. Maybe McDonald's would've hired a fry cook at $5/hour, now we're paying $8/hour, but how much of that cost gets passed through, how much is dead-weight loss, how much is coming out of the company pocket, how much more is the employee actually making....all open questions, all obfuscated. EITC, we can quantify that much easier.
3. Minimum wage sets a minimum productivity for any job. Any job that's not worth $X/hour is not going to get done. I expect this to be worse in rural or low-cost areas than, say, NYC or SF.
4. Min Wage will distort employment decisions at the bottom of the pyramid beyond just #3. Ex: I was working $10/hour as a data entry guy, which was  lot better than min wage at the time. Jacking up the min wage makes other jobs look more attractive to me since the min wage is so much higher. This is actually an intended effect, it drives up all wages at the lower tier. However, you probably don't want college kids crowding out less-skilled adults from part-time retail and food industry jobs.



Quote
Putting more money in the hands of people that are going to spend it and less in the hands of those that won't spend it means there's more spending being done on the same amount of money supply.
https://en.wikipedia.org/wiki/Helicopter_money = solution
Title: Re: Thoughts on Minimum Wage?
Post by: omachi on June 30, 2017, 11:03:16 AM
One objection is this: you're transferring wealth from one person/group to another without receiving any benefit in exchange.  Pretty much any time you do that, you lose economic value.  Using static analysis (i.e. assuming the business doesn't adapt), the employee gains, but some combination of customers, other employees, or investors lose out.  It's a zero-sum situation.  At best.

I don't think that's a completely valid objection because there is a benefit in keeping money/wealth circulating. Putting more money in the hands of people that are going to spend it and less in the hands of those that won't spend it means there's more spending being done on the same amount of money supply. That's more taxes to collect, more services provided, and more goods needed. The people hoarding wealth are not circulating it. The benefit of the transfer is circulation without having to inflate the money supply.
I've heard that argument made before, but I'm not convinced it holds water, because it assumes that: 1) investors will take the hit, 2) investors won't spend it.  Here's why I have trouble agreeing with it:
1) if profits are down, investors will sell, and the stock price will drop until P/E (or expected P/E) makes more sense.  Also, businesses like to keep their profits high, so they're more likely to cut costs in order to preserve the profits.  Automation is probably the most apparent symptom of that.
2) even if #1 were true, you've just destroyed an awful lot of wealth, and therefore future spending power, by driving the stock price lower.  All those investors now have less wealth that they can spend.

On point 1, automation is coming anyway. The question should be whether advancing it's adoption causes more problems than exploiting the time until it arrives. Our huge push to STEM jobs is pretty much just accelerating the coming wave of automation anyway. Maybe we see 4 years of relief for the minimum wage worker rather than 7 years of the status quo. We could then compare the pros and cons. But I don't have a crystal ball.

On point 2, I'm not convinced it would be catastrophic, but I bet it'd make a mess. Still, I think there's a point where investors just have to accept the fact that they're going to take a hit one way or another. Without money moving, there isn't an economy. Without people being paid a livable wage, there is no room for people to buy anything more than bare necessities. Without all this commerce, investors aren't making more money.

We've done an amazing job masking these problems with debt, but that necessarily catches up to people if inflation and wage growth aren't enough to keep them solvent. As the whole mortgage crisis showed, debt can come undone in a hurry. Tons of wealth just disappeared. Then we (as the government) stepped in to stabilize all those bad investments rather than let more wealth just disappear. Probably the right decision in terms of stability, but also probably not in terms of fixing a system where growth can't happen because debt is all the people who are willing to spend can get their hands on, rather than money.

Further, the wealthy investors who hold wealth don't spend it. Look at what all of us here are trying to accomplish, a stable pile of wealth that produces returns we can live on without touching the principal. Maybe 30, 40, 50 years down the line we'll pass it off to people or institutions that will spend it once we're dead. But we're not going to touch it. Those wealthier than us are doing the same and then some. There are plenty of multi-millionaires that feel they need another several million before they can stop earning. You don't get rich by spending money.

I'm still not thinking that a minimum wage increase is the best way to perform that transfer, in no small part because it makes an incentive of getting rid of employees in order to keep profits steady. I'd much rather see a UBI implemented and a bunch of reforms to assistance, taxes, and wages implemented in order to pay for it.
Title: Re: Thoughts on Minimum Wage?
Post by: Jrr85 on June 30, 2017, 11:41:39 AM
I would support expansion of EITC and other welfare programs to cover the gap between what unskilled labor is worth and the cost of living.

This, I think the minimum wage is a bad alternative.
I wasn't very well acquainted with EITC, so I went off and did some research.  It seems like both programs have the same effect from the worker's point of view, but MW puts the burden directly on the employer (and customers, investors, other employees), while EITC puts the burden on taxpayers in general.  Why do you feel like EITC is the better of the two?

A huge, huge difference is that the EITC doesn't harm low productivity workers nor workers providing goods/services with a particularly elastic demand curve. 

For low productivity workers, working is often the best avenue for picking up new skills and increasing their productivity.  Telling workers that can generate $12 an hour in value  that they can't work for pay anymore until they figure out how to generate $15 worth of value is cruel.  A lot of low productivity workers are the exact type of people who learn much more effectively by doing work than they do in educational settings. 

Title: Re: Thoughts on Minimum Wage?
Post by: dividendman on June 30, 2017, 11:48:00 AM
I would support expansion of EITC and other welfare programs to cover the gap between what unskilled labor is worth and the cost of living.

This, I think the minimum wage is a bad alternative.
I wasn't very well acquainted with EITC, so I went off and did some research.  It seems like both programs have the same effect from the worker's point of view, but MW puts the burden directly on the employer (and customers, investors, other employees), while EITC puts the burden on taxpayers in general.  Why do you feel like EITC is the better of the two?

A huge, huge difference is that the EITC doesn't harm low productivity workers nor workers providing goods/services with a particularly elastic demand curve. 

For low productivity workers, working is often the best avenue for picking up new skills and increasing their productivity.  Telling workers that can generate $12 an hour in value  that they can't work for pay anymore until they figure out how to generate $15 worth of value is cruel.  A lot of low productivity workers are the exact type of people who learn much more effectively by doing work than they do in educational settings.

I think having UBI and also no minimum wage also accomplishes this (i.e. people and jobs would be available for whatever value exists, and someone might do it since their basic needs are already met).
Title: Re: Thoughts on Minimum Wage?
Post by: A Definite Beta Guy on June 30, 2017, 12:05:43 PM
I would support expansion of EITC and other welfare programs to cover the gap between what unskilled labor is worth and the cost of living.

This, I think the minimum wage is a bad alternative.
I wasn't very well acquainted with EITC, so I went off and did some research.  It seems like both programs have the same effect from the worker's point of view, but MW puts the burden directly on the employer (and customers, investors, other employees), while EITC puts the burden on taxpayers in general.  Why do you feel like EITC is the better of the two?

A huge, huge difference is that the EITC doesn't harm low productivity workers nor workers providing goods/services with a particularly elastic demand curve. 

For low productivity workers, working is often the best avenue for picking up new skills and increasing their productivity.  Telling workers that can generate $12 an hour in value  that they can't work for pay anymore until they figure out how to generate $15 worth of value is cruel.  A lot of low productivity workers are the exact type of people who learn much more effectively by doing work than they do in educational settings.

I think having UBI and also no minimum wage also accomplishes this (i.e. people and jobs would be available for whatever value exists, and someone might do it since their basic needs are already met).

True, which is why a lot of libertarians support the UBI option.
http://marginalrevolution.com/marginalrevolution/2017/06/libertarian-universal-basic-income.html
Title: Re: Thoughts on Minimum Wage?
Post by: Jrr85 on June 30, 2017, 12:21:42 PM
I would support expansion of EITC and other welfare programs to cover the gap between what unskilled labor is worth and the cost of living.

This, I think the minimum wage is a bad alternative.
I wasn't very well acquainted with EITC, so I went off and did some research.  It seems like both programs have the same effect from the worker's point of view, but MW puts the burden directly on the employer (and customers, investors, other employees), while EITC puts the burden on taxpayers in general.  Why do you feel like EITC is the better of the two?

A huge, huge difference is that the EITC doesn't harm low productivity workers nor workers providing goods/services with a particularly elastic demand curve. 

For low productivity workers, working is often the best avenue for picking up new skills and increasing their productivity.  Telling workers that can generate $12 an hour in value  that they can't work for pay anymore until they figure out how to generate $15 worth of value is cruel.  A lot of low productivity workers are the exact type of people who learn much more effectively by doing work than they do in educational settings.

I think having UBI and also no minimum wage also accomplishes this (i.e. people and jobs would be available for whatever value exists, and someone might do it since their basic needs are already met).

To be clear though, there is a big difference between UBI, which, as the name implies, is "universal" and the EITC or other forms of wage supports, which encourages work. 
Title: Re: Thoughts on Minimum Wage?
Post by: eve steps on July 05, 2017, 05:14:43 AM
I think that without UBI a minimum wage is a necessary evil to avoid (further) worker exploitation.
Title: Re: Thoughts on Minimum Wage?
Post by: Kaydedid on July 06, 2017, 12:32:52 PM
Instead of just throwing more money at people, we should also talk about making it possible for most of the population to live comfortably on less.  For example, modest, affordable housing can be hard to come by in many places.  60 years ago, boarding houses were common and much cheaper than an apartment.  Now many places have legislated against these, usually because they put poor people in middle/upper-class neighborhoods.  Aldi's doing some good things on the food front, but there's still lots of room to grow. How about stores with ugly/soon-to-expire foods, or downtown auctions of grade B foods from local farmers ?  Changing from a car-centered to a people-centered city plan, as MMM has pointed out, would save us all a heap of cash and time.  Childcare and healthcare are 2 more huge issues, although Medicaid has done a lot on the latter.  Throwing more money at this will help short-term, but will only increase systematic inefficiencies in the long run.  (Slightly off topic:  For a good read on the history of the EITC, the defacto replacement for cash welfare, and case studies of recipients I highly reccomend "It's Not Like I'm Poor: How Working Families Make Ends Meet in a Post-Welfare World"). 

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Title: Re: Thoughts on Minimum Wage?
Post by: Cowardly Toaster on July 06, 2017, 12:54:37 PM
It needs to be raised but to nowhere near the $15 range that is commonly pushed. It just isn't possible to raise the minimum to a "living" wage. Whatever it is raised to, hopefully they index it to inflation so the debate doesn't go on and on.

The real issue is that people get stuck in low wage jobs without enough savings buffer to get training to move up. This is a personal and societal issue that needs addressed but paying people significantly more money to work as a cashier at Chipotle isn't the answer.


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But won't we need people to work at Chipotle (or other menial jobs) no matter what? Not everyone can become a tech worker, for economic reasons and the intelligence bell curve.
Title: Re: Thoughts on Minimum Wage?
Post by: acroy on July 06, 2017, 12:57:00 PM
Minimum wage should be abolished. It can only remove opportunities, not create them. It can only reduce freedom and choices by outlawing specific activities.

It has zero, none, zilch upside.
Title: Re: Thoughts on Minimum Wage?
Post by: Watchmaker on July 06, 2017, 01:24:28 PM
Instead of just throwing more money at people, we should also talk about making it possible for most of the population to live comfortably on less.  For example, modest, affordable housing can be hard to come by in many places.  60 years ago, boarding houses were common and much cheaper than an apartment.  Now many places have legislated against these, usually because they put poor people in middle/upper-class neighborhoods.  Aldi's doing some good things on the food front, but there's still lots of room to grow. How about stores with ugly/soon-to-expire foods, or downtown auctions of grade B foods from local farmers ?  Changing from a car-centered to a people-centered city plan, as MMM has pointed out, would save us all a heap of cash and time.  Childcare and healthcare are 2 more huge issues, although Medicaid has done a lot on the latter.  Throwing more money at this will help short-term, but will only increase systematic inefficiencies in the long run.  (Slightly off topic:  For a good read on the history of the EITC, the defacto replacement for cash welfare, and case studies of recipients I highly reccomend "It's Not Like I'm Poor: How Working Families Make Ends Meet in a Post-Welfare World"). 

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This.

If we changed our expectations on what we need to have to be happy, and we provided the infrastructure to "live smaller", the current MW could easily be a living wage.

These means things like smaller homes (boarding/efficiency/cooperative housing), walkable cities, communal resources (shared kitchens, shared tools). 

Ultimately, I still think we'll need UBI as the majority of low paying jobs will disappear, but even then UBI will only work if we recondition people to consume less.  One thing I've been thinking about recently is whether an in-kind form of UBI could work--free housing, clothing, food, and medical care for all.
Title: Thoughts on Minimum Wage?
Post by: Ocinfo on July 06, 2017, 01:30:28 PM
It needs to be raised but to nowhere near the $15 range that is commonly pushed. It just isn't possible to raise the minimum to a "living" wage. Whatever it is raised to, hopefully they index it to inflation so the debate doesn't go on and on.

The real issue is that people get stuck in low wage jobs without enough savings buffer to get training to move up. This is a personal and societal issue that needs addressed but paying people significantly more money to work as a cashier at Chipotle isn't the answer.


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But won't we need people to work at Chipotle (or other menial jobs) no matter what? Not everyone can become a tech worker, for economic reasons and the intelligence bell curve.

No. Many minimum wage jobs are easily automated. Amazon stores will be mostly employee less and a number of restaurants have replaced waiters with people who just drop off your food after you order on an iPad. A robot can pretty easily vacuum and mop a building if it makes economic sense. Even high paying jobs such as law are susceptible. These result in needing some x% less people, between nearly 100% and a few % reduction.

Minimum wage jobs are already being automated and this will accelerate as the minimum wage increases. Employee price is going up and tech prices are going down.

I would rather see some form of universal basic income or additional free trade/tech training to help lift people out of poverty, rather than pay an artificially high wage to do a menial job.

Yes, some people are not cut out for high tech jobs but there are a lot of menial jobs that are worth more to society but aren't as easy to automate. These are the types of positions that people should be moved into. We've been through this before as most people moved from the farm fields to the cities and it's a rough transition. Paying people more to stay in the field just delays the inevitable and in this case might actually pour fuel on the fire.


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Title: Re: Thoughts on Minimum Wage?
Post by: talltexan on July 06, 2017, 02:41:22 PM
If every person whose wage were affected by SKOPOS were to invest the extra earnings, we'd see a one-time lift in asset prices with no accompanying increase in demand for goods and services. P/E multiples would go up. I'm not aware of an empirical study that tests for this, but I have a gut feeling that most of these workers are spending the extra, not investing/saving it.
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on July 06, 2017, 07:02:26 PM
If every person whose wage were affected by SKOPOS were to invest the extra earnings, we'd see a one-time lift in asset prices with no accompanying increase in demand for goods and services. P/E multiples would go up. I'm not aware of an empirical study that tests for this, but I have a gut feeling that most of these workers are spending the extra, not investing/saving it.
At the same time, though, that inflation of P/E would encourage others to sell, which would increase spending.  Of course, a higher minimum wage would drive prices higher, so their buying power wouldn't necessarily be any greater.
Title: Re: Thoughts on Minimum Wage?
Post by: Leisured on July 18, 2017, 09:02:42 AM
I am always amazed at the way Americans express opinions on social matters without bothering to look at the experience of other rich countries. The Australian minimum wage is about A$17 an hour, or about US$13.50 an hour. The Canadian minimum wage is about C$14 an hour, or about US$11. The sky has not fallen in. I accept that forcing wages up should increase unemployment, but the Australian experience is that this is not a serious problem.

I hear that American visitors to Australia complain about the cost of take away food in Australia. The Australian attitude is that if an industry cannot pay its employees properly it should go out of business. In Australia, we are ashamed of working class poverty, even if we cannot do much to solve the problem.

