I was talking to someone who thought that the minimum wage was a matter of justice. When I told her, while it might be good for the person getting a raise, there are global effects, some of which I enumerated, that would end up hurting more people than might be helped, she was dumbfounded. Like so many of the policies coming from the Left, they are often not thought out thoroughly or well. And because their positions are often, at least partly, based on emotion, the complexity hardly even gives them pause.
Another thing to add. Aggrieved workers who feel overlooked for promotion or have some other grievance will often deliberately reduce their productivity ("work-to-rule"), in protest at the fact that they get paid the same (or even less) than lazier staff; staff who aren't just lazy and less productive, but who abuse the sick pay system as well.
Minimum wage is honestly a mandatory price collusion on the cost of labor. And people wonder why wages stagnate. Minimum wage also implies that a Minimum Profit exists and then they wonder why poor people have a hard time climbing up.
I worked there and the productivity measuring system is utterly flawed. It might lead to more disgruntlement and workplace tension if pay-by-productivity were introduced. Not that I support the minimum wage, but just to point out the flaw.
If arbitrarily setting a minimum wage and raising it worked, then it could be instituted in all corners of the world and poverty would be eradicated within a week. And since people seem to think that "just paying people more" makes everyone wealthier, why are they stopping at 15? Where did 15 come from? (For those of you who already know it's just a bandwagon number based on nothing)
@@marvinmallette6795 The problem with that argument is that it still doesn't answer where 15 came from anymore than it says it should be no higher than 15. It also leaves out entirely why any numbers pulled out from Georgia should be the basis for a national standard. Sorry, but the argument doesn't hold water.
@@marvinmallette6795 That also has the same problem of ignoring terms. "Minimum" and "Living" seem to be defined by whoever is arbitrarily setting standards rather than any actual sense of the word. It's just an Open Ended Fallacy. Not to mention that you have the rest of economics to contend with.
@@marvinmallette6795 Legality has nothing to do with it. Anything can be "legal". And the problem is that what's going on isn't sustainable and the argument isn't logical. As an example, how could you reason any other number I throw out other than 15 would be objectively incorrect and by what measure would you place boundaries on the number? You're still using open ended terms. That's a problem. "Living Wage" and "Poverty Level" are not hard and fast terms with their own qualifiers.
@@marvinmallette6795 You're being thick. Again, "legality" can be anything and that includes "legal terms". Get any shift and politics and these terms will change with every wind, bound to nothing with no objective qualifiers and disqualifies. You're making a circular and positivist argument. This is why "poverty" will always exist no matter what. Because arguments as you have given allow its definition to keep changing without end. Again, you're using words like "basic" and "minimum" but you're not ever actually using a consistent definition of either one.
@@marvinmallette6795 Well, given that you are the one advocating putting people out of jobs for the sake of ensuring that in order to get a job you have to be able to justify a wage that can purchase these 'basic legal standards' (in between rambling about mansions). So yes, I do expect you to clearly define a single set of basic necessities. Or all you have is a magic 'legal number' that you pulled from your backside.
@@avenue8822 I love decentralization of power, but when it comes to a minimum I say decentralize it to the individual. The states are also corrupt and terrible. Federally abolish the minimum.
@CrabApples Bodaciously Bitter Fruit's simply nonsense. The fed artificially adjusts rates. They openly admit this and if you knew anything about their function, you'd see how.
@@museitup4741 It's pretty simple actually. Minimum wage laws increase the demand for skilled labor but decrease the demand for less-skilled labor. If an employer is going to spend $15hour on that employee they better be well qualified and do a good job because the risk and cost of mishiring can be huge for that employer. So as a consequence, people who have a lower skill set aren't able to find jobs and in turn, become unemployable.
I remember when my daughter was 15. She got a Christmas season job at Macy's............................. the minimum wage that she received.......... well, many 15 year olds are not even worth that !!!! But Macy's was good, and taught the youngsters how to have a job.
Didn't note if you discussed how a minimum wage can keep wages low because it' a government-enforced price collusion among businesses to set a low wage when workers might otherwise be able to earn more if all others weren't also using this low wage. By the way, if employers can trick employees to accept a minimum wage even if the natural market wage might be higher, when they raise the minimum wage, there may be no loss of jobs because the employer simply is "forced" to pay what is the market wage anyway.
If there is a natural market wage that is higher than the government set minimum wage then some people will be earning that wage. Take for example my home state of Texas. The prevailing minimum wage here is $7.25 per hour. However if you look at job postings both before the pandemic and after you'd be hard pressed to find many, if any, job postings offering $7.25 per hour.
@Marvin Mallette the natural market wage doesn't tend to be lower. People compete for labor. You make labor more of an expense! The minimum contributes to inflation and outsourcing. It doesn't help anyone.
@@marvinmallette6795 where are these "markets" where the natural wage tends to be lower and trending towards non-existence? In what economic system is the cost of labor not an expense? A free market may serve as a check on wages increasing uncontrollably. But what evidence do you have that a free market inevitably pushes wages down, ultimately leading to a wage of zero. Labor always has value. that value however is determined by the quality of the labor and the particular demand for that labor in the market. That being said the value, and thus the wage paid to someone whose predominant skill is pushing a broom, will be significantly less than that of someone who can weld. But the person whose only skill is manipulating a broom can take the time to develop themselves and acquire new skills, thus increasing the value of their labor and the price they can command for that labor. If I need a welder, the value of the person who can push a brooms labor to me is significantly lower. In part because I too can push a broom and also because my need isnt for the particular skills they possess. But none of that is an attempt to push the wages for labor to zero.
