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wateroverfire posted:Purchasing power is most relevant for housing, education and health care, basically. I think if those three items are included in living wage you'll have an inflationary nightmare assuming everything about the way those things are produced and distributed doesn't change as well. But if those three items aren't included it's hard to conceptualize what would be meant by a living wage. Maybe I'm reading you wrong and you're saying the government should just provide those things? Well, the government should provide these things, and businesses would benefit thereby compared to being expected to pay for that themselves through the minimum wage. Which brings us to another thing minimum wage activism is good for: it's about the only time you start to see Forbes and the WSJ run pro-EITC and pro-safety-net pieces, when they start to see enough support for the minimum wage that they get frightened for their profits.
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Jun 8, 2015 20:27
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JeffersonClay posted:There is no difference between setting a minimum wage at a "living wage" and then indexing for inflation and setting the minimum wage at whatever level allows workers to support themselves at current price levels. They are literally exactly the same thing. If that's the idea great, but I don't think a living wage would be a specific ratio of inflation, at least not for long. It might fit right now but changes in the economy could cause that ratio to be ineffectual later down the line. I'm worried if we don't define the goal of a policy it will be misused or crippled by factors that we can't foresee. Setting minimum wage to a specific ratio does nothing to address what it's trying to solve. It's just a changing a number, that's why people in this thread argue that minimum wage isn't supposed to provide a living wage, the policy itself has no constraints or criteria that enforce it's purpose.
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Jun 8, 2015 21:37
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JeffersonClay posted:Not all infinite series sum to infinity. The only way you could create a positive feedback loop that caused runaway inflation would be if minimum wage labor costs were 100% of total costs, but they're not, not even close. Hold on, if you're raising minimum wage, and say we assume that leads to increases in wages across the board due to secondary effects, doesn't that increase the percentage of labor in total costs? You start out with minimum wage labor 50% of total costs, you increase it by 100% - but you didn't change the rest. So now the new minimum wage labor is 66.7% of costs. Total costs rose by 50%, so you raise 66.7% by 50%, now you're raising the total by 33.3%, not 25%. Labor is now 75% of costs. Raise it by 33.3%, _now_ you get 25% increase, and now labor is 80%. The increase goes as the series summing 1/n, which doesn't converge. But I think that's the wrong model to look at. Let me play around for a minute to see what is going on. Say you want a worker to always be able to afford a living with their wages. So, we want MinWage = LivingWage. Let's say that making a living means you buy products, and that all those products have a labor and a non-labor component. So: LivingWage=a * Labor+ (1-a) * Other Where Labor is the average labor cost, Other is the average non-labor cost, both for the product basket we're looking at. Now, let's further suppose that Labor is linear in MinWage, say by a factor X. So we finally get: MinWage = a * X * MinWage + (1-a) * Other MinWage = Other * (1-a)/(1-aX) So for any value of Other (external?), a (labor-intensiveness of production, basically 1-a is kind of the productivity?) and relation between average wage and minimum wage X (which is independent of the rest maybe?), you should be able to choose a minimum wage that is a living wage. But like with dynamic hedging, I guess the problem is that you can only adjust these things at finite intervals, which may cause instabilities. The fact that your more time-series-like model doesn't converge leads me to suspect that this is the case. Caveat lector: I am not an economist by any means. ETA: Oh, heh, I already see a problem: if aX >= 1, this doesn't work.  So a < 1/X, meaning you need labor intensiveness to be low enough, or productivity to be high enough, for this to work. Alternately, average labor costs are very close to the minimal wage, meaning you have a mostly egalitarian society. 
Absurd Alhazred fucked around with this message at 22:13 on Jun 8, 2015 |
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Jun 8, 2015 21:59
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The math you're doing is more complete, yes. Raising the minimum wage will increase the labor share of cost, but there are likely to be other effects which could counteract that. 1). Productivity. If raising the minimum wage increases worker productivity, the labor share of cost will decrease, either because total production increases and therefore the cost of other factors goes up, or because companies can employ less labor to produce the same amount of product. 2). Employer responses. Employers could respond to higher labor costs by substituting capital for labor through automation, lowering the labor share of cost. They could also choose to produce fewer labor intensive goods and more capital intensive goods with the same result. 3. Accounting. Employers will pay for part of the wage hike from their savings due to reduced turnover, and some employers will reduce benefits to increase wages. These portions of the minimum wage will have a zero net effect on the labor share of cost. I can only guess, but I'd expect 1) and 2) to grow as the minimum wage increases, damping any runaway feedback effect. JeffersonClay fucked around with this message at 22:32 on Jun 8, 2015 |
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Jun 8, 2015 22:29
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Also, there are states where they index the minimum wage to inflation already and it didn't kick off a diverging series of raises driving all prices to infinity...what is it with this thread and imagining insane and fanciful consequences of ordinary policies that already exist?
