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Thread: Minimum Wage

  1. #31
    Senior Member Survive & Stay Free's Avatar
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    Quote Originally Posted by onemoretime View Post
    Whoa, where'd this question of "need" even come from? The only things we truly need are to eat, fuck, and love one another. Everything else comes down to choice.
    Did Cicero or someone say that originally, a bit differently?

  2. #32
    Ghost Monkey Soul Vizconde's Avatar
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    Quote Originally Posted by JHBowden View Post
    Spamtar, my reasoning applies in the marginal case. Apples and Apples. If we increased the minimum wage to $25hr, ceteris paribus, we would create more unemployment than $20hr, but less than $30hr.
    No +300% compared to less than 15% ($7.50 per hour compared with $20/25/30 per hour) is blowing the facts way out of proportion.

    Abstract it if you wish to address this matter as an academic debate contest but if you still believe this when you go home for the day you may wish to do a reality check. The example is way out of proportion from reality and best only if raised for the point of hyperbole but not meant to be taken literally without looking/being batshit crazy (and this is from someone who comes up with and believes in a lot of abstractions which admittedly seem batshit crazy; however your example cast is too concrete to get "too creative")
    I redact everything I have written or will write on this forum prior to, subsequent with and or after the fact of its writing. For entertainment purposes only and not to be taken seriously nor literally.

    Quote Originally Posted by Edgar View Post
    Spamtar - a strange combination of boorish drunkeness and erudite discussions, or what I call "an Irish academic"

  3. #33
    Gotta catch you all! Blackmail!'s Avatar
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    Quote Originally Posted by Magic Poriferan View Post
    If every business realizes they benefit from paying their employees nothing, than they may decide that it's better for all of them to agree to not try paying better than one another.

    This is at least one reason for enforcing a minimum wage.
    Exactly.

    The trouble with arguments like the one JHBowden produced, is the fact they (wrongfully) assume the market is infinite, while in reality it has boundaries everywhere. I'd say he hasn't properly understood socio-economy, or the inherent complexity of modern society.

    The moment you realize markets are per se limited to specific niches in society, when you introduce specialization, then marginalism becomes less and less effective as a theory. When you have a competition (however tiny!) over a limited sector of the economy, theory says wages will inevitably drop to... zero. Or at least, to the minimal possible wage. Here, the so-called "invisible hand" will always lead to absurd results.

    ---

    I don't know if somebody here has ever heard of the "parable of piano movers"?

    Here it is:

    1/ Let's say that to move a grand piano, you need at least two men. Each one has a specific role: one near the keyboard, and another near the opposite frame. The two movers can't exchange their roles (I.e: the market is not infinite), they are too specialized.

    2/ Let's say that the two men are payed €1000 to move the grand piano.

    We can imagine that, after a short discussion, the two movers would agree to share the contract, and take €500 each. And that would be fair, since each of them produces approximately the same effort, despite their specialization.

    But now, imagine that a third mover appears. And he knows only how to handle the piano near the keyboard (-> Here we introduce competition within a specialized niche).
    Rationally speaking, he will propose to do the job for €499. But then the other mover will propose €498... and so on, and so on.

    So in the end, assuming it's better to earn something rather than nothing, we will have a situation where you will have one mover that earns €1, and the other (near the opposite frame of the grand piano), €999.

    ---

    Now, do you understand the purpose of a minimal wage? It's only a regulation tool.

    I should add that if our CEOs usually earns so much, it's not because they are capable or competent, or because they are the only ones who are able to take risks: it's only a myth they retrospectively invented to justify their crazy salaries.
    Most of the time, it's rather because they manage to prevent or circumvent any possible competition around their working niche. This way, they will stay as long as possible in the situation of the mover that will earn €999.

    (That's the real trick, and it works everywhere)
    "A man who only drinks water has a secret to hide from his fellow-men" -Baudelaire

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  4. #34
    mountain surfing nomadic's Avatar
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    ^ Thats a cool piano mover example there.

