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Study: The 2007 minimum wage hike cost more than 1 million jobs during the recession

Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

WallStreetVixen said:
They are different terms because they are different words. The concept is the same. Wage Floor, Wage Ceiling, etc. They are both Price controls.

Price controls - Wikipedia, the free encyclopedia
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That is correct, but it's difficult to get MW advocates to openly admit it. The damages done by price controls are more widely known, but we want to think that because labor is the item that most of us sell, that it's somehow "special", and so all the rules of the Dismal Science don't apply to it. :( We lie to ourselves and the result is that we do damage to our poor, but inversely, feel good about it.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

cpwill said:
Do you have the reading comprehension to understand that I was demonstrating the failure of that application of the term "monopsony"?
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You took the wiki approach because you had absolutely no idea (until it was pointed out) that dynamic monopsony allows you to drop the "single buyer" assumption to focus on exploitation of information asymmetries as a means of setting wages. This ensures elasticity of the labor supply schedule.

I don't need to google - Monopsony is the flip side of Monopoly - except where Monopoly means there is effectively only one seller, Monopsony means there is effectively only one buyer.
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I see you are going to struggle with this one before running away. Oh well. :lol:
 
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Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Kushinator said:
You took the wiki approach because you had absolutely no idea (until it was pointed out) that dynamic monopsony allows you to drop the "single buyer" assumption to focus on exploitation of information asymmetries as a means of setting wages. This ensures elasticity of the labor supply schedule.
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1. No, I've seen the monopsony foolishness in the MW debate before. It was and remains a ridiculous series of assumptions that all MW employees are identical, or that there is not a preference among firms for quality workers, or competition between firms that is partly won by the quality of their workforce. How does an economist get out of a hole? "Assume a ladder". :roll:

2. Claims that information asymmetry dominates to the point of creating effective monopsony is a joke in the age of glassdoor.com. I interviewed for five separate positions this year, and each time I went in I had solid information on what the competition was paying, what the contract was paying, and what my years of experience and education were bringing on the market in my job field. There is a reason why wages rise in relative labor shortages. Wal-Mart isn't paying double-digit per hour starter rates in South Dakota because it wants to, it is doing so because it has to, because otherwise it will lose those workers.

3. The declaration (that he made) that because there were more sellers of MW labor than purchasers there was a monopsony was and remains fallacious.

I see you are going to struggle with this one before running away. Oh well. :lol:
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:roll:
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

cpwill said:
It was and remains a ridiculous assumption that either all MW employees are identical or that there is not competition among firms for quality workers.
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Pay attention: Traditional monopsony refers to a single buyer, ensuring an upward sloping labor supply curve. The dynamic approach allows us to drop the "single buyer" assumption, as incomplete information of job vacancies, which is a feature in the MW labor market, ensures the the same upward sloping labor supply curve.

That is what monopsony infers; that the labor supply curve for the market is identical to that of the hiring firm.

Claims that information asymmetry dominates to the point of creating effective monopsony is a joke in the age of glassdoor.com. I interviewed for five separate positions this year, and each time I went in I had solid information on what the competition was paying, what the contract was paying, and what my years of experience and education were bringing on the market in my job field.
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I was unaware you were interviewing for minimum wage jobs via glassdoor.com. My comment pertained to the LS/LW labor market, not your anecdotal journey through frictional unemployment.

There is a reason why wages rise in relative labor shortages. Wal-Mart isn't paying double-digit per hour starter rates in South Dakota because it wants to, it is doing so because it has to, because otherwise it will lose those workers.
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That isn't monopsony. Here we see demand side factors influencing the price of low skilled jobs, ensuring that particular labor market (South Dakota frack towns) will exhibit an inelastic labor supply curve, thereby eliminating the wage making ability of the employer.