There was a very interesting video on myths about taxes by a channel (I think it was called learning liberty) that addressed your question. Spoiler: raising taxes does not necessarily generate more revenue.
Keeping costs down, maybe even subsidizing life, would be better than going for an ever increasing minimum wage ... in the absence of the Federal Reserve. However, the Federal Reserve keeps inflation as an ever present reality, therefore wage Inflation (minimum wage) is necessary for as long as the Federal Reserve exists
@@tasunkewitka8769 Ah, I see what you're saying. You're saying people need to be paid more so they can afford inflated prices. But inflation affects wages too, precisely for that reason. Wages are just another price: the price of labour. So it doesn't follow that a MW is necessary. More importantly, in principle MW doesn't actually result in people getting paid more. As the lecturer explains, it merely prohibits jobs that pay below the mandated rate. In practice some workers tend to get a modest raise with an increase of MW, but this comes at the expense of others. And the 'others' are people _lower down_ in the labour market. So MW, to the extent it benefits anyone, benefits those with relatively high skills and experience, at the expense of those with less skills and experience.
@@anarchic_ramblings what I am saying is that the federal reserve guarantees inflation. Sadly, certain businesses cannot extract increased profits by raising prices. This hurts productivity. I'm saying the economic collapse is the federal reserves fault, I'm saying that deflation should be allowed, and that allowing deflation is necessary for removing the minimum wage
What’s it matter how much worthless paper other people are paid for their drudgery? The world economic system isn’t set up for their convenience anyway
This makes sense. I think a lot of the problems are corporate hiring cheap employees that are less productive. Just terrible management disconnected from the needs of the local operations. If you $15, and not $7.50 you have better workers, less chaos, and less need for training. The concert hall or whatever ends up being run better, and more people decide to come to the shows from having a better experience. Profits increase as a result.
Minimum wage forces companies to productively train and manage the employees they hire. Inefficient companies do not simply disappear due to competition.
If there were productivity gains to be reaped in this way, why would companies not have the incentive to take advantage of this option even without a minimum wage increase? Higher productivity would mean higher profits and the ability to pay higher wages/ be more selective with their workforce. You might say maybe laziness or incompetence. But you can’t legislate industriousness or competence. If an owner/manager is lazy and incompetent and not maximizing productivity, then he or she will eventually either have to improve or be out competed in the ordinary course of affairs, regardless of wage laws. It’s likely that a minimum wage increase would accelerate this process, but it’s hard to see how that would benefit the minimum wage workers that he or she employs, since they will now be out of a job. You might say, well they will go to another company where the owner/manager was competent enough to increase productivity. But why weren’t they working there before if it was an option? Presumably they didn’t make the cut for the more productive and therefore more desirable workplaces. And because firms like the incompetent one have now gone out of business after the minimum wage hike, there is now a greater supply of labor, and therefore greater competition for those fewer jobs. The bottom line is that the minimum wage essentially makes it illegal for people who is discounted marginal value product is lower than the minimum wage to offer their services for sale. As a result, the people at the very bottom of the income scale, often the young or uneducated, who would benefit from work experience and training the most, are unable to get it through employment.
So it's essentially forcing people to stop being lazy and make there time worth enough to actually support themselves while also giving business incentives to invest in time saving techniques. Sounds like a great idea to me.
The problem is that by raising the wage, you raise the minimal ability required before someone is worth risking. But if someone has not been given a chance to develop those skills, what do they do? If you don’t compensate the steeper learning curve and reduced opportunity, some won’t learn helpful skills at all. They will have to either beg, borrow, steal, or starve. They will have no choice. Trying to force those who are profitable to invest in the education and living of those who aren’t without any say could lead to those receiving welfare or free education becoming dependent on it and those who pay for them without say to be resentful. Now you have class tensions. Worse still, those dependent on them may prefer to just live off the welfare instead of working. You could add a work requirement or requirement they apply for a job (spoilers: we tried that and it didn’t work as well as expected), but then the skill problem appears once again. They need training and incentives to improve with experience. Welfare does not allow for that. Unless you turn welfare into a government jobs and training program that basically forces welfare recipients to work for the government or make welfare temporary, you’re actively hurting those who are productive now with no guarantee of a long term benefit. Even still, how much force can you apply to make them improve and leave welfare without effectively turning welfare into a form of slavery? many will be incentivized not to get a job and lose the “free money”. They will seek any loop hole to maximize benefits and attend the college or training perpetually instead of contributing to society. Many will also seek alternative methods to make more money without losing welfare benefits, like selling illicit drugs in secret or working under that table. (I read Zimbabwe was infamous for most jobs there technically being illegal and under the table, but that could be false). This punishes law abiding citizens. What about the long term? If we keep raising the minimum wage, borrowing money, and increasing welfare or UBI, then disaster is inevitable. First, businesses that were forced to only hire “good workers” as you put them will now be in crisis because the old labor force is retiring and the new generation has neither the skills nor the will to train for the new jobs. We see this now because welfare benefits by the government are essentially strong arming businesses to pay 15 and up, or shut down altogether. Because much of their labor isn’t worth 15 an hour, many businesses are opting for the later permanently. There are many help wanted signs but a record number of unemployment. That shouldn’t happen in a free market. Of course, this isn’t a free market because in part due to minimum wage. But also because of welfare, licensing bottlenecks, progressive taxes, and red tape . The unemployed don’t want to work if the cost in doing so is more than getting a handout for not working. Nor do business want to run at a net loss. Soon the small businesses owners become unemployed and dependent too. Then reduced competition allows big businesses to raise prices and reduces quality of the products or services. Less taxpayers and more welfare recipients means higher taxes are necessary on those who still work or reduced benefits. Ok so we just tax the rich more then, right? No. Studies have shown that the tax rate and the amount collected by the government are not positively correlated. Higher taxes means fewer willing or able to pay them. The elite will find ways to bribe, leave, or hide their money. (Look at the pajama papers as proof). Those who can’t will either be taxed to death or go the path of john galt. This leads to a corrupt oligopoly where mega corporations and big government become virtually indistinguishable because only an elite few can afford anything and are the only ones who can fund political candidates. The inequality will sky rocket and the lower class will lose all bargaining power. You don’t get to negotiate your welfare or UBI. after all, beggars can’t be choosers. (The hated one has an excellent video on that). Sooner or later, our atlas will shrug and the debt must be paid. That is why higher minimum wage, alongside welfare and higher taxes won’t solve the problem. It is the problem.