    I'd like to incorporate it into my West Coast School of New Economics if you don't mind. ^^

    Its a great example of discussing the limitations of infinite boundaries and the limitations of mathematics in explaining all socio-economic situations.

  5. #35
    Dreaming the life onemoretime's Avatar
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    Quote Originally Posted by Magic Poriferan View Post
    If you're going to be that reductionist, who says we need to love each other?
    The part of us that gets depressed and suicidal in isolation.

  6. #36
    ^He pronks, too! Magic Poriferan's Avatar
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    What's more profitable than being competitive?

    Being anti-competitive.
    Go to sleep, iguana.


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  7. #37
    Gotta catch you all! Blackmail!'s Avatar
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    Quote Originally Posted by Magic Poriferan View Post
    What's more profitable than being competitive?

    Being anti-competitive.
    Absolutely.
    "A man who only drinks water has a secret to hide from his fellow-men" -Baudelaire

    7w8 SCUxI

  8. #38
    Senior Member JHBowden's Avatar
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    spamtar, I suggest you review the basics of marginalism if you're going to keep up with the conversation.

    Blackmail!, I don't even know what the phrase "infinite market" means. I am familiar with concrete situations, and can multiply them at will. For example, at my last job, I was doing data analysis for a contractor for grocery store chains. Which wasn't the best use of my physics degree, but whatever. We had, I dunno, something like ten production lines with a swarm of Mexicans working on them. But we were always keeping an eye on what was being done in Europe. Why? Labor is much more expensive in Europe for reasons we're debating in this thread. As a result, companies who did what we did in Europe used expensive machines, and not the immigrant swarms.

    People who moralize economics always look at things categorically, as if the purpose of political thought is to achieve Social Justice, to find "solutions" to our "problems." Politicians talk this way all of the time. But businesses always deal with trade-offs, which is what economics fundamentally studies: opportunity costs. In the situation above, if the price per labor hour rises to a certain point, it makes sense, if you want to keep the company afloat, to lay off workers and use the machines instead.

    The irony is that progressive policies such as the minimum wage hurt those they are designed to help the most -- minorities, the poor, and young workers looking for starter jobs.

    Lark-- Making the best use of resources at our disposal will always be by definition exploitation. Those who disagree with this aren't just disagreeing with the profit motive; they're championing something I would categorize as evil: the loss motive. "Sacrificing for the Common Good," as progressives call it.

  9. #39
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    Quote Originally Posted by JHBowden View Post

    The irony is that progressive policies such as the minimum wage hurt those they are designed to help the most -- minorities, the poor, and young workers looking for starter jobs.
    That's only a neo-classic propaganda, and the irony is that you do not seem even aware of it.

    My example was in fact very concrete. But I'd just wanted to show you how complex situations can be when you mix economy and sociology, and when you incorporate the fact that we're all different, that the "workforce" is not always interchangeable, and that markets are plurals (some grow, some die), not unified, and not dominated by the same trend everywhere.

    This is called the theory of labor market segmentation (just in case you don't know).

    You see, the current economy is not based on your outdated marginalist models nor on the marxist concept of "labor power", it seems now to be based on knowledge and information, and how these datas are eventually shared (or not).

    Do you know what the "human capital" is?

    That's what I meant by specialization. And that's why your example of "immigrant swarms" is NOT concrete at all, unless you imagine a society where everybody (and that includes me and you) are looking for "starter jobs".
    "A man who only drinks water has a secret to hide from his fellow-men" -Baudelaire

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  10. #40
    Senior Member JHBowden's Avatar
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    Blackmail!--

    Your example was an imaginary parable. In real life, wages don't get bargained down to nothing, therefore, without explaining why it is false, we know your example is false. We can assert this dogmatically. Though I'd argue the neoclassical model indeed explains why this is the case. Things like how much productivity a worker adds to a company matter.

    My example referred to an actual business situation, a concrete business decision, and real people. In other words, experience.

    Like exploitation, propaganda is a word with a bad reputation. It is merely deliberately disseminated information. You ought to be more concerned whether statements are true or false.

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