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Why a federal minimum wage law?

I'm Supposn said:
CPWill, as you apparently prefer, I’ll present an argumentum ad absurdum.
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Though it seems you are still refusing to address the point raised - that harming the very poor in order to benefit the slightly less poor is a problem - alright :)

Although reducing the minimum’s purchasing power may promote creation of more jobs of lesser purchasing powers, pools of employees and unemployed workers will also be increased. Paradoxically, percentages of those unemployed are not reduced; but percentages and numbers of unemployed seekers of lower wage rate jobs may be particularly increased.
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Assuming that by "the minimum" you meant "the minimum wage, what I understand you to be saying here is that reducing the minimum wage would create:

1. More jobs
2. More employees
3. More unemployed

While 1 and 2 are likely, so long as we do not increase unemployment payments to where they represent a higher rate than the previous minimum wage, 3 does not follow.

If a labor market lacks something similar to a legally enforced definite minimum rate or something that performs a similar function, that market may and likely will on numbers of occasions experience indefinite rates of the dreadfully poor purchasing powers.
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Yes. That is the actual minimum wage, which is "zero, because you are unemployed". The more people we push into that category, the more we are reducing their purchasing power.

That’s the reason all major nations (regardless of their types of economies), have something similar to, or a quasi-government provision for, something performing the function of USA’s minimum wage rate laws.
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Actually the reason we have minimum wage laws was to screw over non-whites:

...Leading supporters of legal minimum wages, certainly the most influential economists among them—Ely, Commons, Henry Rogers Seager, Sidney Webb, John B. Andrews, and others—were Progressive reformers, and many were AALL leaders. Progressive-Era marginalists—Alfred Marshall, John Bates Clark, Frank Taussig, Philip Wicksteed, and A. C. Pigou—generally opposed minimum wages (Leonard 2003b).

More surprising than Progressive support for legal minimum wages was the fact that Progressive economists, like their marginalist interlocutors, believed that binding minimum wages would result in job losses. What distinguished supporters of minimum wages from their marginalist opponents was how they regarded minimum-wage-induced job loss. Whereas the marginalists saw disemployment as the principal cost of binding minima, indeed as the reason to oppose minimum-wage legislation, minimum-wage advocates regarded minimum-wage-induced disemployment as a social benefit—a eugenic virtue of legal minimum wages. Sidney and Beatrice Webb ([1897] 1920, 785) state it plainly: “With regard to certain sections of the population [“unemployables”], this unemployment is not a mark of social disease, but actually of social health.”...​


The original controversy over the minimum wage centered on what to do about that "unemployable class." By which they meant "black people" and (and, this has always been one of my favorite of the bizarre early Progressive phrasings) "the Mongrelized Asian Hordes". It was Syndey Webb (a major early proponent)'s belief, shared by many of the progressive economists affiliated with the American Economic Association, that establishing a minimum wage above the value of the "unemployables" worth would lock them out of the market, accelerating their elimination as a class. "Of all ways of dealing with these unfortunate parasites," Webb observed, "the most ruinous to the community is to allow them unrestrainedly to compete as wage earners."

Sociologist E. A. Ross put it succinctly: "The Coolie cannot outdo the American, but he can underlive him." Since the "inferior races" were content to live closer to a filthy state of nature than the Nordic Man, the savages did not require a civilized wage. Hence if you raised minimum wages to a civilized level, employers wouldn't hire such miscreants, instead preferring "fitter" specimens, making the undesirables less likely to reproduce and, if necessary, easier targets for forced sterilization. Royal Meeker, a Princeton economist and adviser to Woodrow Wilson, explained: "Better that the state should support the inefficient wholly and prevent the multiplication of the breed than subsidize incompetence and unthrift, enabling them to bring forth more of their kind."

We got the Davis-Bacon Act for the same reason. Darn ole blacks and immigrants were getting jobs when Decent White People' weren't. So, you raise the barrier for entry into the market, knowing that you'll price out many of the "undesirables".

:(
 
I'm Supposn said:
CPWill, CBO reports do not indicate any PROPORTIONAL material increase of USA’s aggregate unemployment rates. They don't even indicate any PROPORTIONAL material increase of USA’s aggregate unemployment rates among only the lowest 1% of USA’s employees or their families. They do indicate proportional reductions of families near or below the poverty thresholds for families of their sizes. Such families include member who are employed or unemployed.
Respectfully, Supposn
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Supposn, the CBO is clear that hiking the MW to $15 an hour will toss 1.4 million people out of work - and the literature heavily supports that contention. Referring to net effects across the population does not obviate that fact, nor does pointing out that many of those people, because they will be permanently unemployed, will not be counted in U3.

