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ALSO: This is not about me advocating an across-the-board minimum wage hike.

This is about the owners who can afford to pay better than that, should. Y'know, gbaji, the ones who are so generous with donations that this country doesn't need stuff like food stamps? Because they give so much?



EDIT: "who can", not "can can"

Edited, Dec 16th 2015 10:38am by Bijou

Have I told you about our Lord and Savior, Jesus Christ?

The market prefers slavery or sweat shops elsewhere. It's great at pushing down wages for more common roles, but just looking at trends in wage growth or lack of over time, it's pretty clear it's kind of **** at spreading overall gains.

So GPD increases and the top 10% see good growth in their income, this increase is clearly not shared with the employees, that's your 100 workers and 1 CEO example in real life.

It cuts into their own paychecks.

I would think that people would be willing to pay more to get somebody else to do the menial, onerous tasks

In the right circumstances this can happen. For instance, moving a large hill to the end of the race instead of the beginning of the race will have a major impact in that, if people are running. Irrelevant if its cars. So you know, details and circumstances are important.

Yes. And I disagree. Hence it being an argument. My issue is that you keep pointing to things that aren't problems and insisting that this is proof that the system is broken. Um... People getting paid the value of their labor isn't a broken system. On the other hand, a system that forces employers to pay workers more than the value of their labor *is* a broken system. One that will, in fact, collapse pretty quickly. For what I would hope are obvious reasons.



You're changing the words though. You're equating "worth doing the work for" with "earns you a living wage". My argument has been (consistently, I might add) that not all workers require earning a living wage. A student earning $8/hour is going to consider that wage worth doing the work for, but it's not a living wage. That's the point I think you keep missing. It's perfectly ok to have jobs that earn wages lower than one can support a household on. Because, as you correctly point out, there are some jobs that just aren't worth that much in terms of output, and also many people who might like to make some cash and earn experience, but who don't yet *need* to support a household solely on their earnings.

Those are the jobs that get you into the workforce, get you experience working, and hopefully help you learn skills that you can build into a higher paying job later. Not having these low paying jobs effectively makes employment a "head of household or bust" proposition. Which frankly, hurts a lot of people.



Except what it's fixing isn't a problem, and it doesn't actually fix it. That's the point I'm trying to get across.



Yes. But all those people do not need to support a household all by themselves. And the labor they're doing, while useful and even arguably necessary on the whole, isn't valuable enough on a per-worker basis to justify a salary sufficient to support a household (which is the standard for a "living wage", right?).

It's not a problem that these jobs don't earn enough to support a household on. There's nothing to fix. But by trying to fix it, you may create additional problems, by increasing the cost to employ those people in those jobs, resulting in a loss of entry level positions for new workers, thus cheating them of those valuable workplace skills that are so necessary for earning higher salaries later. What I find funny is that you even point out a problem with raising those wages. The jobs will be eliminated. Is that "better"? I don't think so.



Or. We can not try to force every single job to earn enough to support a family on. Do you see that the "solution" you're proposing is the actual problem? Please tell me you can see this?

Any labour is worth a living wage though because if it's not the public pays the difference through taxes. We don't live in your dream world where paying a McDonald's employee more will cause the entire economy to inflate. In the real world if you pay a McDonald's employee a living wage the cost of McDonald's products will increase by a small percentage. This isn't some kind of unmitigated disaster, it's going to redistribute the value of labour which rich people don't want because it will devalue their wealth. If charging $2.00 for a burger isn't enough to pay your staff a living wage then the burger should be more than $2.00. If that makes burgers less appealing to the masses then guess what? Burgers probably shouldn't be as easy to get because the labour required to produce them exceeds their current value.

You keep saying the labour isn't worth the output but that's not the problem the problem is the output isn't worth the labour but we're doing it anyway.

So you don't think that the hundreds of thousands of people in your wage group somehow don't drive inflation?

Interesting.


Once again the lowest payed employees ruin the economy. Those jerks.

No, my wage group does not drive inflation, and it's strange that you would think so. This isn't an "us vs them" situation. My wage is not artificially inflated. It's the wage my employer is freely willing to pay me in return for my labor, absent any force requiring it to do so. This means that my labor is actually valued at the relative wage I earn. This relative value is not "broken". It's based on the consumer value of the products my employer produces, and an assessment of my employer as to the degree to which my labor contributes to that value.

As I said earlier, the value of my labor relative to that of a burger flipper is a natural result of the market. It's not artificial. It's the result of the entire collective decisions of all the consumers in the market making free purchasing decisions. That does not create inflation because it does not cause an increase in other relative valuations. What causes the form of inflation I'm talking about is when wages are artificially adjusted by some authority. We don't have laws which mandate higher wage levels for skilled professions. There's no law saying a computer programmer must make $60k/year and an EE must make $85k/year, etc. Thus, there's no artificial wage going on.