The declaration (that he made) that because there were more sellers of MW labor than purchasers there was a monopsony was and remains fallacious.
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I cannot comment on behalf of your discussion with others. You clearly lack exposure to labor economics, which you continue to wear on your sleeve with each reply. Why not swallow your pride and try to learn something?
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Kushinator said:
Pay attention: Traditional monopsony refers to a single buyer, ensuring an upward sloping labor supply curve. The dynamic approach allows us to drop the "single buyer" assumption, as incomplete information of job vacancies, which is a feature in the MW labor market, ensures the the same upward sloping labor supply curve.
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Yeah, got that, which is why my reply referenced and then pointed out the problems with assuming sharp wage-related information asymmetries, not to mention unique purchaser collusion.

That is what monopsony infers; that the labor supply curve for the market is identical to that of the hiring firm.
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If a labor supply curve is upsloping, that means that you will need to offer higher wages in order to attract additional workers, if you want to attract additional workers. Demand for labor is elastic (which you have argued as I recall is actually a good thing in this regards, as it increases the relative incentive for investment in capital). I'd look with a jaundiced eye at the claim that that is our unique driver in this market, as opposed to considering opportunity costs such as leisure, or competition from off the books labor. There is absolutely slack in the Low Skill Labor force.

I was unaware you were interviewing for minimum wage jobs via glassdoor.com. My comment pertained to the LS/LW labor market, not your anecdotal journey through frictional unemployment.
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:shrug: Had I been interviewing for low-skill jobs I would have had the same resources available - I wouldn't have interviewed at Wal-Mart without knowing what K-Mart was paying, and visa versa. Had I been interviewing at Chik Fil A I would have compared them to Zaxby's.

That isn't monopsony.
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That is correct, it is not.

Here we see demand side factors influencing the price of low skilled jobs, ensuring that particular labor market (South Dakota frack towns) will exhibit an inelastic labor supply curve, thereby eliminating the wage making ability of the employer.
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Not eliminating. Reducing. This is a slope that never reaches either axis.

However, on the reverse slide of the slope, you are confusing "competition among wage earners" for something that is solely a firm function. A larger supply of labor relative to demand is not a monopsony.

I cannot comment on behalf of your discussion with others.
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That is interesting to see you say, given that this discussion started with you doing precisely that - the post you responded to was my response to Dittohead Not.

You clearly lack exposure to labor economics, which you continue to wear on your sleeve with each reply. Why not swallow your pride and try to learn something?
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I have no problem learning - quite the opposite. It is in fact, a large part of why I come here. :) You merely confuse your comfort with the terminology with the status of automatically being the smartest person in any room you walk into (a common affliction), which is unfortunately why you overbite. It's not exactly like any of this stuff is rocket surgery.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Kushinator said:
Monopsony describes the low skill labor market.
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Business is not a one way street, so all it describes is that the low skill market have very poor leveraging skills.

A monopsony, for the most part, is fictional.
 
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Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Kushinator said:
This isn't necessary a bad thing. It ensures up-skilling and increased capital investment. See the agricultural and fast food industries for example.
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Its bad for people who cannot achieve their first job, obtain the necessary skills for their career paths and people entering the labour force who simply just want to make a living.

These are why we have internships, as the only legal way for having a fully capable person to work below the minimum wage is if they work for free.
 
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Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

sangha said:
Yes, a minimum wage that is debated by economists, workers, pundits, and politicians in Congress is "arbitrary" :roll:

As compared to the # the market comes up with (ie $0) which is not arbitrary
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The market comes up with the number based on supply and demand. These economist, workers, pundits and politicians come up with all different types of numbers, such as $10.10, $12.50 $15 and $20 based on what sounds good, and somehow you don't believe its arbitrary?

And no, the MW can not be tied to the cost of living or inflation or anything else. The constitution forbids that.
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Whatever excuse you want to tell yourself.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

WallStreetVixen said:
The market comes up with the number based on supply and demand. These economist, workers, pundits and politicians come up with all different types of numbers, such as $10.10, $12.50 $15 and $20 based on what sounds good, and somehow you don't believe its arbitrary?