From your own link:

The federal minimum wage of $7.25 per hour has not changed since 2009. Increasing it would raise the earnings and family income of most low-wage workers, lifting some families out of poverty—but it would cause other low-wage workers to become jobless, and their family income would fall.​

If higher MW advocates are not willing to deal with the fact that their preferred policy will utterly predictably harm the bottom 1% of workers, then they aren't going to be very credible advocates.
 
cpwill said:
... Assuming that by "the minimum" you meant "the minimum wage, what I understand you to be saying here is that reducing the minimum wage would create:
1. More jobs
2. More employees
3. More unemployed
While 1 and 2 are likely, so long as we do not increase unemployment payments to where they represent a higher rate than the previous minimum wage, 3 does not follow. ...
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CPWill no, you don‘t entirely understand what I posted.
I posted of 1. More jobs, 2. More employees working for wage rates of extremely poorer purchasing powers and producing much lesser marginally increased values of production, and 3. Increased rates of unemployment.
Respectfully, Supposn
 
I'm Supposn said:
CPWill no, you don‘t entirely understand what I posted.
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You are sometimes very difficult to read, so, that is entirely possible.

I posted of 1. More jobs, 2. More employees working for wage rates of extremely poorer purchasing powers and producing much lesser marginally increased values of production, and 3. Increased rates of unemployment.
Respectfully, Supposn
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Yes.

1. follows and is a logical outcome
2. follows and is a logical outcome
3. does not.


And, again:

From your own link:

The federal minimum wage of $7.25 per hour has not changed since 2009. Increasing it would raise the earnings and family income of most low-wage workers, lifting some families out of poverty—but it would cause other low-wage workers to become jobless, and their family income would fall.

Respectfully, if higher MW advocates such are yourself are not willing to deal with the fact that their preferred policy will utterly predictably harm the bottom 1% of workers, it will at best continue to damage your persuasiveness and credibility, and, at worst, risks making you appear dishonest when you constantly dodge the point. :(

I believe, given how you generally comport yourself here (well), that you are better than that.
 
I'm Supposn said:
CPWill no, you don‘t entirely understand what I posted.
I posted of 1. More jobs, 2. More employees working for wage rates of extremely poorer purchasing powers and producing much lesser marginally increased values of production, and 3. Increased rates of unemployment.
Respectfully, Supposn
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It would seem that 1 and 3 are contradictory positions. How would having more jobs lead to having increased rates of unemployment?
 
ttwtt78640 said:
It would seem that 1 and 3 are contradictory positions. How would having more jobs lead to having increased rates of unemployment?
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The only way I can think of to square that circle is if you had a concurrent alteration in the public support structure wherein we removed time limitations from unemployment payments, but required people to self-report as unemployed but job seeking in order to gain the benefit, thereby pulling in people who have no actual intention of seeking out a job, but who are willing to collect free money.
 
cpwill said:
The only way I can think of to square that circle is if you had a concurrent alteration in the public support structure wherein we removed time limitations from unemployment payments, but required people to self-report as unemployed but job seeking in order to gain the benefit, thereby pulling in people who have no actual intention of seeking out a job, but who are willing to collect free money.
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Or if folks were paid more in UI benefits than they could get by accepting a given job offer. ;)
 
CPWill, the federal minimum wage rate, to the extent of its purchasing power, reduces the number and incidences of poverty in the USA.
You don‘t entirely understand and consequentially do not accept Congressional Budget office’s, (CBO’s) projections for the proposed “Raise the Wage Act. Respectfully, Supposn

For example CBO projected: Referring to How Increasing the Federal Minimum Wage Could Affect Employment and Family Income | Congressional Budget Office (cbo.gov) How Increasing the Federal Minimum Wage Could Affect Employment and Family Income | Congressional Budget Office (cbo.gov)

“Raise the Wage Act, as passed” option, graph of “Average Percentage Change in Real Family Income, by Income Group”:
The graph indicates only 2025 highest income families are projected to experience any net reductions of real family total incomes (rather total wages). Those incomes are reduced by less than 1/5 of a percent. All other family total incomes are increased or materially unaffected.
 
ttwtt78640 said:
Or if folks were paid more in UI benefits than they could get by accepting a given job offer. ;)
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I don't know - he also said there would be more employees. :confused:
 
I'm Supposn said:
CPWill, the federal minimum wage rate, to the extent of its purchasing power, reduces the number and incidences of poverty in the USA.
You don‘t entirely understand and consequentially do not accept Congressional Budget office’s, (CBO’s) projections for the proposed “Raise the Wage Act. Respectfully, Supposn

For example CBO projected: Referring to How Increasing the Federal Minimum Wage Could Affect Employment and Family Income | Congressional Budget Office (cbo.gov) How Increasing the Federal Minimum Wage Could Affect Employment and Family Income | Congressional Budget Office (cbo.gov)

“Raise the Wage Act, as passed” option, graph of “Average Percentage Change in Real Family Income, by Income Group”:
The graph indicates only 2025 highest income families are projected to experience any net reductions of real family total incomes (rather total wages). Those incomes are reduced by less than 1/5 of a percent. All other family total incomes are increased or materially unaffected.
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Hmm... how is someone who now has a SS pension above the FTE of the MW “materially unaffected” if that situation is reversed?
 
