Slaves to the Wage

|

Over at Real Clear Politics, author and sometime Reasonoid Jeremy Lott tries to prove that minimum wage-hiking ballot measures yanked the Democrats to victory.

Minimum wage increases were up for vote in six states this year and carried all but one state by overwhelming margins (Coloradans approved it by a more modest margin). Residents of Arizona, Colorado, Missouri, Montana, Nevada, and Ohio decided that low wage workers deserved a raise—out of somebody else's wallet, of course.

According to preliminary turnout figures compiled by George Mason University political scientist Michael P. McDonald, the initiatives did a great job of getting voters out to the polls in the midterm elections. Nationally, there were 83,217,655 ballots cast for the highest elected office in any state—a 6.2 % increase over the 2002 midterms. Nearly a third of that increase (1,450,223 ballots) was concentrated in the six minimum wage-hiking states.

The minimum wage vote had four positive effects for Democrats: (1) It gave them control of the U.S. Senate; (2) It added to their majority in the House; (3) It helped them in state gubernatorial and legislative races; and (4) It was a Democrat-friendly issue to rival gay marriage.

Me, I'm not so sure. There's never been definitive proof of people going to the polls to vote for a ballot measure in a general election. The groups agitating to pass/defeat said measures may turn out their voters, but there's not a proveable connection between voting for Amendment X and voting for Candidate Who Supports Many of the Issues Embodied by Amendment X. Look at Virginia, which hosted an anti-gay marriage ballot measure that conservatives expected to help George Allen (who supported it) beat Jim Webb (who didn't). The amendment passed by 14 points, but Allen lost, and 40,000 people who voted in the Senate race left their ballots blank on the marriage amendment. Also, Arizona, Colorado, Montana, Ohio and Nevada had more competitive races than they did in 2002. The candidates and party committees were spending more to turn voters out than they had four years ago.

But the hook of Lott's column is his advice for Democrats.

Democrats can continue to hike minimum wages on a state-by-state basis or they can hike the federal minimum wage, but probably not both. A federal raise will relieve pressure to hike state minimum wages and rob Democrats of future political gains.

What might serve Democrats best at this point is misdirection and demagoguery. They can encourage Republicans in the Senate to filibuster it or, failing that, pass a bill so ridiculous that even President Bush will have to veto it. Then tell voters the Man is keeping them down.

That sounds like the "backlash narrative" that Tom Frank was accusing Republicans (rightly) of stoking in What's the Matter With Kansas. Lott's solution is clever, but 1) the backlash narrative looks like it crapped out in 2006 and 2) the minimum wage is easier to game and re-game than gay marriage or abortion. You can have an amendment redefining marriage, one banning gay adoptions, then apart from legiaslating around the edges, you're done. But even if Congress passes a minimum wage increase, states can put slightly-higher-than-national increases on the ballot from here to the end of time.

Advertisement

NEXT: Japanese Invasion of France Repelled...

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. I think we should lower the minimum wage to $1 an hour. Just think how many more workers could be employed, right?

  2. I get it. This is that sarcasm thing I’ve read about right?

    Really a drop to $1 would have virtually no effect, because almost no one’s labor is worth that little (maybe children). Some wages would drop, most would stay the same and go up over time, as we don’t exactly have an unemployment crisis in this country.

    Also, your snarky hypothetical is impractical, if not impossible. If the Fed min wage dropped to $1, all the state ones would still take precedent.

  3. As much as I prefer no statutory minimum wage . . .

    I must be catching some sort of disease in this forum! I *wish* the statutory minimum wage could be eliminated, but unfortunately, too many people think it actually helps people.

    Keeping it below the market minimum probably does not hurt anybody, but it probably has unforeseen consequences. For some reason, most of these measures manage to stay below the market minimum for most employers, but that does not make it any more acceptable.

  4. “For some reason, most of these measures manage to stay below the market minimum for most employers, but that does not make it any more acceptable.”

    The ‘some reason’ would be that democrats can only buy votes with a minimum wage that isn’t harmful, and the only minimum wage that isn’t harmful is the one set below prevailing wages.

    There are some of this recent batch that are big enough increases that we might be able to see some impact in the data.

  5. I don’t buy it. I jusst don’t believe that the minimum wage is that big a deal to voters.

  6. I did not like “What’s the Matter with Kansas” I found the amount of power and foresight that Frank Tomas attributed to the Republicans of Kansas to be equal to the amount of power and foresight femminsts attribute to the men, racial crusaders attribute to “The Man”, and marxists attribute to the ruling class.

  7. The ‘some reason’ would be that democrats can only buy votes with a minimum wage that isn’t harmful, and the only minimum wage that isn’t harmful is the one set below prevailing wages.

    You’re probably correct. If a minium wage was really meant to raise wages, wouldn’t it be indexed to inflation? I think it would be around $10/hr now based on what it was when first implemented.

  8. Working at the Chicken Kitchen down the street is worth $10 an hour? Or the job I had as a caddy when I was 14? Lord knows I needed the money to support my family.

  9. Good thing it’s only upper-middle class teenagers who know people at country clubs who earn minimum wage.

  10. It IS mostly unskilled workers who earn minium wage. Most unskilled workers happen to be teenagers working part-time who don’t have many finacial responsiblities.

  11. Working at the Chicken Kitchen down the street is worth $10 an hour? Or the job I had as a caddy when I was 14? Lord knows I needed the money to support my family.

    “Worth” is kind of an abstract concept, especially considering the worth of a job depends pretty much on how many other people are able to do it.

    But yet we still need caddies and chicken cookers and they still need to be able to afford a place to live and food to eat. So as a society, what do we do? Minimum wage is one way of addressing that problem.

  12. “mostly”

    It’s this commitment to individualism that really makes libertarianism inspiring.

    Hey, man, 51% 51%!

    Oh, and your empathy for the great unskilled is equally inspiring.

  13. And my point is that minium wage doesn’t (well, barely) descriminates between the upper-middle class teenagers at country clubs and those working in the shit factories who’d need the extra dough.
    It’d force companies to pay a living wage even in situations where people don’t even need it.

  14. We need caddies? Mighty broad definition of “need” you got there, Dan.

  15. If I were running for President or some other office (say in 2012) I would say something along the lines of “The minimum wage is only earned by about 2% of workers, half of which are under the age of 25. While I am opposed to wage and price controls, I will not pursue aboloshing the minimum wage. I would rather reach for the low hanging fruit, say the federal war on drugs, our far reaching foreign policy, or our unfair positions on international trade.”

    Would I lose as many libertarian votes as I gain?

  16. But yet we still need caddies and chicken cookers and they still need to be able to afford a place to live and food to eat. So as a society, what do we do? Minimum wage is one way of addressing that problem.
    But it still wouldn’t adress the problem. They would be earning more money, but it puts real wages down. A large portion of jobs that employ low-skilled workers (fast food, wal-mart, etc) supply buisness and services to people who earn lower incomes. The buisnesses need to make money somewhere to recoup the losses from pouring all of their money into their workers, and usually that is done by raising the prices of their products or hiring less employees.

  17. Why not target the people that need the help the most by expanding the earned income tax credit?

  18. Sayeth Dan:

    ‘ “Worth” is kind of an abstract concept, especially considering the worth of a job depends pretty much on how many other people are able to do it.’

    And yet the federal government can somehow take that abstract and put a hard number to it. FM, man.

  19. “What might serve Democrats best at this point is misdirection and demagoguery.”

    Misdirection and demagoguery: Not just for Democrats any more, not just for Republicans either. NOW for Libertarians TOO!

    (Explain to me why I am so lonely as an anarchist?)

  20. We need caddies? Mighty broad definition of “need” you got there, Dan.
    Of course, we don’t really “need” chicken chefs, cars, computers, TVs to survive either, but they are nice to have.

  21. We need caddies?

    Ahem, the world needs ditch diggers too.

  22. Jason, I suspect it’s because “a minimum wage increase” is easier to understand to the demographic the particular politicians are pandering to.

  23. But it still wouldn’t adress the problem. They would be earning more money, but it puts real wages down. A large portion of jobs that employ low-skilled workers (fast food, wal-mart, etc) supply buisness and services to people who earn lower incomes. The buisnesses need to make money somewhere to recoup the losses from pouring all of their money into their workers, and usually that is done by raising the prices of their products or hiring less employees.

    Prices probably would go up in some cases, the question is who would absorb those higher prices? I suppose it depends on the business.

  24. That’s just it, Dan T.

    “still need to be able to afford a place to live and food to eat” is not a universally-held belief.

    Some of us are willing to accept outcomes where people who work full time don’t have adequate food or shelter, and some of us are not.

    Jonathon,

    If there is to be a minimum wage, I don’t see how linking its level to the worker’s status can work. If the shit factories can pay teenagers from nice homes $5.00/hr, but have to pay adults trying to support a household $8.00/hr, there will just be fewer jobs for adults.

  25. “But yet we still need caddies and chicken cookers and they still need to be able to afford a place to live and food to eat. So as a society, what do we do? Minimum wage is one way of addressing that problem.”

    I nominate this as the incoherent thought of the day. Wages are determined by demand and supply for a given job, so when there are too many people who can do an easy job, society needs to raise their wage – otherwise there will be fewer people doing that job. Take that!

  26. “Some of us are willing to accept outcomes where people who work full time don’t have adequate food or shelter, and some of us are not.”

    Work full time doing what? How about counting sand. That sure is hard work. Maybe being a mime?

  27. Janathon H,

    “The buisnesses need to make money somewhere to recoup the losses from pouring all of their money into their workers, and usually that is done by raising the prices of their products or hiring less employees.”

    Have you ever seen the earnings of McDonald’s, Tyson Chicken, or most other minimum-wage-payers? The idea that these companies are paying minimum because they’re right on the edge of folding is a myth.