Whatever excuse you want to tell yourself.
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They often give a rationale, so it wouldn't be completely arbitrary.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

Boo Radley said:
They often give a rationale, so it wouldn't be completely arbitrary.
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The rationale we've seen usually begs more questions, which is why these numbers seem arbitrary.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

WallStreetVixen said:
The rationale we've seen usually begs more questions, which is why these numbers seem arbitrary.
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Only, I think many are easy to follow, and having questions isn't a disqualifer. Particularly if we haven't kept up with inflation, for example.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

WallStreetVixen said:
You're not saying anything but telling me what the law currently does. The intent, during the Great Depression, was to price child labour out of the market place. The goal was to ultimately eliminate child labor, but previous attempts have failed. The original FLSA didn't ban child labor. It placed limits on it. Originally, FLSA excluded children who worked in agriculture. As a result, children under 16 were priced out of dangerous industrial jobs and there was a surge in agricultural child employment.

Plenty of books have been written on this...
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So what you're saying is, if I write a book about economics, you'll believe every word of it?



I've been totally wasting my time on these darn forums!
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

US Conservative said:
Its remarkable that you know the telos of other posters. Magical even.
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Why? You've done me the same. Is that a power only you have?
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

ocean515 said:
I was kind of hoping someone one with such substantial "credentials" here at DP could think with a little more clarity. When "living wage" gets plugged into the equation, how is an employee supposed to advance? Wait for the next determination of what it takes to live to come down the pipe? Who is going to vacate these "minimum wage" jobs so that new people (that's typically young people) can get their first jobs?

If you think those locked into the newly determined "living wage" are going to see more opportunities to advance, what is holding them back from doing it now?

It would be nice if rational ideas ever permeated from the invented from emotion liberal/progressive agenda. At least those ideas could be discussed with some degree of reality included in the discussion.
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No one here is talking about living wage.



Straw man.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

cpwill said:
Do you have the reading comprehension to understand that I was demonstrating the failure of that application of the term "monopsony"?

I don't need to google - Monopsony is the flip side of Monopoly - except where Monopoly means there is effectively only one seller, Monopsony means there is effectively only one buyer.
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Why has this word become so popular all of a sudden? What important person recently used it?
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

KevinKohler said:
Why has this word become so popular all of a sudden? What important person recently used it?
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Kushinator.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

WallStreetVixen said:
Where does it do that? Again, it says one of the main forms of a price control is a price floor, and it references the minimum wage while doing that. If prices has nothing to do with wages, and a price floor isn't a wage floor what is the minimum wage even doing in the same paragraph as a price control?

Maybe its you who should be doing the trying...
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You don't seem to understand what you read so I don't see how posting something for you to read is going to remedy the lack of understanding you are demonstrating
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

WallStreetVixen said:
It didn't ban child labour. It limited it. Later revisions to the FLSA removed child labour across all sectors.

Plenty of books written on that too...
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Implementing a MW didn't eliminate child labor either.

The National Labor Standards Act was passed in order to address the economic problems of the time which was not "child labor"

And there are plenty of books written about how the lunar landing was a hoax too.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

cpwill said:
Do you have the reading comprehension to understand that I was demonstrating the failure of that application of the term "monopsony"?

I don't need to google - Monopsony is the flip side of Monopoly - except where Monopoly means there is effectively only one seller, Monopsony means there is effectively only one buyer.
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You don't seem to understand what you wrote. You said
By that standard, every form of employment is monopsony
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Jobs which can't be filled for lack of qualified workers are obviously not monopsonic so your claim is moronic BS.
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

WallStreetVixen said:
The market comes up with the number based on supply and demand. These economist, workers, pundits and politicians come up with all different types of numbers, such as $10.10, $12.50 $15 and $20 based on what sounds good, and somehow you don't believe its arbitrary?



Whatever excuse you want to tell yourself.
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Only the deluded or the hopelessly partisan think that MW #'s are based on "what sounds good"
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

KevinKohler said:
Why? You've done me the same. Is that a power only you have?
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You?

