Greed is Good (Fodder for a broad discussion of economics :))

[jafs]

Well, I would start from the idea that any employees should be paid what I consider appropriate, which is about $10/hr (that's the minimum wage from the '60's adjusted for inflation).

That sounds good, and I totally get where you are coming from. 

But what would you do if you were paying your employees $10 an hour, but the local government passed a law saying that you had to pay your employees at least $15/hr?  Your labor costs just went up by 50%!

I don't know.

Why is the local government passing that law?  Are the costs of living in my area so high that $10/hr is insufficient to support oneself?  How is my business doing?  Am I making enough that I can easily absorb the extra costs or not?  Are there a lot of other businesses in the area that will also be increasing wages, such that I can reasonably expect more business to help off-set the extra costs?

[jafs]

I asked you a bunch of questions I'd need to know the answers to in order to answer your question.

That's interesting - without government regulation, businesses will take advantage of their employees - you can see that easily if you look at the history of employment practices in this country.

I also have compassion for small business owners, who are squeezed in many ways in our system too.  It's the huge multinational corporations that are doing the damage I'm talking about on a large scale.

[jafs]

I asked you a bunch of questions I'd need to know the answers to in order to answer your question.

Fair enough... Here are some answers:

Why is the local government passing that law? 

Because they thought it would be a good idea to raise the minimum wage to $15.

Are the costs of living in my area so high that $10/hr is insufficient to support oneself? 

You don't think so.  That's why you currently pay $10/hr.

How is my business doing?  Am I making enough that I can easily absorb the extra costs or not? 

It depends on what you mean by "easily".  If your revenue stays flat, you surely will have less profit.  Let's say it means that your family will have to take out a $40,000 loan for your daughter to remain at her current university (covering her junior and senior years).  Alternatively, she would need to transfer to a less expensive (and less desirable) university.

Are there a lot of other businesses in the area that will also be increasing wages, such that I can reasonably expect more business to help off-set the extra costs?

I don't know how to define "reasonably sure".  It seems like a gut call to me.

That's interesting - without government regulation, businesses will take advantage of their employees - you can see that easily if you look at the history of employment practices in this country.

While I think some regulation is necessary, I'm not sure wage regulation is the way to go.  I think some of the other proposals by PS and MT (restrict immigration, stronger labor unions) would be better.

I also have compassion for small business owners, who are squeezed in many ways in our system too.  It's the huge multinational corporations that are doing the damage I'm talking about on a large scale.

I sympathize with you here.  But will your minimum wage law affect the multi-nationals very much?  Or will it cause more pain for the guy who runs a small coffeeshop and lives with his wife and 2 kids in the two-bedroom apartment upstairs?

Without some reasonable basis to do that, I'd probably oppose the change.

And, if $10/hr is sufficient, then I'd continue to think that's a fair wage.

We don't have kids, but if we did, I wouldn't necessarily consider it my responsibility to pay for a private college for them, so they'd probably already be at a state school (if they were in college at all).

Depending on my gut feeling on that, I would go different ways.  If I felt pretty sure we'd be ok with the increased wages, I'd probably increase them without other changes, and if not, I'd make other changes, like decreasing hours.  If $10/hr is enough to live on full-time, then $15/hr would be enough to live on part-time - I could adjust hours to make overall compensation the same, and nobody would be hurt.  Of course, I might have to do more work myself that way.

- Minimum wage laws, by themselves, wouldn't be enough to reverse the trend we're talking about here.  And, we could always consider policies to help out the actual small business owners, who have a heck of a time competing with the big guys already.

[Mountaineer]

Where exactly do you all get the idea that life is supposed to be fair?  Without struggle?  Without pain?  Even the homeless guy on the street manages to stay somewhat warm and fed during this catestrophic global warming, climate changed, mess of a blizzard on the east coast of the past couple of days.  I do not believe that is stated in Scripture (kingdom of the right) or in our Constitution (kingdom of the left) that anyone is entitled to much of anything easy.  So why go inventing all these utopian ideas about how to live life better?  Suck it up, you lazy dolts and get with the program.  Work, die, or shut the hell up!  Go love your neighbor and help him with his needs.  Saving the whales is a worthless pursuit and will suck your energy dry from being used to help the ones next to you. 

... M

2 Thessalonians 3:10King James Version (KJV)

10 For even when we were with you, this we commanded you, that if any would not work, neither should he eat.

[stuper1]

Nobody is stopping businesses from paying employees $10/hr if they think they are worth it.

What we are trying to say is that businesses shouldn't be forced to pay people $10/hr who are not worth it.  All that does is cause price inflation and less employment at the lower end.