@@jacobfaro9571 Well thanks for taking the time to reply. I guess I should clarify that I do believe raising too high no doubt has negative consequences. If it we're $50 bucks an hour (in the USA) I couldn't get a job either. Could I work myself up to that? Maybe. But either way that's extreme. I think there is a minimum amount of money that 95% of able bodied people are worth. If we allow the 5% that can't attain the minimum wage in the work place to work at government jobs where they might not technically be "earning there fair share" I don't think that would be much of a problem. If there's too many people going for the government jobs then the minimum is too high and if there's not enough then the minimum is too low. We should probably target 5% unemployment with access to free training programs as long as people meet certain benchmarks. That way we have a certain amount of people learning new skills with less people getting stuck in a shit job with no growth. It seems to me people focus too much on scary stories of the bottom few percent of mostly useless people in society to justify defending no minimum wage. In reality those people are probably going to be unproductive whether there is one or not.
Why though? You think it’s morally right to force them to be jobless because they aren’t deemed hard working enough? If someone who just doesn’t produce that much, maybe they are young, disabled, or whatever. You now think we should use a minimum wage to force them to go jobless or somehow improve. Also how the hell are they going to improve? They have no job to practice. Sounds a tad authoritarian.
The shills for the Corporate freeloader class really dont care about this issue. Large Corporations are well insulated both economically and politically, and simply pass the cost on while maintaining there personal wealth. What you need to understand is that Small Business is affected by Government mandated wages, and they dont have the political clout. So I would love to talk to you about that.
@@avenue8822 lmmfao. If the corporate freeloader class didn't care about the minimum wage, they wouldn't instruct their puppets in government to block it. Its funny how the corporate freeloader thinktanks always attempt to use small business as a shield. Small business will be just fine overall. Nice try.
@@endcorruptio Your obvious lack of economic understanding is almost humorous. Try to follow Karl, why would GM or Ford care about the minimum wage? Are you really that stupid?
This is why Austrian “economics” is not mainstream or respected. In the Manning paper, he quite clearly says the theoretical consequences of minimum wage are ambiguous (it depends on the elasticity of demand and labor market frictions). To answer the question, you need to look at actual data. If you’re just going to ignore data contrary to your prior beliefs, all you get is confirmation bias. Manning concludes with saying clearly the ambiguity of the empirical studies suggest at some levels and in certain circumstances, minimum wage does not have a negative employment effect and in others it does. He suggests the future research should focus on what level is that turning point. Austrian “economists” could never recognize this because they are not academically honest.
The question isn't "what changed after this particular policy was implemented in this particular place at this particular time?" The relevant question for the theory of minimum wage (not the empirics of minimum wage, which are necessarily tied up in a specific time and place) is "what is the difference between the state of the world under the minimum wage and the state of the world, had the minimum wage not been implemented, all else equal?" The problem with using empirical studies is that "all else" is never equal. Yes, we can acknowledge that there may be a historical instance of the minimum wage where negative employment effects are either undetected or are overwhelmed by other factors in the economy. But this doesn't change the counterfactual result that, had the minimum wage not been implemented, otherwise favorable employment contracts wouldn't have been altered or terminated. It really doesn't have anything to do with academic honesty. It's all about methodology. I suggest you look into the Austrians' view on the method of economics if you're curious about why they treat empirical studies the way they do.
@@broodoots If you read the papers cited by manning, they are not case studies. The Card and Kruger paper is a case study but many subsequent papers, for example Cengiz et al., are not and not “tied up in specific time and place.” Mainstream methods are comparing the observed state of the world with a counterfactual state of the world (for comparing means, it’s call the average treatment effect). The criticism that these studies are poorly thought out or conducted is just misinformed. The criteria “all else equal” is sufficient but not necessary to determine causality. See en.m.wikipedia.org/wiki/Mill%27s_Methods. You just need some exogenous variation. Econometric methods can be very compelling. The reason why Austrian economics aren’t academically honest is because no empirical evidence will change their “a priori” beliefs. They believe minimum wage causes a decrease in employment on no real theoretical grounds and no amount of evidence can change their minds. That’s not science, it’s nonsense.