He's done that for everyone left of Pat Buchanan. In fact, it's pretty much his entire shtick
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

KevinKohler said:
No one here is talking about living wage.



Straw man.
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You mean nobody is admitting to talking about it.

Really poor deflection.

Perhaps you'd like to prove a similar desire to ignore the relevant points in my post?
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

sangha said:
You don't seem to understand what you wrote. You said


Jobs which can't be filled for lack of qualified workers are obviously not monopsonic so your claim is moronic BS.
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The point I was making was that the standard was incorrect, and that to claim a monopsony under it was foolishness.

It's not exactly like this was some grand hidden, nuanced, point that I really depended upon the reader to be able to infer from deep understanding.

Here's what I said:

cpwill said:
imagep said:
it doesn't absolutely have to be just one buyer, just that the number of sellers have to significantly outnumber the amount of buyers.
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By that standard,[[cpwill interjects to point out - "that standard" is pretty clearly responding to "the number of sellers have to significantly outnumber the amount of buyers to be a monopsony"]] every form of employment is monopsony - it is a standard so broad as to be useless [[see, this is the portion that you for some convenient reason cut off]].
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Did you... did you even read what you were responding to? Or was your decision to mischaracterize it deliberate?
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

cpwill said:
If a labor supply curve is upsloping, that means that you will need to offer higher wages in order to attract additional workers, if you want to attract additional workers. Demand for labor is elastic (which you have argued as I recall is actually a good thing in this regards, as it increases the relative incentive for investment in capital). I'd look with a jaundiced eye at the claim that that is our unique driver in this market, as opposed to considering opportunity costs such as leisure, or competition from off the books labor. There is absolutely slack in the Low Skill Labor force.
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LOL! Just as i thought. You have absolutely no idea what you are talking about. This has become a common theme in discussions regarding political economy. The cult-like attitude simply won't cut it!

If people have knowledge about open positions and pay, the hiring firms labor supply curve should be completely elastic, or have a slope of zero. In a competitive labor market, a single firm is a wage taker (not a wage maker!). This differs from the labor supply curve of the labor market itself, which should be upward sloping as workers would be more willing to work in positions that have higher pay.

The competitive labor market and the single firm should have a wage diagram as follows:

Wages_in_a_competitive_market.png


In the instance of monopsony, a single firms wage diagram becomes:

10-1_Resource%20Market_11.jpg

Do i need to explain why the wage in a competitive market will be higher than the wage in a labor market dominated by dynamic monopsony? Do i also have to explain why a minimum wage will essentially eliminate a monopsonistic wage?


That is interesting to see you say, given that this discussion started with you doing precisely that - the post you responded to was my response to Dittohead Not.
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That is a flat out lie. This discussion started when i replied to WSV's post stating that the low skilled labor market can be summed up by monopsony. This fictional response to Dittohead is of no consequence to our discussion.

I have no problem learning - quite the opposite. It is in fact, a large part of why I come here.
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After all of our exchanges these past few years, your posts reflect an entirely different reality. Clearly you are an intelligent guy, so why do you allow your ideology to substitute for your capacity to learn?

You merely confuse your comfort with the terminology with the status of automatically being the smartest person in any room you walk into (a common affliction), which is unfortunately why you overbite. It's not exactly like any of this stuff is rocket surgery.
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My apologies for understanding the topic. Perhaps you can do better than claiming to understand a topic you clearly do not?
 
Re: Study: The 2007 minimum wage hike cost more than 1 million jobs during the recess

WallStreetVixen said:
Business is not a one way street, so all it describes is that the low skill market have very poor leveraging skills.
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That is correct.

A monopsony, for the most part, is fictional.
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Again, this is correct. While a single buyer of labor is largely non-existent, the implications (upward sloping labor supply curve of the single firm shifting to its marginal revenue cost) often do exist.
 
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