Automation is emerging, and I fully agree that a UBI is the future.
Title: Re: Thoughts on Minimum Wage?
Post by: Jrr85 on July 18, 2017, 11:07:04 AM
I am always amazed at the way Americans express opinions on social matters without bothering to look at the experience of other rich countries. The Australian minimum wage is about A$17 an hour, or about US$13.50 an hour. The Canadian minimum wage is about C$14 an hour, or about US$11. The sky has not fallen in. I accept that forcing wages up should increase unemployment, but the Australian experience is that this is not a serious problem.

I hear that American visitors to Australia complain about the cost of take away food in Australia. The Australian attitude is that if an industry cannot pay its employees properly it should go out of business. In Australia, we are ashamed of working class poverty, even if we cannot do much to solve the problem.

Automation is emerging, and I fully agree that a UBI is the future.

For people fortunate enough to be unaffected by minimum wage other than seeing higher priced take-out food, yeah it's pretty easy to take in stride.  I suspect the people who are not productive enough to merit a job at or above the minimum wage are a little less stoic about the problems that come with being unemployed. 

So I would say in addition to looking at the experience of other rich countries, relatively rich people should also consider the negative impacts, and the intensity of those impacts, on people less fortunate than themselves.   
Title: Re: Thoughts on Minimum Wage?
Post by: omachi on July 18, 2017, 12:44:24 PM
I am always amazed at the way Americans express opinions on social matters without bothering to look at the experience of other rich countries. ...
The Australian attitude is...

That cuts both ways. It isn't that we can't look around, it's that the American attitude is far, far different than that of the attitude elsewhere. Most people not affected by it don't give a crap about working class poverty here. Even many who are affected are in denial. People are far more interested in their immediate profit than making sure people make a living wage. See the post about how badly hurt the investors would be if a company paid a living wage because it would change the P/E ratios. It's almost certainly true, but which is the bigger problem, that people have problems getting by as things are now or that investors have come to expect profits only possible when this is true and would be hurt if that changed? I'm not asking facetiously; there's not agreement on the answer. Welcome to the US.

The response to rising minimum wages here would be to at the very least investigate how to cut the number of workers making that higher wage, because no American boardroom is going to take declining profits lying down. One of the things that has struck me in my travels around the globe is just how stingy America is about profit. As an American, it's downright weird to me to see people who have the sole job of helping people load luggage onto a bus (not the driver, another person at a given stop), to direct traffic out of an alley and across just one junction of a sidewalk, or to just have people on hand to help out in public facing situations that aren't also constantly stocking shelves. I see them and think two things. First, it's nice but I'm used to doing things like handling my luggage myself. Second, these are the first jobs any American company would cut to trim fat and raise profits.

Finally, it helps to remember that many Americans don't think of themselves as poor, but as the temporarily embarrassed rich. They're so certain that they're going to be rich eventually that they'll vote against their own current interests so they won't be held back once they've taken their rightful spot at the top of the pile. Most other countries seem to have a better grasp on class and that mobility between classes isn't all that easy. While it's a tiny percentage of the population that moves between classes in the US, there are enough rags to riches stories here that people don't think it crazy to think they're going to be rich, and to keep things relevant, that minimum wages don't need to move because it won't affect them.
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on July 18, 2017, 02:28:02 PM
Automation is emerging, and I fully agree that a UBI is the future.
Such a concern is not new.  In fact, it's a long and glorious tradition (https://en.wikipedia.org/wiki/Luddite) centuries old.  The truth of the matter is that automation has to date never resulted in widespread, long-term unemployment.
Title: Re: Thoughts on Minimum Wage?
Post by: omachi on July 18, 2017, 04:43:37 PM

Finally, it helps to remember that many Americans don't think of themselves as poor, but as the temporarily embarrassed rich. They're so certain that they're going to be rich eventually that they'll vote against their own current interests so they won't be held back once they've taken their rightful spot at the top of the pile. Most other countries seem to have a better grasp on class and that mobility between classes isn't all that easy. While it's a tiny percentage of the population that moves between classes in the US, there are enough rags to riches stories here that people don't think it crazy to think they're going to be rich, and to keep things relevant, that minimum wages don't need to move because it won't affect them.

If your parents are in the bottom two income brackets, your odds of moving up at least one bracket are over 50%. 
If your parents are in the top two brackets, there's more than a 50% chance you will move down at least one bracket.

This is what the data shows - am I presenting it accurately?  Clearly one is going to have better odds if born into a higher bracket.  It will always be this way (is this something people want to 'fix'?).  The point is that those that are born at the bottom have real opportunities to move up, and if you're born at the top it's not a guarantee that you stay there.

You aren't wrong on the income quintiles obviously, but are those quintiles classes? It's hard to pin down classes in the US, because everybody wants to claim that they're solidly middle class, but I'd argue that income quintiles and classes don't line up all that well. I'm not even sure class and income align, and net worth might be a better indicator. There are certainly high earners that have incredibly low amounts of wealth.

But, let's say income and class go hand in hand for the sake of argument. Quintile boundaries are surprising, at about $17k, $30k, $46k, and $75k for individual earners. One half of all US income is earned by the top quintile of households. Of that, the top 5% of the top quintile take home 40% of the income in that quintile. That's a huge disparity. I wouldn't remotely include all members of that quintile in the same class.

If you count below poverty incomes (about 14th percentile) as lower class and the top 1% (which take 20% of all income, starting at ~$288k in income for an individual) as the upper class, you get about 1 in 12 class upwardly mobile people when applying the income quintile movements proportionally to those populations. You also get a middle class that's about 85% of the population. You can draw different lines for classes and get different results, obviously. I'll grant the ~8.5% my definitions give isn't tiny for upward class mobility, though it's far and away smaller than the 35% the quintile chart would suggest. And most of that is people escaping poverty, not people becoming rich.
Title: Re: Thoughts on Minimum Wage?
Post by: omachi on July 18, 2017, 05:12:14 PM
On further reflection, that graph is also weird, taking family income and relating it to mobility using apparently individual income. So somebody coming from a family that has one worker and brings in median household income and replicates that setup would appear to move up, because median household income is actually in the 4th quintile when considered as an individual income. Likewise, a household with two people working equally to make median household income that produced somebody who made the same amount as one parent would appear to be downwardly mobile, because half median household income is in the 2nd quintile for individual income. So I'm not really sure what sort of mobility that graph manages to measure, since doing the same thing as your parents could indicate moving up or down.
Title: Re: Thoughts on Minimum Wage?
Post by: Kyle Schuant on July 18, 2017, 06:28:52 PM
Australia has twice the minimum wage of the USA, and our economy hasn't collapsed. In fact we have higher workforce participation, a higher median income, and less money spent on social welfare (per capita - US 9.8k, Oz 8.5k). A rising tide floats all boats.

What affects business isn't conditions so much as changing conditions. I mean business goes on even in Damascus and Aleppo and Baghdad and Tripoli where there's a civil war. Business can adapt to all kinds of wages and taxes and regulations and so on, it's when they change quickly that it's an issue, or when they change and then change back again, and so on.

So I would not suggest doubling the minimum wage overnight, obviously that'd destroy jobs. But if you raise it gradually to a decent level you'll find it doesn't do any harm, and in fact does much good.

It works in other countries, and the US is not a unique special snowflake, sorry.
Title: Re: Thoughts on Minimum Wage?
Post by: FINate on July 18, 2017, 10:06:31 PM
Most of us are not dependent on minimum wage in MMM, but I was curious to see if anyone in the community had any thoughts on the minimum wage increase pros and cons that has been in the news lately.  I feel that mustachians tend to feel a social responsibility that factors into our opinions, which I like, but at the same time many of us are not in the demographic where minimum wage positions are our only job prospects, making us potentially out of touch.

The nuance is lost in the rhetoric from both the Left and the Right. Will a higher minimum wage cause mass layoffs? Not necessarily, but it will slow job growth and may result in some job losses. Will it help poor people? In some cases it may. How it all plays out depends on many factors, and the effects will be localized.

In many affluent urban areas the market-clearing price for labor is close to or higher than the proposed increases. In these places very few people will see meaningful pay increases. Will the few that see relatively large increases be better off? Perhaps. However, as an example, in Coastal California it's well established people bid up housing/rent prices such that rents are a function of incomes (http://www.lao.ca.gov/reports/2015/finance/housing-costs/housing-costs.aspx). In these areas any increases in income will likely be a case of robbing Peter (business owners) to pay Paul (landlords).

In many poor areas, especially rural, the market-clearing price for labor is lower than the existing minimum wage, as evidenced by existing high levels of unemployment (https://www.forbes.com/sites/timworstall/2016/04/06/californias-15-minimum-wage-sure-is-going-to-be-painful/#5ef730d35b79). These areas will be harmed the most by the fight for $15...low wage/low skill labor will simply be automated away or relocated.

In the end the results are a mixed bag. Not as terrible as some people imagined, though some localized pain. But also not that helpful, though a handful of people may be better off. I believe it's a wash in the end.
Title: Re: Thoughts on Minimum Wage?
Post by: Kyle Schuant on July 18, 2017, 11:58:58 PM
Again, that's all theory. The evidence from practice is that people are overall better off with a higher minimum wage. More employment, higher median income.


The only way to ignore the evidence is to say America is a Unique Special Snowflake for whom the normal rules don't apply. But I am sceptical of such claims.
Title: Re: Thoughts on Minimum Wage?
Post by: FINate on July 19, 2017, 12:30:41 AM
Again, that's all theory. The evidence from practice is that people are overall better off with a higher minimum wage. More employment, higher median income.


The only way to ignore the evidence is to say America is a Unique Special Snowflake for whom the normal rules don't apply. But I am sceptical of such claims.

I think you have some confirmation bias in your view of employment in Australia: https://www.theguardian.com/business/2017/mar/27/third-of-australian-youth-have-no-job-or-are-underemployed-report-finds

The head of the Brotherhood of St Laurence, Tony Nicholson, said the record rates particularly hurt people who don’t go to university and gain qualifications and skills “to navigate the fast-changing modern economy”.

Doesn't matter what the overall employment rate is as the minimum wage doesn't apply to most of the labor market, those who are skilled and semi-skilled.

Germany (where I lived for a year), and most of the EU have stubbornly high youth unemployment. Minimum wage, along with other "workforce protections" do not come without a cost. Not saying they are necessarily bad, but we have to be aware that economies are dynamic systems, if you push or pull on one part it perturbs things in other areas.

What I posted is what I can tell from reading what economists have to say on this topic.

I cited my sources, now your turn.
Title: Re: Thoughts on Minimum Wage?
Post by: BlueMR2 on July 19, 2017, 05:21:35 AM
Automation is emerging, and I fully agree that a UBI is the future.
Such a concern is not new.  In fact, it's a long and glorious tradition (https://en.wikipedia.org/wiki/Luddite) centuries old.  The truth of the matter is that automation has to date never resulted in widespread, long-term unemployment.

Automation looks different this time though.  Up to this point, we've automated away all the manual labor and people could move on up the scale into jobs creating concepts.  The next wave of automation is replacing our creative thought.  In order to stay relevant we need to move on to the next thing.  However, there doesn't seem to be any further to move...  We may have reached the end of the scale finally.
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on July 19, 2017, 05:42:38 AM
Again, that's all theory. The evidence from practice is that people are overall better off with a higher minimum wage. More employment, higher median income.
What evidence are you talking about?
Title: Re: Thoughts on Minimum Wage?
Post by: A Definite Beta Guy on July 19, 2017, 09:04:59 AM
Again, that's all theory. The evidence from practice is that people are overall better off with a higher minimum wage. More employment, higher median income.
What evidence are you talking about?

The evidence of one data point that agrees with his priors. All the evidence you need.

Germany had no minimum wage in 2013. France had a minimum wage of 9.76 per hour. Germany had 5.4 million jobs below the German implemented minimum wage of something in the 8-euro/hour zone....something like 16% of the German work force.

Sweden, Denmark, Norway, Switzerland, Finland all do not have minimum wages. If you want to implement the "Nordic" model, one of the planks is obviously going to be the complete elimination of all minimum wages, even if you want to argue that these nations have labor unions that set minimum wages by industry.


Though, I agree, the US isn't special: minimum wages are also a bad idea for Canada and Australia and the UK as well.
Title: Re: Thoughts on Minimum Wage?
Post by: Jrr85 on July 19, 2017, 04:08:23 PM

Finally, it helps to remember that many Americans don't think of themselves as poor, but as the temporarily embarrassed rich. They're so certain that they're going to be rich eventually that they'll vote against their own current interests so they won't be held back once they've taken their rightful spot at the top of the pile. Most other countries seem to have a better grasp on class and that mobility between classes isn't all that easy. While it's a tiny percentage of the population that moves between classes in the US, there are enough rags to riches stories here that people don't think it crazy to think they're going to be rich, and to keep things relevant, that minimum wages don't need to move because it won't affect them.

(http://www.msnbc.com/sites/msnbc/files/styles/embedded_image/public/042914-income-mobility_chart2.png?itok=bSWbC58s)

Source: http://www.msnbc.com/msnbc/us-social-mobility-problem (http://www.msnbc.com/msnbc/us-social-mobility-problem)
Article is from 2014 and aims to show incomes are not mobile enough.  The data shows that more than a tiny percentage (over half in fact) of those who's parents are in the lowest income bracket wind up in a higher income bracket themselves.  I'd say that's pretty good.

If your parents are in the bottom two income brackets, your odds of moving up at least one bracket are over 50%. 
If your parents are in the top two brackets, there's more than a 50% chance you will move down at least one bracket.

This is what the data shows - am I presenting it accurately?  Clearly one is going to have better odds if born into a higher bracket.  It will always be this way (is this something people want to 'fix'?).  The point is that those that are born at the bottom have real opportunities to move up, and if you're born at the top it's not a guarantee that you stay there.

It's also worth pointing out that when people claim other countries, particularly in western europe, enjoy greater mobility, what they really mean is greater relative mobility.  So it's not that low income people in other countries have a better chance of increasing their income than those in the U.S., it's that the U.S.'s higher income in general means that our quintiles are "wider" and you have to earn more to move up each quintile. 

If you just looked at absolute income mobility, low income people in the U.S. have just as much or more income mobility than any of the western european countries, and if you are the type to assume policies explain everything (I'm not), then the U.S.'s policies look like the proverbial free lunch.  Our very poor people enjoy about the same consumption as those in any western european country, once you move away from the very poor, people in the U.S. at any given percentile have more purchasing power than the same percentile in any other country, and there is no negative impact on absolute income mobility. 
Title: Re: Thoughts on Minimum Wage?
Post by: Chesleygirl on July 19, 2017, 04:48:52 PM
Most of the press coverage about minimum wage increase has been geared toward fast food workers. But I feel paid caregivers and nurse aides should be first in line for an increase. I used to work as a nurse aide and the job paid only 9.50 - 10 an hour, and the pay is actually going down, not up in this field, even though we have a huge increase in our elderly population and a huge demand for paid caregivers.
Title: Re: Thoughts on Minimum Wage?
Post by: LalsConstant on July 20, 2017, 06:42:57 AM
Minimum wage should be abolished. It can only remove opportunities, not create them. It can only reduce freedom and choices by outlawing specific activities.

It has zero, none, zilch upside.

Thank you.  People who actually understand that and state it plainly are too rare.  All a minimum wage does is protect the strong from the weak, so to speak.

One of the biggest problems with discussing economics is that you can't prove the negative, I.e. the alternative that would occur under different conditions.

People can't see all the marginally employable people who can't get a foot on the ladder and all the small businesses that cannot start up.

It is a bizarre idea to me to advocate people ignore economic reality as public policy.  If you don't produce $10 an hour of economic value, why should anyone pay you $15?  Please note there is a complete separation between being a great human being and being a well compensated human being.