    Jason, the EITC is a good idea, too.

  28. the only minimum wage that isn’t harmful is the one set below prevailing wages.

    Unfortunately the union contracts tied to minimum wage rates do plenty of harm.

    your empathy for the great unskilled is equally inspiring.

    Working at a minimum-wage or less job is one way to go from being unskilled to skilled. Either that or suffer through school. Either way it takes a modicum of effort and sacrifice.

  29. “Wages are determined by demand and supply for a given job,” OK “…so when there are too many people who can do an easy job,” Yes, keep going “…society needs to raise their wage” yes, very good, almost to the end “- otherwise there will be fewer people doing that job.”

    BZZZTTTTTT!!!!! Oh, so close. I’m sorry, we were looking for ” – otherwise, the people doing that job will be earning a wage that does not allow them to support themselves.” No, the possibility of there being a smaller number of people doing a particular job has nothing whatsoever to do with why a minimum wage is necessary.

    “Work full time doing what?”

    Whatever shitty job you were forced to take by the absence of better alternatives.

  30. If there is to be a minimum wage, I don’t see how linking its level to the worker’s status can work. If the shit factories can pay teenagers from nice homes $5.00/hr, but have to pay adults trying to support a household $8.00/hr, there will just be fewer jobs for adults.
    You’re right.
    Hey, brainstorm; we should take $10,000 from buisnesses across the country and hold a lottery. We’ll take the names of 6,000,000 people where half of them need the money and half of them don’t need it put it in a box, and then give the money to the first 1 mil names pulled out of the shoebox.
    Sure, it is inefficient and half of the money would go to waste at the expensive of buisnesses, but it helps the poor, so it has to be a good thing, right?

  31. Swillfredo,

    “Working at a minimum-wage or less job is one way to go from being unskilled to skilled.”

    You become just skilled by boxing fried chicken at $8.00/hr as at $6.15/hr.

  32. Have you ever seen the earnings of McDonald’s, Tyson Chicken, or most other minimum-wage-payers? The idea that these companies are paying minimum because they’re right on the edge of folding is a myth.
    Because the minium wage isn’t that high, unlike the $10 and hour like Dan T. wants, which is higher than most mangers even make.

  33. This is more than a macroeconomic issue, it is a human issue. I can’t believe how little minimum wage increase proponents care about the people that lose jobs due to the increases. Their empathy for the unemployed certainly isn’t inspiring.

    I guess some are willing to accept the outcome that workers that are already struggling financially may now find themselves out of work. It is a shame they don’t care.

  34. “A federal raise will relieve pressure to hike state minimum wages and rob Democrats of future political gains.”

    This is ridiculous. You can keep hiking the minimum wage to keep up with inflation. Every four years, around election time, should do the trick.

  35. The minimum wage increase is a Democratic scheme to make middle class union members lose their overpriced jobs overseas, making them more dependent on the hand-out party. And the union fools actually vote for the party that’s trying to send them to the unemployment line.

  36. joe:

    Now, now. If you don’t like the nomination of DanT’s post for Most Incoherent thought, you have to at least reference HIS comment, especially this part:

    “But yet we still need caddies and chicken cookers…”

  37. “Whatever shitty job you were forced to take by the absence of better alternatives.”

    Wrong as usual. Nobody forced anyone to take the shitty job, and there are plenty of alternatives. Of course, some of those alternatives may require that the worker be able to provide a service, or have a skill or be able to use the education that was available to them “for free” (ie. at the expense of the people who DO provide a service/skill that others with a service/skill value).

    Cracker’s Boy

  38. The conspiracy theory I’ve heard is reverse of that; the union workers want to keep unskilled workers out of jobs so they could stay in power/jobs.

    Personally, I think both of them are full of bunk. Talk to the average democrat in the streets and they’ll say its because they think it helps the working man. Considering how inept they are at gaining and keeping power (John FUCKING Kerry), I would find it hard to see them exceling in that area and fail completely in most others. (in recent years)

  39. Solution to the “forced to take a shitty job” problem:

    Get some skills you lazy, boring fucks.

    There are so many opportunities for poor folks to have access to education that no one who wants to better themselves can say they weren’t given a shot.

    Before I get called an elitist, my background is civil servant parents, put myself through undergrad and law school. I owe $170,000 for my degrees. I took the chance and now I have a huge debt, but that investment will pay off handsomely over time.

    It can be done, kids can get training if they have a high school diploma or not. Displaced workers can get tuition breaks and extended unemployment. Grants, scholarships, internships, externships…the list is endless.

    I won’t shed one tear for some cry-baby nanny-stater who can’t feed his family on his hamburger-flipper salary ’cause he’s too fucking lazy to make himself worth more in the market.

  40. Jonathan C. Hohensee,

    I have heard that some union contracts use the minimum wage in scale calculations, but I have never seen that.

    I have, on many occasions, heard union members and their representatives use minimum wage in discussions about how their most junior member is worth X times the minimum wage.

  41. I think most people who start off in shitty jobs DO get some skills, (even working in those jobs will give them experience that will help them open doors to better opprununities) but the mind-set of a lot of people is that once you’re on minium wage, you’re stuck there for life.

    Personally, I hate the “why don’t you homeless people get jobs” mentality.

  42. Cab,

    If there was anything close to a perponderance of evidence suggesting that the minimum wage increased unemployment, yours would be an important rejection.

    But, as even the hard-core libertarians here at Reason have admitted, there simply isn’t any evidence to support that assertion. Some studies show a small job-reducting effect, some show no effect, and some show that raising the minimum wage decreases unemployment slightly.

  43. joe:

    “”Work full time doing what?”

    Whatever shitty job you were forced to take by the absence of better alternatives.””

    So, there is no imaginable job that is worth less than the minimum required to pay rent and buy groceries, no matter how low the demand for said job happens to be?

  44. I won’t shed one tear for some cry-baby nanny-stater who can’t feed his family on his hamburger-flipper salary ’cause he’s too fucking lazy to make himself worth more in the market.
    To clarify my last post, I meant that people who vote for minium wage thinks that out there, somewhere, is some poor mythical creature who’s a hard worker but completely unable to advance through life in any way. (I had this argument with a Marxist who kept throwing this ridculous senerios at me; “what if the boss doesn’t like him even though he’s a good worker and he gets a bad refrence?” “what if he lives in detroit?” “what if every time he makes some money, Godzilla bites one of his arms off?”)

  45. “worth” in what sense?

    A person who gives you his labor for 40 hours/week should be able to put food on his table. A human being is worth that much.

  46. If there was anything close to a perponderance of evidence suggesting that the minimum wage increased unemployment, yours would be an important rejection.
    It doesn’t cause unemployment; it slows job growth. A small amount of minium wage wouldn’t have that much effect, but once you start demanding that even 14-year-old workers can earn enough to buy and furnish their own apartment, you begin seeing problems.

  47. “civil service parents”

    Wow. Give me a minute here. I think I’m about to cry.

    Man, you really DO know what people from the poorest communities, in areas with little economic opportunity, are going through? I mean, your parents had civil service benes?

    Wow.

  48. “It doesn’t cause unemployment; it slows job growth.”

    There’s not enough evidence for that statement, either.

  49. Why do we always come here
    I guess we’ll never know
    It’s like a kind of torture
    To read Dan T. and joe

  50. crushing my left thumb
    is like reading a post by
    dan t. or joe

  51. That wasn’t quite a hiaku, Jon.

  52. You become just skilled by boxing fried chicken at $8.00/hr as at $6.15/hr.

    True, and you become just as skilled at $100/hour too. So why not make that the minimum wage? Oh, right, because when you increase the cost of labor you decrease the demand for it. And when you increase the price of boxed fried chicken you decrease the demand for it too. So with the exception of lower overall employment and higher prices it’s a win-win.

  53. There are so many opportunities for poor folks to have access to education that no one who wants to better themselves can say they weren’t given a shot.

    But if everybody got an education, that would mean that the education would be worth much less. We’d just have burger-flippers with college degrees, still getting paid crap wages.


    It can be done, kids can get training if they have a high school diploma or not. Displaced workers can get tuition breaks and extended unemployment. Grants, scholarships, internships, externships…the list is endless.

    But then who would flip the burgers?

    I won’t shed one tear for some cry-baby nanny-stater who can’t feed his family on his hamburger-flipper salary ’cause he’s too fucking lazy to make himself worth more in the market.

    But once again somebody has to do these jobs. That’s the key fact that you and others ignore.

  54. To clarify my last post, I meant that people who vote for minium wage thinks that out there, somewhere, is some poor mythical creature who’s a hard worker but completely unable to advance through life in any way.

    But wages are not based on how “hard” the work is. It’s capitalism, not hardworkism.

  55. joe:

    To be clear then, on the low end of the scale, the job that someone does should have no bearing on the wage they receive?

    I’m a bit stuck on full time, too. If you have two employers for 25 hours per week, which one needs to make sure you get paid your worth as a human being?

  56. ” “It doesn’t cause unemployment; it slows job growth.”

    There’s not enough evidence for that statement, either.”

    NO amount of evidence would convince you. So that’s what you guys call a straw man, right?

    There is plenty of evidence that providing a service/skill that is of value to others will put food on the table of the home that you can afford.

    Life is about choices, Joe. Some people make bad choices. You, being the elitist that you are, know what is best for people because you are smarter than they are. Right?

    Cracker’s Boy

  57. But then who would flip the burgers?
    UNSKILLED WORKERS. Everyone starts at the bottom rung, and works their way up. When I leave blockbuster, I am just going to pass my torch to the next kid who is just out of highschool and doesn’t have much work experience.

  58. “But once again somebody has to do these jobs. That’s the key fact that you and others ignore.”

    joe: See? Because there are too many people who can do a job, the wage is low. You need to raise the wage because ‘somebody has to do these jobs’. Presumably, these somebodys would normally come from the ranks of the too many people who can already do the job, but I’m sure we’re onto something here.

