Mondays (Bart Johnson)

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Letter: Update living wage

"Paying a fair wage for a fair day’s work is just the right thing to do."

The wage as determined on the market is the fair wage.

To be fair, the LTE proposes only using this higher minimum wage on businesses who get money from the city, but the logic is still flawed.

August 1, 2015 at 9:51 a.m. ( | suggest removal )

Letter: Higher wage lessons

"They will only create jobs if and only if it benefits their profit margins. "

Of course. They are running a for-profit business and not a charity. Your suggestion of raising wages beyond the competitive market price would thus lose some people their job. The choice isn't between $9 and $15 an hour, but between $9 and $0.

"It's a completely line. "

Doesn't matter their motivations or intentions or anything. As Adam Smith pointed out over 200 years ago, capitalists do good things for society in order to benefit themselves. The baker doesn't bake your bread because he wants you to be happy. He does it for the money you'll give him for it.

Regardless, this entire discussion is brought about because of government intervention in the economy via inflation. When we had a stable currency, it was much easier to see how capitalists benefitted the average man by constantly trying to lower prices in order to sell more products. If your wages remain the same but prices go down, your life has improved. In the era of government inflation, prices mostly go up, so now we look to wages as the way that we improve our lives. Under inflation, wages are always the last thing to go up, so wage-earners are always behind. Minimum wage used to be $1.25 back when quarters had silver in them. Well, five silver quarters today is $15. In other words, without inflation the purchasing power of the minimum wage would be about what $15 an hour would get you today. Government inflation is the real enemy, not greedy businesses.

July 24, 2015 at 11:13 p.m. ( | suggest removal )

Letter: Higher wage lessons

Jason, the problem with your example is that you assume that rich people and poor people are sitting at a table, with the poor guy having three beans on his plate and the rich guy having a huge pile of spaghetti. Why, if only the rich guy shared a little bit of spaghetti, the poor guy could eat too. After all, the rich guy can't eat all that spaghetti himself, right?

What's wrong with your idea is that rich people do not consume all their wealth. Nor do they sit on huge piles of cash. For most wealthy people, their wealth is tied up in capital assets--machines, equipment, tools, computers, offices, factories, mines, farms, ships, silos, stores, merchandise, etc. They own businesses, real estate and investments in other people's businesses like debt and stocks. These are the things which enable society to produce our great wealth. Imagine trying to build a car without machines and tools. Workers don't provide their own equipment, they use the capitalist's equipment to produce goods, and without that equipment they wouldn't be nearly as productive.

So what you are really asking is to take some of the rich person's capital assets away, which would decrease the wealth of the entire society.

July 24, 2015 at 6:14 p.m. ( | suggest removal )

Letter: Higher wage lessons

Economics cannot be done by controlled experiment. Data is completely useless in testing hypothesis because you cannot rule out all other factors. Business cycles affect unemployment, inflation affects wage levels, technology and innovation affect productivity, consumer demand affects which fields are more in demand, the diversity of skills and resources affects which places are best suited to meet consumer demand. There are too many possible things that can affect the unemployment rate to be able to change any one factor and conclude that the subsequent data are the result of that one change.

You call using deductive logic "water dowsing." That's just silly. Deductive logic arrived at from observable axioms provides airtight conclusions. It is an uncontestable truth that a worker who's production is less than their wage will lose money for the business owner. That's simple logic. You say it's "water dowsing" or like a "magic 8 ball" as if these economists just say what they want to say and have no reasoning behind their conclusions. That's just simple minded arrogance on your part. You haven't studied it, you don't care to learn about it, you just want to ignore that it's even possible.

Notice that you haven't even tried to answer what happens to the worker who's production is less than the minimum wage. You just dismissed that entire idea by assuming that no such people exist.

July 24, 2015 at 6:03 p.m. ( | suggest removal )

Letter: Higher wage lessons

Eh-hem. By Paul Krugman:
"So what are the effects of increasing minimum wages? Any Econ 101 student can tell you the answer: The higher wage reduces the quantity of labor demanded, and hence leads to unemployment."

Regarding the Card-Krueger study:
"What is remarkable, however, is how this rather iffy result has been seized upon by some liberals as a rationale for making large minimum wage increases a core component of the liberal agenda--for arguing that living wages "can play an important role in reversing the 25-year decline in wages experienced by most working people in America" (as this book's back cover has it). Clearly these advocates very much want to believe that the price of labor--unlike that of gasoline, or Manhattan apartments--can be set based on considerations of justice, not supply and demand, without unpleasant side effects. This will to believe is obvious in this book: The authors not only take the Card-Krueger results as gospel, but advance a number of other arguments that just do not hold up under examination. "
http://www.thefreelibrary.com/Living+...