You're trying to turn this into an identity based issue. It's not. While we don't have wage fixing laws for higher skilled people we *do* have minimum wage laws. The poor don't cause this problem, but the existence of minimum wage laws can. If you raise minimum wage, you've now raised the "floor" that an unskilled laborer can earn. And since, as I've explained numerous times in this thread, and which should be inherently obvious to anyone with a passing understanding of economics, dollars only have value as a medium of exchange, when you raise the dollar cost of unskilled labor, the relative cost for all other labor valued higher than unskilled must go up as well. Maybe not instantly, but it will adjust.

Which will cause inflation. You aren't just raising the wage of the poor person. You will raise the relative wage of everyone. See the problem is that you're trying to improve the relative economic condition of the "poor" relative to the rich, but you can't do that by raising minimum wage. You just can't. In the same way you can't raise the relative height of a dingy compared to a cruise ship by raising the water level. They both have the same relative height over the water level. In the same way, wages will retain a relative "height" over the minimum wage based on how the market relatively values the labor.

You can't fix the problem that way. The only way to help the poor is to provide them better means and opportunity to improve the real relative value of their labor. Any other solution is just chasing your own tail.

Edited, Jan 5th 2016 2:15pm by gbaji

Sure. In the short term. And for those who retain their jobs (or can find one in the first place). Again, you're mostly providing a benefit for those who need it least, based on a purely emotional argument. And said benefits fade pretty quickly. It's why liberals keep going back to the minimum wage well year after year. If raising it actually helped the poor, wouldn't it have... you know... helped the poor by now?



Temporarily. They just raised it recently, so prices have not have time to adjust yet. Um... But we can already see a rising unemployment trend among those most likely to earn minimum wage (young workers). That will adjust, of course, but about the same rate as the costs adjust. Which leaves you with a wash.

I'll also point out that you can't directly compare one nations numbers to another. What you have to look at is deltas within a nation's economy over time, based on economic policy choices. I just see raising the minimum wage as an attempt to rob Peter to pay Paul. In the end, you don't accomplish much, but along the way, you might just get some "feel good" support from the process. Which, I'll submit, is the primary reason why the Left loves to propose this. If they really thought that simply raising minimum wage was the way to help the poor, why not raise it to something substantial, like say $40 or $50 per hour? $10.10, or $12, or even $15 isn't enough to support a household on, right?

Clearly, the Left understands that this actually doesn't work. But if they propose smaller changes, that will have little effect at all, but will play on people's emotions, they can gain political advantage with the issue. Which is why it's used. It has *nothing* to do with actually trying to help the poor because no amount of raising the minimum wage will ever be sufficient to accomplish that, and any amount that would be would have immediate and powerful negative effects (like say actually raising it to $40 or $50 per hour).



Well, that's a whole different issue though. Remember that within any given industry, there are a range of jobs, with a range of skills, and a range of relative valuation, and thus wages paid. One could argue, for example, that my company might benefit from various trade deals and subsidies (or be harmed by them, depending on how things pan out), and that this would logically affect the relative profits of the company (and likely all others in the same industry), and thus effect the salaries of those working here. Um... But there's no reason to assume this would only benefit IT engineers and chip designers, right? It would also benefit secretaries, admin clerks, janitors, groundskeepers, security personnel, etc, etc, etc. So it's hard to paint this in terms of a broad effect on wages in a specific profession, since the same skill set might land you a similar job in any of a number of companies engaged in potentially radically different industries.

I'd argue that this is an effect on specific wages for a given individual worker based on the company they work for, but likely gets washed out when looking broadly at an entire field. The larger effect of relative valuation of the skills of a given profession will tend to far outweigh those other factors. So while there may be some variation for an IT engineers salary based on where he works, the set of "all IT engineers" compared to "all burger flippers" is going to remain pretty constant in terms of relative valuation. And, as I've mentioned above, raising minimum wage isn't going to have a long term effect on that relative valuation. It may temporarily benefit the burger flipper, but the economy will adjust, other wages will adjust, prices will adjust, and the short term benefit will fade.

The only long term way a burger flipper improves his relative economic position is to improve his skill set so that he's no longer employed flipping burgers, but is instead doing something that is valued higher. This is a far far better bet than sitting around hoping for a minimum wage hike to make your burger flipping job pay more. So policies that make it easier for burger flippers to move on to doing something more valuable to the labor market are much better approaches than policies that attempt to make burger flipping pay more. The former actually helps people improve themselves over their lifetimes. The latter does not, and can actually be harmful because the mere pursuit of the goal can result in more people choosing to linger in a low skill job waiting for the government to impose a wage increase rather than taking actions to improve their skills themselves.