  59. But wages are not based on how “hard” the work is. It’s capitalism, not hardworkism.
    Semantics. If I changed the word to “valued” worker then your arugment wouldn’t have a leg to stand on.
    And, except for in Godzilla scenerios, most people are compitent enough to improve their work value.

  60. I would agree the numbers aren’t staggering, but I’m convinced that (in the short run at least) minimum wage increases decrease total employment. Ironically, they negatively affect some of those specific individuals minimum wage proponents are trying to help. For a politician not to care about those people in an attempt to garner votes is shameful.

    I suspect some do care about the people, that is why they set the minimum below market rate. Setting the minimum below market rate is just lip service anyway. No one gets fired, and the politicians gather votes with populist rhetoric. Win – win for them.

  61. UNSKILLED WORKERS. Everyone starts at the bottom rung, and works their way up. When I leave blockbuster, I am just going to pass my torch to the next kid who is just out of highschool and doesn’t have much work experience.

    But if it were only high school kids that had low-paying jobs there would be no problem.

    And certainly not everybody “starts at the bottom rung”. Paris Hilton only flipped burgers as part of her TV show.

  62. I don’t even get your intial burger flipping argument. If everyone graduated highschool, there would be no more burger flippers?

  63. joe is correct that the evidence of flat out unemployment is inconclusive. It is inconclusive because you can raise the minimum wage to below prevailing wages while only hurting people on the very bottom margin in a way that doesn’t show up in the data.

    You can’t make a company hire the same number of people for identical jobs at wages that are above the value those employees provide, irrespective of their value as human beings. Something has to give.

    On the margin, the forced wage increase may have little to no impact if the company has margins and a competitive environment that permit increased labor costs. A little higher, and you see changes to the conditions (costs) or expected productivity (benefits) of each employee. The air conditioning can be turned off, for example. Higher still, and it is unsustainable.

  64. I don’t even get your intial burger flipping argument. If everyone graduated highschool, there would be no more burger flippers?

    I’m saying that if everybody got a bachelor’s degree, for example, it wouldn’t mean all the sudden everybody would have a well-paying job. It would just mean that the value of that degree would drop. Just like the value of a high school diploma.

    So we’d still have burger-flippers making $6/hr, they’d just be educated burger-flippers.

    The general problem with capitalism is that it requires a large mass of people who have no choice but to sell their labor for less than it’s worth. But if they can’t make enough to pay the bills, what happens?

  65. Jason Ligon,

    It should certainly have some bearing on how much you earn; there should just be a minimum below which the wage is not allowed to go. $100 hour minimum wages only exist in the minds of people like Swillfredo.

    “If you have two employers for 25 hours per week, which one needs to make sure you get paid your worth as a human being?”

    Both, prorated based on the fraction of full time you work for them. Having to play dumb is not a good sign of your confidence in your position.

    Cracker’s Boy,

    A preponderance of the evidence would convince me. Any time you’d care to provide it, I’ll check it out. But as I said, even the hardcore true believers at Reason now admit that the evidence simply does not support your assertions of job loss.

    “Life is about choices, Joe. Some people make bad choices.” You keep telling yourself that luck means nothing, and that you’re just a better person than the people who bus your table, snob-boy. Me, I’m humble enough to know that “there but for the grace of God go I.”

  66. The same thing that always happens; they die horribly of starvation.

  67. The same thing that always happens; they die horribly of starvation.

    Nope, people generally don’t go down that easily. They’re more likely to riot or turn to crime.

    In our case, we’ve got a welfare system to prevent that. Thankfully.

    But it is ironic that the money you save at Wal-Mart due to the very low minimum wage comes out of your pocket in the form of taxes, anyway.

  68. The general problem with capitalism is that it requires a large mass of people who have no choice but to sell their labor for less than it’s worth.

    Capitalism isn’t perfect, it’s just better than what you are pushing. I mean it is better than what you want people to think you are pushing. Sometimes. Unless you say its wasn’t you later. Kind of. What I’m trying to say is…nevermind. Anyway…where was I? Oh. You’re wrong again.

  69. But it is ironic that the money you save at Wal-Mart due to the very low minimum wage comes out of your pocket in the form of taxes, anyway.
    Not many here support subsidies.

  70. oh, wait, never mind

  71. Michigan already has twice the average unemployment rate. When Ford and GM have to merge because of labor costs, you can bet the unemployment rate will go even higher. Sure, plenty of hard working folks will find employment, at lower wages. But they will be even more prone to believe that Democratic paternalism is in their best interests. While bemoaning wage disparity in public, the Democratic vote counters are privately rubbing their hands together in glee about the situation.

  72. ” “Life is about choices, Joe. Some people make bad choices.” You keep telling yourself that luck means nothing, and that you’re just a better person than the people who bus your table, snob-boy. Me, I’m humble enough to know that “there but for the grace of God go I.” ”

    Snob boy? Wow. What’s amazing is that you think you can improve someone’s LUCK then, eh? Sort of a god-like complex, isn’t it? You’re callin’ me a snob and you are saying you can make up for someone’s bad luck if only everybody does what YOU want them to do.

    I love ya’ man.

    Preponderance – My FIRST hit on Google….

    http://www.mises.org/fullstory.aspx?control=1603

    Clearly not a preponderance. But something I’m sure you’ll dismiss since you disagree with it.

    Cracker’s Snobby Boy

  73. I imagine Ford’s new CEO getting $18 million just for showing up is not exactly the labor costs you’re talking about.

  74. Jason Ligon,

    “You need to raise the wage because ‘somebody has to do these jobs’.” You’re leaving out the rest of that statement “…and it is unacceptable to have a class of people whose full-time wage is not enough to live on.” We will always have people working these jobs; either you’re ok with them living in miserable poverty, or you’re not.

    “It is inconclusive because you can raise the minimum wage to below prevailing wages while only hurting people on the very bottom margin in a way that doesn’t show up in the data.” That’s an interesting hypothesis, but not the most likely one. There is this body of workers that has been hurt, and no one can find them? No one? Not even with all the money being pumped into economic research by parties with an interest in opposing minimum wages? Maybe, Jason – just maybe – it isn’t a data failure, or a conspiracy. Maybe – just maybe – you’re WRONG.

    “You can’t make a company hire the same number of people for identical jobs at wages that are above the value those employees provide, irrespective of their value as human beings. Something has to give.” And when an immenstely profitable operation like a meat packing plant experiences an increase in labor costs, the owners take slightly less of an immense profit. Have you ever heard of a McDonald’s going out of business because the labor market was tight? Even one? They absorb these labor costs easily when they have to.

    “…at wages that are above the value those employees provide…” Employers’ don’t base their wage decisions on the value that employees actually add to the company; they offer the lowest wage they think they can pay, and if they can get people to work for much less than the value they provide to the company, so much the better. McDonald’s in poor neighborhoods are immensely profitable businesses; their employees aren’t earning crap wages because they only bring that much value to the operation, but because their options for finding other work are so limited.

  75. joe, I just caught the fact that earlier you described yourself as “humble.” how rich.

  76. “What’s amazing is that you think you can improve someone’s LUCK then, eh”

    Nope, just soften the blow of having bad luck.

    Now that I’ve cleared up that misunderstanding for you, I trust you can work out on your own why the rest of your comment makes no sense.

  77. There’s not enough evidence for that statement, either.

    Of all of the arguable concepts in economics, the one that gets near unanimous agreement is a downward sloping demand curve. When you decrease the price for something the demand increases. Looking in the other direction, when you increase the price for something, say labor, the demand decreases. Marx, Veblan, Galbraith and Keynes had no problem whatsoever with it.

    $100 hour minimum wages only exist in the minds of people like Swillfredo.

    Feel free to tell me in more detail other than “a living wage” what the magic number is. Actually I would more enjoy hearing you explain how it is okay to interfere in a consensual transaction between two individuals, one an employer and one an employee. What possible business is their contract of yours? You sure are generous with other people’s money.

  78. I imagine Ford’s new CEO getting $18 million just for showing up is not exactly the labor costs you’re talking about.
    We’re talking about Chicken Kitchen’s newest employee getting $10 an hour just for showing up and chopping some chicken, even though about 90% of America can do his job.

    How many people can the do the CEO of Ford’s job? (Not even the CEO of Ford, BAM!)

  79. “I trust you can work out on your own why the rest of your comment makes no sense.”

    Interesting. It made sense to me… and I read it again and it STILL makes sense to me, but as I said before, nothing will convince you otherwise. So of course it makes no sense to you. You know better.

    Cracker’s Lucky Boy

  80. How many people can the do the CEO of Ford’s job? (Not even the CEO of Ford, BAM!)

    I don’t know, but give me $1 million and I guarantee I won’t do 18 times worse.

  81. Anyway, I do want to thank everybody for the good debate, even those who disagreed with me on this one.

  82. yes you will, moreso infact. You’re a crappy at blogging; what makes you think you would do any better with operating a huge corporation?

  83. Anyway, I do want to thank everybody for the good debate, even those who disagreed with me on this one.
    At least you’re a graceful loser. 8)

  84. “I don’t know, but give me $1 million and I guarantee I won’t do 18 times worse.”

    I’ll take that bet. You WOULD do 18 times worse. See any of your posts above for an explanation.

    Cracker’s Gambling Boy

  85. “Maybe, Jason – just maybe – it isn’t a data failure, or a conspiracy. Maybe – just maybe – you’re WRONG.”

    Free lunches for everyone!

  86. It’s easy: let’s just let Joe decide how much money someone needs to put food on his table, a roof over his head and clothe himself; provide himself with healthcare; purchase transportation to work, the grocery and the doctor’s office; pay the utility bills; indulge in a little entertainment now and then; buy soap and shampoo, and occasionally get a haircut, etc., and then we’ll all do the math together to convert the answer into a minimum hourly wage.