@@badman5363 like I said, for example Cengiz et al. (here’s the working paper version cep.lse.ac.uk/pubs/download/dp1531.pdf ). It was published in the Quarterly Journal of Economics in 2019, a “top-5” economics journal. There are over 130 instances of state minimum wage changes
@Izzy C if you actually watched the video, you'd see that there's very easy ways to get around the minimum through volunteer unpaid hours in conjunction with paid hours. I never see you people address the logic, just say the 'evidence' doesn't line up. It does. Stop denying basic laws of economics.
I’m cool with killing minimum wage IF were mandated all company organize as cooperatives OR we had a subsistence UBI of $42,000/year in 2021 money. In a coop employees and employers share in profits, which means you have alignment of incentives PLUS you curb the sticky wages problem when all wages are replaced with profit dividends. With UBI you actually get laborers bargaining power in wage negotiations without the need for labor to unionize.
I'm cool with killing the minimum wage...Period. All it does, for the most part, is outlaw mutual agreements between employer and employee and cut off the lowest rungs of the ladder. It makes it more difficult for inexperienced and unskilled young people to get a job and build experience and skills. I'm also cool with state getting entirely out of the economy. The only need for "government" (which should be pretty much invisible) would be to punish actual crimes against the non-aggression principle and settle contract disputes). I'm also cool with UBI supporters going for the system they want...with each other. What's stopping the millions of UBI supporters from setting up a voluntary "banking" system with online access that calculates each member's dues and pays out the monthly dividend to each active member accordingly?
So, no voluntarism or anything close to resembling a Market. Sounds like one idea being replaced with a worse idea and not just because of the heavy handed State needed to enforce all that.
Giving your comment a little more thought: 1) May you please explain why a negative income tax is not sufficient? It solves all the problems with welfare while not being UBI. 2) I thought a coop was analogous to employees getting bonuses based on how the company performs in some companies (so yes I agree, give your employees a stake in company performance and they'll care more about company performance, some companies try to lean this way) but apparently a coop is completely different from what I thought it was after talking to my brother about it. So please expand on what a coop is. -Also, one of the perks of being a wage laborer is that you don't have to care about company performance, you're guaranteed your wage based on hours worked then you can go home without a care. Honestly I'd rather NOT have the same worries as my manager does when I get home. 3) I can only say that this statement is true because employers are trying to beat out unemployment benefits with sign-on bonuses and such. Now this may also cause a radical shift in big companies going for automation in the future. And also companies can get creative to hire less workers. For this I highly recommend this episode of econtalk: www.econtalk.org/jacob-vigdor-on-the-seattle-minimum-wage/ It was an episode on Seattle raising their minimum wage. Now it wasn't like everyone who made less than $15/hr just got laid off, it was far more complicated than that and this episode goes over all of the creative ways companies utilized to hire less workers.
Alignment of incentives! Don’t make me laugh dude. I helped start and worked at a cooperative for a decade man and I can tell you that incentives are absolutely not always lined up.
I love his example of a person choosing not to work and watching the last air bender. People dont usually have the choice not to work. Welfare payments are abysmal therefore forcing people into work for low pay. If we had a UBI then his example would make sense.
What a pathetic argument. Surely everything progresses including prices which are getting higher and higher all the time. That's just one argument on why minimum wage needs to be increased. But surely this single measure only isn't enough to tackle the massive austerity people have been kept in globally . Controlled economy is the way to fix all the problems caused by the current governments which have long being serving only the interests of the corporations.
Does a Government mandated minimum wage affect large business Corporations or Small Business? Large Corporations really are not impacted by a higher minimum wage, and Small business certainly is NOT catered to by the Government.
"The goverments team with corporations to benefit them, that's why goverments should have more power over the economy" Do you see the fault in your logic ?
@@petarmiletic997 No I don't see any fault in my logic because any government is subject to change. Have you by any chance heard of left and right wing governments? It's all about policies, ideologies, etc.
I'd love to hang out on Dr. Lucas' farm
I was talking to someone who thought that the minimum wage was a matter of justice. When I told her, while it might be good for the person getting a raise, there are global effects, some of which I enumerated, that would end up hurting more people than might be helped, she was dumbfounded. Like so many of the policies coming from the Left, they are often not thought out thoroughly or well. And because their positions are often, at least partly, based on emotion, the complexity hardly even gives them pause.
Kind of like this vaccine
She only thinks that because she's ignoring any definition of "minimum" and "justice". Those are just feel good words for her.
Another thing to add. Aggrieved workers who feel overlooked for promotion or have some other grievance will often deliberately reduce their productivity ("work-to-rule"), in protest at the fact that they get paid the same (or even less) than lazier staff; staff who aren't just lazy and less productive, but who abuse the sick pay system as well.
Best minimum wage video on RUclips
True
Yep… i watched many and this is it
Minimum wage is honestly a mandatory price collusion on the cost of labor. And people wonder why wages stagnate. Minimum wage also implies that a Minimum Profit exists and then they wonder why poor people have a hard time climbing up.
I often wonder how the job pressure complaints would change, if Amazon went to a piece work rather than hourly pay structure.
I worked there and the productivity measuring system is utterly flawed. It might lead to more disgruntlement and workplace tension if pay-by-productivity were introduced. Not that I support the minimum wage, but just to point out the flaw.
It would be pretty huge for using the argument to get citations in the description for the numbers given.