The question is who gets to determine what they're "worth" and how that's determined.

So, no minimum wage at all?  Let businesses pay employees $2/hr?

Exactly, who gets to determine what the employees are "worth"?  Does the government decide, or does the market decide?

Yes, everyone would be better off if there were no minimum wage at all.  Jobs that were worth $5/hr would get filled by people who can only get jobs that are worth $5/hr.  Jobs that were worth $20/hr would get filled by other people.  If $5/hr is not a living wage, then the $5/hr people may have to live with someone else (e.g., parents) or get help some other way.  If you set the minimum wage at $10/hr, all you do is make it harder for businesses and jobs to be created.

[MediumTex]

What I hear jafs saying is that there are people out there with limited skills, but who wouldn't mind showing up for work every day, and who need to be paid enough to live on, regardless of the value they deliver to the employer.

Overall, what jafs seems to be describing is not a minimum wage, but rather government jobs in general.

Why not just have the government hire these people for $10 an hour and give them some plausibly useful function to perform?  Why is it necessary to involve the private sector at all in the wage control experiment?

[Pointedstick]

What I hear jafs saying is that there are people out there with limited skills, but who wouldn't mind showing up for work every day, and who need to be paid enough to live on, regardless of the value they deliver to the employer.

Overall, what jafs seems to be describing is not a minimum wage, but rather government jobs in general.

Why not just have the government hire these people for $10 an hour and give them some plausibly useful function to perform?  Why is it necessary to involve the private sector at all in the wage control experiment?

Bingo. Let the market set its own wages, and create some kind of national make-work program for people with few skills but decent work ethic. Better yet, have them build things of value rather than put on fancy uniforms and harass people who travel by air.

[MediumTex]

What I hear jafs saying is that there are people out there with limited skills, but who wouldn't mind showing up for work every day, and who need to be paid enough to live on, regardless of the value they deliver to the employer.

Overall, what jafs seems to be describing is not a minimum wage, but rather government jobs in general.

Why not just have the government hire these people for $10 an hour and give them some plausibly useful function to perform?  Why is it necessary to involve the private sector at all in the wage control experiment?

Bingo. Let the market set its own wages, and create some kind of national make-work program for people with few skills but decent work ethic. Better yet, have them build things of value rather than put on fancy uniforms and harass people who travel by air.

You could have them build a giant pyramid monument to Obama out of used Amazon shipping boxes.

There would be a great hall within the pyramid called "The Obamanareum". 

It would be a monument not just to a great President, but it would also be a monument to the lasting nature of well-intentioned government full employment programs.

***

Sorry for the snark blast, but I actually had the image above in my mind, and President Camacho was standing next to the pyramid saying: "Well fuck yeah they built this bitch.  We had to do something with all of those boxes." 

(Note: I do not approve of the language that President Camacho uses.)

[Pointedstick]

I think paying the people we're talking about to make art from discarded materials is a great plan. Some of it might be good art, which is cool! And bad art is harmless and can be destroyed or recycled at a later date. Either way, it's a problem that is at least harmless, and by letting these people exit the labor market, what remains of the labor market will probably be a lot better and we can get rid of some of the dumb regulations on it. And the whole unemployment comp program, too. Instead of getting checks, you just go to work making art from trash and stuff until you find a new job. These people could get basic health care, and then you could get rid of medicaid and Obamacare as well.

[Xan]

A citizen's dividend is something worth seriously looking into.  Assuming it comes at the benefit of dropping a LOT of regulations and programs, such as minimum wage, welfare, etc, AND assuming it could be worked out who's a citizen, then it solves the poverty problem without creating a lot of distortions.

Isn't that what the majority of Social Security disability benefits amount to?

I don't think so.  It still has the extremely undesirable property of forcing people to choose between getting benefits and doing work.  That's why a citizens' dividend needs to be paid to everyone: there's no disincentive to work.

[MediumTex]

I think paying the people we're talking about to make art from discarded materials is a great plan. Some of it might be good art, which is cool! And bad art is harmless and can be destroyed or recycled at a later date. Either way, it's a problem that is at least harmless, and by letting these people exit the labor market, what remains of the labor market will probably be a lot better and we can get rid of some of the dumb regulations on it. And the whole unemployment comp program, too. Instead of getting checks, you just go to work making art from trash and stuff until you find a new job. These people could get basic health care, and then you could get rid of medicaid and Obamacare as well.

That's exactly the shit I was talking about.  Give those aspiring artist po folks some paint, a hot glue gun, and a Hobby Lobby gift card and tell them to get their unemployed asses to the junk yard.

