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re: When did minimum wage become living wage?
Posted on 6/7/17 at 2:00 pm to Korkstand
Posted on 6/7/17 at 2:00 pm to Korkstand
quote:He can clarify. But the point remains, why would we expect the price to remain constant when the costs have risen at different rates than CPI inflation?
I don't see any confusion, he clearly said prices, not costs.
quote:Got it. But that presumes the value of labor is the same as well. There have been massive deflationary pressures on labor. Quite frankly it's a wonder the price of manual labor is as high as it is.
As in, what once cost a MW worker an hour of labor now costs 1.39 hours of labor.
1
Posted on 6/7/17 at 2:04 pm to HeyHeyHogsAllTheWay
quote:Well, if you're paying a person above the economic value of their labor performed -- what's the difference between that and welfare -- where you pay a person above the economic value of their labor performed?
ALL I am concerned about here is making sure that the MW allows a single person to stay off welfare.
I suppose we could talk about degrees? Maybe the delta is larger. Or that some level-of-effort in obtaining the subsidy is virtuous.
But I'm not one for using legislation to instill virtue in citizens. Just my view.
Posted on 6/7/17 at 2:07 pm to Korkstand
quote:
You seem to think that dropping welfare would suddenly increase the supply of people willing to work for piddly wages, which would have the effect of lowering the market price. Seems to me the opposite would happen.
Because law of demand?
Think on the margin from the perspective of the labor-supplier worth at or near MW. After all, you're talking about poor people well below some supposed minimum 'living' standard having their ability to consume absolutely decimated. (Or, you're talking about kids who aren't actually supporting themselves, who should be pretty far down the priority list in this discussion.)
To the extent that an individual in such a situation can control how much they work, the decision to not work (or work less) just became much more costly relative to their living standard, while leisure hasn't become any more or less valuable.
In equilibrium the optimal amount of labor supplied per unit increases.
This post was edited on 6/7/17 at 2:11 pm
Posted on 6/7/17 at 2:09 pm to HeyHeyHogsAllTheWay
Lets try to separate the intent of the MW and the effect of the MW...the intent of the MW is that no worker will earn less than a certain wage, while the effect of a MW is that no employment will exist below a certain wage. Do you think that is a good idea?
Posted on 6/7/17 at 2:12 pm to Taxing Authority
quote:
Well, if you're paying a person above the economic value of their labor performed --
For some we could be doing that at 4 of 5 bucks an hour. I mean that's hard to know for sure.
I mean the whole idea of a MW nullifies that anyway, because obviously we aren't going to see a uniform economic value across state lines and across industries, the way a MW sets an artificial floor.
I am merely saying since we artifically setting the floor anyway, let's set it so that it is above the poverty threshehold
And let's just be honest. Even a small business, say 3 employees, if you raise their wages from lets say $8 an hour average to $10. That's $2 an hour for 120 hours a week, or $240. If you are running a business and that $240 a week is going to make you or break you, you are failing anyway.
Posted on 6/7/17 at 2:18 pm to Taxing Authority
quote:May need more clarification here, too, but in my reading of the post, the argument is not that the price of any particular thing should remain constant, it's that wages should keep up with the cost of living.
But the point remains, why would we expect the price to remain constant when the costs have risen at different rates than CPI inflation?
quote:Yeah, and this is only going to get worse, faster. Staying on topic, I honestly have no idea why McD's still pays people to frick up taking an order in 2017.
Got it. But that presumes the value of labor is the same as well. There have been massive deflationary pressures on labor.
Posted on 6/7/17 at 2:45 pm to 90proofprofessional
quote:
Think on the margin from the perspective of the labor-supplier worth at or near MW.
...
To the extent that an individual in such a situation can control how much they work, the decision to not work (or work less) just became much more costly relative to their living standard
...
In equilibrium the optimal amount of labor supplied per unit increases.
I see where you're trying to go, and I agree that dropping welfare would grow the total labor pool, but I'm not able to wrap my head around the idea that the price of labor would fall as a result.
Would it depend on the proportion of welfare recipients that work vs. those who can but don't? Because as I see it, if you work for MW and receive welfare, if the welfare goes away then you've just dropped out of the labor supply at MW. It's just not a viable option anymore.
Posted on 6/7/17 at 2:54 pm to Korkstand
quote:
I'm not able to wrap my head around the idea that the price of labor would fall as a result.
I think it would absent some government constraint, but that's beyond my contention ITT
My contention here is that welfare in its current form is not a subsidy to labor supply, and thus not corporate welfare (eta: except for EITC, which does serve to increase labor suply and could be fairly called an indirect corporate subsidy)
quote:
as I see it, if you work for MW and receive welfare, if the welfare goes away then you've just dropped out of the labor supply at MW. It's just not a viable option anymore.
If welfare's gone, and you have some say over the amount of labor you supply, what's the viable alternative? As I see it, it's either work more to recover some of your lost living standard, starve, or hope for charity. At least some increase to labor supply is quite likely
This post was edited on 6/7/17 at 2:56 pm
Posted on 6/7/17 at 3:30 pm to 90proofprofessional
quote:The view is that welfare (in its current form) is a supplement to the MW worker's income, a supplement that he may no longer qualify for if he were to earn higher wages. Does this not artificially increase the supply of labor at MW prices? Supply increases with price, correct? Seems that the welfare "bonus" at MW prices serves to boost labor supply.