I am glad however so many people are brainstorming other ideas, it shows more people at least understand it's not as simple as implementing a price control on wages.
Title: Re: Thoughts on Minimum Wage?
Post by: CindyBS on July 20, 2017, 08:47:30 PM
There are a lot of people who will never get out of minimum wage or low paying jobs.  It can be b/c of low IQ, disability, poor upbringing, disadvantaged background or maybe they are just plain unmotivated.   

My problem with them not making a living wage, is that the way most of these people get by is by government provided services - food stamps, HUD apartments, Medicaid, etc.

Why should I as a tax payer pay that so a corporation doesn't have to pay a living wage?  That is an indirect subsidy to the corporation -  corporate welfare.  Taxpayers are already paying for the highways their goods are shipped on, the police/fire department to come when there is an emergency, etc. and many large corporations then turn around and do off shore tax havens and pay very little taxes themselves at the same time giving the CEO's outrageous salaries. 

A person who works full time should make a living wage.
Title: Re: Thoughts on Minimum Wage?
Post by: Kyle Schuant on July 20, 2017, 09:01:02 PM
I think you have some confirmation bias in your view of employment in Australia: https://www.theguardian.com/business/2017/mar/27/third-of-australian-youth-have-no-job-or-are-underemployed-report-finds (https://www.theguardian.com/business/2017/mar/27/third-of-australian-youth-have-no-job-or-are-underemployed-report-finds)
The overall workforce participation rate is higher in Australia than the US, and this applies for youth, too. We also have a higher median household income than the US - note I said "median", not "average". Going by the household is important, since an 18yo with no job is better off in a household where the parents earn $100k than one where they earn $30k, they have a better day-to-day life and ultimately better prospects long-term.

Youth unemployment is high because they're unskilled, and with free trade, many of our unskilled jobs have gone overseas. We can't compete with Chinese living in dorms and getting $150 a month. Thus, youth unemployment is a problem with the structure of the economy: we don't make things any more. When manufacturing declines, youth employment declines.

The real employment issue in Australia is not so much unemployment (except in regional areas) but security of employment. Most new jobs created are part-time casual, or if full-time are contract work. The person could be binned at any time. This doesn't give people confidence to do things like buy a house or get married. And casual vs permanent is not a function of wage level, but of culture: is it a culture of commitment, or not?

Casual workers actually cost companies more per hour than permanent ones, but they like the freedom to bin the person at any time if things get less busy, or the person annoys them, etc. It's also a way of evading discrimination laws, if you don't want to hire single mothers or something, just hire them then give them few or no hours.

Ultimately the companies committing to at least some of their staff tend to do better than those doing everything part-time casual, but because so many businesses do the casual thing, they survive longer than they deserve to, and there are not enough secure jobs for people.

Australia has many problems, but our high minimum wage isn't among them, and dropping it to US levels wouldn't solve any, indeed it'd create more: I already noted the US has a higher social welfare bill per capita than Australia, as the public purse has to make up for private stinginess. Employed people in Australia don't need welfare.
Title: Re: Thoughts on Minimum Wage?
Post by: Leisured on July 21, 2017, 04:52:40 AM
Mechanization replaced horses a century ago, and horses became unemployable because they cannot be trained to do anything else than pull wagons or plows.  Farm workers were laid off a century ago, but farm workers can retrain to work in factories. As factories become automated, can these redundant workers be retrained? Some will, many will not Eventually many workers will be in the same position as horses a century ago where they cannot be retrained.

Suppose all workers could become doctors, lawyers, engineers. How many of these people does the economy need?

This time it really is different.

Title: Re: Thoughts on Minimum Wage?
Post by: sokoloff on July 21, 2017, 05:37:30 AM
Youth unemployment is high because they're unskilled, and with free trade, many of our unskilled jobs have gone overseas. We can't compete with Chinese living in dorms and getting $150 a month. Thus, youth unemployment is a problem with the structure of the economy: we don't make things any more. When manufacturing declines, youth employment declines.
Does a high minimum wage have any effect on the ability of these youth to get their first job where they can start developing skills?

Does a high minimum wage have any effect on where companies can compete doing manufacturing activities?
Australia has many problems, but our high minimum wage isn't among them, and dropping it to US levels wouldn't solve any, indeed it'd create more: I already noted the US has a higher social welfare bill per capita than Australia, as the public purse has to make up for private stinginess. Employed people in Australia don't need welfare.
If you doubled the minimum wage again, employed people would have even better outcomes. It's the unemployed people who are harmed by high minimum wages, not the employed people.
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on July 21, 2017, 08:23:25 AM
Why should I as a tax payer pay that so a corporation doesn't have to pay a living wage?  That is an indirect subsidy to the corporation -  corporate welfare.  Taxpayers are already paying for the highways their goods are shipped on, the police/fire department to come when there is an emergency, etc. and many large corporations then turn around and do off shore tax havens and pay very little taxes themselves at the same time giving the CEO's outrageous salaries. 
It's worth noting that all costs imposed on companies are passed on to the consumer or investor.  That's you and me.  You will pay for that higher minimum wage whether you want to or not.  Either you'll have to accept lower returns as an investor, or higher prices as a consumer.
Quote
A person who works full time should make a living wage.
This, unfortunately, flies in the face of the laws of economics.  What you're arguing here is that a person with zero skills (who you would hire at minimum wage) should be paid just as much as, say, the guy who's been swinging the hammer or flipping the burgers for several years and is now a manager (at, say, $15).

I think we can all agree that it would be desirable that everyone who works will earn a living wage, but the work that some people do simply does not bring enough value into the economy to justify higher wages.  When you increase the cost of a good or service, you'll see less demand.  Raise the cost of a fast food worker, and you'll get fewer people hiring fast food workers.
Title: Re: Thoughts on Minimum Wage?
Post by: Jrr85 on July 21, 2017, 12:17:11 PM
There are a lot of people who will never get out of minimum wage or low paying jobs.  It can be b/c of low IQ, disability, poor upbringing, disadvantaged background or maybe they are just plain unmotivated.   

My problem with them not making a living wage, is that the way most of these people get by is by government provided services - food stamps, HUD apartments, Medicaid, etc.

Why should I as a tax payer pay that so a corporation doesn't have to pay a living wage?  That is an indirect subsidy to the corporation -  corporate welfare.  Taxpayers are already paying for the highways their goods are shipped on, the police/fire department to come when there is an emergency, etc. and many large corporations then turn around and do off shore tax havens and pay very little taxes themselves at the same time giving the CEO's outrageous salaries. 

A person who works full time should make a living wage.

So a person of low IQ that can't be productive enough to earn a "living wage" should be legally barred from working? 

A person's worth as a human being is not tied to their economic productivity, and just because a person is less productive than you think they should be, that doesn't mean they shouldn't be allowed to work and earn what they can, even if they need additional help on top of what they can earn. 

Title: Re: Thoughts on Minimum Wage?
Post by: CindyBS on July 21, 2017, 02:55:55 PM
There are a lot of people who will never get out of minimum wage or low paying jobs.  It can be b/c of low IQ, disability, poor upbringing, disadvantaged background or maybe they are just plain unmotivated.   

My problem with them not making a living wage, is that the way most of these people get by is by government provided services - food stamps, HUD apartments, Medicaid, etc.

Why should I as a tax payer pay that so a corporation doesn't have to pay a living wage?  That is an indirect subsidy to the corporation -  corporate welfare.  Taxpayers are already paying for the highways their goods are shipped on, the police/fire department to come when there is an emergency, etc. and many large corporations then turn around and do off shore tax havens and pay very little taxes themselves at the same time giving the CEO's outrageous salaries. 

A person who works full time should make a living wage.

So a person of low IQ that can't be productive enough to earn a "living wage" should be legally barred from working? 

A person's worth as a human being is not tied to their economic productivity, and just because a person is less productive than you think they should be, that doesn't mean they shouldn't be allowed to work and earn what they can, even if they need additional help on top of what they can earn.

No, I am arguing the opposite.  Our definition of "productive enough to earn a living wage" should change.  Just like most western countries that have living wages as minimum wages.

A person with a low IQ who works at Burger King their entire life should make enough money to support themselves without taxpayer supports.  There are people who cannot get advanced job training, go to college, or make their way up an economic ladder, but can live independently and do honest work for what should be a livable wage.

That may mean *gasp* corporations don't pay CEO's $10,000 per hour or *gasp again* there is less profits in a company. 

Since companies won't raise wages on their own, that would have to be done with government regulation - i.e. a higher minimum wage.  Since the vast majority of all western countries have done this without economic collapse, it is possible here.

btw, as a full time caregiver who works her ass off in very difficult conditions and gets paid exactly $0 to do it, I am very familiar with the idea person's worth is not tied to economic productivity.  Otherwise, I would be considered worthless.
Title: Re: Thoughts on Minimum Wage?
Post by: FINate on July 21, 2017, 03:14:55 PM
No, I am arguing the opposite.  Our definition of "productive enough to earn a living wage" should change.  Just like most western countries that have living wages as minimum wages.

A person with a low IQ who works at Burger King their entire life should make enough money to support themselves without taxpayer supports.  There are people who cannot get advanced job training, go to college, or make their way up an economic ladder, but can live independently and do honest work for what should be a livable wage.

That may mean *gasp* corporations don't pay CEO's $10,000 per hour or *gasp again* there is less profits in a company.

Since companies won't raise wages on their own, that would have to be done with government regulation - i.e. a higher minimum wage.  Since the vast majority of all western countries have done this without economic collapse, it is possible here.

btw, as a full time caregiver who works her ass off in very difficult conditions and gets paid exactly $0 to do it, I am very familiar with the idea person's worth is not tied to economic productivity.  Otherwise, I would be considered worthless.

How many countries have minimum wage, and of those how many have approximately doubled it over a short period? Also, I would much prefer we do what's healthy for the economy rather than aiming for avoidance of economic collapse.

As has already been stated on this thread, the push to increase minimum wage is supposedly for the benefit of low wage workers, so the question of how it impacts the overall economy is of secondary concern.

So other than cutting CEO pay or making less profit the company could also cut hours, increases automation, replace low skill workers with higher skilled workers, relocate...or any number of other options/combinations that end up hurting low wage workers in the end.  This is what Seattle is experiencing in their push to $15:

The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city.

On the whole, the study estimates, the average low-wage worker in the city lost $125 a month because of the hike in the minimum.

https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.040a7933d61c

Title: Re: Thoughts on Minimum Wage?
Post by: FINate on July 21, 2017, 03:21:44 PM
This article showing pizza shop automation should help prove the point about minimum wage displacing more workers than it helps.  I would bet there would be less investment in robots if the pizza shop could hire workers for their market and productivity value, vs. mandated minimum wages.

https://finance.yahoo.com/news/pizza-making-robots-want-change-world-175742922.html (https://finance.yahoo.com/news/pizza-making-robots-want-change-world-175742922.html)

Quote
Eventually, Garden and his cofounder Julia Collins intend to replace all of the humans in their pizza shop.

People can also read about Flippy the hamburger making robot (http://fortune.com/2017/03/14/miso-robotics-flippy-burger-flipping-robot/).

And I'm seeing a lot more self order/checkout kiosks popping up now that California has passed legislation to phase in a $15 minimum.
Title: Re: Thoughts on Minimum Wage?
Post by: StudentEngineer on July 21, 2017, 05:31:25 PM
I'm not trying to be cruel to those that can't produce enough to survive on their own.  I think the government (taxpayers) must step in and help them.  Same goes for the people who can't work at all.  We can't force corporations to hire them to sit around and produce nothing.  The country is rich enough to provide a basic means for non-productive people to live somewhat comfortably.  We also need to make up the difference for those that produce less than what it takes to live somewhat comfortably.

I would just like to add that the governmental support for those who are non productive should be structured in such a way as to not incentivize becoming a non productive member of society because you , for instance, have enough money to pay for TV, recreational activities and as much fast food as you'd like.  It should provide the minimum needed to survive - shelter that isn't particularly desirable but completely habitable, enough for a very basic sustenance and something in the way of medical care.  Past that anything else should require the individual to engage in a consensual trading of goods and labor in a free market economy.

Also what about introducing these people to MMM type concepts and solve the issue from the personal standpoint rather than having the government dictate what the correct route is?  These people all have free access to public libraries and the internet which opens up the entire world to them, anything that they would like they can learn.  I'd rather approach this problem from the personal level than the governmental level at first.
Title: Re: Thoughts on Minimum Wage?
Post by: Leisured on July 22, 2017, 11:57:31 PM
I am always amazed at the way Americans express opinions on social matters without bothering to look at the experience of other rich countries. ...
The Australian attitude is...

Finally, it helps to remember that many Americans don't think of themselves as poor, but as the temporarily embarrassed rich. They're so certain that they're going to be rich eventually that they'll vote against their own current interests so they won't be held back once they've taken their rightful spot at the top of the pile. Most other countries seem to have a better grasp on class and that mobility between classes isn't all that easy. While it's a tiny percentage of the population that moves between classes in the US, there are enough rags to riches stories here that people don't think it crazy to think they're going to be rich, and to keep things relevant, that minimum wages don't need to move because it won't affect them.

Thank you for the perceptive social comment, omachi. Karl Marx would call such an attitude by poor Americans as 'false consciousness.'  Social beliefs can have a powerful effect on economic behavior. i have heard of slot machine rooms in Las Vegas that are so large that somewhere a slot machine announces a win every few minutes, thus creating the illusion that the odds of winning are larger than they really are.

Title: Re: Thoughts on Minimum Wage?
Post by: Kyle Schuant on July 23, 2017, 09:14:57 PM
If you doubled the minimum wage again, employed people would have even better outcomes. It's the unemployed people who are harmed by high minimum wages, not the employed people.
If a widget costs me $1 to produce, I may sell more at $2 than $100. But I only need to sell 1 at $100 to make $99 profit, and it may be easier to do that than sell 99 at $2 for $99 profit. This does not mean I should try to sell it for $1,000. So there is some optimum price point where I maximise profit on the widget. This will vary based on the product, the branding (iphones cost no more than android phones to make, but branding means they can sell for more), and so on.


Likewise, I would think that there will be an optimum minimum wage, low enough to encourage businesses to hire, and high enough that the person can spend and increase aggregate demand in the economy as a whole.

Since the US has higher unemployment, lower median income, and a higher per capita welfare bill than Australia, it is evident that the optimum level lies somewhat above the USA's minimum wage, but probably not a lot beyond Australia's.

Again, most here speak of theory in justifying a low minimum wage. It is perhaps inevitable that a frugality group will attract the stingy and heartless, since some people confuse being frugal with being miserly. So when faced with evidence from other countries that raising the minimum wage does not lead to economic collapse and mass unemployment, they retreat into theory.

I don't mind paying more for things if it means that others will be able to earn more, and be less dependent on welfare; what I lose on spending more will be gained in lower taxes, after all.
Title: Re: Thoughts on Minimum Wage?
Post by: dilinger on July 24, 2017, 12:20:50 AM
Ugh, you guys. Stop bringing up that shitty UW minimum wage study.  It was seriously flawed.

https://sccinsight.com/2017/06/27/understanding-dueling-minimum-wage-studies/

http://www.startribune.com/15-minimum-wage-study-was-flawed-minneapolis-should-still-follow-seattle-s-lead/431409123/

"First, Seattle’s booming labor market is naturally shifting toward higher-paying jobs. The UW study interprets this drop in low-paying jobs as evidence that the minimum wage is hurting employment — essentially treating every worker who gets a raise to above $19 as the loss of a low-wage job blamed on the minimum wage."

This is an astoundingly bad study that got way too much press.