[img width=480]http://t.fod4.com/t/1a7417fe0a/c1280x720_47.jpg[/img]

[Cortopassi]

Been reading this thread from afar for a while.  Makes me think about one of my favorite DS9 episodes, Past Tense.  Two parter.  Very prescient.  Sanctuary cities for people who are mentally ill, unemployed or otherwise a "problem" for society, and how a leader rises up and starts a change of heart toward these people and how humanity treats them.

Of course it is idealized, but it is one of my hopes that somehow humanity can get to living the Star Trek Utopian Dream.  Without all the nasty aliens.  Magical unlimited energy could be a great start toward that ideal. 

https://en.wikipedia.org/wiki/Past_Tens ... ce_Nine%29

[jafs]

If a citizen's dividend would be high enough to accomplish it's objective, it would probably be high enough that it could discourage working.

I'm not opposed to government jobs programs as well, but still see no reason to let employers take advantage of their employees in the private sector.

[jafs]

Without some reasonable basis to do that, I'd probably oppose the change.

And, if $10/hr is sufficient, then I'd continue to think that's a fair wage.

The "without some reasonable basis" is the key part.  Here's the way I look at it: You think you are being reasonable in opposing the increase in my hypothetical example.  But there might exist a different version of yourself in my example whose circumstances cause him to say that $15 *is* a fair minimum wage (after all, he was already paying *his* employees $15/hr).  So jafs and dopple-jafs are both being reasonable, yet they disagree.

In contrast, I do think that it is worthwhile to promote an underlying culture where an attitude of "let them eat cake" is deemed unacceptable.  I think this would result in a better quality of life for all.  (That's my kubaya moment. )

But using the blunt instrument of government (with its underlying threat of violence) to coerce business owners to make such a change is no way to achieve it.  I think the big guys get around the law, and the small guys suffer.

Any government regulation or laws have the "blunt instrument" quality if some do, and the big guys will always try to get around them.  Why would other regulations be any different?

And, is your objection ideological or practical?  In other words, if it actually worked well in practice, would you still oppose it?

[jafs]

What I hear jafs saying is that there are people out there with limited skills, but who wouldn't mind showing up for work every day, and who need to be paid enough to live on, regardless of the value they deliver to the employer.

Overall, what jafs seems to be describing is not a minimum wage, but rather government jobs in general.

Why not just have the government hire these people for $10 an hour and give them some plausibly useful function to perform?  Why is it necessary to involve the private sector at all in the wage control experiment?

I'm saying that the notion of "value delivered to employers" is generally not a good way to look at it.  Unless you're working on an assembly line where you can count exactly how many widgets somebody puts together (or some analogous job), it's not really how most jobs work.  Most jobs just involve showing up every day and doing a bunch of different tasks.  It's customers and customer demand that generate revenue.

And, unless/until robots do all of the un/low skilled labor, businesses need people to do those jobs, and should compensate them adequately.

[Xan]

If a citizen's dividend would be high enough to accomplish it's objective, it would probably be high enough that it could discourage working.

Anybody who wanted extra money could go out and earn it without penalty.  That's what's missing from need-based programs.

[Xan]

I'm saying that the notion of "value delivered to employers" is generally not a good way to look at it.  Unless you're working on an assembly line where you can count exactly how many widgets somebody puts together (or some analogous job), it's not really how most jobs work.  Most jobs just involve showing up every day and doing a bunch of different tasks.  It's customers and customer demand that generate revenue.

And, unless/until robots do all of the un/low skilled labor, businesses need people to do those jobs, and should compensate them adequately.

There's a certain cost of employing anybody.  If the cost of employing him is higher than the marginal revenue he brings in, then he won't be hired.

It doesn't matter how many different tasks are involved.  If it costs too much to hire somebody, then it won't happen, and everybody loses.

[jafs]

If a citizen's dividend would be high enough to accomplish it's objective, it would probably be high enough that it could discourage working.

Anybody who wanted extra money could go out and earn it without penalty.  That's what's missing from need-based programs.

Sure, they could.

But if it's high enough to eliminate poverty, it would be high enough that a number of people might easily choose not to work and just live on the dividend.

[jafs]

I'm saying that the notion of "value delivered to employers" is generally not a good way to look at it.  Unless you're working on an assembly line where you can count exactly how many widgets somebody puts together (or some analogous job), it's not really how most jobs work.  Most jobs just involve showing up every day and doing a bunch of different tasks.  It's customers and customer demand that generate revenue.