I'm Supposn said:
CPWill, the federal minimum wage rate, to the extent of its purchasing power, reduces the number and incidences of poverty in the USA.
You don‘t entirely understand and consequentially do not accept Congressional Budget office’s, (CBO’s) projections for the proposed “Raise the Wage Act. Respectfully, Supposn
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Supposn,

I do accept their projections, and have addressed your point about aggregate changes in purchasing power. It is you who are refusing to acknowledge that the CBO has also stated that part of this will be funded by kicking many of the poorest of the poor out of employment, despite me having cited it for you multiple times, using links you provided.

Respectfully, the longer you continue to dodge that point while accusing others of doing it, it will more difficult it will be to assume that you are coming to this discussion honestly :( I very much hope that you do so.
 
ttwtt78640 said:
It would seem that 1 and 3 are contradictory positions. How would having more jobs lead to having increased rates of unemployment?
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Ttwtt78640, & CPWills, reduced purchasing power, (i.e. the “real value”) of the minimum wage enables commercial performance of tasks that previously did not justify minimum rate wage’s cost.
Although reducing the purchasing power or eliminating the federal minimum wage rate promotes creation of more jobs of much poorer purchasing power, (i.e. the “real value”) of the labor markets’ minimum waged enables commercial performance of tasks that previously did not justify minimum rate wage’s cost.

Paradoxically, percentages of those unemployed are not reduced; but percentages and numbers of unemployed seekers of lower wage rate jobs may, (and likely will) be particularly increased.
Respectfully, Supposn
 
I'm Supposn said:
Ttwtt78640, & CPWills, reduced purchasing power, (i.e. the “real value”) of the minimum wage enables commercial performance of tasks that previously did not justify minimum rate wage’s cost.
Although reducing the purchasing power or eliminating the federal minimum wage rate promotes creation of more jobs of much poorer purchasing power, (i.e. the “real value”) of the labor markets’ minimum waged enables commercial performance of tasks that previously did not justify minimum rate wage’s cost.

Paradoxically, percentages of those unemployed are not reduced; but percentages and numbers of unemployed seekers of lower wage rate jobs may, (and likely will) be particularly increased.
Respectfully, Supposn
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That emphasizes my point, which is while some of the employed (those still in the workforce) will no doubt benefit from mandated pay raises - those not in the workforce (retirees and the unemployed) will be worse off due to the resulting increased cost of all goods/services.

What the MW does is simply to declare (mandate?) that any labor not profitable at that hourly wage level is then illegal to employ. While I may elect to pay someone else $20 to mow my lawn or clean my house, I may well decide that doing so myself is preferable to paying someone else to do so for $30 - especially if my (retirement) income did not increase by 50%.
 
cpwill said:
Supposn, I do accept their projections, and have addressed your point about aggregate changes in purchasing power. It is you who are refusing to acknowledge that the CBO has also stated that part of this will be funded by kicking many of the poorest of the poor out of employment, despite me having cited it for you multiple times, using links you provided.

Respectfully, the longer you continue to dodge that point while accusing others of doing it, it will more difficult it will be to assume that you are coming to this discussion honestly :( I very much hope that you do so.
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CPWIill, the Congressional Budget office, (CBO’s) doesn’t project any materially PROPORTIONAL increased rate of unemployment due to the proposed “Raise the Wage ACT”. If we only considered the lower wage rate earners' segment of USA’s population, CBO doesn’t project any materially PROPORTIONAL increased rate of unemployment among them.

The longer you continue to dodge this point, it’s more difficult to assume that you’re coming to this discussion honestly. I very much hope that you do so. Respectfully, Supposn
 
I'm Supposn said:
CPWIill, the Congressional Budget office, (CBO’s) doesn’t project any materially PROPORTIONAL increased rate of unemployment due to the proposed “Raise the Wage ACT”. If we only considered the lower wage rate earners' segment of USA’s population, CBO doesn’t project any materially PROPORTIONAL increased rate of unemployment among them.
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Supposn, the CBO was clear that this policy change would throw poor people - actual poor people - out of the workforce.

Pointing out that they would then be out of the workforce long-term and thus not counted as unemployed, doesn't change the fact that they were trapped in structural poverty.