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Jun 9, 2015 00:29
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VitalSigns posted:Also, there are states where they index the minimum wage to inflation already and it didn't kick off a diverging series of raises driving all prices to infinity...what is it with this thread and imagining insane and fanciful consequences of ordinary policies that already exist? How dare you sully my simple and pretty math with brute empiricism?!
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Jun 9, 2015 00:40
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VitalSigns posted:Also, there are states where they index the minimum wage to inflation already and it didn't kick off a diverging series of raises driving all prices to infinity...what is it with this thread and imagining insane and fanciful consequences of ordinary policies that already exist? I didn't intend for this to be an argument over whether or not indexing the minimum wage to inflation would or wouldn't cause hyper inflation. I'm just trying to say that setting an index doesn't solve the problem of providing a living wage, of course we can use the states that are currently doing that as an example. Do all the states that index to inflation have a reduced number of welfare recipients? Currently only these states have active min wage indexing: Arizona, Colorado, Florida, Missouri, Montana, Nevada, New Jersey, Ohio, Oregon and Washington I know at least Arizona and Florida aren't on the list of lowest welfare recipients...
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Jun 9, 2015 00:43
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None of those states have a minimum wage above the poverty level for a single earner with kids, and there's a lot more that goes into "number of people on welfare" besides the minimum wage anyway, I'm not sure what a raw comparison like that will even tell you. Full-time workers at Walmart and McDonald's commonly go on welfare now. VitalSigns fucked around with this message at 00:53 on Jun 9, 2015 |
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Jun 9, 2015 00:51
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VitalSigns posted:None of those states have a minimum wage above the poverty level, and there's a lot more that goes into "number of people on welfare" besides the minimum wage anyway, I'm not sure what a raw comparison like that will even tell you. It tells us that setting the minimum wage as an index of inflation does nothing to solve the living wage problem. If we increase the minimum wage to $15/h and then index to inflation will it provide a living wage? Who knows, that's why I don't think it's enough to just raise it and keep it there. Indexing just ensures the amount of money you earn won't be affected in real dollars by inflation.
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Jun 9, 2015 00:57
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ElCondemn posted:It tells us that setting the minimum wage as an index of inflation does nothing to solve the living wage problem. If we increase the minimum wage to $15/h and then index to inflation will it provide a living wage? Who knows, that's why I don't think it's enough to just raise it and keep it there. Indexing just ensures the amount of money you earn won't be affected in real dollars by inflation. It tells us that tacking a minimum wage to inflation does not solve the living wage problem if the minimum wage was already too low. If the minimum wage is a living wage, then tacking its value to inflation by definition maintains it as a living wage. If an inflation-tracking minimum wage is $11/hour and it's determined that a living wage is now $12/hour, then the minimum wage increases to $12/hour. Maybe you're concerned that goods have prices that change in different ways? In that case, it's all just a matter of measuring inflation using the right types of goods (necessities)
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Jun 9, 2015 01:10
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QuarkJets posted:It tells us that tacking a minimum wage to inflation does not solve the living wage problem if the minimum wage was already too low. If the minimum wage is a living wage, then tacking its value to inflation by definition maintains it as a living wage. If an inflation-tracking minimum wage is $11/hour and it's determined that a living wage is now $12/hour, then the minimum wage increases to $12/hour. That sounds reasonable. QuarkJets posted:Maybe you're concerned that goods have prices that change in different ways? In that case, it's all just a matter of measuring inflation using the right types of goods (necessities) Yes that's a big concern for me but I think your explanation is enough to assuage my fears.
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Jun 9, 2015 05:56
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VitalSigns posted:Also, there are states where they index the minimum wage to inflation already and it didn't kick off a diverging series of raises driving all prices to infinity...what is it with this thread and imagining insane and fanciful consequences of ordinary policies that already exist? I mentioned this once or twice already since I sitting right here in Washington State, but no one seemed to think a real world example was useful.