If arbitrarily setting a minimum wage and raising it worked, then it could be instituted in all corners of the world and poverty would be eradicated within a week. And since people seem to think that "just paying people more" makes everyone wealthier, why are they stopping at 15? Where did 15 come from? (For those of you who already know it's just a bandwagon number based on nothing)
@@marvinmallette6795 The problem with that argument is that it still doesn't answer where 15 came from anymore than it says it should be no higher than 15. It also leaves out entirely why any numbers pulled out from Georgia should be the basis for a national standard.
Sorry, but the argument doesn't hold water.
@@marvinmallette6795 That also has the same problem of ignoring terms. "Minimum" and "Living" seem to be defined by whoever is arbitrarily setting standards rather than any actual sense of the word. It's just an Open Ended Fallacy.
Not to mention that you have the rest of economics to contend with.
@@marvinmallette6795 Legality has nothing to do with it. Anything can be "legal". And the problem is that what's going on isn't sustainable and the argument isn't logical. As an example, how could you reason any other number I throw out other than 15 would be objectively incorrect and by what measure would you place boundaries on the number?
You're still using open ended terms. That's a problem. "Living Wage" and "Poverty Level" are not hard and fast terms with their own qualifiers.
@@marvinmallette6795 You're being thick. Again, "legality" can be anything and that includes "legal terms". Get any shift and politics and these terms will change with every wind, bound to nothing with no objective qualifiers and disqualifies. You're making a circular and positivist argument.
This is why "poverty" will always exist no matter what. Because arguments as you have given allow its definition to keep changing without end.
Again, you're using words like "basic" and "minimum" but you're not ever actually using a consistent definition of either one.
@@marvinmallette6795 Well, given that you are the one advocating putting people out of jobs for the sake of ensuring that in order to get a job you have to be able to justify a wage that can purchase these 'basic legal standards' (in between rambling about mansions). So yes, I do expect you to clearly define a single set of basic necessities. Or all you have is a magic 'legal number' that you pulled from your backside.
Dr Lucas: I’m only 12 years behind on my air bender duties
Aang: …
Doesn't this in turn cause inflation?
No it actually doesn't. Kills employment, but doesn't cause inflation.
Nothing but a central bank causes inflation, at least in the long run.
Thanks, what if there wasn't one
If there WAS NOT a Federal Minimum wage, we would all be better off. Let the States decide.
@@avenue8822 I love decentralization of power, but when it comes to a minimum I say decentralize it to the individual. The states are also corrupt and terrible. Federally abolish the minimum.
Things would be marginally better.
Anytime one hears Minimum Wage, one must consider the Minimum Price of the Goods/Services the wage helps produce.
@CrabApples Bodaciously Bitter Fruit's simply nonsense. The fed artificially adjusts rates. They openly admit this and if you knew anything about their function, you'd see how.
The mimimum wage is about getting the less productive out of the market as to not compete with the more productive.
That doesn't make sense, you can already incentivise higher productivity without minimum wage
@@museitup4741 I didn't say anything about incentivizing productivity i said its about reducing competition.
@@EMO_alpha I guess I'm still not following what you're saying
@@museitup4741 It's pretty simple actually. Minimum wage laws increase the demand for skilled labor but decrease the demand for less-skilled labor. If an employer is going to spend $15hour on that employee they better be well qualified and do a good job because the risk and cost of mishiring can be huge for that employer. So as a consequence, people who have a lower skill set aren't able to find jobs and in turn, become unemployable.
@@gowen9383 I'm aware of that, but that's not what @banger is saying
I remember when my daughter was 15. She got a Christmas season job at Macy's............................. the minimum wage that she received.......... well, many 15 year olds are not even worth that !!!! But Macy's was good, and taught the youngsters how to have a job.
Take a shot every time he says right!
same thought on his banking-talk, aight
It comes off to me as a tick from a man who has spent a lifetime trying to convince others of his way of thinking haha
Oh my god is that a name with the Xx xX thing? Is this a MW2 lobby?
@@panimala damn close
our problem in the US is not as much a minimum wage issue as it is a globalization of labor issue.
Didn't note if you discussed how a minimum wage can keep wages low because it' a government-enforced price collusion among businesses to set a low wage when workers might otherwise be able to earn more if all others weren't also using this low wage.
By the way, if employers can trick employees to accept a minimum wage even if the natural market wage might be higher, when they raise the minimum wage, there may be no loss of jobs because the employer simply is "forced" to pay what is the market wage anyway.
If there is a natural market wage that is higher than the government set minimum wage then some people will be earning that wage.
Take for example my home state of Texas. The prevailing minimum wage here is $7.25 per hour. However if you look at job postings both before the pandemic and after you'd be hard pressed to find many, if any, job postings offering $7.25 per hour.
@Marvin Mallette the natural market wage doesn't tend to be lower. People compete for labor.
You make labor more of an expense!
The minimum contributes to inflation and outsourcing. It doesn't help anyone.