My contention here is that welfare in its current form is not a subsidy to labor supply, and thus not corporate welfare
quote:Like I said, I agree that the total labor supply would increase, I just don't think wages would drop as a result (again, absent MW laws).
If welfare's gone, and you have some say over the amount of labor you supply, what's the viable alternative? As I see it, it's either work more to recover some of your lost living standard, starve, or hope for charity. At least some increase to labor supply is quite likely
This post was edited on 6/7/17 at 3:31 pm
Posted on 6/7/17 at 3:54 pm to Korkstand
if i could jump in for a bit...i see that your discussion is contingent upon the absence of a MW. In that scenario i think a larger share of the folks on welfare rolls would be working. I say that because there are currently no jobs below the MW. If there is no MW, then there will be many more jobs and workers working those jobs.
So, what i'm driving at is this: people that currently work at or above the MW would most likely continue to earn the same wage after repeal of MW (holding all other things constant). But once MW is repealed, there would now be new workers in the labor force that are satisfied working for less than what the MW was. So, in this scenario, i'm not sure if "Wages would drop" as a result of welfare being removed. There would simply be more workers deciding to work to stave off starvation and many more low wage jobs that didn't exist before MW was repealed. Seems like wages would appear to drop because now folks would be working for 3 or 4 bucks and hour, but really what happened was job growth, albeit low wage jobs. i apologize if i'm repeating someone else's thoughts. I didn't read all the comments.
So, what i'm driving at is this: people that currently work at or above the MW would most likely continue to earn the same wage after repeal of MW (holding all other things constant). But once MW is repealed, there would now be new workers in the labor force that are satisfied working for less than what the MW was. So, in this scenario, i'm not sure if "Wages would drop" as a result of welfare being removed. There would simply be more workers deciding to work to stave off starvation and many more low wage jobs that didn't exist before MW was repealed. Seems like wages would appear to drop because now folks would be working for 3 or 4 bucks and hour, but really what happened was job growth, albeit low wage jobs. i apologize if i'm repeating someone else's thoughts. I didn't read all the comments.
Posted on 6/7/17 at 4:07 pm to HeyHeyHogsAllTheWay
quote:
man some of yall suck at this debate thing. In REAL dollars. $1.40 an hour in 1965 was equal to $10.97 an hour today. So the minimum wage is worth 66% of what it was in 1965.
And you accuse me of sucking at this debate thing!
Your post has very little to do with my response to the other poster.
His post was reminiscing about the old days saying that minimum wage could support a person with a car and an apartment. that isn't true.
It had nothing to do with whether the current minimum wage had the same buying power today as it did in 1965.
As a matter of fact the current battle cry of $15 minimum wage would have somewhere around 50% more buying power than the 1.40 in 1965 did.
Posted on 6/7/17 at 4:08 pm to jimbeam
When middle America lost their jobs and opened small businesses
Posted on 6/7/17 at 5:27 pm to Korkstand
quote:
a supplement that he may no longer qualify for if he were to earn higher wages. Does this not artificially increase the supply of labor at MW prices?
I think what it does is disincentivize additional supply at and near MW prices, because welfare is (mostly) not conditional on work effort. That's because work sucks- especially low wage work. And with welfare, you have a guaranteed minimum standard of living.
That changes what you give up/gain with your labor supply decision, by making the choice to enjoy leisure less painful than it would be otherwise. If you totally quit in a system with welfare, you lose a lot. But if you quit in a system without welfare, you lose everything.
quote:
he may no longer qualify for if he were to earn higher wages
He also may no longer qualify if he were to work more hours- a much more direct and immediate mechanism for depressing labor supply.
Still, the angle here ("poverty trap" causing greater numbers of exactly MW-quality laborers) is an interesting one worth considering a bit. Note though that much of its overall effect would probably be to just rob some laborers from the tier that's just a smidge better than MW. Where would that second-lowest-tier get its replacement from such that this wouldn't be a wash in the aggregate? We'd be substituting among the existing low-end, but not necessarily kicking participants out of the aggregate.
It is true that this situation is a disincentive to become more productive in the pursuit of higher wages. But it's not clear at all that this effect would increase the # of labor units supplied overall. It is clear though that an individual who faces losing benefits if they work too many hours would likely not work those hours.
This post was edited on 6/7/17 at 5:32 pm
Posted on 6/7/17 at 5:46 pm to HeyHeyHogsAllTheWay
I like a national $15/hr minimum wage, for the sake of fairness.
A young lady told me the other day she was thinking about taking a part time job with UPS that paid $8/hour! I was absolutely HORRIFIED that a profit laden company like UPS would offer such a ****rdly wage.
A young lady told me the other day she was thinking about taking a part time job with UPS that paid $8/hour! I was absolutely HORRIFIED that a profit laden company like UPS would offer such a ****rdly wage.
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