  87. Characteristics of the minimum wage earner in 2005:

    http://www.bls.gov/cps/minwage2005.htm
    “1.9 million workers with wages at or below the minimum made up 2.5 percent of all hourly-paid workers”

    “Minimum wage workers tend to be young. About half of workers earning $5.15 or less were under age 25, and about one-fourth of workers earning at or below the minimum wage were age 16-19. Among employed teenagers, about 9 percent earned $5.15 or less. About 2 percent of workers age 25 and over earned the minimum wage or less. Among those age 65 and over, the proportion was about 3 percent.”

    It’s really easy for some to say, “only 2%. Fuck ’em”. If you’re one of them, no need to read on: we probably differ too much on the value of the individual.

    Understanding that policy decisions do result in winners and losers (e.g., free trade decisions) doesn’t mean that you eschew the decisions, but you do need to understand who is being positively and negatively affected, are those effects on the balance positive, positive for your main constituency, negative on a constituency, overall negative, or indifferent. If you’re a boss, you’ll make those decisions, so why not here and now, too?

    The minimum wage arguments are very interesting. And I’m glad someone brought up fast food.
    (NOTE: K&K’s article is from 1992!!!)
    Katz and Krueger (Oct 1992: Industrial and Labor Relations Review, Vol. 46, No. 1. (Oct., 1992), pp. 6-21. ) present data that suggest:
    1)”relatively few employers use[d] the subminimum wage, even in an industry where many employers could probably attract teenage workers at a subminimum wage”
    2)”[T]he evidence on employment and price changes does not seem consistent with a conventional view of the effects of increases in a binding minimum wage.”
    3)”Our results indicate that employment increased at firms most affected by the minimum wage increase….
    emphasis mine
    4) Castillo and Friedman (1992) show that Puerto Rico’s relatively high minimum wage did have “substantial” disemployment effects
    5) “Under certain conditions, monopsony models predict that a small increase in the minimum wage leads to an increase in employment, whereas a large increase in the minimum wage leads to a decrease in employment”

    (all citations are from page 16 of my little handout – that’s from “The Effect of the Minimum Wage on the Fast-Food Industry”, Industrial and Labor Relations Review, Vol. 46, No. 1. (Oct., 1992), pp. 6-21.)

    Neumark (1992) uses panel data by state (Microeconometric geek alert!) in this paper:
    Industrial and Labor Relations Review, Vol. 46, No. 1. (Oct., 1992), pp. 55-81.

    He shows elasticities for teens to be -0.1 to -0.2, meaning that a 10% rise in the minimum wage is accompanied by a 1% to 2% decrease in employment for teenagers. And elasticities suggesting a decrease in employment for every 10% increase in minimum wage to be around 1.5% to 2%. Note: his study is also from 1992.

    Juan Dolado; Francis Kramarz et al in:
    Economic Policy, Vol. 11, No. 23. (Oct., 1996), pp. 317-372.
    “The Economic Impact of Minimum Wages in Europe”

    They find that the importance of the minimum wage has been exaggerated.

    Martin Rama in:
    Industrial and Labor Relations Review, Vol. 54, No. 4. (Jul., 2001), pp. 864-881.
    “The Consequences of Doubling the Minimum Wage: The Case of Indonesia”

    He found that doubling the minimum wage lead to an increase of the average wage 5-15% and decreased employment by 0-5%, with the smaller firms experiencing “substantial decreases in employment, whereas some large firms actually saw their employment increase”

    That’s the developing nation view.

    You can argue, of course, that in Indonesia, probably more poverty-stricken workers could tend to work in small businesses, thereby ruining the redistributive goals.

    You can also argue that the goals for minimum wage hikes or laws are politically, and they respond to the “interest group” model. The workers in large firms benefited the most from the increase, thereby satisfying a political need at the expense of the ultra poor.

    I do not have either answer.

    I do know that Sobel (1999) in the J of Pol Economy rejects the notion that the minimum wage law addresses what the Fair Labor Act of 1938 was designed to achieve. He attributes the path of the minimum wage laws in the US to be influenced by labor and business. Quelle Surprise. The timing of the wage changes, the level etc. are, according to his argument, “are shaped by pressures in the political process”.
    (Russell Sobel: “Theory and Evidence on the Political Economy of the Minimum Wage”: The Journal of Political Economy, Vol. 107, No. 4. (Aug., 1999), pp. 761-785.)

    Couch and Wittenburg (“The Response of Hours of Work to Increases in the Minimum Wage” in Southern Economic Journal, Vol. 68, No. 1. (Jul., 2001), pp. 171-177.) show that the neoclassical model holds: reduced hours worked by teens, suggesting employers would reduce teens’ hours.

    Finally, the models in intro econ textbooks showing the effects of the minimum wage on free-market equilibrium (shudder) an increase in the wage causes a reduction of employment (movement along the the labor demand curve) with the proportional change being equal to the elasticity of demand for unskilled labor. Great (takes book and throws it out window). That’s “all else being equal”. Also, consider that there’s higher turnover rates in minimum wage jobs. Although the only figure I have is around 12% per month, that’s from 1981 (by Converse et al), so who knows.

    To me, this argument seems yet another proxy battle of the “big labor vs big business”.

    There are living wage laws out there, too. Our friend Neumark teamed up with Scott Adams back in 2003 to examine:
    “Do Living Wage Ordinances Reduce Urban Poverty?

    The Journal of Human Resources, Vol. 38, No. 3. (Summer, 2003), pp. 490-521.

    They find wages of low wage workers are boosted, but there is also a “moderate negative employment effect”. (elasticity is -0.13)

    They do not examine “Big Box Ordinances”, rather only businesses that provided service to the city or those businesses receiving some sort of financial incentive from the city (e.g., economic development or job creation: from page 31 of my handy-dandy 33 page handout).

    They find that the only adverse effects were in employment, not wages nor poverty.

    I do agree with the opinion that this argument is proxy for a political battle rather than an economic one, and with that in mind, does anybody want to discuss the forces pulling various groups towards and away from minimum wage laws?

    What would organized labor? They negotiate their own wages. In right to work states, what would the minimum wage increase do? What sectors would be affected, positively and negatively by increases in the minimum wage? Would there be substitutes for the higher wage earning unskilled laborers? How would the firm’s choices for skilled vs unskilled labor change?

    Where would there be substitution away from skilled labor?

    What about the original goals of the minimum wage: keeping people above the poverty line? Have states indexed the minimum wage? Or will there be occasional jumps in it to keep up with changes in definitions of the federal poverty level? Does the current legislation address that issue? If yes, then argue about whether that’s the best way to do it. If no, then argue about what the law is designed to do.

    This topic is huge, rather difficult, and while the kneejerk reaction is to respond to the aversion to the effects of meddling in the (allegedly but not at all) free market, then think about why we have that reaction.

    Sorry for hitting and running. And apologies for the HUGE post. Gotta go.

  88. “Employers’ don’t base their wage decisions on the value that employees actually add to the company; they offer the lowest wage they think they can pay, and if they can get people to work for much less than the value they provide to the company, so much the better.”

    Yes, this describes the bottom margin of what an employer will or can pay. It doesn’t address the top margin, which is an area you don’t seem to acknowledge. Essentially what I said is that if the spread between the bottom and top has some space in it, you won’t see the minimum wage effects much. If the spread is narrow, or if you are pushing for a wage hike sufficient to push the boundary of value provided to the company, you are going to cause problems.

    The spread is wider in fat times, in industries that aren’t cut throat, and so forth, so you have more of a cushion to raise then.

  89. “Employers’ don’t base their wage decisions on the value that employees actually add to the company; they offer the lowest wage they think they can pay, and if they can get people to work for much less than the value they provide to the company, so much the better.”

    Correct. Two points to remember:

    1) If the employer sets the wage too low, they won’t attract ANYONE, the work won’t get done and they won’t make any money.

    2)If they CAN get people to work for less than the value they provide, then they end up with extra money. Money to: replace the french fry machine that will eventually wear out, or the grill which will eventually need replacement, to repaint the exterior so that the business will be attractive to the customers who pay their money to purchase there. And maybe, if they are very lucky (there’s that “Luck” again Joe… maybe most of what you see as “bad luck” is really “bad choices” and “good luck” is “good choices”… or the choices that you make when confronted with “luck”) they will have some “profit” left over to pass through to the “stockholders”; ie. the people who forewent (past tense of forego?) big screen TV’s and new cars in order to “invest” in the burger shop in the first place. Certainly they “deserve” something for deferring their gratification.

    Cracker’s Little Capitalist Boy

  90. Of corse, when he buys the new fry machine he buys it at the lowest price that he will be able to buy it at, thus “exploiting” the french fry machine makers.

    And when I work at Burger King, I get the highest wage I can get out of Burger King, thus “exploiting” them.

  91. The state minimum wage as a practical matter is a largely symbolic issue. I live in OR where the minimum is $7.25, and I don’t know anyone who does full-time work for that much. The loading-dock workers at Columbia Sportswear are starting at $9.50 this year. McDonalds trains teenagers for $7.50, then raises it to $8.25.

    A national minimum wage deprives low-wage parts of the country of one of their few comparqative advantages, however. Which is one reason compassionate liberals from, say Massachusetts, so ardently support it.

  92. joe

    If a family man desperately needs assistance to support himself and a family beyond what his skills can earn him in the marketplace in the short- and mid-term, forcing every low-wage employer in the vicinity to pay thousands and tens of thousands of dollars more for all their marginal hiring decisions is a piss-poor way to target assistance to those in a desperate predicament.

    How could this be good public policy?

  93. Yes, Swillfredo, we all understand the demand curve, and how it relates to the predictions that minimum wage increases would effect the availability of jobs.