The fallacy here is looking at the numbers in those low paying jobs and making huge hay out of it. The more important figure is the rate of upward mobility. How hard is it to move up into higher income brackets within a given labor market? That's what really matters. Everyone can (and probably should) start with a low paying job. But they should be encouraged to move up to higher paying jobs, and do so by actually improving their skills and value to their employees. This works because they are actually producing things of value greater than the cost of their labor, producing a net positive macro economic effect on the economy. When you start dorking around with mandated wage levels, the temporary benefit to those in the low paying jobs is at the expense of those jobs actually costing more relative to what they produce. Which has a net negative economic effect. Even if the argument is that the economy (or businesses in that segment of the economy) "can afford it", that misses the point. Profits don't get stuffed in mattresses. They get re-invested in some way. And one of the direct benefits of those profits is relatively higher employment in the next cycle. Reducing those profits will have a net negative effect on employment over time. The cost may not be immediately apparent, but it will be paid. There ain't no such thing as a free lunch.

Edited, Jan 5th 2016 4:16pm by gbaji

You are inconsistent. On one hand you argue that min wage hikes will result in a corresponding increase in wages above min wage and thus obliterate any gains via inflation, on the other hand you argue that min wages hikes are unfair on those earning slightly above it because their additional pay is eroded. Both of these things cannot logically be true.

It temporarily raises the wages of those at or near minimum wage. Which provides them a temporary benefit until wages and prices adjust to this. But the same temporary benefit for them, is a temporary harm to those who were earning at or near the new minimum wage (and arguably helps those in the range above the old and up to and including the new level less relatively speaking based on how much farther they were in that rage). It's not inconsistent at all. To whatever degree that a minimum wage hike helps those who were previously earning below that new level, it harms those earning an amount just above it.

The point I'm trying to make here, is that the assumption that minimum wage will help some people is based on a lack of adjustment (or quick adjustment anyway) of prices and other relative wages. As I mentioned earlier, the relative value of job A to job B remains constant over time. So personB earning $15/hour's labor is worth 50% more than personA earning $10/hour, right? If you raise the minimum wage to $15/hour, that personB's wages are no longer accurately reflecting that relative labor value. This condition will remain until that his wage raises to a similar relative amount (so let's say $22.50 if we keep it absolutely relative, although as you've said this isn't always going to be a 1:1 thing). Ok. But what happens to personC who was previously earning $22.50, and thus has his wages ranked at 50% higher than personB? His labor is also now not reflective of that relative valuation. But remember, that relative valuation is pretty constant. We value one job relatively more than another regardless of the number of dollars represented. Dollars don't have inherent value. They are just a means of exchange between relative valuations of goods and services in the economy. So his wage will *also* have to increase to maintain that relative valuation.

This isn't going to happen immediately, of course, but it will happen. And the more completely it happens, the more that inflation factor we talked about actually does approach a 1:1 increase and washes out the initial economic gain of the lowest earner we helped by raising minimum wage. Here's the thing though, the longer it takes to happen, then the longer all those people in those ranges above minimum wage are harmed by the increase. In direct proportion to the relative amount we raised the minimum by.

So you're left with a catch-22. Either you raise the minimum assuming the relative wage gains will remain for them, but by doing so also accept that the relative wage loss by everyone else will also remain. Which means you're hurting more people than you're helping, and arguably hurting those we least want to hurt, while helping those least in actual need of help. OR... We assume a fairly rapid adjustment for those earning wages in the range above minimum wage (say up to 2-3x the minimum). But if that adjustment is rapid, then the inflation effect will also be rapid, which means that we wont see the benefits to those we raised the minimum for (or not for very long).

You kinda have to pick one. And frankly, I'm not dogmatically married to either option. I'm just pointing out that it has to be one or the other, and either one represents a strongish negative to raising the minimum wage. And it certainly totally offsets the idea that you can (or should) raise minimum wage sufficiently to be a "living wage". It just can't work. The higher and faster you raise the wage, the harsher the negative on those in some smallish multiple of wages above that minimum, and the faster the economic response will be. Because despite many people's assumptions to the contrary, employers aren't terrible ogres who love to see their employees suffer. When faced with a minimum wage hike, those employers who have employees earning wages in the negative zone will realize this. They'll recognize that the single mom working as their shift manager now earns less relatively speaking than she did before, and they will endeavor to raise her wage somehow. And to offset that increase, they will raise the prices on the goods and services their business provides to consumers. This effect will ripple through the entire economy, ultimately erasing the relative wage improvement you originally sought to accomplish.


This is why, btw, no liberal seriously suggests actually raising the minimum wage to something you could actually support a household on. Because they know it wont work. The minimum wage argument exists purely as a political argument, designed to influence people's emotions and gain votes. It is not actually a valid economic argument. The best way to actually improve the average standard of living in your economy is to encourage industries to grow and produce products and services that are valued by consumers, thus driving higher employment in better paying jobs. Playing legislative games with wage laws doesn't actually do anything at all. Because ultimately the size of your economic pie is based on the total production of your workforce, not the number of dollars you print, or how many dollars you attach to a different job. We could declare a job standing around twiddling your thumbs to be worth $100/hour but unless people actually value thumb twiddling that much (which they presumably don't), you haven't actually added anything to the pie. You've just changed the exchange rate, so to speak.