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Jun 9, 2015 09:42
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VitalSigns posted:Also, there are states where they index the minimum wage to inflation already and it didn't kick off a diverging series of raises driving all prices to infinity...what is it with this thread and imagining insane and fanciful consequences of ordinary policies that already exist? Ideological opposition to the concept of a minimum wage leads to all kinds of crazy things.
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Jun 9, 2015 14:50
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VitalSigns posted:Also, there are states where they index the minimum wage to inflation already and it didn't kick off a diverging series of raises driving all prices to infinity...what is it with this thread and imagining insane and fanciful consequences of ordinary policies that already exist? Because idiots took basic Econ and the only way to argue against wage increases is to divorce yourself from reality and tell everyone else they just don't get it?
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Jun 9, 2015 18:27
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Nevvy Z posted:Ideological opposition to the concept of a minimum wage leads to all kinds of crazy things. Yeah, but Elcondemn is ideologically comitted TO the minimum wage. VitalSigns posted:Also, there are states where they index the minimum wage to inflation already and it didn't kick off a diverging series of raises driving all prices to infinity VitalSigns posted:None of those states have a minimum wage above the poverty level for a single earner with kids There's some inherent tension between the arguments here. Low minimum wages don't empirically cause big problems but don't empirically do much to ameliorate poverty. Why assume that at higher minimum wage levels the first trend will continue but the second will change?
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Jun 9, 2015 18:30
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JeffersonClay posted:Yeah, but Elcondemn is ideologically comitted TO the minimum wage. Wait, is your position that there shouldn't be a minimum wage, period?
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Jun 9, 2015 18:35
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JeffersonClay posted:There's some inherent tension between the arguments here. Low minimum wages don't empirically cause big problems but don't empirically do much to ameliorate poverty. Why assume that at higher minimum wage levels the first trend will continue but the second will change? They're completely different issues, they're not in conflict at all The first one addresses the question of whether or not an inflation-indexed minimum wage will result in runaway inflation: it clearly doesn't. There's not a good reason to suspect that it would, either. The second one addresses why there is still poverty in states with an inflation-indexed minimum wage: those states indexed their minimum wages at sub-poverty levels. Raising the minimum wage might cause a very small amount of inflation, depending on the size of the increase, but it won't trigger the runaway inflation addressed by argument 1.
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Jun 9, 2015 18:36
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JeffersonClay posted:Yeah, but Elcondemn is ideologically comitted TO the minimum wage. Poverty isn't a big problem to you? 
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Jun 9, 2015 18:38
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JeffersonClay posted:Yeah, but Elcondemn is ideologically comitted TO the minimum wage. I guess you could say I'm ideologically committed to the idea that people should be paid for their work. If you're working it should be able to provide the basics for you and your family, otherwise what's the point in participating in society? Just steal and do what you want if you have no legitimate avenue to provide for yourself, that's the contract of work. You exchange your labor for what's necessary to survive. If you can't survive following the rules, do what you need to survive, it's basic. VitalSigns explained to me that indexing to inflation once we find the "living wage" will ensure it remains a living wage, though I still worry that the way inflation is calculated may have drawbacks in terms of defining a living wage. But since it's the best option we have and I can't think of a better way to define a living wage it's acceptable to me. JeffersonClay posted:There's some inherent tension between the arguments here. Low minimum wages don't empirically cause big problems but don't empirically do much to ameliorate poverty. Why assume that at higher minimum wage levels the first trend will continue but the second will change? Low minimum wages do empirically cause big problems, I don't know what the gently caress you're on about. ElCondemn fucked around with this message at 18:44 on Jun 9, 2015 |
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Jun 9, 2015 18:41
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ElCondemn posted:Low minimum wages do empirically cause big problems, I don't know what the gently caress you're on about. Yeah but only for minimum wage workers, they shouldn't count (is what JeffersonClay is saying)
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Jun 9, 2015 19:00
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Absurd Alhazred posted:Wait, is your position that there shouldn't be a minimum wage, period? No I think we should raise the U.S. minimum wage. Who What Now posted:Poverty isn't a big problem to you? I'm considering the minimum wage to be exogenous to poverty. Some countries solve poverty without a minimum wage at all. When I say big problems I mean things like inflation and unemployment. QuarkJets posted:Yeah but only for minimum wage workers, they shouldn't count (is what JeffersonClay is saying) I feel like the thread is better when you're not inventing strawmen every third post. QuarkJets posted:They're completely different issues, they're not in conflict at all The conflict comes from the attitude towards empirical evidence-- it doesn't make sense to use past small minimum wage increases to dismiss possible harms, but to ignore the very meager benefits of past small minimum wage increases when asserting a large minimum wage hike is a vital tool to help the poor. I agree that an inflation adjusted minimum wage will not produce snowballing inflation.