    The problem is, studies of the real world do not bear these predictions out. Raising the minimum wage either doesn’t cause any job loss, causes an increase in the number of jobs or, at most, has a very slight negative effect on job availability – much less than would be effected if the job market was operating as the model predicts.

    The demand curve is a model – a very useful one, but one that is limited by it simplicity. Its usefulness as a predictor of what will happen in the material world varies from situation to situation. When it comes to minimum wages, it would appear that there are confounding variables that sharply limit its usefulness.

    And you sure are cheap. Period.

  94. “The problem is, studies of the real world do not bear these predictions out. Raising the minimum wage either doesn’t cause any job loss, causes an increase in the number of jobs or, at most, has a very slight negative effect on job availability – much less than would be effected if the job market was operating as the model predicts.”

    Source? What studies? Or should we just believe you, because, after all, “Joe Knows What’s Best for You”.

    Cracker’s Skeptical Boy who at least posts a link that supports his point.

  95. Jason Ligon, I think you make a good point with “The spread is wider in fat times, in industries that aren’t cut throat, and so forth, so you have more of a cushion to raise then.”

    It certainly makes sense to raise minimum wages during periods of robust growth.

    Craker’s Boy,

    “If the employer sets the wage too low, they won’t attract ANYONE, the work won’t get done and they won’t make any money.” Like your certainty that the Demand Curve explains all, this is too simplistic. Without other employment opportunties, there will never be a wage that is “too low.” If minimum-wage employers enjoy a large enough share of the local job market – as they often do in depressed areas, or in meat processing company towns – the lack of other job opportunities precludes the wage-raising competition your description depends on.

    “Money to: replace the french fry machine that will eventually wear out, or the grill which will eventually need replacement, to repaint the exterior so that the business will be attractive to the customers who pay their money to purchase there.” Again, this is a reasonable argument when it comes to businesses that are right on the margin, but much less compelling when we’re talking about the bid minimum wage employers, like McDonald’s or Tyson’s, that are immensely profitable, and have no problem whatsoever meeting their capital costs and paying their shareholders.

  96. ‘Source? What studies? Or should we just believe you, because, after all, “Joe Knows What’s Best for You”.’

    I just know what I read on Reason. Go ahead and find the last three posts about the minium wage and its effect on unemployment.

  97. Sigh.

    studies. studies. studies.

    Card, Katz, Krueger give one story.
    Neumark and others give a different story.

    Not.That.Simple.

    Besides the ones I mention above.

    Card and Krueger, “Minimum Wages and Employment” (that’s another fast food one) Quarterly Journal of Economics, 1998. (N&W (below) take a look at that)

    Zadodvy, “Why Minimum Wage Hikes May not Reduce Employment,” (Fed of Atlanta, Economic Review, Second Quarter, 1998)

    Neumark and Wascher, “The New Jersey-PA Minimum Wage Experiment: A Reevaluation Using Payroll Records” (American Econ. Review)

    But most of you are oversimplifying the issue tremendously, again suggesting that this is a proxy for a larger political battle than actual economic argument (and since this citizen really doubts the ability of most here to read econ studies – any more than we could read pharmacokinetics studies or sonar readings, this is a waste of time)

    (signed)

    A Disgusted Moose.

  98. joe

    Your studies probably don’t debunk the demand curve, nor require any special adjustments for the labor market. There is a simpler explanation. Minimum wage legislation rarely stays very far ahead of the actual market wage for any full-time work.

    The national minimum wage does affect where corporate employers make new investments however. There is a reason why Tysons locates in SC and Arkansas, rather than NY and Mass.

  99. You know, it’s funny how circumscribed doubt is on this site. 95%+ of climate scientists are in agreement about the causes and implications of global warming, and yet everyone lines up to insist that the jury is still out. The globe is just too complicated for a simple model like the greenhouse effect to accurately describe what’s happening, and “there are still a lot of questions.”

    Yet on the minimum wage, the effects of which are a hotly-debated topic among economists, who are nowhere near a consensus, a thousand commenters uniformly declare its effect on the jobs to be a closed question, and as rarefied and fragile a model as the demand curve is treated as the final answer, which only an idiot could fail to see.

  100. Andrew,

    “My” studies don’t debunk the demand curve at all. The demand curve is real – it’s just not controlling in all circumstances, as actual economists realize and attempt to account for. Other effects can, and do, produce results widely at variance with what would come about if the demand curve was the only factor at play.

  101. “demand curve is treated as the final answer, which only an idiot could fail to see.”

    You took the words right out of my mouth!

    You, from your throne, assume that you can decide what components constitute an individual’s “demand” (as it relates to supply and demand). The demand curve DOES control in all circumstances where Joe, or some other elitist busybody, stays out of the extremely personal “demand” decision. Individual preferences (not Joe’s preferences) enter into my “demand” for a given item/service. So at any given point on the supply curve, there will be a spread of demand, based on individuals’ preferences; see “choices” above.

    Perhaps I am not typing this eloquently enough, but hey. It’s been more than 30 years since college. You’re a smart guy. You understand supply and demand. You simply choose not to believe it works. See “elitist” above; you know what’s best for all of us.

    Cracker’s ‘Tarded Boy

  102. That’s so cute.

    Yes, there is nothing going on other than a perfect market, unless liberals screw it up.

    Now brush your teeth, and I’ll read you another fairy tale.

    BTW, you keep using that word “elitist.” I don’t think it means what you think it means.

    Here’s a simple test – you see somebody with less money than you. Do you A) assume he is less intelligent, responisble, capable, or moral than you, or B) realize you don’t know anything about him or his circumstances.

    If you answered A, congratulations, you are an elitist!

  103. And you sure are cheap. Period.

    Delightful Joe! That is some serious scholarship there. Please continue to avoid substance in your histrionics, even though it would be a refreshing change of pace. But any time you want to explain to me how the labor-wage exchange is any of your business please do. Just remember baby, opinions are like assholes. Everybody’s an asshole.

  104. Minimum wage is a hot-button for the same reasons drug laws are a hot-button. Allow people to chose what they do with their bodies and some people will make the wrong choice.

    But the high is too tempting …

    But the wage greater than zero is too tempting …

  105. “Here’s a simple test – you see somebody with less money than you. Do you A) assume he is less intelligent, responisble, capable, or moral than you, or B) realize you don’t know anything about him or his circumstances.

    If you answered A, congratulations, you are an elitist!”

    How would I know, by looking, that someone has less money than me? You, on the other hand, assume that you know what is best for everyone; whether it be inflating the minimum wage, or finding ways to spend MY money supporting programs that YOU think are important.

    Here’s a simple test – you see somebody (fill in your favorite cause celeb’. Let’s say someone of dark skin or someone who appears to be a Hispanic). Do you A) assume he is less intelligent, responsible, capable, or moral than you, or B) realize you don’t know anything about him or his circumstances.

    If you answered A, congratulations, you are Joe.

    Cracker’s Boy

  106. Here’s a simple test – you see somebody with less money than you. Do you A) assume he is less intelligent, responisble, capable, or moral than you, or B) realize you don’t know anything about him or his circumstances.

    On an individual basis of course choice B is correct, joe. However, I’ve seen enough studies which strongly suggest a causal relationship between intelligence and earning potential, as well as intelligence and lifespan (for example, people in lower intelligence brackets tend to be less likely to follow dosing instructions given by their doctor for prescriptions) to be able to conclude that statistically choice A works when looking at a population.

  107. Here’s a simple test – you see somebody (fill in your favorite cause celeb’. Let’s say someone of dark skin or someone who appears to be a Hispanic). Do you A) assume he is less intelligent, responsible, capable, or moral than you, or B) realize you don’t know anything about him or his circumstances.

    If you answered A, congratulations, you are Joe.

    That is totally the opposite of anything joe has ever said here.

    Suddenly I feel dirty for being on the same side (in principle) as you.

  108. anon2,

    When you take a drug, you’re not harming anyone else.

    When you treat your employees like crap, you are.

    Cracker-snob,

    “How would I know, by looking, that someone has less money than me?”

    Now, suddenly, you don’t know anything about poor people you’ve never met? That’s a switch. Just a couple of hours ago, you knew they were lazy and inferior.

    And if you ever managed to hold a conversation with a minimum wage earner, you would discover that, almost to a person, they don’t like being paid minimum wage, and support raising that wage. Yes, I know that it is better for them to earn enought money to put food on the table. If you didn’t realize this, or thought it was a hotly debated question, congratulations, you’re an idiot.

    And fuck you for calling me a racist, cracker-ass.

  109. jf – EVERYTHING Joe says shows that he believes that EVERYONE is less intelligent, responsible and capable (of making decisions on their own). That is why is he is for the government controlling ALL aspects of everyone’s life. ‘Cause no one is as intelligent, responsilbe or capable as he is. Re-read his posts.

    Joe – lazy and inferior? Where did THAT come from? That was cecil.

    By the way, handle aside, and in spite of your previous, incorrect post that no one objects to being called a “cracker”, I find calling someone a cracker at least as offensive as calling someone a nigger. Of course, it’s okay to insult western Europeans, because they won’t riot at the drop of an insult.

    Cracker’s “Fuck you too” Boy

  110. And now I feel bad. Joe – I don’t start out trying to make this a personal attack against you. I like hearing your point of view (part of “Know your enemy”).

    Let’s try not to get so personal. We have different opinions that we an never reconcile. I am a capitalist and you are a socialist, and those two points of view cannot reconcile.

    I DO love ya’ man.

    Cracker’s Boy.

  111. Joe,

    For you to be arguing about the minimum wage seems tepid, especially because you at best don’t think it hurts the overall employment of minimum wage earners. Big deal. If you believe the studies cited in this thread, the overall positive effect isn’t much to get excited about either. Shouldn’t you be taking this opportunity to argue for a living wage instead?