Meanwhile, despite the $15 minimum wage, Seattle has a shortage of employees. Seattle's unemployment rate is at 2.6%. Business is booming, the population is growing like crazy, we have a housing supply crisis, my house value is going up 15% per year due to workers moving here, etc.  As far as I can tell, the $15 minimum wage has not hurt Seattle.  And frankly, considering that the $15 minimum wage is being phased in, it's too early to draw conclusions at this point.  It's $15 for some companies over 500 employees, and won't be $15 for smaller companies until 2019 or 2021.
Title: Re: Thoughts on Minimum Wage?
Post by: Johnez on July 24, 2017, 02:13:08 AM
Minimum wage is exactly that-the entry point into the market place for those with few skills or lack of experience. Raising the minimum wage to "livable" standards addresses the problem of poverty without accounting for the fallout

Raise minimum wage to $15 an hour:

What happens to all the workers making $10, 11, 12, 13, 14 an hour? Ya just equalized the bottom rung of society. Congrats. It won't last long as factories need to raise pay to attract semi-skilled reliable employees and are forced to raise prices on widgets to make the math work. Widgets that are going to eat up all of that wage increase burger flippers at McD's got anyway....

So why not find a way to increase the opportunities for those on the lowest rung? Giving a temporary benefit that will be taken by inflation anyway does nothing. We need more middle class jobs.
Title: Re: Thoughts on Minimum Wage?
Post by: nara on July 24, 2017, 07:15:36 AM
As a typical W2 employee most of my life, I was all on board with large pay increases. However, now as a small business owner, I have a different perspective and can see how such a pay increase would be devastating to small businesses. We pay well above minimum wage to our professional employees, but occasionally hire college students to help with office work  and would not be willing to pay them $15 an hour. A huge minimum wage increase would only be another benefit for large business and corporations and smaller ones will be at huge disadvantage.
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on July 24, 2017, 07:52:37 AM
Since the US has higher unemployment, lower median income, and a higher per capita welfare bill than Australia, it is evident that the optimum level lies somewhat above the USA's minimum wage, but probably not a lot beyond Australia's.

Again, most here speak of theory in justifying a low minimum wage. It is perhaps inevitable that a frugality group will attract the stingy and heartless, since some people confuse being frugal with being miserly. So when faced with evidence from other countries that raising the minimum wage does not lead to economic collapse and mass unemployment, they retreat into theory.
I'm still waiting for the evidence that higher minimum wages increase employment rates.  There is already plenty of evidence to the contrary. Also, considering that different countries have different welfare programs, comparing them is a meaningless measure.

I think it is also very disingenuous (and outright insulting, if I were the type to be offended) to conflate opposition to an increased minimum wage with being stingy and heartless.  On the contrary, those of us who oppose raising the minimum wage see how it would hurt those it is intended to help, by effectively banning many types of unskilled labor.
Ugh, you guys. Stop bringing up that shitty UW minimum wage study.  It was seriously flawed.

https://sccinsight.com/2017/06/27/understanding-dueling-minimum-wage-studies/

http://www.startribune.com/15-minimum-wage-study-was-flawed-minneapolis-should-still-follow-seattle-s-lead/431409123/
I took the time to read those two articles, and I would say that it's possible the UW study was flawed, at most.  The exclusion of the national chain workers in the UW actually biased the results in favor of hiking the minimum wage, as the larger chains were more likely to cut hours than a local-only business.  Besides, as the UW researcher stated in an interview, the excluded 38% would have to be seeing MASSIVE growth in order to compensate for the 9% losses in the remaining 62%.  And they're not.

It's also worth pointing out that immediately after UW shared an early draft of their study with the mayor's office, the major's office contracted a UC Berkeley economics professor (http://www.seattleweekly.com/news/seattle-is-getting-an-object-lesson-in-weaponized-data/) to run a similar study and publish his results before UW could
Title: Re: Thoughts on Minimum Wage?
Post by: FINate on July 24, 2017, 09:23:55 AM
Ugh, you guys. Stop bringing up that shitty UW minimum wage study.  It was seriously flawed.

https://sccinsight.com/2017/06/27/understanding-dueling-minimum-wage-studies/

http://www.startribune.com/15-minimum-wage-study-was-flawed-minneapolis-should-still-follow-seattle-s-lead/431409123/

"First, Seattle’s booming labor market is naturally shifting toward higher-paying jobs. The UW study interprets this drop in low-paying jobs as evidence that the minimum wage is hurting employment — essentially treating every worker who gets a raise to above $19 as the loss of a low-wage job blamed on the minimum wage."

This is an astoundingly bad study that got way too much press.

Meanwhile, despite the $15 minimum wage, Seattle has a shortage of employees. Seattle's unemployment rate is at 2.6%. Business is booming, the population is growing like crazy, we have a housing supply crisis, my house value is going up 15% per year due to workers moving here, etc.  As far as I can tell, the $15 minimum wage has not hurt Seattle.  And frankly, considering that the $15 minimum wage is being phased in, it's too early to draw conclusions at this point.  It's $15 for some companies over 500 employees, and won't be $15 for smaller companies until 2019 or 2021.

As far as I can tell the only reason anyone considers this study "shitty" is that it disagrees with what they want to believe. It was commissioned by Seattle. The study's authors are not right-wing partisans, they are serious economists.  Everyone was on board with it until the politicians got a preview of the results, which they didn't like, so they funded a competing study that they knew would be more to their liking.

We also have a "shortage of employees" here in Silicon Valley. But we also have a surplus of minimum wage workers. The shortage is for skilled workers. The real question is how has minimum wage increases affected unskilled workers: jobs, hours, total compensation, and such. This is what this "shitty" study is designed to identify in the data. It found that the increase actually ended up hurting low skill workers. High skill workers were, as expected, unaffected...they can go on patting themselves on the back thinking they really made a difference.
Title: Re: Thoughts on Minimum Wage?
Post by: Jrr85 on July 24, 2017, 09:55:36 AM

No, I am arguing the opposite.  Our definition of "productive enough to earn a living wage" should change.  Just like most western countries that have living wages as minimum wages.

A person with a low IQ who works at Burger King their entire life should make enough money to support themselves without taxpayer supports.  There are people who cannot get advanced job training, go to college, or make their way up an economic ladder, but can live independently and do honest work for what should be a livable wage.

That may mean *gasp* corporations don't pay CEO's $10,000 per hour or *gasp again* there is less profits in a company. 

Since companies won't raise wages on their own, that would have to be done with government regulation - i.e. a higher minimum wage.  Since the vast majority of all western countries have done this without economic collapse, it is possible here.

btw, as a full time caregiver who works her ass off in very difficult conditions and gets paid exactly $0 to do it, I am very familiar with the idea person's worth is not tied to economic productivity.  Otherwise, I would be considered worthless.

You are badly confused as to what a minimum wage law does.  It doesn't mandate that low skilled employees be employed at the minimum wage.  It makes it illegal to employ them (or anybody else) at below the minimum wage.  For some workers, the "zone of agreement" extends below and above the minimum wage, and the minimum wage ensures that they won't accept below the minimum wage.  And for some workers, the resulting adjustments due to the minimum wage results in a better job opportunity for them (e.g., monitoring 6 self-checkout lanes may pay better than being a cashier at one lane). 

But for people that aren't productive enough, you are just condemning them to public assistance.  Because they are not as productive as you think they should be, they don't get to work legally at all. 

Again, people who cannot get advanced job training, go to college, or make their way up an economic ladder, but can live independently and do honest work should still be allowed to work without having to resort to working under the table. 

And other taxpayers shouldn't be required to completely support a person when that person could support themselves in part, just because you are offended that they do not meet some minimum level of productivity.   
Title: Re: Thoughts on Minimum Wage?
Post by: A Definite Beta Guy on July 24, 2017, 02:50:21 PM
Ugh, you guys. Stop bringing up that shitty UW minimum wage study.  It was seriously flawed.

https://sccinsight.com/2017/06/27/understanding-dueling-minimum-wage-studies/

http://www.startribune.com/15-minimum-wage-study-was-flawed-minneapolis-should-still-follow-seattle-s-lead/431409123/

"First, Seattle’s booming labor market is naturally shifting toward higher-paying jobs. The UW study interprets this drop in low-paying jobs as evidence that the minimum wage is hurting employment — essentially treating every worker who gets a raise to above $19 as the loss of a low-wage job blamed on the minimum wage."

This is an astoundingly bad study that got way too much press.

Meanwhile, despite the $15 minimum wage, Seattle has a shortage of employees. Seattle's unemployment rate is at 2.6%. Business is booming, the population is growing like crazy, we have a housing supply crisis, my house value is going up 15% per year due to workers moving here, etc.  As far as I can tell, the $15 minimum wage has not hurt Seattle.  And frankly, considering that the $15 minimum wage is being phased in, it's too early to draw conclusions at this point.  It's $15 for some companies over 500 employees, and won't be $15 for smaller companies until 2019 or 2021.

As far as I can tell the only reason anyone considers this study "shitty" is that it disagrees with what they want to believe. It was commissioned by Seattle. The study's authors are not right-wing partisans, they are serious economists.  Everyone was on board with it until the politicians got a preview of the results, which they didn't like, so they funded a competing study that they knew would be more to their liking.

We also have a "shortage of employees" here in Silicon Valley. But we also have a surplus of minimum wage workers. The shortage is for skilled workers. The real question is how has minimum wage increases affected unskilled workers: jobs, hours, total compensation, and such. This is what this "shitty" study is designed to identify in the data. It found that the increase actually ended up hurting low skill workers. High skill workers were, as expected, unaffected...they can go on patting themselves on the back thinking they really made a difference.

There's problems with practically all studies. You can't really run RCTs on small groups of people, let alone huge societies.

There's strong reason to disbelieve the UW results because they are way outside the bounds of what is normally tested. That raises some eyebrows.

The Berkley study makes no sense to me. Synthetic Seattle matches Seattle well prior to the minimum wage. That does not make it a good match for Seattle POST minimum wage increase. In several industries, Synthetic Seattle shows both less employment and wage growth than Seattle...the obvious conclusion is that demand is not as high in those cities and the basket of comparison cities is no longer a good reference point.

If you look at the Berkley study, you can also see that the Seattle total wage tracks the Synthetic Seattle total wage in a rather similar manner. The exception is the Limited Service restaurant category, where Seattle wages massively outpace synthetic seattle.  Unsurprisingly, this is also the ONLY sector where Seattle's employment is EVER stationary, for ANY length of time, which is exactly what you would expect if you think a binding minimum wage reduces employment.

There is a then an explosion of limited service restaurant workers in Seattle right at the end of the data set. That screams "data error." It looks to occur at the same time as the Full-Service restaurant dip. Why? Was something redefined from full service to limited service? Those are extremely odd results.


In general, people are subject to isolated demands for rigor. (http://slatestarcodex.com/2014/08/14/beware-isolated-demands-for-rigor) MY study is perfect. YOUR study is fundamentally flawed, and debunked. You need to prove your claims!
This is probably useful for yourself, in good Bayesian reasoning...like, if you get an entirely unexpected result, you should REALLY question it. Stuff that confirms prior beliefs probably doesn't need to be questioned quite as much.
It's NOT the same if you are engaged in the scientific process, where you should be much more aggressive in your questioning. Particularly if you are on a review board.

But almost all studies are flawed in SOME fashion, which is why you should always be suspicious of that guy who always peddles that single study  (http://slatestarcodex.com/2014/12/12/beware-the-man-of-one-study/)non-stop because it confirms his beliefs.

Title: Re: Thoughts on Minimum Wage?
Post by: dividendman on July 24, 2017, 04:23:21 PM
I'm curious why anyone would be for a higher minimum wage instead of an increase in the EITC or a UBI if your goal is to help the working poor.
Title: Re: Thoughts on Minimum Wage?
Post by: Optimiser on July 24, 2017, 05:24:19 PM
I'm curious why anyone would be for a higher minimum wage instead of an increase in the EITC or a UBI if your goal is to help the working poor.

I'm in favor of UBI rather than increasing minimum wage, but I've heard the argument that the companies paying low wages should be responsible for taking care of their workers, not the taxpayers.
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on July 25, 2017, 07:22:25 AM
I'm in favor of UBI rather than increasing minimum wage, but I've heard the argument that the companies paying low wages should be responsible for taking care of their workers, not the taxpayers.
I'm curious as to why you think employers should be responsible for taking care of their workers.  The company's job is to make money.  That means they produce something that people are willing to pay money for, and it usually involves paying employees to help deliver the good or service.  We can probably agree that the company is responsible for providing a safe working environment, and paying a wage commensurate with the value the employee adds, but it's not the company's job to ensure a comfortable lifestyle for the employee.  IMO, the responsibility for "taking care of people" lies primarily with the person, then their family, then their community.
Title: Re: Thoughts on Minimum Wage?
Post by: A Definite Beta Guy on July 25, 2017, 03:45:28 PM

Why should I as a tax payer pay that so a corporation doesn't have to pay a living wage?  That is an indirect subsidy to the corporation -  corporate welfare. 
Different way I think about this: if the corporation said "okay, we're not going to be in business anymore" and closes up shop, it increases the welfare rolls.

The corporation paying the worker doesn't make the government worse off, it makes the government better off, because the government doesn't have to pay the full bill of someone's livelihood.

It's definitely a subsidy to the individual people receiving alms.
Title: Re: Thoughts on Minimum Wage?
Post by: Kyle Schuant on July 26, 2017, 07:45:05 PM
In this thread, a bunch of people who are on much much more than minimum wage argue that minimum wage should be low.


Okay :)
Title: Re: Thoughts on Minimum Wage?
Post by: dilinger on July 26, 2017, 07:47:01 PM
I said nothing about the Berkeley study.  Instead, I said to stop using the UW study to prove your point, because it is bad science.  I agree that there was some sketchiness regarding the way the whole thing has been handled by Seattle's Mayor, but hey - this is a guy who raped foster children.  I'd trust him as far as I can throw him.

Regarding the Berkeley study, my point still remains:
...considering that the $15 minimum wage is being phased in, it's too early to draw conclusions at this point.  It's $15 for some companies over 500 employees, and won't be $15 for smaller companies until 2019 or 2021.
Title: Re: Thoughts on Minimum Wage?
Post by: dilinger on July 26, 2017, 08:04:02 PM
As far as I can tell the only reason anyone considers this study "shitty" is that it disagrees with what they want to believe. It was commissioned by Seattle. The study's authors are not right-wing partisans, they are serious economists.  Everyone was on board with it until the politicians got a preview of the results, which they didn't like, so they funded a competing study that they knew would be more to their liking.

1) Seattle didn't fund a competing study.  They funded the UW study, that's it.

2) The UW study author IS an anti-minimum wage conservative.  This was known before the results of the study were published: http://seattlish.com/post/150746011266/kshama-sawant-is-not-sure-about-the-guy-heading-up .
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on July 26, 2017, 09:14:57 PM
In this thread, a bunch of people who are on much much more than minimum wage argue that minimum wage should be low.
The income of the posters has no bearing on the validity of their arguments.
Title: Re: Thoughts on Minimum Wage?
Post by: A Definite Beta Guy on July 27, 2017, 08:25:14 AM
In this thread, a bunch of people who are on much much more than minimum wage argue that minimum wage should be low.
The income of the posters has no bearing on the validity of their arguments.
Pretty much in agreement with this.
Title: Re: Thoughts on Minimum Wage?
Post by: omachi on July 27, 2017, 09:17:18 AM
I'm in favor of UBI rather than increasing minimum wage, but I've heard the argument that the companies paying low wages should be responsible for taking care of their workers, not the taxpayers.
I'm curious as to why you think employers should be responsible for taking care of their workers.  The company's job is to make money.  That means they produce something that people are willing to pay money for, and it usually involves paying employees to help deliver the good or service.  We can probably agree that the company is responsible for providing a safe working environment, and paying a wage commensurate with the value the employee adds, but it's not the company's job to ensure a comfortable lifestyle for the employee.  IMO, the responsibility for "taking care of people" lies primarily with the person, then their family, then their community.