And, unless/until robots do all of the un/low skilled labor, businesses need people to do those jobs, and should compensate them adequately.

There's a certain cost of employing anybody.  If the cost of employing him is higher than the marginal revenue he brings in, then he won't be hired.

It doesn't matter how many different tasks are involved.  If it costs too much to hire somebody, then it won't happen, and everybody loses.

Again, most jobs don't really work that way.

Most employees don't "bring in revenue", they just do their jobs.  The revenue comes from other things, like customer demand.  It's true that if your revenue isn't larger than your expenses, then your business is in trouble.  And it's true that if you don't have enough new revenue coming in, then you won't hire additional employees.

But the folks working at Wal-Mart (and many other companies) at the level we're discussing aren't bringing in new revenue, they're just stocking shelves, working at the register, and doing similar tasks.

[Xan]

If a citizen's dividend would be high enough to accomplish it's objective, it would probably be high enough that it could discourage working.

Anybody who wanted extra money could go out and earn it without penalty.  That's what's missing from need-based programs.

Sure, they could.

But if it's high enough to eliminate poverty, it would be high enough that a number of people might easily choose not to work and just live on the dividend.

I don't have a problem with that.  If the citizens' dividend is that big, then so be it.

[Xan]

Again, most jobs don't really work that way.

Most employees don't "bring in revenue", they just do their jobs.  The revenue comes from other things, like customer demand.  It's true that if your revenue isn't larger than your expenses, then your business is in trouble.  And it's true that if you don't have enough new revenue coming in, then you won't hire additional employees.

But the folks working at Wal-Mart (and many other companies) at the level we're discussing aren't bringing in new revenue, they're just stocking shelves, working at the register, and doing similar tasks.

They absolutely do work that way.  The only reason a company hires greeters, or cashiers, or whatever, is because without those people, their revenue would be less.

There most certainly is a number, for every employee, that if it cost the employer more than that to keep the employee on, then he would be let go.

[jafs]

Anybody who wanted extra money could go out and earn it without penalty.  That's what's missing from need-based programs.

Sure, they could.

But if it's high enough to eliminate poverty, it would be high enough that a number of people might easily choose not to work and just live on the dividend.

I don't have a problem with that.  If the citizens' dividend is that big, then so be it.

Then, what happens to our productivity if a fair number of people just stop working?

[Xan]

Sure, they could.

But if it's high enough to eliminate poverty, it would be high enough that a number of people might easily choose not to work and just live on the dividend.

I don't have a problem with that.  If the citizens' dividend is that big, then so be it.

Then, what happens to our productivity if a fair number of people just stop working?

The dividend would get lower.

[jafs]

Again, most jobs don't really work that way.

Most employees don't "bring in revenue", they just do their jobs.  The revenue comes from other things, like customer demand.  It's true that if your revenue isn't larger than your expenses, then your business is in trouble.  And it's true that if you don't have enough new revenue coming in, then you won't hire additional employees.

But the folks working at Wal-Mart (and many other companies) at the level we're discussing aren't bringing in new revenue, they're just stocking shelves, working at the register, and doing similar tasks.

They absolutely do work that way.  The only reason a company hires greeters, or cashiers, or whatever, is because without those people, their revenue would be less.

There most certainly is a number, for every employee, that if it cost the employer more than that to keep the employee on, then he would be let go.

I'm really pretty sure that's not how it works.  W-M hires just enough people to cover the demand they have, they don't consider cashiers "revenue bringers".  And, it's only if they have or anticipate having increased demand that they hire more people.

That could be true, but it's not generally based on how much extra revenue the new cashier "brings in".  If they're not getting as much extra demand as they expected (for other reasons), then they'll undoubtedly cut some of the work force.

[Xan]

I'm really pretty sure that's not how it works.  W-M hires just enough people to cover the demand they have, they don't consider cashiers "revenue bringers".  And, it's only if they have or anticipate having increased demand that they hire more people.

That could be true, but it's not generally based on how much extra revenue the new cashier "brings in".  If they're not getting as much extra demand as they expected (for other reasons), then they'll undoubtedly cut some of the work force.

Then how do they decide how many cashiers and greeters they need, and what's the most they're willing to pay for them?

Have you ever hired anybody?  Because it sounds like the answer is no.

it is exactly how it works, there is no difference between producing a # of widgets on an Assembly line and stocking a shelf with a # widgets both are measurable outputs with measurable costs that companies who want to operate in the black must count and track, even customer service, # of customers greeted and helped by knowledgeable staff is a measurable product that has a measurable effect on bottom line...