  112. Cracker’s Boy,

    Here are so things you shoud know about your enemy. I’m not a socialist, I’m a liberal. That distinction would be a good thing to learn.

    I’m not an elitist, I’m an egalitarian. I don’t believe in the superiority of one group over another; that’s why I support efforts to make sure that the less fortunate can earn a decent wage – because they deserve it. They’ve earned it with their labor.

    Jeff S.,

    The minimum wage is not the be-all-end-all of poverty eradication efforts. It is a small part, but a necessary one.

    I support targetted “living wage” efforts, but they are by necessity small-scale solutions, unlike the minimum wage. Poor people are going to be poor; mandating an end to poverty via wage regulation is quite a few bridges too far. I’m just trying to stop the most powerful in society from engaging in a race to the bottom – one that would draw in even the more ethical, like any arms race – on the backs of working people.

  113. Turn the filter off and read those studies. If you, highly improbably, can understand them, then resume discussions.

    Erst lesen, dann denken, hoffentlich verstehen. Schlie?lich diskutieren.

    Au revoir,
    the Anti Jean Bart (ha ha)

  114. “There are so many opportunities for poor folks to have access to education that no one who wants to better themselves can say they weren’t given a shot.”

    Certainly, I’m one of them too. And the more financial problems you have the more money is available; free money too. Also, I’ve worked enough shitty jobs to know that you don’t need a degree, a bit of work ethic and common sense is all it takes to quickly move up.

    But what about the folks who are to dumb to go to college or learn a trade? There are people who simply don’t have anything to offer past menial supervised labor. it doesn’t make them less of a person. They just drew the congenital short straw.

    joe’s answer …”A person who gives you his labor for 40 hours/week should be able to put food on his table. A human being is worth that much.”

    Maybe, but they should be relying on willful charity, not what the state can extort from others. And I think this is really the fundamental difference.

    Whenever I talk about stuff like this with my liberal friends and acquaintances they are always very passionate about the worth of the individual and the tragedy of social injustice (and so forth), but none of them do much. They are perfectly willing to sit on their hands until that glorious day the feds make them. Christ, if you’re that torn up do it yourself. Tip that burger flipper, pay a bum’s dental bill. The stats seem to show that liberals are relatively tight with their charity. What gives?

    And I don’t care to hear what the libs on this board do themselves. I’m sure you are all very generous.

  115. joe

    I believe the apt analogy would be between a low-wage employer and a drug-DEALER.

    When someone sells you a drug you are willing to buy is he enticing you to your own harm, and should this be illegal?

    When a low-wage employer offers work on terms his employees are willing to accept is he abusing them?

    I said earlier that I didn’t know anyone who actually works for the state minimum, but it occurs to me that I see some people who likely do, nearly every day. The supermarket chains around here almost always have door-“greeter”/watchers…almost always elderly people. I am not sure what these people make, but it’s almost certainly the minimum, and if some clown decided that their rate had to be raised to whatever a “living wage” might be, it’s most probable that these jobs would be eliminated. How would these folks be better off?

    When people take full-time work for $5.00 in North Carolina, they MUST be making a living wage…or they wouldn’t take it.

  116. i’m sorry, gang, but the moose, in his infinite reasonableness, just laid it all out in black and white. of course, this being the real world, his variety of black-and-white is actually quite greyscale; quite unlike the microeconomics 201, textbook reality so many of you employ in arguments.

    that is, when you’re attempting to make arguments at all, rather than just trying to score cheap-shots on joe with your combination of strawmen and the mind-reading fallacy.

    point being is the world is nowhere near as simple as the introduction-to-microeconomics, supply-curve/demand-curve/marginal cost world leads people to believe. i was an economics major, once, and might be again, and i have a big problem with the way it’s taught; by trotting out the most basic, clockwork models in the introductory classes (which are the only ones most non-majors take), it creates an army of randroids and young republicans who think that EVERYTHING would be as simple as a few little lines on an x/y axis if not for those busybody libruls fucking things up. of course, once you’ve accepted that premise, it gets really easy to take the next step and say that gee, there’s no excuse for anyone to be poor, they could just work harder/exit the market/commit suicide.. and that if by some accident they DO happen to be poor, it’s because someone came along and disturbed the equilibrium of your pretty little model.

    to paraphrase the esteemed jean bart: “if you got all you know about economics from a sophomore-level microeconomics textbook and a copy of rand’s “the virtue of capitalism”, maybe you need to be quiet before you embarrass yourself any further.”

  117. I dunno

    If the Oregon state legislature were to pass a law tomorrow propounding that no loave of bread in this state should sell for more tha $1000, my guess would be that the “empirical” economists would have a difficult time demonstrating a palpable effect on the demand curve.

    Likewise I wouldn’t expect that lowering the wage around here to three dollars an hour would significantly expand enployment. What does anyone DO for three dollars an hour…cat sit? But that’s mostly unreported income, right?

    Oh well, I’m just a non-economist, unable to evaluate studies – I am assured – demonstrate nothing.

  118. Joe – I said you were a socialist and you said “I’m not a socialist, I’m a liberal. That distinction would be a good thing to learn.”

    I can understand why you would be embarrased to admit to being a socialist. It’s not very popular in this country, nor is it particularly smart, having failed, or is currently failing, EVERYWHERE on Earth that it has been tried. But me saying you are a socialist and you responding that you are a liberal is like me saying you are right handed and you saying “No I’m not. I’m a brunette”. True, but has nothing to do with my statement. A straw man, as you say.

    Egalitarian? I think not. You’ve argued pretty eloquently with me before that you don’t believe that blacks are smart enough to make it on their own; that they need your approved form of discrimination just to get even. That’s not egalitarian, that’s elitist.

    You’re a smart guy Joe. Embrace capitalism, then use your profits to benefit others. That would be the liberal thing to do. Don’t take my profits to benefit others. That’s the socialist thing to do.

    Cracker’s Boy, after a long nap.

  119. In general, HnR has made me think long and hard about the minimum wage over the last year or two. here is yet another truly thought-provoking thread.

    About the only firm conclusion that I have come to is that minimum wage should be entirely a state issue.

    Preferably, it would be better to have some states with a low minimum wage, some states with a high minimum wage and some states with a minimum wage about where it is now.

    Having a regime like that would provide a lot more meaningful info on the interaction between minimum wage and overall economic health (including employment aspects). It would also give at least some people some discretion to “vote with their feet” on the issue.

  120. Oh yeah, one more thing. I suspect that the minimum wage debate is more important for symbolic value than for actual substance.

    There is an ongoing struggle between employees and employers over working conditions. Employers do what they can to convince employees, at all wage levels, that they are expendable, replaceable, taking more money than they deserve, etc., etc.

    Since the dawn of the 2000s employees have been kind of taking it on the chin. Without things like effective labor unions, these minimum wage initiatives are one of the few ways a broad segment of society can combine and tell the capitalists that they are turning the screws a bit hard. Maybe they are right; maybe they are wrong. the viewpoint of the capitalists is well expressed at this blog. They don’t like the message they are getting, but they may, at the same time, be listening to it a bit.

  121. (Probably this discussion would be more interesting with “living wage” or “big box” studies rather than minimum wage)

    Some more studies. JSTOR is a good friend.

    These claims that economists have shown positive employment effects due to the minimum wage are a bit overblown. The “New Economics of the Minimum Wage” people: Katz, Card, Krueger have shown what some here are claiming. That employment increases with minimum wage increases. They use a log of the higher of the state or federal minimum wage. When Neumark (above) uses that, he gets the same findings (positive teen employment effects).

    They, Katz et al, did a fast food study – which has been criticized and is a controversial. From some because it clashes with neoclassical theory, but from others due to methodological issues (one, for example was lack of attention to substitutes for minimum wage labor).

    Ehernberg (1995) has a good paper on empirical generalisations. His money quote in context of Katz’s, Card’s, and Krueger’s findings, “[their findings represent] a devistating critique both of economic theory and of empirical research methods in economics.”

    Besides the studies (above) from Neumark, here are some more. (Neumark and Wascher have studies from 1992, 1994, 1996). Deere, Murphy, and Welch (1995), Taylor and Kim (1995) pretty much have findings consistent with neoclassical theory.

    Some more recent ones:

    “Who Minimum Wage Increases Bite: An Analysis Using Monthly Data from the SIPP and the CPS”
    Richard V. Burkhauser; Kenneth A. Couch; David C. Wittenburg
    Southern Economic Journal, Vol. 67, No. 1. (Jul., 2000), pp. 16-40.

    “Minimum wage increases significantly reduce the employment of the most vulnerable groups in the working-age population – young adults without a high school degree (aged 20-24), young black adults and teenagers (aged 16-24), and teenagers (aged 16-19).”

    Minimum Wages and the Card: Krueger Paradox
    A. Ross Shepherd
    Southern Economic Journal, Vol. 67, No. 2. (Oct., 2000), pp. 469-478.

    He notes that the apparent paradox of positive employment effects of minimum wage increases do hold under certain “monopsonistic conditions in the labor market and competitive price-taking in the market for output, increases in both firm-level and industry employment are compatible with increases in output prices”

    That’s an alternative to the “normal” competitive model. Here the firms are price takers but exercise some influence over the labor market.

    (More on models of monopsonistic competition in the labor market: Bhaskar and To (1999) – keyword, “horizontal job differentiation”)

    That one probably gives the best explanation for the apparent paradox.

    The Effect of Minimum Wages on Youth Employment in Canada: A Panel Study
    Terence Yuen
    The Journal of Human Resources, Vol. 38, No. 3. (Summer, 2003), pp. 647-672.

    Yuen finds a significant disemployment effect “for those with longer low-wage employment histories. This highlights the heterogeneity within low-wage workers and the importance of carefully defining the target group not solely based on workers’ wages”

    See above: it’s a proxy political battle. Do increases in the min. wage really address the problems they’re supposed to solve?