The CBO literally says the exact opposite of what you are trying to suggest that it says - that raising the minimum wage will not result in job loss among the poorest of the working poor.

From the sources you linked:

Reductions in employment would initially be concentrated at firms where higher prices quickly reduce sales. Over a longer period, however, more firms would replace low-wage workers with higher-wage workers, machines, and other substitutes. Thus, CBO expects that the percentage reduction in employment of low-wage workers would generally rise over time for any given increase in the minimum wage....​
​
Low-wage workers might face long-lasting reductions in family income if a minimum-wage increase keeps them from developing skills. For example, low-wage workers who are jobless because of a minimum-wage increase cannot acquire skills through formal on-the-job training or informal learning by doing. Reductions in training might occur even among employed workers if firms cut their spending on training to offset their higher payroll expenses....​
​
CBO estimates that there is a two-thirds chance that the change in employment would fall between about zero and a decrease of 3.7 million workers; thus, there is a one-third chance that the effect lies outside that likely range..... Under the first option, according to CBO’s median estimate, about 1.3 million workers who would otherwise be employed would be jobless in an average week in 2025. That decrease would account for 0.8 percent of all workers and 7 percent of directly affected workers who would otherwise earn less than $15 per hour....​
Employment would also fall disproportionately among part-time workers and adults without a high school diploma.​


Reduction in employment. Employment will Fall. Not "remain proportionally the same", or any such nonsense. Fall. The poorest workers today will be kicked out of the workforce.

Incidentally, I have looked around, and not seen support for your claims regarding the unemployment rates. Could you please point to where you are getting that from?


They also speak to the earlier point raised about Demand:

CBO expects that by 2025, the economic effects from increases in demand would completely dissipate​

These are millions of people we will be trapping in poverty, Supposn. That's a problem. Higher MW advocates need to be able to deal with that, instead of trying to ignore it.
 
cpwill said:
The only way I can think of to square that circle is if you had a concurrent alteration in the public support structure wherein we removed time limitations from unemployment payments, but required people to self-report as unemployed but job seeking in order to gain the benefit, thereby pulling in people who have no actual intention of seeking out a job, but who are willing to collect free money.
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There's another possibility.

Higher wages increase the supply of labor initially, resulting in an increase in unemployment. Remember, a person is unemployed when they are actively seeking employment and yet are unable to secure it. A jump in the minimum wage would undoubtedly cause more people to look for jobs. There would be an spike in frictional unemployment until the market was able to absorb more of the labor supply.
 
Kushinator said:
There's another possibility.

Higher wages increase the supply of labor initially, resulting in an increase in unemployment. Remember, a person is unemployed when they are actively seeking employment and yet are unable to secure it. A jump in the minimum wage would undoubtedly cause more people to look for jobs. There would be an spike in frictional unemployment until the market was able to absorb more of the labor supply.
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Yup - you've made that point before, and made it well. Agree that a higher price floor might increase supply.

But he was arguing that lowering the MW would increase jobs, employees, and the unemployed, and I don't really see how that works in his head. 🤷‍♂️
 
cpwill said:
Yup - you've made that point before, and made it well. Agree that a higher price floor might increase supply.

But he was arguing that lowering the MW would increase jobs, employees, and the unemployed, and I don't really see how that works in his head. 🤷‍♂️
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It doesn't... as it assumes a downward sloping labor supply curve, which is simply not realistic for the market of low cost labor, because it is almost always sensitive to the dynamics of a price floor.

You would expect to see such a response on high income labor markets... But they are never susceptible to price floors, so the comment makes zero sense.

I thought the claim was mixed up, but then again consider the source....
 
Kushinator said:
It doesn't... as it assumes a downward sloping labor supply curve, which is simply not realistic for the market of low cost labor, because it is almost always sensitive to the dynamics of a price floor.

You would expect to see such a response on high income labor markets... But they are never susceptible to price floors, so the comment makes zero sense.
I thought the claim was mixed up, but then again consider the source....
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Kushinator,
I'm Supposn said:
Ttwtt78640, & CPWills, reduced purchasing power, (i.e. the “real value”) of the minimum wage enables commercial performance of tasks that previously did not justify minimum rate wage’s cost.
Although reducing the purchasing power or eliminating the federal minimum wage rate promotes creation of more jobs of much poorer purchasing power, (i.e. the “real value”) of the labor markets’ minimum waged enables commercial performance of tasks that previously did not justify minimum rate wage’s cost.

Paradoxically, percentages of those unemployed are not reduced; but percentages and numbers of unemployed seekers of lower wage rate jobs may, (and likely will) be particularly increased. ...
Click to expand...
Respectfully, Supposn
 
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