The Pitchforks Are Coming For Us Plutocrats

[goodasgold]

In my own case, I'm not sure I ever knew anything anyway, so there isn't much to unlearn.

I think it was Mark Twain (and I am paraphrasing) who said: "When I left home at 19, I was convinced my father was a fool. When I returned home at 21, I was amazed how much the old man had learned in just two years." 

[Pointedstick]

http://www.addictinginfo.org/2014/09/14/15-now-seatac/

Tom Douglas, who runs fifteen restaurants in Seatac, warned that a higher minimum wage would force the shutdown of a quarter of his restaurants. Instead, he is opening five new restaurants to meet demand. And this story is being repeated, over and over again, throughout Seatac.

[moda0306]

http://www.addictinginfo.org/2014/09/14/15-now-seatac/

Tom Douglas, who runs fifteen restaurants in Seatac, warned that a higher minimum wage would force the shutdown of a quarter of his restaurants. Instead, he is opening five new restaurants to meet demand. And this story is being repeated, over and over again, throughout Seatac.

There are probably more things going on than simply high minimum wage being an economic wonder, but there are a couple of economic adjustments that anti-minimum wage folks always forget about.

It's not just your business that has to increase wages, but ALL businesses that pay minimum wage, and many that pay anywhere close to it, but above it.  This could, depending on the different parties' marginal propensity to consume, result in greater sales to offset higher wages.  Especially if you're operating below capacity, but profitably, it could actually increase your profits, depending on who you sell to.

But of course, if you don't think willingness to transfer monetary payment for consumption (or purchase) of goods or services has ANY valuable role to play in economics, then you're going to live in that fantasy land and mis-predict economic outcomes all over the country and world.

I'm really not sold on raising minimum wages yet (I know, the statist pig doesn't want a "living wage?"  WTF!!).  I think people should negotiate for their compensation at arms length.  However, we have to be honest about what all the economic effects of wage hikes might be.  I definitely don't think it's NEARLY the disaster the supply-siders do.  But, of course, we're talking about something where amounts matter here.  It's not a fundamental principal that raising the minimum wage will cause prosperity... just that it seems like it might do so in the right macro-economic circumstances.


One concept I haven't fully fleshed out is that while you may be able to control the PRICE of a thing at the government level, normally, they don't get to dictate every other aspect of that thing.  For instance, if you put price ceilings on rents in Manhattan, you'll naturally see a ceiling on the "niceness" of the places that are rented.  If you put a floor on wages, you don't necessarily control the floor on expected productive output that your employer expects you to create.  It leaves areas of adjustment.  So in the world of minimum wages, even if we pretend the demand/sales side of things is irrelevent, it actually forces employers to get more production out of each employee to be profitable as one very real alternative to "OMG I have to fire 1/4 of my workforce."

Perhaps, if you combine the macroeconomic demand-side benefits of higher wages with the natural necessity for the employers to get more production per hour out of their employees, then perhaps this is why some economies tend to do well when they see a minimum wage hike.  The government doesn't control ALL aspects of the transaction.  Just a price floor (well.. and taxes and certain regulatory requirements).  This leaves businesses room to adjust other variables of the business, a couple of which could be quite positive!

[Pointedstick]

I'm really not sold on raising minimum wages yet (I know, the statist pig doesn't want a "living wage?"  WTF!!).

Nor am I; I just want to try to understand what's happening. If indeed a wage increase would be beneficial, I would much rather employers do it themselves than be forced into it, which always tends to breed resentment and attempts at noncompliance.

[moda0306]

I'm really not sold on raising minimum wages yet (I know, the statist pig doesn't want a "living wage?"  WTF!!).

Nor am I; I just want to try to understand what's happening. If indeed a wage increase would be beneficial, I would much rather employers do it themselves than be forced into it, which always tends to breed resentment and attempts at noncompliance.

Well I think the whole idea is that it is a macroeconomic tool.  It doesn't work if only a few employers do it.

And don't get me wrong... I fully understand the evils that can be accomplished by an agent of government saying "but it's for the greater good if EVERYONE complies, so non-compliance will be met with huge punishment," but really the entire premise of government in the first place is the fallacy of composition that exists when you argue that because every transaction people make is to maximize their happiness among alternatives, then a society that is unencumbered by government is the happiest society possible.

If that fallacy of composition didn't exist, we wouldn't even have government to begin with, because we'd be as collectively happy as we could possibly be without government... or at least as happy as we have the ability to rationally make ourselves.

I'm going to deep.  F'k.


Brevity.