    Anxiously awaiting big box ordinance studies (or living wage ones).

  122. pigwiggle,

    “Maybe, but they should be relying on willful charity, not what the state can extort from others. And I think this is really the fundamental difference.”

    The fundamental difference is that the state is large and universal enough to provide comprehensive solutions, while private charity is not. With so many snobs just certain the suffering of the poor is their own fault, and with people having their own lives to attend to, private charity is just never going to have the reach to solve the problem. If private charity could realistically address issues by itself, there wouldn’t be any need for tax-based solutions, but it can’t.

    As much as certain people like to flatter themselves by asserting that their opposition just plain likes to collect taxes, that’s a dodge. Taxes are merely the means to the end of having sufficient resources.

  123. Those “snobs”… that would be “liberals”, right? Since “conservatives” seem to be the big givers…

    https://www.reason.com/news/show/117303.html

    Cracker’s Boy

  124. Cracker, if I was worried about adopting unpopular descriptions for myself, why would I proudly self-describe as a liberal while conversing on a libertarian web site?

    I’m not going to bother to respond to your self-serving distortions of my positions, or anything you write for that matter, because you’ve demonstrated yourself to be manifestly not worth it.

  125. Andrew,

    “I believe the apt analogy would be between a low-wage employer and a drug-DEALER.”

    That depends on the specifics of the situation. Whether or not you are going to earn enough money to put food in your kids’ bellies is not a matter of discretion comparable to whether a college kid feels like buying a joint on a Friday night. On the other hand, it is somewhat comparable to whether a junkie is going to try to state off agonizing and potentially fatal withdrawal symptoms. And even then, there are more options available to the junkie – rehab, hospitalization, methadone treatment – than to a person who needs a job.

    When a drug dealer tells his “client” that he’s going to spend the night kicking unless he pays whatever price the heroin dealer names, is he abusing his client? Um, yes, he is, as a matter of fact.

    “and if some clown decided that their rate had to be raised to whatever a “living wage” might be, it’s most probable that these jobs would be eliminated” Except that, as a matter of fact, studies of what happens when these people’s wages are raised do not bear out your assumption.

    “When people take full-time work for $5.00 in North Carolina, they MUST be making a living wage…or they wouldn’t take it.” La la la la la. Or maybe they’re also on public assistance, or maybe they go begging at the church, or maybe (no, not maybe, definitely, as epidemiological studies demonstrate), their health takes a beating and they do end up dying sooner. Maybe you shouldn’t just assume that people in that situation are doing fine and dandy, just because it would be convenient for your ideology if that were true.

  126. “why would I proudly self-describe as a liberal while conversing on a libertarian web site?” – I never said you weren’t a liberal… I said you are a socialist, and as such, sadly delusional about how to best help the downtrodden. Make a profit, give it that minimum wage worker you are so concerned about.

    “I’m not going to bother to respond to your self-serving distortions of my positions” – I haven’t distorted your positions, I have pointed out that you are a brunette, while you keep telling everyone that you are right handed.

    “or anything you write for that matter, because you’ve demonstrated yourself to be manifestly not worth it.” – Because I disagree with you and your continued support of a failed economic theory.

    Cracker? Wow. That hurt. NIGGER!

    So there.

    Cracker’s Boy

  127. I appreciate your cooperation in my efforts to brand you as an ass.

    Did you actually just call me the n-word?

  128. joe

    I take it your “model” is something like this?

    Employment in low-end businesses is fairly static. Raising minimums simply gives a “raise” to workers in low-skilled occupations, their comparatively low productivity notwithstanding.

    The raise may even expand employment by attracting new recruits to the labor force – eg. housewifes willing to do clerical work part-time?although it is hard to see why higher costs per worker would create more opportunities, and this is hardly a “living wage” scenario as it would effect mostly workers who previously exercised a choice between leisure and paid employment.

    Since nothing comes ex nihilo, this is presumably a transfer of income, either taken as diminishing returns to investment, or higher prices to consumers. The former, you would like to believe, comes at the expense of high-income Americans (although the entrepeneur trying to make a car-wash or dry-cleaners pay doesn’t necessarily take home more than the average American worker), and the latter might be the sort of premium most secure middle-class workers would cheerfully pay for the guy who has less opportunities?sort of like leaving a tip for the waiter, but more automatic.

    None of this effects investment decisions? The guy trying to make the car-wash work doesn’t bag it, sell the lot, and go to work as a telephone lineman?when he realises he isn’t taking much more home than the guys working for him, while his life savings remain at risk?

    The folks managing the office building downtown don’t lay off the inhouse staff and contract with a cleaning “service” that consists of a Phillipino couple and six kids who, when you figure the flat price against the hours they work, are earning well BELOW minimum wage?

    (I DO guess the Multnomah Athletic Club will eat the cost of paying higher minimums for towel-boys and personal trainers, and pass the costs on in next year’s membership dues?except the MAC likely pays MORE than minimum wage for anyone who works there now – I TEMPED for more than minimum wage setting up a flower show one week-end.)

    And none of this will effect consumer decisions? You don’t wash the car yourself, when the car-wash is more expensive? You don’t go to restaurants less often, when the prices rise?

    Ah?the effects are a wash you say – then what’s the point?

    The data don’t indicate much. But frankly these kinds of econometric studies are crap (despite the fact that they’re dificult to read). And if the prevailing law is anywhere near market equilibrium you wouldn’t expect the effect to be detectable through the blur.

    But I figure joe, that you have a mental image that tells you that it is the desperate predicaments – the “living wage” – that will be spared in employment contractions. But why should this be so? The golf course isn’t going out of business, but the ghetto gas station or hair salon easily might. Who is more likely to employ the middle-aged immigrant, the border-line retardate, the teen-age single mom or the gansta trying to go straight after a couple of years in State Prison?

  129. “Cracker, if I was worried…”

    You started it. So who’s more of an ass?

    Cracker’s Boy
    ps. Cracker’s dead. Died on purpose because he was too “proud” to live in a wheelchair. I’m Cracker’s Boy and proud of it.

  130. Hey Cracker’s Boy (if that is your real name),

    Which failed economic theory do you think Joe espouses?

    “Keynesianism” doesn’t count.

    Here’s why. Basically nobody is a “Keynesian” anymore than one is a “Monetarist” today. The direction of economic research (since the mid 80s call it) hasn’t used those terms in a while:

    The New Keynesians identify the precise nature of market imperfections and nominal rigidities that give rise to deviations of output from its natural level (Phelps, Taylor, Fischer, Blanchard (at least in the 80s), Mankiw (Bush’s first economic advisor), Ben Bernanke (Chair of the Fed), Akerlof). They’re the “salt water economists” (coasts).

    They have a modern version of the (short run) Phillips curve, incorporating price (not wage) inflation, adaptive expectations (use of prior period’s level in assessing prediction for current level of inflation), and include supply shocks (such as oil shocks).

    New Keynesians believe in the neoclassical synthesis (AS-AD), but they also investigate imperfections and the implications of them. However, they basically accept the modern synthesis from rational expectations (Muth, for example)

    Ackerlof won the Nobel Prize in 2001 for work in “norms” and “fairness” and how wages get determined in the market (efficiency wages). He takes a multidisciplinary approach, including sociology and psychology. Hayek beat him to it!

    Imperfections in credit markets (Chair of the Fed Bernanke’s big research when he was at Princeton) and the willingness by the consumer to pay for credit and the implications for monetary policy is pretty cool research. Krugman looked at the Japanese case, too. Explaining the European economies is also widely searched here.

    Nominal rigidies – how prices and wages change at a staggered pace, and how this staggering can affect output (keep it from adjusting back to its natural rate) is the project of Akerlof and N. Greg Mankiw (Bush’s first economic advisor) they call it the “menu phenomenon” – menus don’t respond that quickly to changes in prices due to costs of reprinting, etc. This explains why the economy can adjust slowly, implying that policy makers should have flexibility in fiscal and monetary policy. The New Classical school rejects the notion of “nominal rigidies”. This is an extension of wage and price setting research in the rational expectations synthesis.

    *****
    You enjoy piling on, but you’ve not done one thing to make an economic argument for your case. Perhaps the better question is what theory are you using?

    You hint at neoclassical effects – movement along the demand curve and a deadweight loss, the magnitude of which, in perfectly competitive markets, is represented by those triangles, and the slope of the demand curve enables you to calculate the magnitude of the effect, but that’s intro stuff, as Mr. Crane notes.

    Were it that easy… the data fairy doesn’t come down and give you the perfect data set and a pre-specified model or answers. You have that theory – you have to collect the data, understand and assess the tradeoffs, specify your model (including lags, proxy variables for collinear variates, etc), select the technique, test, interpret, and sometimes throw the damn thing out.

    And because there are many factors at play, probably including attrition rates at minimum wage jobs, confounding instances abound.

    You’re right in that there are studies that confirm the negative effect, but did you think that the effect would be greater than, for example, what Neumark found?

    Were it as easy as you suggest (demand curve), why have the debate at all? If the effects were as dramatic as you seem to imply… game over. But they don’t seem to be: you’re confirming that this is a proxy battle for something else. You’re better off looking at policy failure and that the Fair Labor Standards act isn’t fulfilling its original purpose.

    However, in the one living wage study by Neumark (he’s the neoclassical one, recall), they did find negative employment but positive wage and positive poverty effects with the public-contract living wage programs. Watching those studies develop will be interesting.

    we’re awaiting more living wage studies (followups, new ones, and adjustments, and big box studies, stay tuned!)

    Joe hasn’t mentioned any studies – although I’d guess he’s talking about the fast food in NJ and PA that Krueger et al did. Your yelling of “demand curve” isn’t nearly as dumb as the bread in Oregon example, tho. But at least throw down some evidence to show that his example is wrong and why.

