Agnapostate
Banned
- Joined
- Sep 18, 2008
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- Libertarian
More than likely this will cause more layoffs and slow hiring.
You can't successfully mandate wage increases and get a favorable outcome.
Incorrect, there will always be job market shrinkage when artificial controls are added or increased such as a minimum wage.
Here we have a snapshot into the rather incomplete rightist perspective, in which the fact that textbook models of competition are not present in the actual labor market is unfortunately overlooked. In reality, monopsony power (and more broadly, oligopsonistic conditions in labor markets) complicates matters. Firms are confronted with an upward sloping labor supply curve, To simplify all this more, the imperfections of labor markets make things a hell of a lot more complicated than is immediately evident, and claiming that minimum wages increase unemployment is not so cut and dry, considering that the absence of infinite elasticity (few would argue that cutting wages by a cent would result in worker resignation, for example) is an element in the general deficiencies of labor markets.
I'm sorry, but I've been hearing a bunch of bull**** from faux "free market" people about the pitfalls of a minimum wage for as long as I've been interested in economics and history does not bear that argument out.
It certainly doesn't. Urethra mentioned the British experience, and it thus seems important to note the realities of minimum wage increases not adversely affecting employment as illustrated by legitimate empirical research rather than crude textbook theory inapplicable to actual conditions. For example, we could turn to Dickens et al.'s (in which Manning is included), The Effects of Minimum Wages on Employment: Theory and Evidence from Britain. Consider the abstract:
Recent work on the economic effects of minimum wages has stressed that the standard economic model, where increases in minimum wages depress employment, is not supported by empirical work in some labor markets. We present a general theoretical model whereby employers have some degree of monopsony power, which allows minimum wages to have the conventional negative impact on employment but which also allows for a neutral or positive impact. Studying the industry‐based British Wages Councils between 1975 and 1992, we find that minimum wages significantly compress the distribution of earnings but do not have a negative impact on employment.
Unfortunately, this is the kind of empirical research that the utopian rightists aren't interested in looking into; they'd rather engage in horrible misinterpretations of Adam Smith or copy and paste something from mises.org.
Teenagers are already having problems finding summer jobs, this will make it worse.
The empirical research into the effects of the minimum wage on teenage employment is somewhat mixed, but is somewhat inclined toward the conclusion that the consequences are generally not adverse. The most oft-cited study into the teenage job sector (specifically the fast-food industry) is probably Card and Krueger's Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania. Again, consider the abstract.
On April 1, 1992 New Jersey's minimum wage increased from $4.25 to $5.05 per hour. To evaluate the impact of the law we surveyed 410 fast food restaurants in New Jersey and Pennsylvania before and after the rise in the minimum. Comparisons of the changes in wages, employment, and prices at stores in New Jersey relative to stores in Pennsylvania (where the minimum wage remained fixed at $4.25 per hour) yield simple estimates of the effect of the higher minimum wage. Our empirical findings challenge the prediction that a rise in the minimum reduces employment. Relative to stores in Pennsylvania, fast food restaurants in New Jersey increased employment by 13 percent. We also compare employment growth at stores in New Jersey that were initially paying high wages (and were unaffected by the new law) to employment changes at lower-wage stores. Stores that were unaffected by the minimum wage had the same employment growth as stores in Pennsylvania, while stores that had to increase their wages increased their employment.
I have a feeling some of us should be reading that instead of Henry Hazlitt.
No. Companies only have so much money to go around. Guess what happens if they have to pay their employers more? Can you say layoffs? This isn't complicated.
Actually, it's considerably more complicated than the textbook model of the labor market that you utilize would have us believe, which is why the monopsony model is preferable and more importantly, corresponds with existing empirical research.
If you ignore Say's Law you're going to get burned.
Say's Law is fallacious in nature, a reality that has been acknowledged by those aware of the nonexistence of perfect competition since Keynes, but of course ignored by those who draw their economic "expertise" from Economics In One Lesson and Peter Schiff's latest blog post. Regardless, the libertarian socialist economist Robin Hahnel notes the following:
While it is true that every dollar's worth of production generates exactly a dollar's worth of income or potential purchasing power, it is not necessarily true that a dollar's worth of income always generates a dollar's worth of demand for goods and services. Aggregate demand can be greater than income if all actors in an economy as a whole use previous savings, or wealth, to spend more than their current income, or if actors in the economy as a whole borrow against future income. And aggregate demand can be less than income if actors in the aggregate spend less than current income, saving and adding power of current income to their stock of wealth.
As a whole, the adoption of an approach able to note the negative deficiencies of oligopsonistic conditions in labor markets, the self-correcting balance of supply and demand absent from the imperfections of market deficiencies as a whole, and the presence of market disequilibria, negative externalities, inherent inefficiencies, etc., enables us to note that various facets of capitalism are rather unpleasant indeed. :shrug:
I don't believe anybody should be exploited, whether they be sixteen or sixty.
The minimum wage is not sufficient to eliminate exploitation, and merely serves to counter the negative effects of monopsony. To eliminate exploitation, we'd have to do away with capitalism altogether, something that unfortunately won't be happening in the conceivable future.
What's worse, is when you are forced to pay someone more than their labor is worth. Thats exploitation.
When we consider the realities of diminishing marginal utility, would it be overpayment that affected the employer more adversely than the laborer or underpayment that affected the laborer more adversely than the employer? And more importantly, what of the fact that existing empirical research indicates that underpayment is the norm in a significant portion of the labor market (imperfect information of course thrives in the capitalist economy) as well as what I'm always quick to note about the unjust extraction of the surplus labor of workers by those above them?
What is crazy is how the capitalist system is what made this country the worlds only superpower with the largest economy but lots of people love to talk about how it doesnt work. kind of strange dont you think
Yeah, it's pretty odd. Capitalism of course involves extensive state protectionism as the government is an integral developmental and stabilizing agent, and it was by the virtues of interventionism that the U.S. and Britain were able to develop as economic powers of the world, but we still have naive laissez-faire utopians praising the benefits of "free markets" despite their perpetual nonexistence and failing to consider the accomplishments of actually existing capitalism. :shrug:
It's not capitalism, try again, it's a socialist/capitalist hybrid and the capitalist part isn't what is failing.
Incorrect. There can be no legitimate compatibility of socialism and capitalism, as they necessitate precisely opposite states of affairs. Socialism requires the public ownership and management of the means of production, whereas capitalism requires the private ownership and management of the means of production. You of course incorrectly consider elements of governmental intervention in the capitalist economy to be "socialism," but that is merely based on a corruption of the economic spectrum.
Gee thanks socialism. You really helped.
More inaccurate reference to socialism. Socialism requires collective ownership and management of the means of production; is there a single rightist on here who knows what that means?