I agree that the minimum wage can hurt people in cases where it pushes labor prices above what the employee adds in value. I also prefer a UBI to a minimum wage*. However, I think you're confusing two things, the value added by the labor and the price that available labor will accept to do the job. They're very different.

How much value do you think the typical McDonald's employee adds to the business? Clearly MCD is quite profitable. What would happen if MCD employees on the front lines nationwide managed to unionize and then started a strike? Would this considerably disrupt MCD's ability to turn a profit? If demanded before they would return to work, could MCD pay these employees a higher wage and still make a profit? If so, I think we have to agree that this class of employees isn't being paid a wage commensurate with the value the class adds.

So let's look at the price that available labor will accept. MCD is pretty anti-union, just like many other big companies such as Walmart that would be affected by a minimum wage hike. We're probably not going to see the above union scenario play out. The jobs are not particularly skilled labor, so there is a large pool of people who can do it. For a pool of unskilled, unorganized labor, any job is typically better than no job, driving wages down when there's less work than labor. In a strictly rational sense (with no social safety net) the acceptable wage is the minimum necessary to survive. If any particular employee demands a higher wage, MCD can replace them without too much disruption from this pool of cheaper labor.

A minimum wage prevents the push of wages for this unskilled labor to near zero when there is surplus labor. The argument of how much the company should "take care" of their employees is really an argument over where this floor should be. And since we do have social safety nets, that translates to how large of a gap between value added and wage paid the public is willing to subsidize via the social safety net while balancing against how many people are added to the safety net because they can't produce the requisite value to be paid the minimum wage.

*I think coming automation is going to render the argument moot and that there won't be enough jobs available, period, so let's adjust to a UBI now rather than after we need it.
Title: Re: Thoughts on Minimum Wage?
Post by: Jrr85 on July 27, 2017, 03:53:19 PM
In this thread, a bunch of people who are on much much more than minimum wage argue that minimum wage should be low.


Okay :)

You also have a bunch of people who are on much much more than minimum wage argue that people who aren't productive enough to earn minimum wage shouldn't be allowed to legally work unless an employer treats them as a charity case.  Would that argument be less callous if the people making it earned just above the minimum wage? 
Title: Re: Thoughts on Minimum Wage?
Post by: rdaneel0 on July 27, 2017, 04:42:27 PM
As a former minimum wage worker I think it should definitely exist and be significantly higher than it is. I don't understand why minimum wage isn't set at a state level though. In a HCOL area, living on anything under $15 an hour is incredibly difficult if not impossible (w/ dependents). In LCOL areas I think $10 is totally reasonable.

When I was an MMM-style minimum wager in a HCOL area I had to work 7 days a week, every week, and I was barely saving anything. I went months with no days off, went to work sick, worked every holiday, worked overtime 12+ hours a day at times. Thanks to MMM and having no dependents I didn't get into debt and I did save a small amount, but it took a tremendous amount of deprivation and grit to just live at the bare minimum. Every time my savings started to build an unexpected expense would wipe it out. We had no furniture and our diet was very limited (dried beans, dried grains, frozen vegetables) and we lived in a terrifying neighborhood with zero amenities. The library was practically bare and basically one shitty room.

I'm not trying to tell a sob story at all, we still had fun doing free stuff and we're doing very well now, but I cannot imagine how people with families exist on such a low wage for decades on end. Many homeless people in the USA are "working poor", in other words they have jobs but still can't afford a place to live. I don't have a grasp on advanced economics, but I don't think that's right.
Title: Re: Thoughts on Minimum Wage?
Post by: sokoloff on July 27, 2017, 06:45:29 PM
Now, imagine when you were working that job that you had a cousin in your similar situation, who was only 2/3rds as "good" as you were, but had the same high level of motivation, dedication, and work ethic that you displayed, but because his output was only 2/3rds as much as yours, that it was economically a losing proposition to hire him at minimum wage (because the company would pay him the minimum wage, but he wasn't able to produce that much value for them). Maybe you got paid $10/hr and created $12/hr of value, but he was only able to make $8/hr of value.

Would that cousin be better off if he was allowed to be hired at a lower wage, say $7, where it was economical to hire him?

Or would he be better off if he was (effectively) barred from working as a result of having lower productivity, despite having a strong work ethic and a dedicated sense of wanting to work?
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on July 28, 2017, 06:53:04 AM
How much value do you think the typical McDonald's employee adds to the business? Clearly MCD is quite profitable. What would happen if MCD employees on the front lines nationwide managed to unionize and then started a strike? Would this considerably disrupt MCD's ability to turn a profit? If demanded before they would return to work, could MCD pay these employees a higher wage and still make a profit? If so, I think we have to agree that this class of employees isn't being paid a wage commensurate with the value the class adds.
Fair enough, although I don't feel like it changes the outcome of the discussion much.  The value an employee adds is the ceiling for how much an employer should be required to pay them--otherwise, as Jrr85 put it, the company is literally losing money by employing that person, and it's a charity case.

How did you get out of that situation?  It would be great to share that, since many are stuck at minimum wage for extended periods.  Did you get government assistance while on minimum wage or did the government help you out of that situation somehow?
I'm interested in hearing how the story ends as well :)
Title: Re: Thoughts on Minimum Wage?
Post by: rdaneel0 on July 29, 2017, 08:01:12 PM
Hey! I don't want to derail the thread so I posted a simplified version of the story here:

https://forum.mrmoneymustache.com/journals/journey-to-the-center-of-the-'stache/

It was definitely a mix of hard work and good fortune. We never got government assistance during our minimum wage years. We always felt like we could support ourselves and that we were pretty lucky all things considered, but I don't begrudge anyone who takes advantage of it.
Title: Re: Thoughts on Minimum Wage?
Post by: koshtra on July 29, 2017, 09:55:12 PM
I usually support minimum wage increases, not because I like them -- I really don't, they introduce distortion and drag into the market, as many of y'all have pointed out -- but because they've been politically possible. What I'd really prefer is UBI, or something like Milton Friedman's negative tax: the cheapest and easiest way to redistribute money is to just redistribute it.

Twenty years ago, I didn't even bother to talk about UBI or negative taxes: everyone dismissed them out of hand. I'm heartened to see so many people willing to talk about them now. I think it's a far better solution -- more flexible, less paternalistic & less bureaucratic than minimum wage.

In the meantime, I'll go on supporting minimum wage increases... to me, inefficient redistribution is better than none.
Title: Re: Thoughts on Minimum Wage?
Post by: rdaneel0 on July 30, 2017, 01:18:29 PM
I guess I'd say luck had a lot to do with it because of my educational background and family background (lots of discipline instilled at an early age), which as you pointed out a lot of people on minimum wage don't have.

I think increased minimum wage would help the people who have the ability, discipline, and intelligence to climb out of the lower class, but who can't now simply because they don't make enough to live on. An important thing to point out is that I had no kids, so that's a huge advantage I had. With kids on minimum wage, I really don't think I would have had much of a chance. I would have gone into credit card debt to bridge the gap so fast.

I also think other services should be improved. I think programs that supplement income (SNAP, etc.) should be distributed on a weekly basis rather than a monthly basis. It's stupid to expect low income people to budget more carefully and skillfully than upper middle class professionals.  I think coupling that with free government provided childcare would go a long way for many people. In a perfect world I'd add in mandatory personal finance classes in high school too, but I'm sure that wouldn't do much good in crappy schools anyway.

There will always be those who can't pull themselves up, but if minimum wage workers went from the situation they're in now to having weekly government assistance for food, a livable wage, and childcare, I think that would make a huge difference for many. Again, I'm not an expert this is all just my feeling based on personal experiences.
Title: Re: Thoughts on Minimum Wage?
Post by: obstinate on July 30, 2017, 03:04:46 PM
I think you have some confirmation bias in your view of employment in Australia: https://www.theguardian.com/business/2017/mar/27/third-of-australian-youth-have-no-job-or-are-underemployed-report-finds (https://www.theguardian.com/business/2017/mar/27/third-of-australian-youth-have-no-job-or-are-underemployed-report-finds)
The overall workforce participation rate is higher in Australia than the US, and this applies for youth, too. We also have a higher median household income than the US - note I said "median", not "average". Going by the household is important, since an 18yo with no job is better off in a household where the parents earn $100k than one where they earn $30k, they have a better day-to-day life and ultimately better prospects long-term.

Youth unemployment is high because they're unskilled, and with free trade, many of our unskilled jobs have gone overseas. We can't compete with Chinese living in dorms and getting $150 a month. Thus, youth unemployment is a problem with the structure of the economy: we don't make things any more. When manufacturing declines, youth employment declines.
I saw this today: https://twitter.com/ernietedeschi/status/891761312224694273. It may be that the common wisdom about youth unemployment is not actually wisdom.
Title: Re: Thoughts on Minimum Wage?
Post by: fattest_foot on July 31, 2017, 12:06:20 PM
How much value do you think the typical McDonald's employee adds to the business? Clearly MCD is quite profitable. What would happen if MCD employees on the front lines nationwide managed to unionize and then started a strike? Would this considerably disrupt MCD's ability to turn a profit? If demanded before they would return to work, could MCD pay these employees a higher wage and still make a profit? If so, I think we have to agree that this class of employees isn't being paid a wage commensurate with the value the class adds.

Eh? So you're basically arguing that labor wages should theoretically rise enough to eat almost all of retained earnings? As long as the company has a number > $0, they're good?

Labor isn't the only expense for a business. Just because they earn a profit doesn't mean they're underpaying their labor.
Title: Re: Thoughts on Minimum Wage?
Post by: omachi on July 31, 2017, 03:19:04 PM
How much value do you think the typical McDonald's employee adds to the business? Clearly MCD is quite profitable. What would happen if MCD employees on the front lines nationwide managed to unionize and then started a strike? Would this considerably disrupt MCD's ability to turn a profit? If demanded before they would return to work, could MCD pay these employees a higher wage and still make a profit? If so, I think we have to agree that this class of employees isn't being paid a wage commensurate with the value the class adds.

Eh? So you're basically arguing that labor wages should theoretically rise enough to eat almost all of retained earnings? As long as the company has a number > $0, they're good?
I'm not arguing that, mostly out of selfishness since I'm both an employee and investor and there are plenty of reasons that I want to see companies turning profits. The largest being that I can diversify my income among many companies by owning lots of them, rather than having my income tied only to what would be the profits of the company I work for. This is good for everybody investing. Of course, I'm also not part of the 80% of the households in this country that only hold a combined 15% of its wealth, so I could be accused of being biased in thinking corporate profits are great.

If I wanted to look at it strictly from a laborer's standpoint, particularly a minimum wage laborer, it's an easy argument. For laborers that are not also investors, I'm having trouble seeing why the laborer wouldn't want wages to consume the entire profit. They could disagree on how much of the gross revenue should be reinvested into the business, which would then compete with wages rather than profits, sure, but profits don't seem to help them.

In fact, I could probably make that argument from a stronger vantage than minimum wage laborer. Companies turning profits don't appear to appreciably benefit the majority of US households. Median US net worth excluding home equity (so max worth that could be invested) is about $30k. All investable wealth returning 10% represents less income than a $1.45/hr raise for one full time worker in half of US households. Since that's of little help, it seems to me that the majority of this country should be demanding more income at the expense of the ~$1.5T in corporate profits per quarter. I'd bet most of them would be much better off if all of those profits were distributed as wages instead.

Labor isn't the only expense for a business.
I don't really see your point in stating this. Labor isn't the only expense, of course, which is why I mentioned profit and not gross revenue. Since profit is by definition exclusive of expenses, nothing considered profit is being spent towards labor or non-labor expenses for a business.

Just because they earn a profit doesn't mean they're underpaying their labor.
If you define the value of labor by what you can get away paying labor, well, you tautologically cannot underpay labor, can you? If you define the value of labor as the economic value the employee adds to a company, you can't overpay labor without taking a loss. In fact, because of the other expenses you mention, you are forced to underpay the full economic value the employee adds in order to keep a company afloat. This is accepted for myriad reasons, including job stability at a company and not having to handle overhead on your own. So I don't get your statement here, either. You either cannot or must underpay the value of labor, depending on definition, and profit has nothing to do with it.

If you read the rest of my post you excerpted from, you'll see I think we can set a minimum wage in a manner to minimize the cost to the social safety net, regardless of company profits. That may mean raising the minimum wage and putting a small number of people out of a job so a large number of people are less dependent on it. It may mean lowering the minimum wage so a large number of people are newly employable at a small cost to the safety net and a small number are more dependent on the safety net. I don't know where that balance is, though I'd guess the former. Regardless, I'm willing to bet it's far below companies no longer make profits and far above no minimum wage.
Title: Re: Thoughts on Minimum Wage?
Post by: Reynold on August 01, 2017, 11:04:13 AM
I saw an article in the WSJ a year or two ago that discussed a study on the effects, where they compared neighboring states with similar economies where one raised the minimum wage and the other didn't.  Effects were largely as predicted; the state which raised the wage had more unemployed, but the smaller number of people who had jobs made more money compared to the state which keep the wage the same.  Whether more people having lower paying jobs or fewer people having higher paying jobs is the more desirable situation starts verging on an ethical discussion rather than an economic one, but there didn't seem to be a way around that tradeoff. 

The other effect which made it non zero-sum, though, was that the state which raised its minimum wage had slower economic growth.  Thus, over time, it will have less businesses, lower wages, less tax revenue to distribute, and so on.  That may be a high price to pay to have a subset of workers make a more "living wage". 
Title: Re: Thoughts on Minimum Wage?
Post by: omachi on August 01, 2017, 12:09:23 PM
I saw an article in the WSJ a year or two ago that discussed a study on the effects, where they compared neighboring states with similar economies where one raised the minimum wage and the other didn't.  Effects were largely as predicted; the state which raised the wage had more unemployed, but the smaller number of people who had jobs made more money compared to the state which keep the wage the same.  Whether more people having lower paying jobs or fewer people having higher paying jobs is the more desirable situation starts verging on an ethical discussion rather than an economic one, but there didn't seem to be a way around that tradeoff. 

The other effect which made it non zero-sum, though, was that the state which raised its minimum wage had slower economic growth.  Thus, over time, it will have less businesses, lower wages, less tax revenue to distribute, and so on.  That may be a high price to pay to have a subset of workers make a more "living wage".

Eh, there are lots of things in play besides minimum wage and there are at least counter-examples regarding rising wages and all sorts of conventional wisdom about what drives growth. If you compare MN and WI, two neighbors with similar populations, it doesn't really hold that well. MN's minimum wage is higher and raised recently, restaurant workers have no tip credit in MN, and MN taxes are higher. Yet MN both was hit less harshly in 2008 and recovered faster than WI. MN's GDP is bigger, too, despite having fewer total jobs. Poverty level in MN is lower than WI as well.

http://blogs.mprnews.org/newscut/2015/01/minnesota-economy-beats-wisconsin-7-charts-1-table/
http://cepr.net/blogs/cepr-blog/wisconsin-vs-minnesota-what-the-data-show

Since the states are so similar, if minimum wages were really that big a differentiator you'd expect a different picture. If taxes were a diffentiator you'd expect a different picture. Conclusion from the top article is that slight differences in key industries contribute some, as does MN's higher quality of life and better educated workforce.
Title: Re: Thoughts on Minimum Wage?
Post by: obstinate on August 01, 2017, 09:57:43 PM
Since the states are so similar, if minimum wages were really that big a differentiator you'd expect a different picture. If taxes were a diffentiator you'd expect a different picture. Conclusion from the top article is that slight differences in key industries contribute some, as does MN's higher quality of life and better educated workforce.
I dunno if I'd say "you'd expect." As you rightly point out, there are far too many variables to make any certain conclusions. However, for the minimum wage and tax skeptics, it would be nice to see at least some positive evidence that reducing taxes or having a low minimum wage spurs growth. There simply isn't any empirical evidence at all for this viewpoint.
Title: Re: Thoughts on Minimum Wage?
Post by: WhiteTrashCash on August 02, 2017, 09:57:29 AM
Why does everyone think that automation is somehow not going to happen if we keep the minimum wage where it is? Are we really that naive? Robots are really cheap compared to paying employees anything. They are basically legal slave labor. Plus, businesses don't deal with shrinkage from employee theft and employee error. The robots are coming no matter what we make the minimum wage.

