The Minimum Wage Destroys Jobs

Originally Posted by Bradylama

There's also a laughably poor understanding of buying power going on here. If the prevailing minimum is 5 dollars, and then you suddenly increase that by a dollar, you're looking at 1/5th of the current employees on minimum wage losing their jobs. While those remaining have more money to pay for goods, the ones that have been fired have nothing.

So the choices are everyone gets next to nothing, or some people get nothing and the rest get a bit more?

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Originally Posted by Bradylama

That's how it works. Arbitrarily raising the minimum wage without any reflection on the actual productivity of minimum wage workers is zero-sum. Workers on the net aren't any more productive after the minimum wage hike than they were before. So the choice is, either everybody suffers, or the lowest skilled become economic and political losers doomed to cronic unemployment.

If it's zero sum, then why would anyone care if it happens or not? =\/

Also, aren't you assuming that every dollar earned is of equal importance? What if the dollar between earning $5 and $6 for four people is much more valuable than the $5 the one person loses?

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But the value to a certain person. Could their standard of living increase enough with the extra $1 enough to outweigh the decrease in standard of living for the person making $5? Not talking about total economic wealth going on here, I'm talking about standard of living (where curves don't necessarily have to be straight lines).

Think of it this way, if you take away $100,000 from a CEO's salary and give $10,000 of it to 10 people making $10,000 a year already, would their quality of living most likely increase more than the decrease in quality of life for the CEO that lost 5% of his salary?

How ya doing, buddy?

Originally Posted by Bradylama

Yes, but we're not talking about wealth distribution whose end result is a marginally smaller loss for the CEO, you're talking about wealth distribution that forces a fraction of the population into destitution.

Umm...that seems like it's more aimed at the analogy than the actual point I was trying to make. If everyone is going to live in destitution at $5 an hour, but at $6 an hour some people can stop taking those second jobs and working eighteen hour days while one person gets fucked over, then isn't it beneficial to give those people $6 an hour instead of $5 an hour?

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People think blacks must be stupid or lazy to be so poor in the inner city, but the fact is that you can't be either to survive ghetto economics! They can't get legitimate work because they simply can't perform well enough to be hired at the prevailing wage! Attempting to justify this kind of "benefit" is inhuman! Socialist bastards and unions have stacked the odds against the poor of this country by denying them the ability to compete and I'm sick of it.

Ummm...ok?

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Originally Posted by Bradylama

It's still not working. Nobody all of a sudden stops taking on a new job because they just earned an extra buck an hour instantly. You're also looking at a zero-sum game. At what point do you have to get before minimum wage workers stop taking on multiple jobs? 9 dollars an hour? 12 dollars an hour? How many people have to become unemployable just so 1/3 of the people at the minimum skill bracket don't have to take two jobs for a "living wage?"

There's some wage amount that will get people to stop working a second job in order to get by. I don't know what it is, and I doubt you do either, but do you see the reason why knowing that point could be important?

Also, do you know what zero sum actually means? Taking all the wealth in a country and giving it to one person creates a zero net change in wealth for a country, but I don't think anyone out there would argue the two situations are equivalent from any standpoint other than raw numbers.

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Also, since I didn't clarify, the idea that an employer would keep all of their employees and raise prices is ludicrous. Doing so lowers sales and revenue, and a business owner would much rather keep the same overhead and keep the same product marketability than raise overhead and lose marketability. Like I said a long time ago, minimum wage hikes hurt small businesses and help the large corporate ones like Wal-Mart since they can easily eat the overhead.

Don't smaller businesses tend to make one of their main selling points their exceptional customer service? You know, it's worth going to your local hardware store over Walmart because even though it's a little more expensive you're going to get expert assistance while you're shopping.

I was speaking idiomatically.

Originally Posted by Bradylama

That's exactly what I'm saying it means. In your example everybody save one person is a loser of wealth. In the real example of a minimum wage hike, the real losers are in a minority, yet are also the ones who are most purported to be the benefactors. This doesn't seem insane to you? The inability of any central authority to measure such items is why Keynesianism is bullshit.

So, in other words, all that matters is the total amount of wealth in the economy and everyone that disagrees can go suck a cock (obviously what they'd be doing to get by)?

Also, welcome to the soft sciences, the inability to measure anything worthwhile is what makes them very speculative and difficult to determine. But just because we can't get an exact number for something doesn't mean we shouldn't at least go for a best shot.

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Knowing the drop off point for when a person stops taking a second job is impossible, because it can only be applied on a case-by-case basis. How much is one man going to be content with compared to another? How much does he need compared to another? These are impossible terms to measure, and expecting somebody working 6 hours a day at one job to stop working the other 6 hours because they're making an extra few bucks is absurd. It won't apply all over the board, and the people who it may apply to aren't going to be significant enough to provide any net benefit.

I thought you said we couldn't measure this sort of thing, yet you're magically making assumptions about how exactly the distribution will fall.

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In any case when you increase the minimum wage both federally and at the state level, you create more economic losers, and more chronically unemployed who are incapable of climbing out of their rut without being able to underbid the wages of their competing employees.

Well, we create more economic losers, but we're also creating even more economic winners. You know, all the minimum wage people that are keeping their jobs.

Also, I'm actually curious, how many people do you know that have been unable to find employment from places that hire at minimum wage? The only people I knew in high school that couldn't find work were those that valued their time at considerably more than minimum wage, so they felt it was better to not even spend their time working in the first place. Much like how if I were to have difficulty during a job search, I'd consider my time being worth more than minimum wage, so instead of working 40 hour weeks at Walmart I'd feel I'd be better off working very little and putting my time towards finding a better line of employment.

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And in order to maintain that expert assistance they'd have to eat expert costs. Which increases with the minimum wage hike. It's an unnecessary burden that shouldn't be placed on small businesses.

Nothing is forcing the small company to pay their employees more since we're assuming they're already paying more than minimum wage prior to the hike, so why should we make the assumption that they will increase their wages to keep a notch above the rest?

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Originally Posted by Bradylama

Yes, Mikey, 2 dollars an hour is the most fair price to pick strawberries, as it's cheaper on labor costs than automation in the long-term. Do you really think that farmers can afford to pay 40 people 7.25 an hour to pick strawberries for a month?

I dunno, the strawberry farmers in my area always hired middle/high school kids to work the fields and the kids like to do it because they could earn at least minimum wage doing it.

Of course, the other question is why would the farmer not be able to pay 40 people $7.25 an hour. Is it because all the other farmers in the area are able to get their labor for much cheaper?

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If you can import workers who are willing to work for 2 dollars an hour compared to hiring a bunch of kids to work 7 dollars an hour, you've got the edge on the competition. That's how unskilled labor markets work. The unskilled worker willing to work for the smallest wage is the most attractive, and since the exchange is voluntary the problems of passive resistance do not rear up as they do with slavery.

So in other words farmers that try to stay legal in their hiring prices are coerced into practices they'd rather not do because of their criminal neighbors or are forced to go out of business?

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Originally Posted by Bradylama

Either that or they crunch to automate. Illegal immigration is as inevitable as the drug trade so long as there's a demand for labor which is willing to work below the minimum. Either the solution is to legitimize immigrant workers, or it's to get rid of the minimum wage.

Can't you also try to prevent illegal immigration?

Jam it back in, in the dark.

There's nowhere I can't reach.