@@marvinmallette6795 where are these "markets" where the natural wage tends to be lower and trending towards non-existence? In what economic system is the cost of labor not an expense? A free market may serve as a check on wages increasing uncontrollably. But what evidence do you have that a free market inevitably pushes wages down, ultimately leading to a wage of zero. Labor always has value. that value however is determined by the quality of the labor and the particular demand for that labor in the market. That being said the value, and thus the wage paid to someone whose predominant skill is pushing a broom, will be significantly less than that of someone who can weld. But the person whose only skill is manipulating a broom can take the time to develop themselves and acquire new skills, thus increasing the value of their labor and the price they can command for that labor. If I need a welder, the value of the person who can push a brooms labor to me is significantly lower. In part because I too can push a broom and also because my need isnt for the particular skills they possess. But none of that is an attempt to push the wages for labor to zero.
Minimum wage means minimum tax revenue. Raise the wage you raise the tax revenue right? Does the loss of jobs effect tax revenue?
There was a very interesting video on myths about taxes by a channel (I think it was called learning liberty) that addressed your question. Spoiler: raising taxes does not necessarily generate more revenue.
@@jacobfaro9571 if you can link me to a video i would like to watch it
Right. R’ite. Rut. Rite. Rrr’t.
Jesus
Keeping costs down, maybe even subsidizing life, would be better than going for an ever increasing minimum wage ... in the absence of the Federal Reserve.
However, the Federal Reserve keeps inflation as an ever present reality, therefore wage Inflation (minimum wage) is necessary for as long as the Federal Reserve exists
By that logic there should be mandated minimum prices for *everything.*
@@anarchic_ramblings there are. It's called inflation
@@tasunkewitka8769 Ah, I see what you're saying. You're saying people need to be paid more so they can afford inflated prices. But inflation affects wages too, precisely for that reason. Wages are just another price: the price of labour. So it doesn't follow that a MW is necessary. More importantly, in principle MW doesn't actually result in people getting paid more. As the lecturer explains, it merely prohibits jobs that pay below the mandated rate. In practice some workers tend to get a modest raise with an increase of MW, but this comes at the expense of others. And the 'others' are people _lower down_ in the labour market. So MW, to the extent it benefits anyone, benefits those with relatively high skills and experience, at the expense of those with less skills and experience.
@@anarchic_ramblings what I am saying is that the federal reserve guarantees inflation. Sadly, certain businesses cannot extract increased profits by raising prices. This hurts productivity.
I'm saying the economic collapse is the federal reserves fault, I'm saying that deflation should be allowed, and that allowing deflation is necessary for removing the minimum wage
@@tasunkewitka8769 I agree with everything regarding central banking, but I don't see the connection with MW.
bojler eladó
this guy is such a dork omg we'd be best friends lol CALL ME LUCAS
What’s it matter how much worthless paper other people are paid for their drudgery? The world economic system isn’t set up for their convenience anyway
This makes sense. I think a lot of the problems are corporate hiring cheap employees that are less productive. Just terrible management disconnected from the needs of the local operations. If you $15, and not $7.50 you have better workers, less chaos, and less need for training. The concert hall or whatever ends up being run better, and more people decide to come to the shows from having a better experience. Profits increase as a result.
Minimum wage forces companies to productively train and manage the employees they hire. Inefficient companies do not simply disappear due to competition.
If there were productivity gains to be reaped in this way, why would companies not have the incentive to take advantage of this option even without a minimum wage increase? Higher productivity would mean higher profits and the ability to pay higher wages/ be more selective with their workforce. You might say maybe laziness or incompetence. But you can’t legislate industriousness or competence. If an owner/manager is lazy and incompetent and not maximizing productivity, then he or she will eventually either have to improve or be out competed in the ordinary course of affairs, regardless of wage laws. It’s likely that a minimum wage increase would accelerate this process, but it’s hard to see how that would benefit the minimum wage workers that he or she employs, since they will now be out of a job. You might say, well they will go to another company where the owner/manager was competent enough to increase productivity. But why weren’t they working there before if it was an option? Presumably they didn’t make the cut for the more productive and therefore more desirable workplaces. And because firms like the incompetent one have now gone out of business after the minimum wage hike, there is now a greater supply of labor, and therefore greater competition for those fewer jobs. The bottom line is that the minimum wage essentially makes it illegal for people who is discounted marginal value product is lower than the minimum wage to offer their services for sale. As a result, the people at the very bottom of the income scale, often the young or uneducated, who would benefit from work experience and training the most, are unable to get it through employment.
So it's essentially forcing people to stop being lazy and make there time worth enough to actually support themselves while also giving business incentives to invest in time saving techniques. Sounds like a great idea to me.
The problem is that by raising the wage, you raise the minimal ability required before someone is worth risking. But if someone has not been given a chance to develop those skills, what do they do? If you don’t compensate the steeper learning curve and reduced opportunity, some won’t learn helpful skills at all. They will have to either beg, borrow, steal, or starve. They will have no choice.
Trying to force those who are profitable to invest in the education and living of those who aren’t without any say could lead to those receiving welfare or free education becoming dependent on it and those who pay for them without say to be resentful. Now you have class tensions. Worse still, those dependent on them may prefer to just live off the welfare instead of working. You could add a work requirement or requirement they apply for a job (spoilers: we tried that and it didn’t work as well as expected), but then the skill problem appears once again. They need training and incentives to improve with experience. Welfare does not allow for that. Unless you turn welfare into a government jobs and training program that basically forces welfare recipients to work for the government or make welfare temporary, you’re actively hurting those who are productive now with no guarantee of a long term benefit. Even still, how much force can you apply to make them improve and leave welfare without effectively turning welfare into a form of slavery? many will be incentivized not to get a job and lose the “free money”. They will seek any loop hole to maximize benefits and attend the college or training perpetually instead of contributing to society. Many will also seek alternative methods to make more money without losing welfare benefits, like selling illicit drugs in secret or working under that table. (I read Zimbabwe was infamous for most jobs there technically being illegal and under the table, but that could be false). This punishes law abiding citizens.