In the meanwhile, as I've said before and as other people are saying on this thread, we are really sick and tired of having to basically pay half the wages for these corporations' workers through our taxes, because our politicians are owned by the corporations and refuse to force them to pay living wages.
Title: Re: Thoughts on Minimum Wage?
Post by: Jrr85 on August 02, 2017, 10:37:40 AM
Since the states are so similar, if minimum wages were really that big a differentiator you'd expect a different picture. If taxes were a diffentiator you'd expect a different picture. Conclusion from the top article is that slight differences in key industries contribute some, as does MN's higher quality of life and better educated workforce.
I dunno if I'd say "you'd expect." As you rightly point out, there are far too many variables to make any certain conclusions. However, for the minimum wage and tax skeptics, it would be nice to see at least some positive evidence that reducing taxes or having a low minimum wage spurs growth. There simply isn't any empirical evidence at all for this viewpoint.

I think if you compared growth rates across countries to the tax per GDP of the country, you'd see pretty good correlation.  It'd be messy because as you note, there are lots of differences, but it'd be there.  It might be very slight if you could tease out the effects of anti-market policy.  Rich countries can afford a lot of taxes if they generally let markets work.

For low minimum wage spurring growth, I'm not sure many people think low minimum wages spur growth as much as they limit the harm to low skilled employees.  In the U.S., the federal minimum wage isn't really limiting in a lot of places, and there has been very little variance, although with cities like Seattle implementing a $15 minimum wage, we might finally be having enough of a difference in policy to see clear impacts.  (Even then, it's not the best comparison to look at very well off cities like Seattle; having a high minimum wage in St. Louis but not in Kansas City might be much more informative.)

But regardless, it seems like people arguing that the demand curve for labor doesn't slope downward should have the burden of proof for producing empirical evidence supporting their position, not the people arguing that the demand for labor curves downward just like it does for pretty much every other service and non-giffen goods.     
 



Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on August 02, 2017, 11:16:37 AM
Why does everyone think that automation is somehow not going to happen if we keep the minimum wage where it is? Are we really that naive? Robots are really cheap compared to paying employees anything. They are basically legal slave labor. Plus, businesses don't deal with shrinkage from employee theft and employee error. The robots are coming no matter what we make the minimum wage.
Automation will come eventually to a lot of things, regardless of the labor cost.  The effect of minimum wage (and changes to it) is more a matter of when and how quickly that transition will happen, and how much economic value is lost in the meantime.  Allowing the market to make that transition on its own means it'll happen more gradually, with less market disruption.

For low minimum wage spurring growth, I'm not sure many people think low minimum wages spur growth as much as they limit the harm to low skilled employees. 

...

But regardless, it seems like people arguing that the demand curve for labor doesn't slope downward should have the burden of proof for producing empirical evidence supporting their position, not the people arguing that the demand for labor curves downward just like it does for pretty much every other service and non-giffen goods.
Well-put, on both points.

I hadn't heard of Giffen goods before.  It sounds like they're a bit of a unicorn--a few things have been claimed as Giffen goods, but there's a distinct lack of evidence for them existing.
Title: Re: Thoughts on Minimum Wage?
Post by: libertarian4321 on August 02, 2017, 11:25:00 AM
To those that say "the fight for $15" will result in less workers, it's not true.

Here we have 4 new workers starting their careers, made possible by rising wages for low skill workers:

(http://www.thegatewaypundit.com/wp-content/uploads/Automated-Cashiers.jpg)

Happy, hard working employees who never need a break, always show up on time, never take a day off, and never take to the streets demanding ridiculous wages.

Enjoy that $15/hour wage...
Title: Re: Thoughts on Minimum Wage?
Post by: dividendman on August 02, 2017, 11:34:57 AM
To those that say "the fight for $15" will result in less workers, it's not true.

Here we have 4 new workers starting their careers, made possible by rising wages for low skill workers:

Happy, hard working employees who never need a break, always show up on time, never take a day off, and never take to the streets demanding ridiculous wages.

Enjoy that $15/hour wage...

Hrm.... I think that result is good.
Title: Re: Thoughts on Minimum Wage?
Post by: WhiteTrashCash on August 02, 2017, 11:44:21 AM
To those that say "the fight for $15" will result in less workers, it's not true.

Here we have 4 new workers starting their careers, made possible by rising wages for low skill workers:

(http://www.thegatewaypundit.com/wp-content/uploads/Automated-Cashiers.jpg)

Happy, hard working employees who never need a break, always show up on time, never take a day off, and never take to the streets demanding ridiculous wages.

Enjoy that $15/hour wage...

Why were you eating at McDonalds? Ew.
Title: Re: Thoughts on Minimum Wage?
Post by: sokoloff on August 02, 2017, 11:56:14 AM
I hadn't heard of Giffen goods before.  It sounds like they're a bit of a unicorn--a few things have been claimed as Giffen goods, but there's a distinct lack of evidence for them existing.
Somewhat related, might as well read about Veblen goods today as well (similar idea, opposite end of the price spectrum).
Title: Re: Thoughts on Minimum Wage?
Post by: talltexan on August 04, 2017, 02:24:23 PM
One of the famous examples of a Giffin good was potatoes during the Irish potatoe famine. You need it to be what economists call an "inferior good", which means that wealthy people will sub in something more expensive if they can afford it (meat is the expensive substitute for potatoes). It also needs to represent a substantial portion of the total household expenditures.

If you can get a perfect storm of price spike on an inferior good that a LOT of people have to buy because it's the cheap option, then, bam, upward-sloping demand curve.
Title: Re: Thoughts on Minimum Wage?
Post by: ixtap on August 04, 2017, 02:32:19 PM
One of the famous examples of a Giffin good was potatoes during the Irish potatoe famine. You need it to be what economists call an "inferior good", which means that wealthy people will sub in something more expensive if they can afford it (meat is the expensive substitute for potatoes). It also needs to represent a substantial portion of the total household expenditures.

If you can get a perfect storm of price spike on an inferior good that a LOT of people have to buy because it's the cheap option, then, bam, upward-sloping demand curve.

Sounds like corn/tortillas when larger shares of the corn market were diverted to ethanol.
Title: Re: Thoughts on Minimum Wage?
Post by: Johnez on August 05, 2017, 10:49:11 PM
Regarding mass automation, it'll happen.....eventually. It doesn't have a whole lot to do with minimum wage discussions. As I see it, it's like wondering if getting the iPhone 8 is a good idea when the iPhone 12 will probably have immersive reality, complete with telepathy and improved telekinesis. The tech is all there, witness the auto industry. There's a reason it is crawling forward instead of taking over however.

The UBI is what will be discussed once automation takes hold. When there are no (or very few) actual people making things, selling things,or even designing things-who's gonna buy things?
Title: Re: Thoughts on Minimum Wage?
Post by: nnls on August 06, 2017, 12:12:17 AM
Youth unemployment is high because they're unskilled, and with free trade, many of our unskilled jobs have gone overseas. We can't compete with Chinese living in dorms and getting $150 a month. Thus, youth unemployment is a problem with the structure of the economy: we don't make things any more. When manufacturing declines, youth employment declines.
Does a high minimum wage have any effect on the ability of these youth to get their first job where they can start developing skills?


I couldn't see anyone responding to this, but maybe I missed the reply.

Minimum wage doesnt apply to youth, I got my first job at 14 and 9 months (earliest I could get a job in my state at the time) I was only paid about $7 an hour, this went up on my fifteenth birthday and automatically went up every year on your birthday, so a higher minimum wage probably encourages people to employ youth as you don't have to pay them full minimum wage until they turn 21
Title: Re: Thoughts on Minimum Wage?
Post by: Optimiser on August 07, 2017, 02:20:40 PM
Regarding mass automation, it'll happen.....eventually. It doesn't have a whole lot to do with minimum wage discussions. As I see it, it's like wondering if getting the iPhone 8 is a good idea when the iPhone 12 will probably have immersive reality, complete with telepathy and improved telekinesis. The tech is all there, witness the auto industry. There's a reason it is crawling forward instead of taking over however.

The UBI is what will be discussed once automation takes hold. When there are no (or very few) actual people making things, selling things,or even designing things-who's gonna buy things?

I hope this is the case, however I worry that we will instead create a complex, inefficient, and expensive system that consists of expanding our current patchwork of existing social welfare programs, that could be real disaster.
Title: Re: Thoughts on Minimum Wage?
Post by: WoodStache on August 07, 2017, 03:23:01 PM
Why does everyone think that automation is somehow not going to happen if we keep the minimum wage where it is? Are we really that naive? Robots are really cheap compared to paying employees anything. They are basically legal slave labor. Plus, businesses don't deal with shrinkage from employee theft and employee error. The robots are coming no matter what we make the minimum wage.

In the meanwhile, as I've said before and as other people are saying on this thread, we are really sick and tired of having to basically pay half the wages for these corporations' workers through our taxes, because our politicians are owned by the corporations and refuse to force them to pay living wages.

Respectfully, I disagree with this. As someone said on the first page, it is society that has placed this value and definition of a suitable standard of living. I don't see it as a corporations responsibility to pay that at all.

That said, I think the minimum wage argument in its entirety is largely a game of political points. I haven't looked up the stats in a while, but something like half of the minimum wage earners are young (high school/college, exactly who you'd think would have minimum wage) and additionally half of them are in service industries which often make additional money in the form of tips. The number of able bodied 25+ year old adults working for minimum wage in this country is very small.
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on August 07, 2017, 03:55:48 PM
I hope this is the case, however I worry that we will instead create a complex, inefficient, and expensive system that consists of expanding our current patchwork of existing social welfare programs, that could be real disaster.
The concept of UBI looks good on the surface, but as with most social programs, it is fraught with issues once you actually dig into the details.  CoL differentials, what constitutes a livable minimum, preventing hedonic adaptation from creating a never-ending cycle of people wanting to raise it, effects on inflation, how to fund it, how to discourage abuse, how to make sure the funds are actually used for necessities (see: EBT fraud/misuse), how to distinguish between those who can't work vs those who won't work, etc.  It gets really messy.

I'm not saying that it can't work in some cases.  I'm just very skeptical that it can work in a society as culturally diverse as the US.  We already have a whole raft of welfare programs (Section 8 housing, EBT, SNAP, free school lunches, subsidized public transit, medicaid, utility assistance programs, free job training, universal education, and EIC, and that's just off the top of my head.  If someone wants to pull themselves out of poverty, it's certainly possible.  Some people choose that path.  And some people, due to physical or mental limitations, can't follow that path.  But it's clear that a significant number of people who could choose that path instead decide not to.  And it seems that no social welfare program can change that.

Respectfully, I disagree with this. As someone said on the first page, it is society that has placed this value and definition of a suitable standard of living. I don't see it as a corporations responsibility to pay that at all.
I'd take it one step further:  it is a subset of our society that has picked (for example) $15/hour as a livable wage.
Title: Re: Thoughts on Minimum Wage?
Post by: sokoloff on August 07, 2017, 04:00:30 PM
I hope this is the case, however I worry that we will instead create a complex, inefficient, and expensive system that consists of expanding our current patchwork of existing social welfare programs, that could be real disaster.
The concept of UBI looks good on the surface, but as with most social programs, it is fraught with issues once you actually dig into the details.  CoL differentials, what constitutes a livable minimum, preventing hedonic adaptation from creating a never-ending cycle of people wanting to raise it, effects on inflation, how to fund it, how to discourage abuse, how to make sure the funds are actually used for necessities (see: EBT fraud/misuse), how to distinguish between those who can't work vs those who won't work, etc.  It gets really messy.
A significant beauty of UBI is the "U"-that it's universal. There's no need to determine can't work vs won't work; all you need to do is determine "alive [and perhaps citizen] vs not". Everyone gets it.

You blow yours on pop rocks and bubble gum? Well, you'll get next month's payment next month; figure it out until then...

If you means test it, it's not UBI.
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on August 07, 2017, 04:05:10 PM
The concept of UBI looks good on the surface, but as with most social programs, it is fraught with issues once you actually dig into the details.  CoL differentials, what constitutes a livable minimum, preventing hedonic adaptation from creating a never-ending cycle of people wanting to raise it, effects on inflation, how to fund it, how to discourage abuse, how to make sure the funds are actually used for necessities (see: EBT fraud/misuse), how to distinguish between those who can't work vs those who won't work, etc.  It gets really messy.
A significant beauty of UBI is the "U"-that it's universal. There's no need to determine can't work vs won't work; all you need to do is determine "alive [and perhaps citizen] vs not". Everyone gets it.

You blow yours on pop rocks and bubble gum? Well, you'll get next month's payment next month; figure it out until then...

If you means test it, it's not UBI.
You're correct in theory.  But uttering anything that can be interpreted as "suck it up, buttercup, you got yourself into this mess" is politically ...unwise, while trumpeting the need to help the poor (with Other People's Money) appears to be eternally popular.
Title: Re: Thoughts on Minimum Wage?
Post by: nnls on August 07, 2017, 04:13:25 PM
In the US there is no scaled minimum wage with age.  Does it work well in AU?  I wonder if employers could use it to exploit younger workers (fire them when they age out of the minimum wage and replace with other young workers)?

I am sure this does happen, but the jobs I had as a teenager were generally after school retail or fast food jobs. The younger people did get preference for these shifts as they were cheaper. And my first office job was specifically advertised as "office junior", once i had been there for a few years I was getting paid more but also had more experience.

None of my friends ever complained about loosing shifts or jobs when they became too old, but this is obviously only my experience so other people may have different stories. But I kinda felt that by the time you were old enough to be paid full wage you had often moved on from the job or had more availability as you weren't at school so more shifts opened up to you 
Title: Re: Thoughts on Minimum Wage?
Post by: Kyle Schuant on August 09, 2017, 05:04:13 AM
In the US there is no scaled minimum wage with age.  Does it work well in AU?  I wonder if employers could use it to exploit younger workers (fire them when they age out of the minimum wage and replace with other young workers)?
Yes, that does happen. However, the sorts of jobs available to unskilled youths - McDs, shelf-stacker at a supermarket, etc - are ones they tend to do only as part-time while at school or early university years. A few go on to be managers, but the majority don't actually want to still be there at 25 years old.


The old-style lower wage jobs in factories, mines and on farms, etc, which some people might want to do for years or decades - they just don't exist as much. It's just the retail and hospitality parts of the service sector.


In practice those getting youth wages view it as a sort of "rite of passage" thing. You do it while studying so you can get a "real" job. So while they do get fired for younger ones, usually they don't need to be, since they just leave. And even without that, there's a huge turnover of staff, since 15-18 year olds tend not to be super-motivated and passionate about anything, let alone stacking a shelf.
Title: Re: Thoughts on Minimum Wage?
Post by: talltexan on August 09, 2017, 11:16:59 AM
I'm really intrigued by the idea that having a UBI might encourage higher fertility rates. Is anyone aware of that being an outcome in the studies that are out there?
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on August 09, 2017, 02:13:21 PM
I'm really intrigued by the idea that having a UBI might encourage higher fertility rates. Is anyone aware of that being an outcome in the studies that are out there?