    (waiting to be called a liberal, too)
    VM

  131. “Hey Cracker’s Boy (if that is your real name),

    Which failed economic theory do you think Joe espouses?”

    Uh… socialism.

    Pronunciation: ‘sO-sh&-“li-z&m
    Function: noun
    1 : any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods

    Did I get it wrong? If so, I stand corrected.

    Cracker’s Boy
    As real as anyone here…

  132. VM – I just re-read your entire previous post. Reminds me of something that someone wrote that ran in our VM box (VM – IBM’s Virtual Machine operating system. Your initials. Coincidence? I think not). It was called the “FOG” exec. You’d type FOG on the command line, and it would prompt for “How many paragraphs?” and you would respond. It would then generate that many paragraphs of completely plausible sounding bullshit, that if analyzed, actually said nothing. We, of course, hacked the code to use phrases that were meaningful in our programming shop. Sounds like you hacked your copy to talk about modern economic theory.

    Sounds like FOG lives!

    Cracker’s Boy

  133. Quite a way to admit that you don’t have the foggiest idea about econ. Except the desire to say “Demand Curve”, probably in the same tone as Team America’s “Matt Damon” did.

    Perhaps you are more stupid than the bread thought, after all. You’re a flawless, complete moron. And flawless, complete morons are rare!

    ‘later, Joe – for the first time, probably in the history of the board, I agree with you. At least your assessment of Mr. Boy.

  134. To paraphrase Belushi….

    Ten years of college, down the drain.

    Did I use a term that offended you VM? So sorry. Demand Curve? Is that not right? I’ll admit, it’s been a while since I had economics at the North Avenue Trade School. I ASSumed that all of you, who are so obviosly much smarter than me, might understand what I was trying, rather ineloquently, to say. At any given intersection of the supply/price lines, there is a range of demand… the intersection is a… a… circle, not a mathematical point. That’s because an individual has choice, and can make substitutions based on individual preferences.

    Is that Keynesian? Galbraithian? Hell, I don’t know. It’s not Marxian, unlike Joe, and I guess now, you.

    Cracker’s Boy

  135. elasticity, what?

    monopsony, what?

    mr. moose, what are all these big words you’re using?

    really, can we get “series of curves” to be as much of a meme in economics departments as “series of tubes” is in internets circles?

  136. Whoops! You got me Mr. Crane!

    (Sources – must always have sources! The top part about new keynesianism is from my notes where professor sketched an outline based on Blanchard’s “Macroeconomics” (Chapter 27, the Epilogue pp 571-583, photocopy) (That’s the third ed. Now we’re up to 4/e: ISBN-13: 9780131860261)

    TUBES!!!!! Demand curve!!!!!! The color of the sky is CAKE!!!!!!

  137. I think part of the confusions around minimum wage owe to pre-economic myths about “natural prices” and “real” production.

    Around here, people get excited if Intel or Nike adds a dozen jobs, but if rising labor costs eliminate 30 or 40 valet parking jobs downtown nobody cares?even if the work pays about the same.

    The Nike jobs seem real because they make something. Convenient parking for downtown shoppers is a silly amenity. But something is worth only what someone is willing to pay for it. The fact that both jobs pay about the same indicates both jobs are worth about the same. I don’t want a pair of high-end athletic shoes?but I might want to dine downtown once or twice a year.

    And there is no reason to think the guy who commutes 15 miles out to Beaverton to the Nike campus isn’t some college kid taking a year off to get his head together, or that the guy attending parking downtown might not be a recovering drug addict desperately trying to start over. The only thing you know about either of these guys is that they were willing to take the work at the wage they were offered?and that the guy who lost his job is now earning nothing.

    But hey?Nike’s going to absorb the minimum wage increase because of “rigidities”, right? It’s not so easy to move your plant to Viet Nam. Meanwhile the downtown restaurant stops renting the parking lot and cans the valets.

    But that cuts both ways – when Nike DOES move their plant to Indonesia?they ain’t coming back! It isn’t like Governor K can say “Bad joke?I’m lowering the minimum wage.”

    When I hear politicians talk about employment here, I think “Next Stop – Rust Belt”.

  138. “But something is worth only what someone is willing to pay for it.”

    Novel concept. Some here would disagree with you. Too bad for you, apparently, but I agree with you.

    Sorry.

    Cracker’s Boy

  139. Andrew,

    I don’t have a grand unified theory. I like to see poor people get a little help, and I can’t help but notice that the objection always raised has fallen flat on its face. I don’t think raising minimum wages has much of an effect on employment at all – like the increases in unemployment that some studies find, any decrease in unemployment is probably just noise. That’s usually what it turns out to be when the results are consistently small, and contradict each other in similar investigations.

    BTW, nice assumption that minimum-wage workers are “low productivity.” That must explain the razor-thin margins at McDonald’s and Tyson.

    “The folks managing the office building downtown don’t lay off the inhouse staff and contract with a cleaning “service” that consists of a Phillipino couple and six kids who, when you figure the flat price against the hours they work, are earning well BELOW minimum wage?” There doesn’t seem to be any evidence of that. I understand why your well-developed model would predict that there would be. I also understand that studies of the real world do not bear out those predictions.

    I’m really much less interested in what the predictions of theorists are, than in the findings of field researchers.

    “Ah?the effects are a wash you say – then what’s the point?” The employment effects are a wash, as far as anyone can tell. The higher incomes for low-income workers who get a raise most certainly are not.

  140. Reading is teh hard!

    I didn’t understand a word of that, VM. You must be really stupid!

  141. “Were it that easy… the data fairy doesn’t come down and give you the perfect data set and a pre- specified model or answers. You have that theory – you have to collect the data, understand and assess the tradeoffs, specify your model (including lags, proxy variables for collinear variates, etc), select the technique, test, interpret, and sometimes throw the damn thing out.

    And because there are many factors at play, probably including attrition rates at minimum wage jobs, confounding instances abound.”

    This is academese for “The studies were crap.”

  142. yup. sher am… 🙂

    but not as stoopid as…

    DEMAND KURVE!!!!!!!!!!!!!

    I knew I shoulda joined Cracker and “john the military lawyer/ slayer of Bas Rutten/ tough guy who sells bread from Oregon at tech school. Dammit.

    Oh well.

    mmm. Mr. Crane said he’d dress up like some cheez whiz for us krakahz. mmm. K?stlich!

    da schau her! ein Designer-Archloch, namens Krakah!

  143. FOG rules!

    CB

  144. @ Cracker’s Boy

    As a real cracker in good standing, I ask you to consider carefully what has been said here in the last fifteen posts or so before touching your keyboard again.

    @ Wikinger Elch

    Gr?? dich, Alter – schon lange nicht gesehen. Vor langer Zeit habe ich es so verstanden, da? du und deine bessere H?lfte doch nach Europa kommen wollten. Was ist da passiert?

  145. ‘nuf said.

    Cracker’s Boy

  146. “BTW, nice assumption that minimum-wage workers are “low productivity.” That must explain the razor-thin margins at McDonald’s and Tyson.”

    Joe
    The marginal productivity of Tyson workers – what they independently contribute to production – is, in fact, probably a bit less than they get paid.
    They are fortunate to be situated near the intersections of supply and distribution, and they are very lucky that Tyson invested so much, and so skillfully, in vast economies of scale, efficient technology and decades of perfected distribution and marketing.

    But with all due respect for the laboring masses, they work neither harder, nor more skillfully, than low-wage workers anywhere else on the planet.

    Tyson earns high profit margins for doing a very successful job of supplying useful and affordable product to the American consumer…and if you had any common sense, that’s behavior you would want to reward.

    If all this is a bit over your head conceptually, you should study up and return to the conversation when you have a more sophisticated understanding.

  147. Servus S: ich schreib Dir mal ein PM, wo wir alles diskutieren k?nnen.

    Sch?ne Weihnachten an Dich!

    Was ist mit diesem Keks – nicht nur, dass er nicht einmal Betriebswirtschaft bzw Volkswirtschaft versteht, ist es, als ob er versucht noch ein gr?sseres Arschloch zu sein!

    Die Feldforschung, die ich als Beispiel anf?hre, konnt’ er ned amal fassen – unglaublich – i nehme es an als gegeben, dass Du a bissl Weanerisch hie und da verstehen k?nnst 🙂

    Die Problematik des Mindestlohns ist allerdings schwer zu begreifen, aber mein Gott – is er willentlich so ein Schaa?kerl?

  148. yo moose i didn’t say nothing about no cheese whiz. i am on wine-and-cheese flight 169 from triscuit international to saltine memorial, non-stop.

  149. Economics isn’t really a science any more than Political Science, although there are practical arts associated with both disciplines.

    Economics really owes more to philosophy, and – although he didn’t know it – Milton Friedman was more of a philosopher in the pragmatist tradition?and a good one, as pragmatist philosophers can sometimes be good.

    (Keynes was more of a crap-artist?in the Continental tradition.)

    Micro-economics is a branch of Logic – really, game theory.

    And “empirical economics” is basically just a misunderstanding – an Inductivist, utopian, unverifiable and ultimately fatuous delusion. It may be currently fashionable in the academy?and always popular with the 3rd and 4th-raters who get hired by the Labor Department.

    VM assures us that there will soon be studies. Crap! Brookings will massage the “data” until they give it up?then lose it.

  150. “I don’t have a grand unified theory…”

    Sorry joe, I credited you with having given at least some thought to the matter, before reccomending a policy adventure which might compromise the well-being of people who are already in many cases marginalised and vulnerable.

    But by default, you DO take the position that significantly changing the price of something will have no impact on the decisions of actors who take that price. A curious proposition from one of the “reality-based”…and if you are wrong, it will create windfall losses for people who are already poor.

Please to post comments

Comments are closed.