What about the long term? If we keep raising the minimum wage, borrowing money, and increasing welfare or UBI, then disaster is inevitable. First, businesses that were forced to only hire “good workers” as you put them will now be in crisis because the old labor force is retiring and the new generation has neither the skills nor the will to train for the new jobs.
We see this now because welfare benefits by the government are essentially strong arming businesses to pay 15 and up, or shut down altogether. Because much of their labor isn’t worth 15 an hour, many businesses are opting for the later permanently. There are many help wanted signs but a record number of unemployment. That shouldn’t happen in a free market. Of course, this isn’t a free market because in part due to minimum wage. But also because of welfare, licensing bottlenecks, progressive taxes, and red tape . The unemployed don’t want to work if the cost in doing so is more than getting a handout for not working. Nor do business want to run at a net loss. Soon the small businesses owners become unemployed and dependent too. Then reduced competition allows big businesses to raise prices and reduces quality of the products or services. Less taxpayers and more welfare recipients means higher taxes are necessary on those who still work or reduced benefits.
Ok so we just tax the rich more then, right? No. Studies have shown that the tax rate and the amount collected by the government are not positively correlated. Higher taxes means fewer willing or able to pay them. The elite will find ways to bribe, leave, or hide their money. (Look at the pajama papers as proof). Those who can’t will either be taxed to death or go the path of john galt.
This leads to a corrupt oligopoly where mega corporations and big government become virtually indistinguishable because only an elite few can afford anything and are the only ones who can fund political candidates. The inequality will sky rocket and the lower class will lose all bargaining power. You don’t get to negotiate your welfare or UBI. after all, beggars can’t be choosers. (The hated one has an excellent video on that). Sooner or later, our atlas will shrug and the debt must be paid. That is why higher minimum wage, alongside welfare and higher taxes won’t solve the problem. It is the problem.
@@jacobfaro9571 Well thanks for taking the time to reply. I guess I should clarify that I do believe raising too high no doubt has negative consequences. If it we're $50 bucks an hour (in the USA) I couldn't get a job either. Could I work myself up to that? Maybe. But either way that's extreme. I think there is a minimum amount of money that 95% of able bodied people are worth. If we allow the 5% that can't attain the minimum wage in the work place to work at government jobs where they might not technically be "earning there fair share" I don't think that would be much of a problem. If there's too many people going for the government jobs then the minimum is too high and if there's not enough then the minimum is too low. We should probably target 5% unemployment with access to free training programs as long as people meet certain benchmarks. That way we have a certain amount of people learning new skills with less people getting stuck in a shit job with no growth.
It seems to me people focus too much on scary stories of the bottom few percent of mostly useless people in society to justify defending no minimum wage. In reality those people are probably going to be unproductive whether there is one or not.
Why though? You think it’s morally right to force them to be jobless because they aren’t deemed hard working enough? If someone who just doesn’t produce that much, maybe they are young, disabled, or whatever. You now think we should use a minimum wage to force them to go jobless or somehow improve. Also how the hell are they going to improve? They have no job to practice.
Sounds a tad authoritarian.
I love to hear all the bogus arguements by the shills for the corporate freeloader class, against the minimum wage. The pretzel logic is entertaining
Not a rebuttal
The shills for the Corporate freeloader class really dont care about this issue. Large Corporations are well insulated both economically and politically, and simply pass the cost on while maintaining there personal wealth.
What you need to understand is that Small Business is affected by Government mandated wages, and they dont have the political clout. So I would love to talk to you about that.
@@MrDanielfff777 actually an apt rebuttal
@@avenue8822 lmmfao. If the corporate freeloader class didn't care about the minimum wage, they wouldn't instruct their puppets in government to block it. Its funny how the corporate freeloader thinktanks always attempt to use small business as a shield. Small business will be just fine overall. Nice try.
@@endcorruptio Your obvious lack of economic understanding is almost humorous. Try to follow Karl, why would GM or Ford care about the minimum wage? Are you really that stupid?
This is why Austrian “economics” is not mainstream or respected. In the Manning paper, he quite clearly says the theoretical consequences of minimum wage are ambiguous (it depends on the elasticity of demand and labor market frictions). To answer the question, you need to look at actual data. If you’re just going to ignore data contrary to your prior beliefs, all you get is confirmation bias. Manning concludes with saying clearly the ambiguity of the empirical studies suggest at some levels and in certain circumstances, minimum wage does not have a negative employment effect and in others it does. He suggests the future research should focus on what level is that turning point. Austrian “economists” could never recognize this because they are not academically honest.
The question isn't "what changed after this particular policy was implemented in this particular place at this particular time?" The relevant question for the theory of minimum wage (not the empirics of minimum wage, which are necessarily tied up in a specific time and place) is "what is the difference between the state of the world under the minimum wage and the state of the world, had the minimum wage not been implemented, all else equal?" The problem with using empirical studies is that "all else" is never equal. Yes, we can acknowledge that there may be a historical instance of the minimum wage where negative employment effects are either undetected or are overwhelmed by other factors in the economy. But this doesn't change the counterfactual result that, had the minimum wage not been implemented, otherwise favorable employment contracts wouldn't have been altered or terminated. It really doesn't have anything to do with academic honesty. It's all about methodology. I suggest you look into the Austrians' view on the method of economics if you're curious about why they treat empirical studies the way they do.