I think it will lead to LOWER fertility rates.  In extremely poor regions (Africa), when people were given better healthcare and income, they actually have fewer children. 

https://blogs.unicef.org/evidence-for-action/evidence-over-ideology-giving-unconditional-cash-in-africa/
From the article:
Quote
Policymakers love to suggest that unconditional cash transfers, particularly those targeted to families with children will cause an increase in fertility as families try to gain eligibility for benefits. This is not true. The Transfer Project has found no evidence of increases in fertility—in fact in two countries (Kenya and South Africa), it was found that cash transfers actually decreased early pregnancy among young women and adolescent girls. Let us not assume that giving support to poor households will result in the next baby boom.

Even in the US, people with higher incomes tend to have fewer children.
That sounds like an apples-to-oranges comparison, though.  Different cultures, different levels of diversity, correlation vs causation, etc.
Title: Re: Thoughts on Minimum Wage?
Post by: Prairie Stash on August 10, 2017, 09:07:28 AM
To those that say "the fight for $15" will result in less workers, it's not true.

Here we have 4 new workers starting their careers, made possible by rising wages for low skill workers:

(http://www.thegatewaypundit.com/wp-content/uploads/Automated-Cashiers.jpg)

Happy, hard working employees who never need a break, always show up on time, never take a day off, and never take to the streets demanding ridiculous wages.

Enjoy that $15/hour wage...
What country is this from? Silly Americans with their center of the universe syndrome. This could be from Canada, Germany, Australia, Japan, Korea or anywhere. Your minimum wage laws have very little effect on automation...if it doesn't start in the USA it'll be imported from Canada where we already have these stations.

So what if the wage is $15 or $5 in the USA, in other countries we'll develop the automation and the jobs to support, build and code the machines, then we'll sell them into the American market. Keep your low minimum wage, its better for Canada if you do :) You can have the low tech and we'll do the high tech jobs, either way these machines are replacing your workers.

Obviously I'm exaggerating some about the high tech jobs leaving the USA, I'm trying to highlight that this is happening outside of the USA and your local wages have no bearing on it.

Title: Re: Thoughts on Minimum Wage?
Post by: Optimiser on August 10, 2017, 09:19:52 AM
I agree that the automation is inevitable, but that doesn't mean that wages don't have some effect on how quickly it takes place.  It might make sense for McDonalds to put in self ordering kiosks even at today's wages, but it probably isn't cost effective for Mom and Pop's Burger Joint. However, there is some level of minimum wage, could be $15/hour could be more or less, where even a small independent shop is going to find a way to reduce their labor force.
Title: Re: Thoughts on Minimum Wage?
Post by: dividendman on August 10, 2017, 11:40:41 AM
To those that say "the fight for $15" will result in less workers, it's not true.

Here we have 4 new workers starting their careers, made possible by rising wages for low skill workers:

(http://www.thegatewaypundit.com/wp-content/uploads/Automated-Cashiers.jpg)

Happy, hard working employees who never need a break, always show up on time, never take a day off, and never take to the streets demanding ridiculous wages.

Enjoy that $15/hour wage...
What country is this from? Silly Americans with their center of the universe syndrome. This could be from Canada, Germany, Australia, Japan, Korea or anywhere.


Well, it's probably not from Germany, Japan or Korea... since they don't tend to use English.

If we look at the machines we can see the Interac logo - this is a Canadian only thing. So my guess is it's from Canada.
Title: Re: Thoughts on Minimum Wage?
Post by: Prairie Stash on August 10, 2017, 12:20:04 PM

What country is this from? Silly Americans with their center of the universe syndrome. This could be from Canada, Germany, Australia, Japan, Korea or anywhere.


Well, it's probably not from Germany, Japan or Korea... since they don't tend to use English.

If we look at the machines we can see the Interac logo - this is a Canadian only thing. So my guess is it's from Canada.
[/quote]
Good eye, I was just randomly saying countries to illustrate a point; that automation isn't related to the minimum wage in the USA.

Fair warning Americans, Canadians are coming for your jobs.
Title: Re: Thoughts on Minimum Wage?
Post by: omachi on August 10, 2017, 12:20:34 PM
What country is this from? Silly Americans with their center of the universe syndrome. This could be from Canada, Germany, Australia, Japan, Korea or anywhere. Your minimum wage laws have very little effect on automation...if it doesn't start in the USA it'll be imported from Canada where we already have these stations.

So what if the wage is $15 or $5 in the USA, in other countries we'll develop the automation and the jobs to support, build and code the machines, then we'll sell them into the American market. Keep your low minimum wage, its better for Canada if you do :) You can have the low tech and we'll do the high tech jobs, either way these machines are replacing your workers.

Obviously I'm exaggerating some about the high tech jobs leaving the USA, I'm trying to highlight that this is happening outside of the USA and your local wages have no bearing on it.

That raises an interesting question. Will the minimum wage driving labor prices up or the massive focus on STEM jobs in the US driving automation costs down result in more job losses? They'll obviously work together nicely to find a price in the middle of where the costs are now. I'd guess the STEM focus, since it would take a lot of wage growth to make automating many jobs attractive now. Once automation costs start dropping, they'll probably only start dropping faster. You can buy a Raspberry Pi for $20 today that in every way beats the pants off a computer from 30 years ago that cost $3000 in 80s money. With ever more people working on it, think we'll see a similar curve for automation?

And as Prairie Stash points out, those darned Canadians will do it to us if we don't do it ourselves.
Title: Re: Thoughts on Minimum Wage?
Post by: FINate on August 12, 2017, 11:12:41 AM
https://www.google.com/amp/s/amp.businessinsider.com/what-self-serve-kiosks-at-mcdonalds-mean-for-cashiers-2017-6 (https://www.google.com/amp/s/amp.businessinsider.com/what-self-serve-kiosks-at-mcdonalds-mean-for-cashiers-2017-6)

McDonalds is rolling these out in 2500 stores, but don't worry it won't replace those jobs they say!

How can they even say this.  They are moving people to other areas like table service?  Don't worry that will fail then those people will be out of work - but it's totally not because of the kiosks. 

Automated ordering via kiosk or smartphone app makes a lot is sense.  It's almost as easy as turning the cash register around to face the customer!

Standard corporate operating procedure. Saying that you're replacing workers with automation doesn't play well, bad PR. And you certainly don't blame it (publicly) on minimum wage increases. No, you state the change in positive terms such as using technology to augment the customer experience. Adding not subtracting. Once kiosks are fully rolled out and the news cycle has moved on then quietly start slashing those table service jobs ("surveys found they were not valued" or whatever).
Title: Re: Thoughts on Minimum Wage?
Post by: Kyle Schuant on August 14, 2017, 04:09:56 AM
I think if you compared growth rates across countries to the tax per GDP of the country, you'd see pretty good correlation. [...]  Rich countries can afford a lot of taxes if they generally let markets work.
This makes intuitive sense, but unfortunately is not correct. I just pulled the data from wikipedia, they have a list of countries by govt tax as share of GDP and one of growth rates. Some countries don't appear in both, eg DPRK has 1% growth, supposedly, but their taxes are unknown; and growth rates of small territories like US Virgin Islands are reported, though their tax as a share of their product is not reported. But these are usually just islands and things so won't change the overall picture much at all.

You can copy and paste and make a chart in excel, you'll see no trends whatsoever. For example, China and India we can say are comparable countries - high population, both in Asia, both industrialising - China takes 10% more of the GDP but ends up with the same growth rate as India. NZ takes more of GDP than Australia and has higher growth rate. Bahrain takes 4.8% and has 4% growth, while UAE takes 1.4% and has 2.7% growth. Bulgaria has 27.8 and 3.4, Russia has 19.8 and is in recession.

There are just so many other factors. You don't even see trends in looking at one country, since it's common for governments to cut taxes and raise spending during recessions, in an attempt to break out of the recession - which doesn't always work, since increasing government debt has other flow-on effects, but even when it does work, they find themselves unable to raise taxes and drop spending later.

There's just too many factors.

   Tax   Growth
Afghanistan   6.4   3.9
Albania   22.9   3
Algeria   7.7   4.2
Angola   5.7   0
Argentina   37.2   -2.3
Armenia   22   0.2
Australia   25.8   2.5
Austria   43.4   1.5
Azerbaijan   17.8   0
Bahrain   4.8   4
Bangladesh   8.5   5.5
Belarus   24.2   -3
Belgium   47.9   1.2
Belize   21.6   3.8
Bolivia   27   4.1
Bosnia   41.2   3
Botswana   35.2   1.9
Brazil   34.4   -3.6
Bulgaria   27.8   3.4
Burma   4.9   5.5
Burundi   17.4   -7.2
Cambodia   8   5.5
Cameroon   18.2   4.4
Canada   32.2   1.4
CapeVerde   23   1.9
Chad   4.2   -6.4
Chile   21   1.6
China PR   28.1   6.7
Colombia   16.1   2
Comoros   12   1
CongoDR   13.2   2.4
Congo,Rep   5.9   -2.7
CostaRica   21   3.8
Côted'Ivoire   15.3   8.5
Croatia   36.7   2.9
Cuba   44.8   1.3
Cyprus   39.2   2.8
CzechRepublic   36.3   2.4
Denmark   50.8   1.1
Djibouti   20   3.7
Dominica   30.3   3.4
DominicanRepublic   12   7
EastTimor   61.5   5.5
Ecuador   13.2   -2.2
Egypt   15.8   4.3
ElSalvador   13.3   3.8
EquatorialGuinea   1.7   -10.2
Estonia   32.3   1.6
Ethiopia   11.6   8
FederatedStatesofMicronesia   12.3   5.5
Fiji   21.8   5.5
Finland   43.6   1.4
France   47.9   1.2
Gabon   10.3   2.3
Georgia   21.7   2.7
Germany   40.6   1.8
Ghana   20.8   4
Greece   39   0
Guatemala   11.9   3.8
Guinea   8.2   0
Guinea-Bissau   11.5   5.4
Guyana   31.9   -2.7
Haiti   9.4   3.4
Honduras   15.6   3.8
HongKong   13   2
Hungary   39.1   2
Iceland   40.4   7.2
India   17.7   6.8
Indonesia   12   5
Iran   6.1   6.5
Ireland   30.8   5.2
Israel   36.8   4
Italy   43.5   0.9
Jamaica   27.2   1.1
Japan   28.3   1
Jordan   21.1   2.1
Kazakhstan   26.8   1.1
Kenya   18.4   6
Korea,South   26.8   2.8
Kuwait   1.5   2.5
Kyrgyzstan   21.4   2
Laos   10.8   7.6
Latvia   30.4   2
Lebanon   14.4   1
Lesotho   42.9   1.9
Liberia   13.2   0.9
Libya   2.7   -6.1
Lithuania   20.9   2.3
Luxembourg   36.5   4
Macau,China   20.1   -4
Macedonia   29.3   3
Madagascar   10.7   4.1
Malawi   20.7   5.4
Malaysia   15.5   4.2
Mali   15.3   5.4
Malta   35.2   5
Mauritania   15.4   3.7
Mauritius   19   1.9
Mexico   19.7   2.3
Moldova   33.8   4
Mongolia   33.8   5.5
Montenegro   28   3
Morocco   22.3   1.5
Namibia   28.8   1.9
Nepal   10.9   7.7
Netherlands   39.8   2.1
NewZealand   34.5   4
Nicaragua   17.8   3.8
Nigeria   6.1   -1.5
Norway   43.6   1
Oman   2   4
Pakistan   16.8   2.3
Panama   10.6   5.5
PapuaNewGuinea   24.5   5.4
Paraguay   12   4.1
Peru   18   3.9
Philippines   14.4   6.8
Poland   33.8   2.8
Portugal   37   1.4
Qatar   2.2   2.7
Romania   27.7   4.8
Russia   19.5   -0.2
Rwanda   14.1   5.4
SaintLucia   23.1   3.8
SaintVincentandtheGrenadines   26.5   3.4
Samoa   25.5   5.5
SãoToméandPríncipe   17.4   5.4
SaudiArabia   5.3   1.4
Senegal   19.2   6.6
Serbia   34.1   2.8
Seychelles   32   1.9
SierraLeone   10.5   -23.9
Singapore   14.2   2
Slovakia   29.5   3.2
Slovenia   39.3   2.5
SolomonIslands   24.7   5.5
SouthAfrica   26.9   0.3
Spain   37.3   3.2
SriLanka   11.6   4.3
Sudan   6.3   1.5
Suriname   22.1   -2.7
Swaziland   39.8   1.9
Sweden   45.8   3.3
Switzerland   29.4   1.3
Syria   10.7   -9.9
Tajikistan   16.5   6.9
Tanzania   12   6.6
Thailand   17   3.2
TheGambia   18.9   5.4
Togo   15.5   5.4
Tonga   27   5.5
TrinidadandTobago   28   3.4
Tunisia   14.9   1
Turkey   24.9   2.9
Turkmenistan   20.2   6.2
Uganda   12.6   4.7
Ukraine   28.1   2.3
UnitedArabEmirates   1.4   2.7
UnitedKingdom   34.4   1.8
UnitedStates   26   1.6
Uruguay   23.1   1.4
Uzbekistan   21   7.8
Vanuatu   17.8   -2
Venezuela   25   -18
Vietnam   13.8   6.4
Yemen   7.1   -28.1
Zambia   16.1   3
Zimbabwe   27.2   5.4
Title: Re: Thoughts on Minimum Wage?
Post by: dilinger on December 13, 2017, 08:02:02 PM
"Socialist hellhole of Seattle leads nation in small business job growth"
https://twitter.com/ByRosenberg/status/940825194884628481

Rosenberg is a Seattle Times reporter.  That minimum wage increase is destroying our fair city!
Title: Re: Thoughts on Minimum Wage?
Post by: Kyle Schuant on December 13, 2017, 08:35:14 PM
Here we have 4 new workers starting their careers, made possible by rising wages for low skill workers:
People just like technological solutions, the cost hasn't much to do with it. Here in Melbourne, we've had a lot of ticketing systems over the years since we decided to get rid of tram and train conductors. The most recent is the Myki card system, basically a debit card which you can only pay for public transport tickets with. For some reason it cost $1.5 billion. At $50k each, this could have paid for 1,000 conductors (about twice as many as needed) for 30 years - and the system won't last 30 years, that's for sure.

A year ago they renewed the 7 year contract for another $700 million. So that's another 500 people for 30 years.

People just think that high tech is good, even if it's MORE expensive. Wages are irrelevant, really, machines will replace humans wherever possible cos machines are kew1, man. This is after all the principle of the Mac Tax. "Yes you should pay twice as much, because it's kew1!!!"
Title: Re: Thoughts on Minimum Wage?
Post by: Chesleygirl on December 14, 2017, 12:03:52 PM
I think it's pointless to raise minimum wage for fast food workers. Most of those jobs are soon going to be automated, so they'll be dispensed with altogether.

I do wonder what will happen to the fast growing elderly population if nurse aides and home health aides aren't paid at least $15 an hour. It's going to get ugly. I used to work in nursing homes, and they beg for CNAs to work there, but won't pay them more than $10 an hour.
Title: Re: Thoughts on Minimum Wage?
Post by: Kyle Schuant on December 14, 2017, 03:35:08 PM
How did you arrive at 500 humans replaced by Myki?  This article shows 30-50k rail employees.
Rail employees nationally, for public transport, freight, maintenance, everything. You didn't even follow the links in your own article you showed us:
https://en.m.wikipedia.org/wiki/Metro_Trains_Melbourne (https://en.m.wikipedia.org/wiki/Metro_Trains_Melbourne)

"Metro Trains Melbourne is also responsible for 218 railway stations and employs a workforce of 3,500 rail professionals including train drivers, mechanical and electrical engineers, network operations specialists and customer service representatives."

There are 218 stations. Most are staffed already; around 1985, Flinder Street Station had 3 guys at windows, 3 guys at the gates, and a guy who came out and changed the clocks to show the next train on each line, 7 people at peak times; now they have 1 guy at the window, 1 guy sitting behind a computer changing the times on the clocks, 2 groups of 4 ticket inspectors, 1 person on each of 8 platforms making announcements at peak times, and so on - they employ more people with Myki and other electronic systems than they did before that. But then, some suburban stations are unstaffed, and others are only staffed for part of the day.