Read the whole article. Krugman shows that economics trumps the "morality" of a living wage idea. And Krugman is a far left liberal. Most economists would readily state that minimum wages increase unemployment over where it would be, ceterus paribus. Bob Murphy, Tom DiLorenzo, Walter Block, Mark Thorton, Joseph Salerno, Tom Woods etc. all agree that the minimum wage hurts the poor the most. Walter Block calls it an "anti-black law" because of how much it hurts poor black Americans.

Regardless, I've read quite a few economists, we could sit here and name names all day. That isn't an argument, Barb. If you can't respond to the point that workers who's production is below the minimum wage won't have a job, then you have failed to respond. If you own a business, and your workers produce $10 worth of work, and you pay them $15 an hour, how long will your business stay open? How long will those people have a job? This is simple logic, and I can't fathom why it's so hard for you to grasp.

July 24, 2015 at 7:25 a.m. ( | suggest removal )

Letter: Higher wage lessons

So let's recap: I've been told many times that I don't know anything about economics, yet not one person can answer me what happens to the people who cannot produce $15 an hour in goods and services. Some study somewhere disagrees with me, so that somehow proves me wrong, but not one person can explain why. Not one person can explain why they think I'm wrong, yet somehow a lot of people think they know more about economics than I do.

No one has refuted my point regarding the field of economics being deductive and not inductive because you cannot conduct controlled experiments. Yet again people claim I know nothing about it and am somehow wrong, for reasons they cannot explain.

One person even said I was "making up claims" when I was discussing the hypothetical situation of a low-skilled worker. Do you even understand the level of the discussion?

The thing is, price floors and ceilings are not even debateable among all economists. Even leftist economists like Paul Krugman would agree that raising the minimum wage would cause more unemployment than there otherwise be, ceterus paribus. In the real world, things are not ceterus paribus. We have inflation, for example, that would slowly push the real minimum wage down over time, and thus slowly raising the minimum wage to reflect inflation would not cause an increase in unemployment, which I have no problem conceding.

What I do have a problem with, is that those who are worst off, those with the least skills, experience and education are the ones who are shut out of a job. High school dropouts, those from rough inner city neighborhoods, those who have no job experience are those who are hurt by minimum wage laws. Look at the unemployment rate for people ago 18-24. They are losing years of valuable on the job training, experience, references, and networking that would enable them to earn higher wages in their futures because they can't find a job now. They also don't develop the work ethic that can help drive their career. You folks pretend like you care about poor people, but those who are worst off are the ones hurt by your law, and none of you seem to care about them like I do. At my job, I work with temporary workers all the time who can't find a permanent position. I see the damage your laws cause to their lives. I care about them as human beings. I don't think you folks really do.

July 24, 2015 at 1:54 a.m. ( | suggest removal )

Letter: Higher wage lessons

Data? Oh my, you don't know what economics is, do you?

July 23, 2015 at 1:24 p.m. ( | suggest removal )

Letter: Higher wage lessons

David, Evidence? Studies? That's not how economics works. You cannot conduct controlled experiments in economics. It is instead based on deductive logic from observable truths. It's quite simple: if someone produces $10 an hour worth of labor, and the minimum price of labor is $15, what happens to their job? Why is that so hard for you to understand?

July 23, 2015 at 1:22 p.m. ( | suggest removal )

Letter: Higher wage lessons

Barb, sure, for those who have a job. What about all the people who's wage would be $0? Don't you care about them?

July 23, 2015 at 1:20 p.m. ( | suggest removal )

Letter: Higher wage lessons

Dorothy, according to your link, Kansas and Wisconsin is doing worse than California in terms of unemployment, yet according to the BLS http://www.bls.gov/web/laus/laumstrk.htm they are both doing better. Care to address that little glitch in your link?

Economics is not something you can do experiments on. You can't look up some numbers and say that proves your point and discard logic and reason. It's quite simple: if you raise the minimum wage above a worker's productivity, they will lose their job. Employers are not going to lose money on an employee who is not producing enough to sustain their wage level. That is logic.

What's hilarious is that you say you refuse to buy groceries from a robot, yet your policy would force just such a thing to happen. You may care, but most people care about price. Why pay $5 for an apple here when they are $1 over there?

And I don't know who these "rich heroes" are that you're talking about, but you seem to have some sort of beef with them, so I hope you can figure it out yourself.

July 23, 2015 at 1:20 p.m. ( | suggest removal )

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