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Jun 9, 2015 19:51
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ElCondemn posted:Low minimum wages do empirically cause big problems, I don't know what the gently caress you're on about. VitalSigns posted:insane and fanciful consequences of ordinary policies that already exist? Nevvy Z posted:Ideological opposition to the concept of a minimum wage leads to all kinds of crazy things. Edit- JeffersonClay posted:No I think we should raise the U.S. minimum wage. Guys he totally supports it thats why he argues nonsense at every opportunity.
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Jun 9, 2015 19:52
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JeffersonClay posted:I'm considering the minimum wage to be exogenous to poverty. Some countries solve poverty without a minimum wage at all. When I say big problems I mean things like inflation and unemployment. Wait... you think inflation is a big problem?
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Jun 9, 2015 20:06
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JeffersonClay posted:I'm considering the minimum wage to be exogenous to poverty. Some countries solve poverty without a minimum wage at all. When I say big problems I mean things like inflation and unemployment. Hey I'm just a spectator but this surprised me. Are there countries that both don't have a minimum wage and have "solved" poverty (whatever that means)? A quick glance at Wikipedia lists a bunch of countries I doubt don't have poverty problems, and a few European countries that set minimum wages via collective bargaining instead of by statute.
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Jun 9, 2015 20:16
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Caros posted:Wait... you think inflation is a big problem? Duh, if we keep up this crazy inflation our stockpiles of money we totally earned will become worthless! Of course that's at the expense of everyone who's working for a living, but JeffersonClay is a man of the people. We've got to keep those not working for a living from losing even more money to the ravages of inflation.
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Jun 9, 2015 21:10
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It's always great when folks pretend to be in touch with the poor and then get angst about inflation. See: the posts that are about to quote this one and entirely miss the point.
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Jun 9, 2015 21:15
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JeffersonClay posted:The conflict comes from the attitude towards empirical evidence-- it doesn't make sense to use past small minimum wage increases to dismiss possible harms, but to ignore the very meager benefits of past small minimum wage increases when asserting a large minimum wage hike is a vital tool to help the poor. I agree that an inflation adjusted minimum wage will not produce snowballing inflation. It makes perfect sense to use past small minimum wage increases as a justification for several small minimum wage increases that bring the minimum wage up to a minimum wage. The empirical approach does not suggest that we should jump at $15 right away, but it does not suggest that we should raise it by a little bit and then stop there for a decade, either. JeffersonClay posted:I feel like the thread is better when you're not inventing strawmen every third post. You discounted the welfare of minimum wage workers entirely when you said that there are "no problems" with keeping the minimum wage low. I was being half-facetious, since I suspect that was not your intention. My post is not a straw man regardless
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Jun 9, 2015 22:04
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Caros posted:Wait... you think inflation is a big problem? I think the biggest potential problems with the minimum wage are inflation and unemployment. I think the biggest potential benefit of the minimum wage is transfer of money to the poor. I don't think it makes sense to use empirical evidence, which shows that both the problems and benefits are small, to dismiss the potential problems but not the potential benefits. If we make the minimum wage large enough to meaningfully affect poverty, it may be big enough to meaningfully affect employment and inflation, too.
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Jun 9, 2015 22:10
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QuarkJets posted:You discounted the welfare of minimum wage workers entirely when you said that there are "no problems" with keeping the minimum wage low. I was being half-facetious, since I suspect that was not your intention. My post is not a straw man regardless No, I said low minimum wages don't cause problems, like unemployment and inflation. Poverty and inequality are problems the minimum wage seeks to solve, and the minimum wage is good insofar as it solves those problems, but poverty and inequality aren't caused by low minimum wages, any more than malaria is caused by low DDT use. QuarkJets posted:It makes perfect sense to use past small minimum wage increases as a justification for several small minimum wage increases that bring the minimum wage up to a minimum wage. The empirical approach does not suggest that we should jump at $15 right away, but it does not suggest that we should raise it by a little bit and then stop there for a decade, either. The empirical approach says very little about minimum wages much higher than 12/hr because they have not been tried. Raising the minimum wage in increments is a good idea because we should measure the effects of each increase to find out when to stop, not because $15/hr is the right minimum wage as long as we approach it incrementally.