@@broodoots If you read the papers cited by manning, they are not case studies. The Card and Kruger paper is a case study but many subsequent papers, for example Cengiz et al., are not and not “tied up in specific time and place.” Mainstream methods are comparing the observed state of the world with a counterfactual state of the world (for comparing means, it’s call the average treatment effect). The criticism that these studies are poorly thought out or conducted is just misinformed.
The criteria “all else equal” is sufficient but not necessary to determine causality. See en.m.wikipedia.org/wiki/Mill%27s_Methods. You just need some exogenous variation. Econometric methods can be very compelling.
The reason why Austrian economics aren’t academically honest is because no empirical evidence will change their “a priori” beliefs. They believe minimum wage causes a decrease in employment on no real theoretical grounds and no amount of evidence can change their minds. That’s not science, it’s nonsense.
@@izzyc1570 Evidence such as?
@@badman5363 like I said, for example Cengiz et al. (here’s the working paper version cep.lse.ac.uk/pubs/download/dp1531.pdf ). It was published in the Quarterly Journal of Economics in 2019, a “top-5” economics journal. There are over 130 instances of state minimum wage changes
@Izzy C if you actually watched the video, you'd see that there's very easy ways to get around the minimum through volunteer unpaid hours in conjunction with paid hours. I never see you people address the logic, just say the 'evidence' doesn't line up. It does. Stop denying basic laws of economics.
I’m cool with killing minimum wage IF were mandated all company organize as cooperatives OR we had a subsistence UBI of $42,000/year in 2021 money.
In a coop employees and employers share in profits, which means you have alignment of incentives PLUS you curb the sticky wages problem when all wages are replaced with profit dividends.
With UBI you actually get laborers bargaining power in wage negotiations without the need for labor to unionize.
Where do you live? I can live quite comfortably on $42k, freeing up 40 hours of my time as well would be even better.
I'm cool with killing the minimum wage...Period.
All it does, for the most part, is outlaw mutual agreements between employer and employee and cut off the lowest rungs of the ladder. It makes it more difficult for inexperienced and unskilled young people to get a job and build experience and skills.
I'm also cool with state getting entirely out of the economy. The only need for "government" (which should be pretty much invisible) would be to punish actual crimes against the non-aggression principle and settle contract disputes).
I'm also cool with UBI supporters going for the system they want...with each other. What's stopping the millions of UBI supporters from setting up a voluntary "banking" system with online access that calculates each member's dues and pays out the monthly dividend to each active member accordingly?
So, no voluntarism or anything close to resembling a Market. Sounds like one idea being replaced with a worse idea and not just because of the heavy handed State needed to enforce all that.
Giving your comment a little more thought:
1) May you please explain why a negative income tax is not sufficient? It solves all the problems with welfare while not being UBI.
2) I thought a coop was analogous to employees getting bonuses based on how the company performs in some companies (so yes I agree, give your employees a stake in company performance and they'll care more about company performance, some companies try to lean this way) but apparently a coop is completely different from what I thought it was after talking to my brother about it. So please expand on what a coop is.
-Also, one of the perks of being a wage laborer is that you don't have to care about company performance, you're guaranteed your wage based on hours worked then you can go home without a care. Honestly I'd rather NOT have the same worries as my manager does when I get home.
3) I can only say that this statement is true because employers are trying to beat out unemployment benefits with sign-on bonuses and such. Now this may also cause a radical shift in big companies going for automation in the future. And also companies can get creative to hire less workers.
For this I highly recommend this episode of econtalk: www.econtalk.org/jacob-vigdor-on-the-seattle-minimum-wage/
It was an episode on Seattle raising their minimum wage. Now it wasn't like everyone who made less than $15/hr just got laid off, it was far more complicated than that and this episode goes over all of the creative ways companies utilized to hire less workers.
Alignment of incentives! Don’t make me laugh dude. I helped start and worked at a cooperative for a decade man and I can tell you that incentives are absolutely not always lined up.
I love his example of a person choosing not to work and watching the last air bender. People dont usually have the choice not to work. Welfare payments are abysmal therefore forcing people into work for low pay. If we had a UBI then his example would make sense.
Your comment is a spectacular example of how easily economics can be misunderstood or misused.
What a pathetic argument. Surely everything progresses including prices which are getting higher and higher all the time. That's just one argument on why minimum wage needs to be increased. But surely this single measure only isn't enough to tackle the massive austerity people have been kept in globally . Controlled economy is the way to fix all the problems caused by the current governments which have long being serving only the interests of the corporations.
Does a Government mandated minimum wage affect large business Corporations or Small Business? Large Corporations really are not impacted by a higher minimum wage, and Small business certainly is NOT catered to by the Government.
*Government teams with corporations*
You: _tHe GoVErNMenT sHOuLd CoNtROL ThE ECoNoMY!!!_
That'll fix it!
The minimum contributes to inflation.
"The goverments team with corporations to benefit them, that's why goverments should have more power over the economy"
Do you see the fault in your logic ?
@@petarmiletic997 No I don't see any fault in my logic because any government is subject to change. Have you by any chance heard of left and right wing governments? It's all about policies, ideologies, etc.