Of course, some staff aren't counted in the wiki. Unstaffed stations made people feel insecure (crime rates, including crime on railways, have dropped, but people feel insecure), the government decided to put cops on the train lines. The cops didn't want to do it, so the government hired Protective Services Officers (formerly just court and state building security guys), with lower standards than VicPol. They have two per train station (http://www.smh.com.au/comment/psos-on-train-stations--there-has-to-be-a-better-way-20160921-grls4t.html), plus admin staff etc, so that's 500 staff just there - they're part of the cost of the train network, but they don't count. $80 million a year cost there.

Any calculations of cost vs Myki must allow for not only the original $1,500 million cost, but the $700 million for the next 7 years, and so on.

Myki is a Melbourne-only system, and like all technological solutions was supposed to replace people. However, as they found when they first brought in fancy ticketing systems back in the 90s, those old conductors they fired, many of them had to be re-hired as ticket inspectors. A conductor notices you jump a turnstile, a ticketing machine doesn't. So they have ticket inspectors.


The ticket inspectors and "customer service representatives" go back to being conductors. We don't need even half as many PSOs if the stations are staffed. Allowing an extra 2 employees per station on average, plus 10-20% more to allow for sick and holiday leave, training and so on, gets us around 500 people.

So we'd only need 500 more public transport workers in Melbourne than we already have, and we could go back to having staff at every station from first train to last, and people on platforms, etc.


Now, we won't do that, of course. Because of sunk cost fallacies and no government can take police off the streets, the timid middle class won't stand for it. But the point is: technology here has not saved us money and made people unemployed, it's actually cost us a lot, lot more - and lead to a lot, lot more employment. Usually it's educated jobs, but not always - cf PSOs.

Quote
I generally think that tech is not adopted until it is cost competitive.  Well that's almost certainly the case in private industry where the bottom line drives decisions.
You're on a discussion forum which is founded on the premise that most people just piss away their money, and you are asserting that tech is adopted rationally?

Technology does not replace people or reduce costs. It changes jobs and often means more education is needed. Despite going from typewriters to photocopiers and personal computers, we have more people working in offices than ever before; but instead of just going to Secretarial College, they have to do a Bachelors in something. So the universities have to expand to accommodate more students. And those students graduate with a student loan debt, so they demand higher salaries. And the computers cost money, and take power, and require more of the airconditioning, and people have to set the computers up and maintain them with their frequent breakdowns.

So in the end, the office with computers costs a lot more to run than did the office with typewriters. The people edged out are those unable or unwilling to get an education. There are indeed losers in this game of social change - but it's not because of minimum wage, it's because we think technology is cool, man.
Title: Re: Thoughts on Minimum Wage?
Post by: FINate on December 16, 2017, 01:14:57 PM
In my news feed this week: https://www.forbes.com/sites/michaelsaltsman/2017/12/15/why-the-15-minimum-wage-will-cost-california-400000-jobs/#6576cd9f43b9
Title: Re: Thoughts on Minimum Wage?
Post by: libertarian4321 on December 17, 2017, 05:10:29 AM
To those that say "the fight for $15" will result in less workers, it's not true.

Here we have 4 new workers starting their careers, made possible by rising wages for low skill workers:

(http://www.thegatewaypundit.com/wp-content/uploads/Automated-Cashiers.jpg)

Happy, hard working employees who never need a break, always show up on time, never take a day off, and never take to the streets demanding ridiculous wages.

Enjoy that $15/hour wage...
What country is this from? Silly Americans with their center of the universe syndrome. This could be from Canada, Germany, Australia, Japan, Korea or anywhere.


Well, it's probably not from Germany, Japan or Korea... since they don't tend to use English.

If we look at the machines we can see the Interac logo - this is a Canadian only thing. So my guess is it's from Canada.

That photo was old.

I recently traveled from Texas, to my home state (or the state I escaped, if you prefer), and saw a lot of these new "employees."  Turns out the great state of NY, in it's continuing effort toward over taxation, over regulation, and economic failure, jacked up the minimum wage well above the Federal level.

That's great news for the companies that make robo-order takers.

The ones I experienced were much smaller than the ones in the photo.

Worked like a charm.  The new employees never bitched.  Never moaned.  Never walked off the job.  Never demanded a break from their high pressure job.  And my order actually was done right.

FWIW, I've worked plenty of minimum wage jobs in my life.  That's the reason I don't work for min wage now....
Title: Re: Thoughts on Minimum Wage?
Post by: Chesleygirl on December 17, 2017, 09:21:30 AM

That's great news for the companies that make robo-order takers.

The ones I experienced were much smaller than the ones in the photo.

Worked like a charm.  The new employees never bitched.  Never moaned.  Never walked off the job.  Never demanded a break from their high pressure job.  And my order actually was done right.

FWIW, I've worked plenty of minimum wage jobs in my life.  That's the reason I don't work for min wage now....

This automated ordering system should have been done a long time ago.  I always felt sad watching older adults take these jobs away from teenagers who needed them. Now these adults will have to learn a real skill to work.
Title: Re: Thoughts on Minimum Wage?
Post by: Kyle Schuant on December 17, 2017, 04:43:38 PM
I think you've ignored the productivity gains in your typewriter vs photocopier discussion.
If there's so much more productivity, why are more people employed in offices than ever? Farming is more productive, so it now employs less people. Manufacturing is more productive, so it now employs less people. Yet you say offices are more productive, and they employ more people? Really?

It's like, why did the war in Iraq cost more than the war in Vietnam, even though less troops were used and less bombs dropped? It just costs more to lose a war than it used to. Likewise, pushing paper around costs more than it used to.
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on December 17, 2017, 05:24:11 PM
I think you've ignored the productivity gains in your typewriter vs photocopier discussion.
If there's so much more productivity, why are more people employed in offices than ever? Farming is more productive, so it now employs less people. Manufacturing is more productive, so it now employs less people. Yet you say offices are more productive, and they employ more people? Really?

It's like, why did the war in Iraq cost more than the war in Vietnam, even though less troops were used and less bombs dropped? It just costs more to lose a war than it used to. Likewise, pushing paper around costs more than it used to.
A smaller percentage of folks' income is now spent on food, so they consume more of other goods/services/etc.  People "consume" more things nowadays that are produced by people who work in offices (and have other people in offices supporting them).  Electronics, apps, web sites, etc.
Title: Re: Thoughts on Minimum Wage?
Post by: Raj on December 18, 2017, 08:29:56 AM
Speaking as someone currently being paid near minimum wage I'd be happy about an increase.

But whenever I think about it from a macro perspective it becomes clear raising the minimum wage is not a good solution as supply and demand will cause their to be less jobs making it a zero sum game at best. This also makes it harder for teenagers and newly graduates to get jobs as they need to do more to earn the higher income but without jobs they can't get experience.
I'm already experiencing something similar in the accounting industry where I'm going to have to volunteer for awhile simply to get my foot into the door and get some experience.

In addition I think it's up to us and the government to support people who can't make enough to live rather than forcing companies to pay more.

As base level tasks become more and more monetized, putting more focus on welfare will become required, but before we reach that stage we will have to reexamine how we treat people on Welfare in our society, as currently we treat them rather poorly and on an emotional level I think less of them despite knowing on an intellectual level its often not their fault.

Sadly this view of welfare is for the week is something commonly shared, many poor people even share the belief and are proud that they haven't "sold out" to the government.
Title: Re: Thoughts on Minimum Wage?
Post by: Kyle Schuant on December 30, 2017, 03:03:58 PM
Speaking as someone currently being paid near minimum wage I'd be happy about an increase.

But whenever I think about it from a macro perspective it becomes clear raising the minimum wage is not a good solution as supply and demand will cause their to be less jobs making it a zero sum game at best.
Once again: the experience of Australia, with double the US minimum wage, shows that this is not the case. A higher minimum wage means higher costs for employers, but it also means more money for people to spend on things those businesses produce.


If higher wages are a zero-sum game, then everyone should be on minimum wage, since it won't make any difference, right? Why is a raise for the guy on $100,000 good for the economy, but a raise for the guy on $20,000 bad for it?
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on December 30, 2017, 03:12:59 PM
If higher wages are a zero-sum game, then everyone should be on minimum wage, since it won't make any difference, right? Why is a raise for the guy on $100,000 good for the economy, but a raise for the guy on $20,000 bad for it?
The argument is that a business is voluntarily giving the raise to the $100k employee, because it makes business sense to do so--either the employee brings that much value, or it provides an incentive to employees to be more productive, etc.  For the $20k employee, the difference is that raising the minimum wage forces the business to spend money in a way that doesn't benefit the business.  You're forcing a transfer of value without any reciprocal benefit.
Title: Re: Thoughts on Minimum Wage?
Post by: WhiteTrashCash on December 30, 2017, 08:41:04 PM
I know I've touched on this before, but laissez faire free market economics frequently lead to terrible consequences for societies. If we let the "markets" decide what people should be paid, then we'd still have workers being paid company scrip so they could pay the rent on their company housing like what we had during the horrors of the Gilded Age.
Title: Re: Thoughts on Minimum Wage?
Post by: The Fake Cheap on January 03, 2018, 07:40:30 PM
I think my big issue with minimum wage is that for most people, minimum wage isn't the wage you make your entire life.  Most people start there and work up.  If you've spent the last 15 years working for minimum wage, it's you, not the system, I'm sorry. 

That being said I think that it is a bit of a two way street, owners do need to pay employees a decent wage, without having to cut back on other perks like the paid breaks and employer paid benefits, especially at a profitable spot like this Tim Horton's:  http://www.cbc.ca/news/business/tim-horton-s-tims-timmies-doubledouble-minimum-wage-ontario-kathleen-wynne-labour-1.4470215

Title: Re: Thoughts on Minimum Wage?
Post by: talltexan on January 04, 2018, 12:13:56 PM
I know I've touched on this before, but laissez faire free market economics frequently lead to terrible consequences for societies. If we let the "markets" decide what people should be paid, then we'd still have workers being paid company scrip so they could pay the rent on their company housing like what we had during the horrors of the Gilded Age.

Yes, letting markets operate freely sometimes has terrible consequences, but sometimes it also has good results. It's not any more reasonable to characterize anti-minimum wage arguments in this way than it is to claim that raising the minimum wage to $15/hour will leave us on the doorstep of Venezuelan catastrophe.
Title: Re: Thoughts on Minimum Wage?
Post by: zolotiyeruki on January 04, 2018, 01:46:20 PM
I know I've touched on this before, but laissez faire free market economics frequently lead to terrible consequences for societies. If we let the "markets" decide what people should be paid, then we'd still have workers being paid company scrip so they could pay the rent on their company housing like what we had during the horrors of the Gilded Age.
Certainly a totally free market has its problems.  Monopolies are one such problem.  Company scrip was one such problem in the past.  At the same time, however, we live in an age of unprecedented availability of information, and practices like that are much harder to pull off.  Witness, for example, all the flak Amazon got a few years back for its "churn and burn" approach to employees.

Certainly, labor laws have helped shape cultural expectations of worker conditions to the benefit of workers.  But minimum wage laws are a bit different from, say, basic safety regulations, because they literally outlaw a certain type of job, and prevent people from taking those jobs even if they fully understand that their pay is low.
Title: Re: Thoughts on Minimum Wage?
Post by: Cowardly Toaster on January 15, 2018, 05:58:37 PM
I know I've touched on this before, but laissez faire free market economics frequently lead to terrible consequences for societies. If we let the "markets" decide what people should be paid, then we'd still have workers being paid company scrip so they could pay the rent on their company housing like what we had during the horrors of the Gilded Age.
Certainly a totally free market has its problems.  Monopolies are one such problem.  Company scrip was one such problem in the past.  At the same time, however, we live in an age of unprecedented availability of information, and practices like that are much harder to pull off.  Witness, for example, all the flak Amazon got a few years back for its "churn and burn" approach to employees.

Certainly, labor laws have helped shape cultural expectations of worker conditions to the benefit of workers.  But minimum wage laws are a bit different from, say, basic safety regulations, because they literally outlaw a certain type of job, and prevent people from taking those jobs even if they fully understand that their pay is low.

Low wages can really hold a society back because cheap labor availability makes technological advancement unnecessary. Some historians theorize that the Romans or Chinese would have went much farther technologically, but never had an incentive to due to the wide availability of slaves.
Title: Re: Thoughts on Minimum Wage?
Post by: dividendman on January 17, 2018, 11:07:17 PM
I know I've touched on this before, but laissez faire free market economics frequently lead to terrible consequences for societies. If we let the "markets" decide what people should be paid, then we'd still have workers being paid company scrip so they could pay the rent on their company housing like what we had during the horrors of the Gilded Age.
Certainly a totally free market has its problems.  Monopolies are one such problem.  Company scrip was one such problem in the past.  At the same time, however, we live in an age of unprecedented availability of information, and practices like that are much harder to pull off.  Witness, for example, all the flak Amazon got a few years back for its "churn and burn" approach to employees.

Certainly, labor laws have helped shape cultural expectations of worker conditions to the benefit of workers.  But minimum wage laws are a bit different from, say, basic safety regulations, because they literally outlaw a certain type of job, and prevent people from taking those jobs even if they fully understand that their pay is low.

Low wages can really hold a society back because cheap labor availability makes technological advancement unnecessary. Some historians theorize that the Romans or Chinese would have went much farther technologically, but never had an incentive to due to the wide availability of slaves.

Can you share a book or something that makes that hypothesis? It sounds intriguing.
Title: Re: Thoughts on Minimum Wage?
Post by: talltexan on January 29, 2018, 01:33:21 PM
You see, I was thinking that low wages allowed for businesses to retain more earnings, which meant more funds would be available to invest for expansion, so you'd see faster growth.
Title: Re: Thoughts on Minimum Wage?
Post by: Jrr85 on January 29, 2018, 02:06:51 PM
I know I've touched on this before, but laissez faire free market economics frequently lead to terrible consequences for societies. If we let the "markets" decide what people should be paid, then we'd still have workers being paid company scrip so they could pay the rent on their company housing like what we had during the horrors of the Gilded Age.
Certainly a totally free market has its problems.  Monopolies are one such problem.  Company scrip was one such problem in the past.  At the same time, however, we live in an age of unprecedented availability of information, and practices like that are much harder to pull off.  Witness, for example, all the flak Amazon got a few years back for its "churn and burn" approach to employees.

Certainly, labor laws have helped shape cultural expectations of worker conditions to the benefit of workers.  But minimum wage laws are a bit different from, say, basic safety regulations, because they literally outlaw a certain type of job, and prevent people from taking those jobs even if they fully understand that their pay is low.

Low wages can really hold a society back because cheap labor availability makes technological advancement unnecessary. Some historians theorize that the Romans or Chinese would have went much farther technologically, but never had an incentive to due to the wide availability of slaves.

Certainly labor being more expensive provides more incentive to invest in mechanization (although I'm not sure how much, as mechanized processes are still usually going to cheaper than even slave labor (who still have to be fed and sheltered).  But do you really want to argue that the government should ban the most vulnerable people in the labor pool from paid work because you think it might spur investment in mechanization/automation?  I don't think I want the government making those kinds of decisions. 
Title: Re: Thoughts on Minimum Wage?
Post by: Kyle Schuant on February 16, 2018, 08:25:22 PM
You see, I was thinking that low wages allowed for businesses to retain more earnings, which meant more funds would be available to invest for expansion, so you'd see faster growth.
That is actually the basis of capitalism, that profit is reinvested into the company to expand it. However, Western society is capitalist in the same way that Russia was communist. The warping may be an inevitable development of the system, but it is a warping nonetheless.