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Jun 9, 2015 23:18
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JeffersonClay posted:No, I said low minimum wages don't cause problems, like unemployment and inflation. No, you said this: JeffersonClay posted:There's some inherent tension between the arguments here. Low minimum wages don't empirically cause big problems but don't empirically do much to ameliorate poverty. Why assume that at higher minimum wage levels the first trend will continue but the second will change? Nothing about unemployment or inflation there, just a general statement of "no problems". But like I said, I suspected that this wasn't intentional, which is why I was half-facetious JeffersonClay posted:The empirical approach says very little about minimum wages much higher than 12/hr because they have not been tried. That's right. So the empirical approach would be to raise the minimum wage in small increments and to monitor the results. quote:Raising the minimum wage in increments is a good idea because we should measure the effects of each increase to find out when to stop, not because $15/hr is the right minimum wage as long as we approach it incrementally. I completely agree
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Jun 10, 2015 00:21
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QuarkJets posted:Nothing about unemployment or inflation there, just a general statement of "no problems". But like I said, I suspected that this wasn't intentional, which is why I was half-facetious I explicitly state that low minimum wages don't do much to ameliorate poverty. Obviously I'm saying that poverty continues to be a problem when minimum wages are low.
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Jun 10, 2015 00:40
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JeffersonClay posted:I don't think it makes sense to use empirical evidence we know
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Jun 10, 2015 00:50
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JeffersonClay posted:I explicitly state that low minimum wages don't do much to ameliorate poverty. Obviously I'm saying that poverty continues to be a problem when minimum wages are low. Even if that were the case, surely you would agree that lower minimum wages create problems for minimum wage workers, right? "Low minimum wages don't cause problems" would be wrong for anyone who makes minimum wage
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Jun 10, 2015 00:54
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QuarkJets posted:Even if that were the case, surely you would agree that lower minimum wages create problems for minimum wage workers, right? "Low minimum wages don't cause problems" would be wrong for anyone who makes minimum wage I think it would be more accurate to say "low minimum wages fail to solve problems." I don't think inequality or poverty are caused by the absence of minimum wages (or any government intervention intended to solve them). If we asked the ghost of Karl Marx what caused inequality and poverty he'd say private ownership of the means of production, and he'd view government interventions like a minimum wage as treating the symptoms, but not the causes, of poverty and inequality. down with slavery posted:I don't care if unemployment goes up as a result of increasing the minimum wage Are you still pro-accelerationism?
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Jun 10, 2015 01:39
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JeffersonClay posted:Are you still pro-accelerationism? yes, i would like to accelerate progress down with slavery fucked around with this message at 01:52 on Jun 10, 2015 |
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Jun 10, 2015 01:44
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How many poor people's lives do you think we'll need to make worse for that to happen?
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Jun 10, 2015 02:01
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JeffersonClay posted:How many poor people's lives do you think we'll need to make worse for that to happen? 0, that's the beauty of empirical data backing up your position believe it or not, employment in of itself is not a great goal do you really have to ask me a bunch of stupid questions when i've already stated my position in this thread about a bajillion times? down with slavery fucked around with this message at 02:11 on Jun 10, 2015 |
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Jun 10, 2015 02:07
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down with slavery posted:do you really have to ask me a bunch of stupid questions when i've already stated my position in this thread about a bajillion times? I feel your pain, brother.
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Jun 10, 2015 02:49
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JeffersonClay posted:I feel your pain, brother. then why are you asking me questions? idgi
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Jun 10, 2015 03:07
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JeffersonClay posted:I explicitly state that low minimum wages don't do much to ameliorate poverty. Obviously I'm saying that poverty continues to be a problem when minimum wages are low. Alright so I'm about to drop a sicknasty truth bomb on you. If low minimum wage means people are poor even if they work, because they're not making much money, ok here's the tricky bit stay with me now, what if we gave them more money
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Jun 10, 2015 04:22
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